EXHIBIT 10.1
FINANCING AGREEMENT
Dated as of June 16, 2005
by and among
NORTH ATLANTIC TRADING COMPANY, INC., NATIONAL TOBACCO COMPANY, L.P.,
NORTH ATLANTIC OPERATING COMPANY, INC., NATIONAL TOBACCO
FINANCE CORPORATION, NORTH ATLANTIC CIGARETTE COMPANY, INC.,
RBJ SALES, INC., ▇▇▇▇ ▇▇▇▇▇▇ & SONS, INC. AND ▇▇▇▇▇▇, INC.,
as Borrowers,
NORTH ATLANTIC HOLDING COMPANY, INC. ,
as Guarantor,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO,
as Lenders,
and
FORTRESS CREDIT CORP.,
as Agent
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS; CERTAIN TERMS.......................................................................1
Section 1.01 Definitions........................................................................1
Section 1.02 Terms Generally...................................................................27
Section 1.03 Accounting and Other Terms........................................................28
Section 1.04 Time References...................................................................28
ARTICLE II THE LOANS......................................................................................28
Section 2.01 Commitments.......................................................................28
Section 2.02 Making the Loans..................................................................29
Section 2.03 Repayment of Loans; Evidence of Debt..............................................32
Section 2.04 Interest..........................................................................32
Section 2.05 Reduction of Commitment; Prepayment of Loans......................................33
Section 2.06 Fees..............................................................................35
Section 2.07 Securitization....................................................................35
Section 2.08 Taxes.............................................................................36
Section 2.09 LIBOR Not Determinable; Illegality................................................38
Section 2.10 Indemnity.........................................................................38
Section 2.11 Continuation and Conversion of Loans..............................................39
ARTICLE III LETTERS OF CREDIT.............................................................................40
Section 3.01 Letter of Credit Guaranty.........................................................40
Section 3.02 Participations....................................................................42
Section 3.03 Letters of Credit.................................................................43
ARTICLE IV FEES, PAYMENTS AND OTHER COMPENSATION..........................................................44
Section 4.01 Audit and Collateral Monitoring Fees..............................................44
Section 4.02 Payments; Computations and Statements.............................................44
Section 4.03 Sharing of Payments, Etc..........................................................45
Section 4.04 Apportionment of Payments.........................................................45
Section 4.05 Increased Costs and Reduced Return................................................46
Section 4.06 Joint and Several Liability of the Borrowers......................................48
ARTICLE V CONDITIONS TO LOANS.............................................................................49
Section 5.01 Conditions Precedent to Effectiveness.............................................49
Section 5.02 Conditions Precedent to All Loans and Letters of Credit...........................53
Section 5.03 Conditions Subsequent to the Initial Loans........................................54
ARTICLE VI REPRESENTATIONS AND WARRANTIES.................................................................55
Section 6.01 Representations and Warranties....................................................55
ARTICLE VII COVENANTS OF THE LOAN PARTIES.................................................................64
Section 7.01 Affirmative Covenants.............................................................64
Section 7.02 Negative Covenants................................................................72
Section 7.03 Financial Covenants...............................................................78
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ARTICLE VIII MANAGEMENT, COLLECTION AND STATUS OF ACCOUNTS RECEIVABLE AND OTHER COLLATERAL................79
Section 8.01 Collection of Accounts Receivable; Management of Collateral.......................79
Section 8.02 Accounts Receivable Documentation.................................................81
Section 8.03 Status of Accounts Receivable and Other Collateral................................81
Section 8.04 Collateral Custodian..............................................................81
ARTICLE IX EVENTS OF DEFAULT..............................................................................82
Section 9.01 Events of Default.................................................................82
ARTICLE X AGENT ..........................................................................................86
Section 10.01 Appointment.......................................................................86
Section 10.02 Nature of Duties..................................................................87
Section 10.03 Rights, Exculpation, Etc..........................................................87
Section 10.04 Reliance..........................................................................88
Section 10.05 Indemnification...................................................................88
Section 10.06 Agent Individually................................................................88
Section 10.07 Successor Agent...................................................................88
Section 10.08 Collateral Matters................................................................89
Section 10.09 Agency for Perfection.............................................................90
ARTICLE XI GUARANTY.......................................................................................91
Section 11.01 Guaranty..........................................................................91
Section 11.02 Guaranty Absolute.................................................................91
Section 11.03 Waiver............................................................................92
Section 11.04 Continuing Guaranty; Assignments..................................................92
Section 11.05 Subrogation.......................................................................93
ARTICLE XII MISCELLANEOUS.................................................................................93
Section 12.01 Notices, Etc......................................................................93
Section 12.02 Amendments, Etc...................................................................94
Section 12.03 No Waiver; Remedies, Etc..........................................................95
Section 12.04 Expenses; Taxes; Attorneys' Fees..................................................95
Section 12.05 Right of Set-off..................................................................96
Section 12.06 Severability......................................................................96
Section 12.07 Assignments and Participations....................................................96
Section 12.08 Counterparts.....................................................................100
Section 12.09 GOVERNING LAW....................................................................100
Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE............................100
Section 12.11 WAIVER OF JURY TRIAL, ETC........................................................101
Section 12.12 Consent by the Agent and Lenders.................................................101
Section 12.13 No Party Deemed Drafter..........................................................101
Section 12.14 Reinstatement; Certain Payments..................................................101
Section 12.15 Indemnification..................................................................102
Section 12.16 NATC as Agent for Borrowers......................................................103
Section 12.17 Records..........................................................................104
Section 12.18 Binding Effect...................................................................104
Section 12.19 Interest.........................................................................104
Section 12.20 Confidentiality..................................................................105
Section 12.21 Integration......................................................................106
Section 12.22 Public Disclosures...............................................................106
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SCHEDULES AND EXHIBITS
----------------------
Schedule 1.01(A) Lenders and Lenders' Commitments
Schedule 6.01(c) Governmental Approvals
Schedule 6.01(e) Capitalization; Subsidiaries
Schedule 6.01(f) Litigation; Commercial Tort Claims
Schedule 6.01(i) ERISA
Schedule 6.01(o) Real Property
Schedule 6.01(q) Operating Lease Obligations
Schedule 6.01(r) Environmental Matters
Schedule 6.01(s) Insurance
Schedule 6.01(v) Bank Accounts
Schedule 6.01(w) Intellectual Property
Schedule 6.01(x) Material Contracts
Schedule 6.01(cc) Name; Jurisdiction of Organization; Organizational ID Number;
Chief Place of Business; Chief Executive Office; FEIN
Schedule 6.01(dd) Tradenames
Schedule 6.01(ee) Collateral Locations
Schedule 7.02(a) Existing Liens
Schedule 7.02(b) Existing Indebtedness
Schedule 7.02(e) Existing Investments
Schedule 7.02(k) Limitations on Dividends and Other Payment Restrictions
Schedule 8.01 Cash Management Accounts
Exhibit A Form of Guaranty
Exhibit B Form of Security Agreement
Exhibit C Form of Pledge Agreement
Exhibit D Form of Notice of Borrowing
Exhibit E Form of Contribution Agreement
Exhibit F Form of Opinion of Counsel
Exhibit G Form of Letter of Credit Application
Exhibit H Form of Assignment and Acceptance
Exhibit I Form of Intercompany Subordination Agreement
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FINANCING AGREEMENT
Financing Agreement, dated as of June 16, 2005, by and among North
Atlantic Holding Company, Inc., a Delaware corporation (the "Parent"), North
Atlantic Trading Company, Inc., a Delaware corporation ("NATC"), National
Tobacco Company, L.P., a Delaware limited partnership ("NTC"), North Atlantic
Operating Company, Inc., a Delaware corporation ("NAOC"), North Atlantic
Cigarette Company, Inc., a Delaware corporation ("NACC"), National Tobacco
Finance Corporation, a Delaware corporation ("NTFC"), RBJ Sales, Inc., a
Tennessee corporation ("RB"), ▇▇▇▇ ▇▇▇▇▇▇ & Sons, Inc., a Tennessee corporation
("▇▇▇▇ ▇▇▇▇▇▇") and ▇▇▇▇▇▇, Inc., a Tennessee corporation ("▇▇▇▇▇▇" and together
with NATC, NTC, NAOC, NACC, NTFC, RB and ▇▇▇▇ ▇▇▇▇▇▇, each a "Borrower" and
collectively, the "Borrowers"), each subsidiary of the Parent listed as a
"Guarantor" on the signature pages hereto (together with the Parent, each a
"Guarantor" and collectively, the "Guarantors"), the financial institutions from
time to time party hereto (each a "Lender" and collectively, the "Lenders"), and
Fortress Credit Corp., a Delaware corporation ("Fortress"), as agent for the
Lenders (in such capacity, the "Agent").
RECITALS
The Borrowers have asked the Lenders to extend credit to the
Borrowers consisting of (a) a term loan A in the aggregate principal amount of
$30,000,000 and (b) a revolving credit facility in an aggregate principal amount
not to exceed $55,000,000 at any time outstanding, which will include a
subfacility for the issuance of letters of credit. The proceeds of the term loan
and the loans made under the revolving credit facility shall be used to
refinance existing bank indebtedness of the Borrowers and for working capital
requirements and other general corporate purposes of the Borrowers. The Lenders
are severally, and not jointly, willing to extend such credit to the Borrowers
subject to the terms and conditions hereinafter set forth.
In consideration of the premises and the covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CERTAIN TERMS
Section 1.01 Definitions. As used in this Agreement, the following
terms shall have the respective meanings indicated below, such meanings to be
applicable equally to both the singular and plural forms of such terms:
"Account Debtor" means each debtor, customer or obligor in any way
obligated on or in connection with any Account Receivable.
"Account Receivable" means, with respect to any Person, any and all
rights of such Person to payment for Inventory sold and/or services rendered,
including accounts, general intangibles and any and all such rights evidenced by
chattel paper, instruments or documents, whether due or to become due and
whether or not earned by performance, and whether now or hereafter acquired or
arising in the future, and any proceeds arising therefrom or relating thereto.
"Acquisition" means the acquisition of all of the Capital Stock of
any Person or certain assets of any Person.
"Action" has the meaning specified therefor in Section 12.12.
"additional amount" has the meaning specified therefor in Section
2.08(a).
"Administrative Borrower" has the meaning specified therefor in
Section 12.16.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, "control" of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the Capital Stock having ordinary voting power
for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise. Notwithstanding anything herein to the contrary, in no event shall
the Agent or any Lender be considered an "Affiliate" of any Loan Party.
"Affected Lender" has the meaning specified therefor in Section
4.05(c).
"After Acquired Property" has the meaning specified therefor in
Section 7.01(o).
"Agent" has the meaning specified therefor in the preamble hereto.
"Agent Advances" has the meaning specified therefor in Section
10.08(a).
"Agent's Account" means an account at a bank designated by the Agent
from time to time as the account into which the Loan Parties shall make all
payments to the Agent for the benefit of the Agent and the Lenders under this
Agreement and the other Loan Documents.
"Agreement" means this Financing Agreement, including all amendments,
modifications and supplements and any exhibits or schedules thereto, and shall
refer to the Agreement as the same may be in effect at the time such reference
becomes operative.
"Applicable LIBOR Rate Margin" means, as of any date of
determination,
(a) For the period from and including the Effective Date to but
excluding the effective date of any determination of the Applicable LIBOR Rate
Margin pursuant to clause (b) below, 3.50% per annum (the "Initial Applicable
LIBOR Rate Margin").
(b) Thereafter, the Applicable LIBOR Rate Margin set forth in the
table below that corresponds to the applicable Leverage Ratio set forth opposite
thereto (as determined in accordance with clauses (c) and (d) below).
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-------------------------------------------------- ---------------------------------
Leverage Ratio Applicable LIBOR Rate Margin:
-------------- -----------------------------
-------------------------------------------------- ---------------------------------
Greater than or equal to 3.00:1.00 6.25%
-------------------------------------------------- ---------------------------------
Less than 3.00:1.00 but greater than
or equal to 2.25:1.00 5.25%
-------------------------------------------------- ---------------------------------
Less than 2.25:1.00 but greater than
or equal to 1.75:1.00 4.25%
-------------------------------------------------- ---------------------------------
Less than 1.75:1.00 3.50%
-------------------------------------------------- ---------------------------------
(c) The Applicable LIBOR Rate Margin shall be determined from time to
time pursuant to clause (b) above on the first day of the calendar month
following (i) the consummation of a Permitted Acquisition, (ii) the consummation
of any repurchase by a Loan Party of any NAHC Notes or NATC Notes and (iii) the
date on which the Borrowers deliver to the Agent a quarterly compliance
certificate in accordance with Section 7.01(a)(iv), commencing with the delivery
by the Borrowers of the quarterly compliance certificate for the fiscal quarter
of NATC and its Subsidiaries ended June 30, 2005. In the event that a compliance
certificate is not provided to the Agent in accordance with Section 7.01(a)(iv),
the Applicable LIBOR Rate Margin shall be set at the relevant Applicable LIBOR
Rate Margin set forth in the table above as of the first day of the month
following the date on which such compliance certificate was required to be
delivered until the date on which such compliance certificate is delivered (on
which date (but not retroactively), without constituting a waiver of any Default
or Event of Default arising as a result of the Borrowers' failure to timely
deliver such compliance certificate, the Applicable LIBOR Rate Margin shall be
set at the relevant Applicable LIBOR Rate Margin set forth in the table above
based upon the calculation of the Leverage Ratio set forth in such compliance
certificate).
(d) Notwithstanding the foregoing, in the event that the audited
annual financial statements of NATC and its Subsidiaries required to be
delivered by the Borrowers pursuant to Section 7.01(a)(ii) for any Fiscal Year
shall indicate that the actual Leverage Ratio was higher or lower than as
previously certified by the Borrowers in the compliance certificate for such
fiscal quarter, then the Applicable LIBOR Rate Margin for such fiscal quarter
shall be adjusted retroactively (to the effective date of the determination of
the Applicable LIBOR Rate Margin that was based upon the delivery of such
compliance certificate) to reflect the correct Applicable LIBOR Rate Margin, and
the Borrowers shall make payments to or receive a future credit or payment from
the Agent and Lenders, as the case may be, to reflect such adjustment.
"Applicable Reference Rate Margin" means, as of any date of
determination,
(a) For the period from and including the Effective Date to but
excluding the effective date of any determination of the Applicable Reference
Rate Margin pursuant to clause (b) below, 1% per annum (the "Initial Applicable
Reference Rate Margin").
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(b) Thereafter, the Applicable Reference Rate Margin set forth in the
table below that corresponds to the applicable Leverage Ratio set forth opposite
thereto (as determined in accordance with clauses (c) and (d) below).
-------------------------------------------------- ---------------------------------
Applicable Reference
--------------------
Leverage Ratio Rate Margin:
-------------- ------------
-------------------------------------------------- ---------------------------------
Greater than or equal to 3.00:1.00 3.75%
-------------------------------------------------- ---------------------------------
Less than 3.00:1.00 but greater than
or equal to 2.25:1.00 2.75%
-------------------------------------------------- ---------------------------------
Less than 2.25:1.00 but greater than
or equal to 1.75:1.00 1.75%
-------------------------------------------------- ---------------------------------
Less than 1.75:1.00 1.00%
-------------------------------------------------- ---------------------------------
(c) The Applicable Reference Rate Margin shall be determined from
time to time pursuant to clause (b) above on the first day of the calendar month
following (i) the consummation of a Permitted Acquisition, (ii) the consummation
of any repurchase by a Loan Party of any NAHC Notes or NATC Notes and (iii) the
date on which the Borrowers deliver to the Agent a quarterly compliance
certificate in accordance with Section 7.01(a)(iv), commencing with the delivery
by the Borrowers of the quarterly compliance certificate for the fiscal quarter
of NATC and its Subsidiaries ended June 30, 2005. In the event that a compliance
certificate is not provided to the Agent in accordance with Section 7.01(a)(iv),
the Applicable Reference Rate Margin shall be set at the relevant Applicable
Reference Rate Margin set forth in the table above as of the first day of the
month following the date on which such compliance certificate was required to be
delivered until the date on which such compliance certificate is delivered (on
which date (but not retroactively), without constituting a waiver of any Default
or Event of Default arising as a result of the Borrowers' failure to timely
deliver such compliance certificate, the Applicable Reference Rate Margin shall
be set at the relevant Applicable Reference Rate Margin set forth in the table
above based upon the calculation of the Leverage Ratio set forth in such
compliance certificate).
(d) Notwithstanding the foregoing, in the event that the audited
annual financial statements of NATC and its Subsidiaries required to be
delivered by the Borrowers pursuant to Section 7.01(a)(ii) for any Fiscal Year
shall indicate that the actual Leverage Ratio was higher or lower than as
previously certified by the Borrowers in the compliance certificate for such
fiscal quarter, then the Applicable Reference Rate Margin for such fiscal
quarter shall be adjusted retroactively (to the effective date of the
determination of the Applicable Reference Rate Margin that was based upon the
delivery of such compliance certificate) to reflect the correct Applicable
Reference Rate Margin, and the Borrowers shall make payments to or receive a
future credit or payment from the Agent and Lenders, as the case may be, to
reflect such adjustment.
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"Applicable Prepayment Premium" means, as of any date of
determination, an amount equal to:
(1) in the case of a reduction of the Total Revolving Credit
Commitment pursuant to Section 2.05(a), (a) during the period from and after the
Effective Date up to the date that is the first anniversary of the Effective
Date, 2% times the amount of the reduction of the Total Revolving Credit
Commitment on the date of determination, (b) during the period from and
including the date that is the first anniversary of the Effective Date up to the
date that is the second anniversary of the Effective Date, 1% times the amount
of the reduction of the Total Revolving Credit Commitment on the date of
determination, and (c) during the period from and including the date that is the
second anniversary of the Effective Date, 0%,
(2) in the case of a voluntary prepayment of the Term Loan A pursuant
to Sections 2.05(b)(ii) or (b)(iii), (a) during the period from and after the
Effective Date up to the date that is the first anniversary of the Effective
Date, 2% times the amount of the Term Loan A prepaid on the date of
determination, (b) during the period from and including the date that is the
first anniversary of the Effective Date up to the date that is the second
anniversary of the Effective Date, 1% times the amount of the Term Loan A
prepaid on the date immediately prior to the date of determination, and (c)
during the period from and including the date that is the second anniversary of
the Effective Date, 0%, and
(3) in the case of the prepayment of the Loans and the termination of
this Agreement pursuant to Section 2.05(b)(iii), (a) during the period from and
after the Effective Date up to the date that is the first anniversary of the
Effective Date, 2% times the sum of (i) the Total Revolving Credit Commitment on
the date of determination, plus (ii) the outstanding principal balance of the
Term Loan A on the date immediately prior to the date of determination, (b)
during the period from and including the date that is the first anniversary of
the Effective Date up to the date that is the second anniversary of the
Effective Date, 1% times the sum of (i) the Total Revolving Credit Commitment on
the date of determination, plus (ii) the outstanding principal balance of the
Term Loan A on the date immediately prior to the date of determination, and (c)
during the period from and including the date that is the second anniversary of
the Effective Date, 0%.
"Assignment and Acceptance" means an assignment and acceptance
entered into by an assigning Lender and an assignee, and accepted by the Agent,
in accordance with Section 12.07 hereof and substantially in the form of Exhibit
H hereto or such other form acceptable to the Agent.
"ATF" means the Bureau of Alcohol, Tobacco, Firearms and Explosives,
United States Department of Justice.
"Authorized Officer" means, with respect to any Person, the chief
executive officer, chief financial officer or Vice President - Finance of such
Person.
"Availability" means, on any date, the difference between (i) the
lesser of (A) the Total Revolving Credit Commitment and (B) the Leverage Cap as
of such date and (ii) the sum of (A) the aggregate outstanding principal amount
of all Revolving Loans and (B) all Letter of Credit Obligations.
5
"Bank" means JPMorgan Chase Bank, its successors or any other bank
designated by the Agent to the Administrative Borrower from time to time.
"Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C.
ss. 101, et seq.), as amended, and any successor statute.
"Board" means the Board of Governors of the Federal Reserve System of
the United States.
"Board of Directors" means, with respect to any Person, the board of
directors (or comparable managers) of such Person or any committee thereof duly
authorized to act on behalf of the board.
"Bollore" has the meaning specified therefor in Section 7.01(q).
"Bollore Distribution Agreements" has the meaning specified in
Section 7.01(q).
"Borrower" and "Borrowers" have the respective meanings specified
therefor in the preamble hereto.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required to
close, provided that, with respect to the borrowing, payment or continuation of,
or determination of interest rate on, LIBOR Rate Loans, Business Day shall mean
any Business Day which dealings in Dollars may be carried on in the interbank
eurodollar markets in New York City and London.
"Capital Expenditures" means, with respect to any Person for any
period, the sum of (i) the aggregate of all expenditures by such Person and its
Subsidiaries during such period that in accordance with GAAP are or should be
included in "property, plant and equipment" or in a similar fixed asset account
on its balance sheet, whether such expenditures are paid in cash or financed and
including all Capitalized Lease Obligations paid or payable during such period,
and (ii) to the extent not covered by clause (i) above, the aggregate of all
expenditures by such Person and its Subsidiaries during such period to acquire
by purchase or otherwise the business or fixed assets of, or the Capital Stock
of, any other Person.
"Capital Guideline" means any law, rule, regulation, policy,
guideline or directive (whether or not having the force of law and whether or
not the failure to comply therewith would be unlawful) of any central bank or
Governmental Authority (i) regarding capital adequacy, capital ratios, capital
requirements, the calculation of a bank's capital or similar matters, or (ii)
affecting the amount of capital required to be obtained or maintained by any
Lender, any Person controlling any Lender, or the L/C Issuer or the manner in
which any Lender, any Person controlling any Lender, or the L/C Issuer allocates
capital to any of its contingent liabilities (including letters of credit),
advances, acceptances, commitments, assets or liabilities.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.
6
"Capitalized Lease" means, with respect to any Person, any lease of
real or personal property by such Person as lessee which is (i) required under
GAAP to be capitalized on the balance sheet of such Person or (ii) a transaction
of a type commonly known as a "synthetic lease" (i.e. a lease transaction that
is treated as an operating lease for accounting purposes but with respect to
which payments of rent are intended to be treated as payments of principal and
interest on a loan for Federal income tax purposes).
"Capitalized Lease Obligations" means, with respect to any Person,
obligations of such Person and its Subsidiaries under Capitalized Leases, and,
for purposes hereof, the amount of any such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.
"Cash and Cash Equivalents" means all cash and any presently existing
or hereafter arising deposit account balances, certificates of deposit or other
financial instruments properly classified as cash equivalents under GAAP.
"Cash Management Accounts" means those bank accounts of each Loan
Party maintained at one or more Cash Management Banks listed on Schedule 8.01.
"Cash Management Agreements" means those certain deposit account
control agreements in form and substance reasonably satisfactory to the Agent,
each of which is among the Agent, the applicable Loan Party and one of the Cash
Management Banks.
"Cash Management Bank" has the meaning specified therefor in Section
8.01.
"Change in Law" has the meaning specified therefor in Section
4.05(a).
"Change of Control" means each occurrence of any of the following:
(a) the acquisition, directly or indirectly, by any person or group
(within the meaning of Section 13(d)(3) of the Exchange Act) other than a
Permitted Holder of beneficial ownership of more than 49% of the aggregate
outstanding voting power of the Capital Stock of the Parent;
(b) the Parent shall cease to have beneficial ownership (as defined
in Rule 13d-3 under the Exchange Act) of 100% of the aggregate voting power of
the Capital Stock of each other Loan Party, free and clear of all Liens (other
than any Liens granted hereunder and Permitted Liens); or
(c) except as permitted under Section 7.02(c), (i) any Loan Party
consolidates or amalgamates with or merges into another entity or conveys,
transfers or leases all or substantially all of its property and assets to
another Person, or (ii) any entity consolidates or amalgamates with or merges
into any Loan Party in a transaction pursuant to which the outstanding voting
Capital Stock of such Loan Party is reclassified or changed into or exchanged
for cash, securities or other property, other than any such transaction
described in this clause (ii) in which either (A) in the case of any such
transaction involving the Parent, no person or group (within the meaning of
Section 13(d)(3) of the Exchange Act) other than a Permitted Holder has,
directly or indirectly, acquired beneficial ownership of more than 33% of the
aggregate outstanding voting Capital Stock of the Parent or (B) in the case of
any such transaction involving a Loan Party other than the Parent, the Parent
has beneficial ownership of 100% of the aggregate voting power of all Capital
Stock of the resulting, surviving or transferee entity.
7
"Closing Fee" has the meaning specified therefor in Section 2.06(a).
"Collateral" means all of the property and assets and all interests
therein and proceeds thereof now owned or hereafter acquired by any Person upon
which a Lien is granted or purported to be granted by such Person as security
for all or any part of the Obligations.
"Commitments" means, with respect to each Lender, such Lender's
Revolving Credit Commitment and Term Loan A Commitment.
"Consolidated EBITDAR" means, with respect to any Person for any
period, the Consolidated Net Income of such Person and its Subsidiaries for such
period, plus (in the case of expense items) or minus (in the case of income
items), without duplication, the sum of the following amounts of such Person and
its Subsidiaries for such period and to the extent included in determining
Consolidated Net Income of such Person for such period: (i) Consolidated Net
Interest Expense; (ii) income tax expense (benefit); (iii) depreciation expense;
(iv) amortization expense; (v) non-cash extraordinary, unusual, or non-recurring
expenses (income) or losses (gains); (vi) cash restructuring charges (and
non-cash charges that represent an accrual or reserve for potential cash charges
in any future period) incurred during such period to the extent such charges are
incurred during the period commencing on May 1, 2005 to and including December
31, 2006 and are set forth in the operating forecast of NATC and its
Subsidiaries delivered to the Agent prior to the Effective Date (including cash
charges for employee severance and separation expenses, losses (gains) from
Dispositions of assets and from the discontinuance of product lines and the
closure of manufacturing facilities, and other non-recurring professional fees),
provided that the aggregate amount of the items described in this clause (vi)
shall not exceed $3,100,000; (vii) cash restructuring charges (and non-cash
charges that represent an accrual or reserve for potential cash charges in any
future period) incurred during such period to the extent such charges are
incurred during the period commencing on the Effective Date to and including
December 31, 2006 and are not set forth in the operating forecast described in
clause (vi) above (and therefore are not included under clause (vi) above),
provided that (A) such cash charges arise from the discontinuance of product
lines, employee severance and separation expenses and the closure of
manufacturing facilities and office locations existing on the Effective Date and
(B) the aggregate amount of the items described in this clause (vii) shall not
exceed $5,200,000; (viii) non-recurring cash charges and expenses incurred
during such period to the extent such charges and expenses are incurred during
the period commencing on the Effective Date to and including December 31, 2006
and are not set forth in the operating forecast described in clause (vi) above
(and therefore are not included under clause (vi) above), provided that (A) such
charges solely relate to tax payments made during such period in respect of
periods prior to the Effective Date and legal fees and expenses paid during such
period and (B) the aggregate amount of such charges does not to exceed
$1,400,000; (ix) fees paid to ▇▇▇▇▇▇▇ & Marsal, LLC, (x) all fees and expenses
paid during such period in connection with the initial closing of the
transactions evidenced by this Agreement; (xi) expenses (recoveries) relating to
counterfeiting activities and (xii) other non-cash charges, including stock
option expense, pension/post retirement expense, and LIFO expense (income),
8
minus (to the extent not deducted in determining Consolidated Net Income of such
Person for such period) cash contributions in respect of pension obligations
plus cash payments for post retirement benefits. For the avoidance of doubt, in
the event that any Person joins the MSA as a participant, any settlement
payments, including the forfeiture or payment of any or all MSA escrow funds,
made by such Person relating to periods prior to such Person joining the MSA,
would be, to the extent deducted from Consolidated Net Income, added back to the
determination of Consolidated EBITDAR. Any amounts paid by such Person relating
to periods subsequent to joining the MSA shall be treated as an expense and
thereby reduce Consolidated Net Income for the purpose of determination of
Consolidated EBITDAR.
"Consolidated Net Income" means, with respect to any Person for any
period, the net income (loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis and in accordance with GAAP.
"Consolidated Net Interest Expense" means, with respect to any Person
for any period, gross interest expense of such Person and its Subsidiaries for
such period determined on a consolidated basis and in accordance with GAAP
(including, without limitation, interest expense paid to Affiliates of such
Person), less (i) the sum of (A) gains for such period on Hedging Agreements (to
the extent not included in interest income above and to the extent not deducted
in the calculation of gross interest expense) and (B) interest income (including
interest paid in kind), plus (ii) the sum of (A) losses for such period on
Hedging Agreements (to the extent not included in gross interest expense) and
(B) the upfront costs or fees for such period associated with Hedging Agreements
(to the extent not included in gross interest expense), in each case, determined
on a consolidated basis and in accordance with GAAP.
"Contingent Obligation" means, with respect to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, (i) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of a primary obligor, (ii) the obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement, (iii) any obligation of such Person,
whether or not contingent, (A) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (B) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (C) to
purchase property, assets, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (D) otherwise to assure or
hold harmless the holder of such primary obligation against loss in respect
thereof; provided, however, that the term "Contingent Obligation" shall not
include any product warranties extended in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation with respect to which
such Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the terms of
the instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability with respect thereto
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.
9
"Contribution Agreement" means the Contribution Agreement, dated as
of the Effective Date, duly executed by each Loan Party, substantially in the
form of Exhibit E.
"Current Value" has the meaning specified therefor in Section
7.01(o).
"Default" means an event which, with the giving of notice or the
lapse of time or both, would constitute an Event of Default.
"Disposition" means any transaction, or series of related
transactions, pursuant to which any Person or any of its Subsidiaries sells,
assigns, transfers or otherwise disposes of any property or assets (whether now
owned or hereafter acquired) to any other Person, in each case, whether or not
the consideration therefor consists of cash, securities or other assets owned by
the acquiring Person, excluding any sales of Inventory in the ordinary course of
business on ordinary business terms.
"Dollar," "Dollars" and the symbol "$" each means lawful money of the
United States of America.
"Effective Date" means the date, on or before June 16, 2005, on which
all of the conditions precedent set forth in Section 5.01 are satisfied or
waived and the initial Loans are made and/or the initial Letters of Credit are
issued.
"Employee Plan" means an employee benefit plan (other than a
Multiemployer Plan) covered by Title IV of ERISA and maintained (or that was
maintained at any time during the six (6) calendar years preceding the date of
any borrowing hereunder) for employees of any Loan Party or any of its ERISA
Affiliates.
"Environmental Actions" means any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter or other communication from any
Person or Governmental Authority involving violations of Environmental Laws or
Releases of Hazardous Materials (i) from any assets, properties or businesses
owned or operated by any Loan Party or any of its Subsidiaries or any
predecessor in interest; or (ii) onto any facilities which received Hazardous
Materials generated by any Loan Party or any of its Subsidiaries or any
predecessor in interest.
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. ss. 9601, et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. ss. 1801, et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. ss. 6901, et seq.), the Federal Clean
Water Act (33 U.S.C. ss. 1251 et seq.), the Clean Air Act (42 U.S.C. ss. 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C. ss. 2601 et seq.) and the
Occupational Safety and Health Act (29 U.S.C. ss. 651 et seq.), as such laws may
be amended or otherwise modified from time to time, and any other present or
future federal, state, local or foreign statute, ordinance, rule, regulation,
order, judgment, decree, permit, license or other binding determination of any
Governmental Authority imposing liability or establishing standards of conduct
for protection of the environment or other government restrictions relating to
the protection of the environment or the Release, deposit or migration of any
Hazardous Materials into the environment.
10
"Environmental Liabilities and Costs" means all liabilities, monetary
obligations, Remedial Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts and consultants and costs of
investigations and feasibility studies), fines, penalties, sanctions and
interest incurred as a result of any claim or demand by any Governmental
Authority or any third party, and which relate to any environmental condition or
a Release of Hazardous Materials from or onto (i) any property presently or
formerly owned by any Loan Party or any of its Subsidiaries or (ii) any facility
which received Hazardous Materials generated by any Loan Party or any of its
Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, and regulations
thereunder, in each case, as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
"ERISA Affiliate" means, with respect to any Person, any trade or
business (whether or not incorporated) which is a member of a group of which
such Person is a member and which would be deemed to be a "controlled group"
within the meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue
Code.
"Event of Default" means any of the events set forth in Section 9.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Credit Facility" means the Amended and Restated Loan
Agreement, dated as of February 17, 2004 by and between NATC, as borrower,
certain subsidiaries of NATC as guarantors, the Parent, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank,
N.A. ("▇▇ ▇▇▇▇▇▇"), as agent bank and ▇▇ ▇▇▇▇▇▇ and LaSalle Bank, National
Association, as lenders, as amended, supplemented or otherwise modified from
time to time.
"Existing Lenders" means the lenders party to the Existing Credit
Facility.
"Facility" means the real property located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, including, without limitation, the land on which
such facility is located, all buildings and other improvements thereon, all
fixtures located at or used in connection with such facility, all whether now or
hereafter existing.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal to, for each day during such period, the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by it.
11
"Field Survey and Audit" means a field survey and audit of the Loan
Parties and an appraisal of the Collateral performed by auditors, examiners
and/or appraisers selected by the Agent, at the sole cost and expense of the
Borrowers.
"Final Maturity Date" means June 30, 2010, or such earlier date on
which any Loan shall become due and payable in accordance with the terms of this
Agreement and the other Loan Documents.
"Financial Statements" means (i) the audited consolidated balance
sheet of NATC and its Subsidiaries for the Fiscal Year ended December 31, 2004,
and the related consolidated statement of operations, shareholders' equity and
cash flows for the Fiscal Year then ended, and (ii) the unaudited consolidated
balance sheet of NATC and its Subsidiaries for the four (4) months ended April
30, 2005, and the related consolidated statement of operations, shareholder's
equity and cash flows for the four (4) months then ended.
"Fiscal Year" means the fiscal year of the Parent and its
Subsidiaries ending on December 31st of each year.
"Fortress" has the meaning specified therefor in the preamble hereto.
"▇▇▇▇ ▇▇▇▇▇▇" has the meaning specified therefor in the preamble
hereto.
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States, applied on a consistent basis, provided that
for the purpose of Section 7.03 hereof and the definitions used therein, "GAAP"
shall mean generally accepted accounting principles in effect on the date hereof
and consistent with those used in the preparation of the Financial Statements,
provided, further, that if there occurs after the date of this Agreement any
change in GAAP that affects in any respect the calculation of any covenant
contained in Section 7.03 hereof, the Agent and the Administrative Borrower
shall negotiate in good faith amendments to the provisions of this Agreement
that relate to the calculation of such covenant with the intent of having the
respective positions of the Lenders and the Borrowers after such change in GAAP
conform as nearly as possible to their respective positions as of the date of
this Agreement and, until any such amendments have been agreed upon, the
covenants in Section 7.03 hereof shall be calculated as if no such change in
GAAP has occurred.
"Governmental Authority" means any nation or government, any Federal,
state, city, town, municipality, county, local or other political subdivision
thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guaranteed Obligations" has the meaning specified therefor in
Section 11.01.
12
"Guarantor" means (i) the Parent and each Subsidiary of the Parent
listed as a "Guarantor" on the signature pages hereto, and (ii) each other
Person which guarantees, pursuant to Section 7.01(b) or otherwise, all or any
part of the Obligations.
"Guaranty" means (i) the guaranty of each Guarantor party hereto
contained in ARTICLE XI hereof, and (ii) each guaranty substantially in the form
of Exhibit A, made by any other Guarantor in favor of the Agent for the benefit
of the Agent and the Lenders pursuant to Section 7.01(b) or otherwise.
"Hazardous Material" means (a) any element, compound or chemical that
is defined, listed or otherwise classified as a contaminant, pollutant, toxic
pollutant, toxic or hazardous substance, extremely hazardous substance or
chemical, hazardous waste, special waste, or solid waste under Environmental
Laws or that is likely to cause immediately, or at some future time, harm to or
have an adverse effect on, the environment or risk to human health or safety,
including, without limitation, any pollutant, contaminant, waste, hazardous
waste, toxic substance or dangerous good which is defined or identified in any
Environmental Law and which is present in the environment in such quantity or
state that it contravenes any Environmental Law; (b) petroleum and its refined
products; (c) polychlorinated biphenyls; (d) any substance exhibiting a
hazardous waste characteristic, including, without limitation, corrosivity,
ignitability, toxicity or reactivity as well as any radioactive or explosive
materials; and (e) any asbestos-containing materials.
"Hedging Agreement" means any interest rate, foreign currency,
commodity or equity swap, collar, cap, floor or forward rate agreement, or other
agreement or arrangement designed to protect against fluctuations in interest
rates or currency, commodity or equity values (including, without limitation,
any option with respect to any of the foregoing and any combination of the
foregoing agreements or arrangements), and any confirmation executed in
connection with any such agreement or arrangement.
"Highest Lawful Rate" means, with respect to the Agent or any Lender,
the maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the
Obligations under laws applicable to the Agent or such Lender which are
currently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum non-usurious
interest rate than applicable laws now allow.
"Indebtedness" means, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money; (ii) all
obligations of such Person for the deferred purchase price of property or
services (other than trade payables or other accounts payable incurred in the
ordinary course of such Person's business and not outstanding for more than 90
days after the date such payable was created); (iii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments or
upon which interest payments are customarily made; (iv) all reimbursement,
payment or other obligations and liabilities of such Person created or arising
under any conditional sales or other title retention agreement with respect to
property used and/or acquired by such Person, even though the rights and
remedies of the lessor, seller and/or lender thereunder may be limited to
repossession or sale of such property; (v) all Capitalized Lease Obligations of
such Person; (vi) all obligations and liabilities, contingent or otherwise, of
13
such Person, in respect of letters of credit, acceptances and similar
facilities; (vii) all obligations and liabilities, calculated on a basis
satisfactory to the Agent and in accordance with accepted practice, of such
Person under Hedging Agreements; (viii) all monetary obligations under any
receivables factoring, receivable sales or similar transactions and all monetary
obligations under any synthetic lease, tax ownership/operating lease,
off-balance sheet financing or similar financing; (ix) all Contingent
Obligations; (x) liabilities incurred under Title IV of ERISA with respect to
any plan (other than a Multiemployer Plan) covered by Title IV of ERISA and
maintained for employees of such Person or any of its ERISA Affiliates; (xi)
withdrawal liability incurred under ERISA by such Person or any of its ERISA
Affiliates with respect to any Multiemployer Plan; and (xii) all obligations
referred to in clauses (i) through (xi) of this definition of another Person
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) a Lien upon property owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness. The Indebtedness of any Person shall include the
Indebtedness of any partnership of or joint venture in which such Person is a
general partner or a joint venturer.
"Indemnified Matters" has the meaning specified therefor in Section
12.15.
"Indemnitees" has the meaning specified therefor in Section 12.15.
"Insolvency Proceeding" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, or extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
"Intercompany Subordination Agreement" means the Intercompany
Subordination Agreement, made by each Loan Party in favor of the Agent for the
benefit of the Agent and the Lenders, substantially in the form of Exhibit I.
"Interest Payment Date" means (i) in respect of each Loan, monthly,
in arrears, on the first day of each month, commencing on the first day of the
month following the month in which such Loan is made, and (ii) in respect of
each Loan, on the date of any prepayment (other than a prepayment expressly
excluded under Section 2.05(e)) (on the amount prepaid) and at maturity (whether
upon demand, by acceleration or otherwise).
"Interest Period" means, with respect to any LIBOR Rate Loan, the
period commencing on the borrowing date or the date of any continuation of such
LIBOR Rate Loan, as the case may be, and ending one, two, or three months
thereafter, provided that (i) any Interest Period that would otherwise end on a
day that is not a Business Day shall be extended to the next succeeding Business
Day, unless such Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (ii) no
Interest Period for any LIBOR Rate Loan shall end after the Final Maturity Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended (or any successor statute thereto) and the regulations thereunder.
14
"Inventory" means, with respect to any Person, all goods and
merchandise of such Person, including, without limitation, all raw materials,
work-in-process, packaging, supplies, materials and finished goods of every
nature used or usable in connection with the shipping, storing, advertising or
sale of such goods and merchandise, whether now owned or hereafter acquired, and
all such other property the sale or other disposition of which would give rise
to an Account Receivable or cash.
"L/C Issuer" means the Bank or such other bank as the Agent may
select in its sole and absolute discretion.
"L/C Subfacility" means that portion of the Total Revolving Credit
Commitment equal to $10,000,000.
"Lease" means any lease of real property to which any Loan Party or
any of its Subsidiaries is a party as lessor or lessee.
"Lender" has the meaning specified therefor in the preamble hereto.
"Letter of Credit" has the meaning specified therefor in Section
3.01(a).
"Letter of Credit Application" has the meaning specified therefor in
Section 3.01(a).
"Letter of Credit Collateral Account" has the meaning specified
therefor in Section 3.01(b).
"Letter of Credit Fee" has the meaning specified therefor in Section
3.03(b).
"Letter of Credit Guaranty" means one or more guaranties by the Agent
in favor of the L/C Issuer guaranteeing or relating to the Borrowers'
obligations to the L/C Issuer under a reimbursement agreement, Letter of Credit
Application or other like document in respect of any Letter of Credit.
"Letter of Credit Obligations" means, at any time and without
duplication, the sum of (i) the Reimbursement Obligations at such time, plus
(ii) the aggregate maximum amount available for drawing under the Letters of
Credit outstanding at such time, plus (iii) all amounts for which the Agent may
be liable to the L/C Issuer pursuant to any Letter of Credit Guaranty.
"Leverage Cap" has the meaning specified therefor in Section 5.02(f).
"Leverage Ratio" means, for any date of determination, the ratio of
(a) the sum of (i) all outstanding Obligations owing to the Agent and the
Lenders as of such date and (ii) all other Indebtedness of NATC and its
Subsidiaries outstanding on such date that is secured by a Lien on any assets
and is not expressly subordinate in right of payment to the prior payment of the
Loans, to (b) Consolidated EBITDAR of NATC and its Subsidiaries for the
immediately preceding twelve month period ending on such date, as provided in
the most recent compliance certificate provided to the Agent in accordance with
Section 7.01(a)(iv) or, with respect to any such date occurring prior to the
delivery of the financial statements for the fiscal quarter ending June 30,
2005, as calculated based on the financial information provided by the Parent to
the Agent on or prior to the Effective Date.
15
"Liabilities" has the meaning specified therefor in Section 2.07.
"LIBOR" means the rate per annum, determined by the Agent in
accordance with its customary procedures, and utilizing such electronic or other
quotation sources as it considers appropriate (rounded upwards, if necessary, to
the next 1/16% to be the rate at which Dollar deposits (or delivery on the first
day of the requested Interest Period) are offered to major banks in the London
interbank market 2 Business Days prior to the commencement of the requested
Interest Period, for a term and in an amount comparable to the Interest Period
and the amount of the Loan requested (whether as an initial Loan or as a
continuation of an extant Loan) by the Administrative Borrower in accordance
with this Agreement, which determination shall be conclusive in the absence of
manifest error.
"LIBOR Rate" means, for each Interest Period for each Loan, the
greater of (i) the rate per annum determined by the Agent (rounded upwards if
necessary, to the next 1/16%) by dividing (a) LIBOR for such Interest Period by
(b) 100% minus the Reserve Percentage and (ii) 2.75%. The LIBOR Rate shall be
adjusted on and as of the effective day of any change in the Reserve Percentage.
"LIBOR Rate Loan" means a Loan bearing interest calculated based upon
the LIBOR Rate.
"Lien" means any mortgage, deed of trust, pledge, lien (statutory or
otherwise), security interest, charge or other encumbrance or security or
preferential arrangement of any nature, including, without limitation, any
conditional sale or title retention arrangement, any Capitalized Lease and any
assignment, deposit arrangement or financing lease intended as, or having the
effect of, security.
"Loan" means the Term Loan A or any Revolving Loan made by the Agent
or a Lender to the Borrowers pursuant to ARTICLE II hereof.
"Loan Account" means an account maintained hereunder by the Agent on
its books of account at the Payment Office and, with respect to the Borrowers,
in which the Borrowers will be charged with all Loans made to, and all other
Obligations incurred by, the Borrowers.
"Loan Document" means this Agreement, any Guaranty, any Security
Agreement, any Pledge Agreement, any Mortgage, any Letter of Credit Application,
any UCC Filing Authorization Letter, the Contribution Agreement, the
Intercompany Subordination Agreement and any other agreement, instrument, and
other document executed and delivered pursuant hereto or thereto or otherwise
evidencing or securing any Loan, any Letter of Credit Obligation or any other
Obligation.
"Loan Party" means any Borrower and any Guarantor.
"Loan Servicing Fee" has the meaning specified therefor in Section
2.06(c).
16
"Material Adverse Effect" means a material adverse effect on any of
(i) the operations, business, assets, properties, condition (financial or
otherwise) or prospects of the Loan Parties taken as a whole, (ii) the ability
of any Loan Party to perform any of its obligations under any Loan Document to
which it is a party, (iii) the legality, validity or enforceability of this
Agreement or any other Loan Document, (iv) the rights and remedies of the Agent
or any Lender under any Loan Document, or (v) the validity, perfection or
priority of a Lien in favor of the Agent for the benefit of the Lenders on any
material portion of the Collateral.
"Material Contract" means, with respect to any Person, (i) the NAHC
Notes Indenture Documents, (ii) the NATC Notes Indenture Documents and (iii) the
Bollore Distribution Agreements.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor
thereto.
"Mortgage" means a mortgage (including, without limitation, a
leasehold mortgage), deed of trust or deed to secure debt, in form and substance
reasonably satisfactory to the Agent, made by a Loan Party in favor of the Agent
for the benefit of the Agent and the Lenders, securing the Obligations and
delivered to the Agent pursuant to Section 5.01(d), Section 7.01(b), Section
7.01(o) or otherwise.
"MSA" means that certain Master Settlement Agreement, dated as of
November 23, 1998, by and among the Settling States and the Participating
Manufacturers (each as defined therein), as amended, supplemented or otherwise
modified from time to time.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which any Loan Party or any of its ERISA
Affiliates has contributed to, or has been obligated to contribute, at any time
during the preceding six (6) years.
"NACC" has the meaning specified therefor in the preamble hereto.
"NAOC" has the meaning specified therefor in the preamble hereto.
"NATC" has the meaning specified therefor in the preamble hereto.
"NAHC Notes" means the 12.25% unsecured senior discount notes of the
Parent due on March 1, 2014 in an aggregate principal amount of up to
$97,000,000.
"NAHC Notes Indenture" means the Indenture between the Parent and
▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Trustee, dated as of
February 17, 2004, with respect to the NAHC Notes, as amended, modified or
supplemented from time to time in accordance with this Agreement.
"NAHC Notes Indenture Documents" means the NAHC Notes Indenture, the
NAHC Notes and any other instrument or document delivered by any Loan Party in
connection with the NAHC Notes Indenture.
"NATC Notes" means the 9.25% unsecured senior notes of NATC due on
March 1, 2012 in an aggregate principal amount of up to $200,000,000.
17
"NATC Notes Indenture" means the Indenture between NATC, the
guarantors party thereto and ▇▇▇▇▇ Fargo Bank, Minnesota National Association
dated as of February 17, 2004, with respect to the NATC Notes, as amended,
modified or supplemented from time to time in accordance with this Agreement.
"NATC Notes Indenture Documents" means the NATC Notes Indenture, the
NATC Notes and any other instrument or document delivered by any Loan Party in
connection with the NATC Notes Indenture.
"Net Cash Proceeds" means, with respect to any Disposition by any
Person or any of its Subsidiaries, the amount of cash received (directly or
indirectly) from time to time (whether as initial consideration or through the
payment or disposition of deferred consideration) by or on behalf of such Person
or such Subsidiary, in connection therewith after deducting therefrom only (i)
the amount of any Indebtedness secured by any Lien permitted by Section 7.02(a)
on any asset (other than Indebtedness assumed by the purchaser of such asset)
which is required to be, and is, repaid in connection with such Disposition
(other than Indebtedness under this Agreement), (ii) reasonable cash expenses
related thereto incurred by such Person or such Subsidiary in connection
therewith, (iii) transfer taxes paid to any taxing authorities by such Person or
such Subsidiary in connection therewith, and (iv) net income taxes to be paid in
connection with such Disposition (after taking into account any tax credits or
deductions and any tax sharing arrangements); in each case to the extent, but
only to the extent, that the amounts so deducted are (x) actually paid to a
Person that, except in the case of reasonable out-of-pocket expenses, is not a
Subsidiary of such Person and (y) properly attributable to such transaction or
to the asset that is the subject thereof.
"New Lending Office" has the meaning specified therefor in Section
2.08(d).
"Non-U.S. Lender" has the meaning specified therefor in Section
2.08(d).
"Notice of Borrowing" has the meaning specified therefor in Section
2.02(a).
"NTC" has the meaning specified therefor in the preamble hereto.
"NTFC" has the meaning specified therefor in the preamble hereto.
"Obligations" means all present and future indebtedness, obligations
(including Letter of Credit Obligations), and liabilities of each Loan Party to
the Agent and the Lenders arising under this Agreement or any other Loan
Document, whether or not the right of payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured, unsecured, and whether or not
such claim is discharged, stayed or otherwise affected by any proceeding
referred to in Section 9.01. Without limiting the generality of the foregoing,
the Obligations of each Loan Party under the Loan Documents include (a) the
obligation to pay principal, interest, charges, expenses, fees, attorneys' fees
and disbursements, indemnities and other amounts payable by such Person under
the Loan Documents, and (b) the obligation of such Person to reimburse any
amount in respect of any of the foregoing that the Agent or any Lender (in its
sole discretion) may elect to pay or advance on behalf of such Person.
18
"Operating Lease Obligations" means all obligations for the payment
of rent for any real or personal property under leases or agreements to lease,
other than Capitalized Lease Obligations.
"Other Taxes" has the meaning specified therefor in Section 2.08(b).
"Parent" has the meaning specified therefor in the preamble hereto.
"Participant Register" has the meaning specified therefor in Section
12.07(g).
"Payment Office" means the Agent's office located at 1251 Avenue of
the Americas, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other office or
offices of the Agent as may be designated in writing from time to time by the
Agent to the Administrative Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permitted Acquisition" means any Acquisition by a Loan Party or any
wholly-owned Subsidiary of a Loan Party to the extent that each of the following
conditions shall have been satisfied:
(a) any one or more Acquisitions for an aggregate purchase price not
to exceed $5,000,000;
(b) any Acquisition by any Loan Party of any Loan Party or any of its
businesses, property or assets;
(c) to the extent the Acquisition will be financed in whole or in
part with the proceeds of any Loan, the conditions set forth in Article V shall
have been satisfied;
(d) the Borrowers shall have furnished to the Agent at least 10
Business Days prior to the consummation of such Acquisition (1) an executed term
sheet and/or commitment letter (setting forth in reasonable detail the terms and
conditions of such Acquisition) and, at the request of the Agent, such other
information and documents that the Agent may reasonably request, including
executed counterparts of the respective agreements, instruments or other
documents pursuant to which such Acquisition is to be consummated (including any
related management, non-compete, employment, option or other material
agreements), any schedules to such agreements, instruments or other documents
and all other material ancillary agreements, instruments or other documents to
be executed or delivered in connection therewith, (2) pro forma financial
statements of NATC and its Subsidiaries after the consummation of such
Acquisition, (3) a certificate of the chief financial officer of the Parent,
demonstrating on a pro forma basis compliance with the Leverage Ratio covenant
set forth in Section 7.03 hereof after the consummation of such Acquisition, and
(4) copies of such other material agreements, instruments or other documents
(including, without limitation, the Loan Documents required by Section 7.01(b))
as the Agent shall reasonably request;
19
(e) the agreements, instruments and other documents referred to in
paragraph (b) above shall provide that (1) neither the Loan Parties nor any of
their Subsidiaries shall, in connection with such Acquisition, assume or remain
liable in respect of any Indebtedness of the Seller or Sellers, or other
obligation of the Seller or Sellers (except for obligations incurred in the
ordinary course of business in operating the property so acquired and necessary
and desirable to the continued operation of such property and except for
Indebtedness that the Agent otherwise expressly consents to in writing after its
review of the terms of the proposed Acquisition), and (2) all property to be so
acquired in connection with such Acquisition shall be free and clear of any and
all Liens, except for Permitted Liens (and if any such property is subject to
any Lien not permitted by this clause (2) then concurrently with such
Acquisition such Lien shall be released);
(d) the Subsidiary to be acquired or formed as a result of such
Acquisition shall be engaged in the same or complementary business as the Loan
Parties and such Subsidiary will be a direct wholly-owned Subsidiary of a Loan
Party;
(e) such Acquisition shall be effected in such a manner so that the
acquired Capital Stock or assets are owned either by a Loan Party or a
wholly-owned Subsidiary of a Loan Party and, if effected by merger or
consolidation involving a Loan Party, such Loan Party shall be the continuing or
surviving Person; and
(f) any such Subsidiary (and its equityholders) shall execute and
deliver the agreements, instruments and other documents required by Section
7.01(b).
"Permitted Holder" means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., ▇▇▇▇▇ Management Corp.
or any of their respective successors and Affiliates.
"Permitted Indebtedness" means:
(a) any Indebtedness owing to the Agent and any Lender under this
Agreement and the other Loan Documents;
(b) any other Indebtedness listed on Schedule 7.02(b), and the
extension of maturity, refinancing or modification of the terms thereof;
provided, however, that (i) such extension, refinancing or modification is
pursuant to terms that are not less favorable to the Loan Parties and the
Lenders than the terms of the Indebtedness being extended, refinanced or
modified and (ii) after giving effect to such extension, refinancing or
modification, the principal amount of such Indebtedness is not greater than the
principal amount of Indebtedness outstanding immediately prior to such
extension, refinancing or modification;
(c) Indebtedness evidenced by Capitalized Lease Obligations entered
into in order to finance Capital Expenditures made by the Loan Parties in
accordance with the provisions of Section 7.02(g), which Indebtedness, when
aggregated with the principal amount of all Indebtedness incurred under this
clause (c) and clause (d) of this definition, does not exceed $4,000,000 at any
time outstanding;
(d) Indebtedness permitted by clause (e) of the definition of
"Permitted Lien";
(e) Indebtedness permitted under Section 7.02(e);
20
(f) Indebtedness in respect of any performance or surety bond entered
into in the ordinary course of business;
(g) Indebtedness incurred under the Master Settlement Agreement;
(h) obligations pursuant to Hedging Agreements in respect of the
Obligations or otherwise entered into to hedge against interest rate, currency
exchange rate or commodity price risk, in each case, arising in the ordinary
course of business of the Loan Parties and their Subsidiaries and not for
speculative purposes;
(i) Indebtedness in respect of the NAHC Notes and the NATC Notes; and
(j) additional unsecured Indebtedness in an aggregate principal
amount not to exceed $2,500,000 outstanding at any time.
"Permitted Investments" means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by any agency thereof and backed by the full faith and credit of the United
States; (ii) commercial paper, maturing not more than 270 days after the date of
issue rated P-1 by Moody's or A-1 by Standard & Poor's; (iii) certificates of
deposit maturing not more than 270 days after the date of issue, issued by
commercial banking institutions and money market or demand deposit accounts
maintained at commercial banking institutions, each of which is a member of the
Federal Reserve System and has a combined capital and surplus and undivided
profits of not less than $500,000,000; (iv) repurchase agreements having
maturities of not more than 90 days from the date of acquisition which are
entered into with major money center banks included in the commercial banking
institutions described in clause (iii) above and which are secured by readily
marketable direct obligations of the United States Government or any agency
thereof, (v) money market accounts maintained with mutual funds having assets in
excess of $2,500,000,000; (vi) tax exempt securities rated A or higher by
Moody's or A+ or higher by Standard & Poor's; (vii) funding any Loan Party's MSA
obligations, including funds in the MSA escrow account; (viii) investments in
Cash and Cash Equivalents; (ix) investments in payment intangibles, chattel
paper, notes receivable and similar items in the ordinary course of business;
(x) Capital Stock and other securities received in settlement of Accounts
Receivable owing from Account Debtors; (xi) loans or advances to any employee of
any Loan Party in the ordinary course of business in an aggregate principal
amount not to exceed $500,000 outstanding at any time, other than any loans or
advances that would be in violation of Section 404 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act;
and (xii) other investments not otherwise permitted hereunder, provided that the
aggregate principal of the Dollar equivalent thereof shall not exceed $1,000,000
outstanding at any time.
"Permitted Liens" means:
(a) Liens securing the Obligations;
(b) Liens for taxes, assessments and governmental charges the payment
of which is not required under Section 7.01(c);
(c) Liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's, landlord's and other similar Liens arising in the
ordinary course of business and securing obligations (other than Indebtedness
for borrowed money) that are not overdue by more than 30 days or are being
contested in good faith and by appropriate proceedings promptly initiated and
diligently conducted, and a reserve or other appropriate provision, if any, as
shall be required by GAAP shall have been made therefor;
21
(d) Liens described on Schedule 7.02(a), but not the extension of
coverage thereof to other property and Liens securing the renewal, extension or
refinancing of any Indebtedness secured thereby to the extent the renewal,
extension or refinancing of such Indebtedness is permitted hereunder;
(e) (i) purchase money Liens (including the interest of a lessor
under a Capital Lease) on equipment acquired or held by any Loan Party or any of
its Subsidiaries in the ordinary course of its business to secure the purchase
price of such equipment or Indebtedness incurred solely for the purpose of
financing the acquisition of such equipment or (ii) Liens existing on such
equipment at the time of its acquisition; provided, however, that (A) no such
Lien shall extend to or cover any other property of any Loan Party or any of its
Subsidiaries, (B) the principal amount of the Indebtedness secured by any such
Lien shall not exceed the cost of the property so held or acquired and (C) the
aggregate principal amount of Indebtedness secured by any or all such Liens
shall not exceed at any one time outstanding $4,000,000;
(f) deposits and pledges of cash securing (i) obligations incurred in
respect of workers' compensation, unemployment insurance or other forms of
governmental insurance or benefits, (ii) the performance of bids, tenders,
leases, contracts (other than for the payment of money) and statutory
obligations or (iii) obligations on surety or appeal bonds, but only to the
extent such deposits or pledges are made or otherwise arise in the ordinary
course of business and secure obligations not past due;
(g) easements, zoning restrictions and similar encumbrances on real
property and minor irregularities in the title thereto that do not materially
impair the value of such property or its use by any Loan Party or any of its
Subsidiaries in the normal conduct of such Person's business;
(h) Liens securing Indebtedness permitted by subsection (c) of the
definition of Permitted Indebtedness; and
(i) Liens in favor of lessors securing leases or agreements to lease,
other than Capitalized Leases.
"Person" means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.
"Plan" means any Employee Plan or Multiemployer Plan.
"Pledge Agreement" means a Pledge and Security Agreement made by a
Loan Party in favor of the Agent for the benefit of the Agent and the Lenders,
substantially in the form of Exhibit C, securing the Obligations and delivered
to the Agent.
22
"Post-Default Rate" means a rate of interest per annum equal to the
rate of interest otherwise in effect from time to time pursuant to the terms of
this Agreement plus 2.0%, or, if a rate of interest is not otherwise in effect,
interest at the highest rate specified herein for any Loan then outstanding
prior to an Event of Default plus 2.0%.
"Pro Rata Share" means:
(a) with respect to a Lender's obligation to make Revolving Loans and
receive payments of interest, fees, and principal with respect thereto, the
percentage obtained by dividing (i) such Lender's Revolving Credit Commitment,
by (ii) the Total Revolving Credit Commitment, provided that, if the Total
Revolving Credit Commitment has been reduced to zero, the numerator shall be the
aggregate unpaid principal amount of such Lender's Revolving Loans (including
Agent Advances) and its interest in the Letter of Credit Obligations and the
denominator shall be the aggregate unpaid principal amount of all Revolving
Loans (including Agent Advances) and Letter of Credit Obligations,
(b) with respect to a Lender's obligation to make the Term Loan A and
receive payments of interest, fees, and principal with respect thereto, the
percentage obtained by dividing (i) such Lender's Term Loan A Commitment, by
(ii) the Total Term Loan A Commitment, provided that, if the Total Term Loan A
Commitment has been reduced to zero, the numerator shall be the aggregate unpaid
principal amount of such Lender's portion of the Term Loan A and the denominator
shall be the aggregate unpaid principal amount of the Term Loan A, and
(c) with respect to all other matters (including, without limitation,
the indemnification obligations arising under Section 10.05), the percentage
obtained by dividing (i) the sum of such Lender's Revolving Credit Commitment
and the unpaid principal amount of such Lender's portion of the Term Loan A, by
(ii) the sum of the Total Revolving Credit Commitment and the aggregate unpaid
principal amount of the Term Loan A, provided, that, if such Lender's Revolving
Credit Commitment shall have been reduced to zero, such Lender's Revolving
Credit Commitment shall be deemed to be the aggregate unpaid principal amount of
such Lender's Revolving Loans (including Agent Advances) and its interest in the
Letter of Credit Obligations and if the Total Revolving Credit Commitment shall
have been reduced to zero, the Total Revolving Credit Commitment shall be deemed
to be the aggregate unpaid principal amount of all Revolving Loans (including
Agent Advances) and Letter of Credit Obligations.
"Rating Agencies" has the meaning specified therefor in Section 2.07.
"RB" has the meaning specified therefor in the preamble hereto.
"Reference Bank" means JPMorgan Chase Bank, its successors or any
other commercial bank designated by the Agent to the Administrative Borrower and
agreed to by the Administrative Borrower from time to time.
"Reference Rate" means the greater of (i) the rate of interest
publicly announced by the Reference Bank in New York, New York from time to time
as its reference rate, base rate or prime rate and (ii) 5.50%. The reference
rate, base rate or prime rate is determined from time to time by the Reference
Bank as a means of pricing some loans to its borrowers and neither is tied to
23
any external rate of interest or index nor necessarily reflects the lowest rate
of interest actually charged by the Reference Bank to any particular class or
category of customers. Each change in the Reference Rate shall be effective from
and including the date such change is publicly announced as being effective.
"Reference Rate Loan" means a Loan bearing interest calculated based
upon the Reference Rate.
"Register" has the meaning specified therefor in Section 12.07(d).
"Registered Loans" has the meaning specified therefor in Section
12.07(d).
"Regulation T", "Regulation U" and "Regulation X" mean, respectively,
Regulations T, U and X of the Board or any successor, as the same may be amended
or supplemented from time to time.
"Reimbursement Obligations" means the obligation of each Borrower to
reimburse the Agent or any Lender for amounts payable by the Agent or any Lender
under a Letter of Credit Guaranty in respect of any drawing made under any
Letter of Credit, together with interest thereon as provided in Section 2.04.
"Related Fund" means, with respect to any Person, an Affiliate of
such Person, or a fund or account managed by such Person or an Affiliate of such
Person.
"Related Party Register" has the meaning specified therefor in
Section 12.07(d).
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, seeping, migrating,
dumping or disposing of any Hazardous Material (including the abandonment or
discarding of barrels, containers and other closed receptacles containing any
Hazardous Material) into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Materials through or in the ambient air,
soil, surface or ground water, or property.
"Remedial Action" means all actions taken to (i) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate or in any other way address
Hazardous Materials in the indoor or outdoor environment; (ii) prevent or
minimize a Release or threatened Release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; (iii) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities; or (iv)
perform any other actions authorized by 42 U.S.C. ss. 9601.
"Replacement Lender" has the meaning specified therefor in Section
4.05(c)(i).
"Reportable Event" means an event described in Section 4043 of ERISA
(other than an event not subject to the provision for 30-day notice to the PBGC
under the regulations promulgated under such Section).
24
"Required Lenders" means Lenders whose Pro Rata Shares aggregate at
least 50.1%.
"Reserve Percentage" means, on any day, for any Lender, the maximum
percentage prescribed by the Board (or any successor Governmental Authority) for
determining the reserve requirements (including any basic, supplemental,
marginal, or emergency reserves) that are in effect on such date with respect to
eurocurrency funding (currently referred to as "eurocurrency liabilities") of
that Lender, but so long as such Lender is not required or directed under
applicable regulations to maintain such reserves, the Reserve Percentage shall
be zero.
"Revolving Credit Commitment" means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans to the Borrowers in the amount
set forth opposite such Lender's name in Schedule 1.01(A) hereto, as such amount
may be terminated or reduced from time to time in accordance with the terms of
this Agreement.
"Revolving Loan" has the meaning specified therefor in Section
2.01(a)(i).
"Revolving Loan Lender" means a Lender with a Revolving Credit
Commitment.
"Revolving Loan Obligations" means any Obligations with respect to
the Revolving Loans (including without limitation, the principal thereof, the
interest thereon, and the fees and expenses specifically related thereto).
"SEC" means the Securities and Exchange Commission or any other
similar or successor agency of the Federal government administering the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect from time to time.
"Securitization" has the meaning specified therefor in Section 2.07.
"Securitization Parties" has the meaning specified therefor in
Section 2.07.
"Security Agreement" means a Security Agreement made by a Loan Party
in favor of the Agent for the benefit of the Agent and the Lenders,
substantially in the form of Exhibit B, securing the Obligations and delivered
to the Agent.
"Seller" means any Person that sells Capital Stock or other property
or assets to a Loan Party or a Subsidiary of a Loan Party in a Permitted
Acquisition.
"Settlement Period" has the meaning specified therefor in Section
2.02(d)(i) hereof.
"Solvent" means, with respect to any Person on a particular date,
that on such date (i) the fair value of the property of such Person is not less
than the total amount of the liabilities of such Person, (ii) 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 existing debts
25
as they become absolute and matured, (iii) such Person is able to realize upon
its assets and pay its debts and other liabilities, contingent obligations and
other commitments as they mature in the normal course of business, (iv) 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 (v) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and any successor thereto.
"▇▇▇▇▇▇" has the meaning specified therefor in the preamble hereto.
"Subsidiary" means, with respect to any Person at any date, any
corporation, limited or general partnership, limited liability company, trust,
estate, association, joint venture or other business entity (i) the accounts of
which would be consolidated with those of such Person in such Person's
consolidated financial statements if such financial statements were prepared in
accordance with GAAP or (ii) of which more than 50% of (A) the outstanding
Capital Stock having (in the absence of contingencies) ordinary voting power to
elect a majority of the board of directors or other managing body of such
Person, (B) in the case of a partnership or limited liability company, the
interest in the capital or profits of such partnership or limited liability
company or (C) in the case of a trust, estate, association, joint venture or
other entity, the beneficial interest in such trust, estate, association or
other entity business is, at the time of determination, owned or controlled
directly or indirectly through one or more intermediaries, by such Person.
"Taxes" has the meaning specified therefor in Section 2.08(a).
"Term Loan A" has the meaning specified therefor in Section
2.01(a)(ii).
"Term Loan A Commitment" means, with respect to each Term Loan A
Lender, the commitment of such Lender to make a Term Loan A to the Borrowers in
the amount set forth in Schedule 1.01(A) hereto, as such amount may be
terminated or reduced from time to time in accordance with the terms of this
Agreement.
"Term Loan A Lender" means a Lender with a Term Loan A Commitment (or
a Lender that holds all or any portion of the unpaid principal amount of the
Term Loan A).
"Term Loan Obligations" means any Obligations with respect to the
Term Loan A (including without limitation, the principal thereof, the interest
thereon, and the fees and expenses specifically related thereto).
"Termination Event" means (i) a Reportable Event with respect to any
Employee Plan, (ii) any event that causes any Loan Party or any of its ERISA
Affiliates to incur liability under Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the
Internal Revenue Code, (iii) the filing of a notice of intent to terminate an
Employee Plan or the treatment of an Employee Plan amendment as a termination
under Section 4041 of ERISA, (iv) the institution of proceedings by the PBGC to
terminate an Employee Plan, or (v) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Employee Plan.
26
"Title Insurance Policy" means a mortgagee's loan policy or marked-up
unconditional binder for such insurance policy, in form and substance reasonably
satisfactory to the Agent, together with all endorsements made from time to time
thereto to the extent available in the applicable jurisdiction, issued by or on
behalf of a title insurance company reasonably satisfactory to the Agent,
insuring the Lien created by a Mortgage in an amount and on terms satisfactory
to the Agent, delivered to the Agent.
"Total Commitment" means the sum of the Total Revolving Credit
Commitment and the Total Term Loan A Commitment.
"Total Revolving Credit Commitment" means the sum of the amounts of
the Lenders' Revolving Credit Commitments.
"Total Term Loan A Commitment" means the sum of the amounts of the
Lenders' Term Loan A Commitments.
"Transferee" has the meaning specified therefor in Section 2.08(a).
"UCC Filing Authorization Letter" means a letter duly executed by
each Loan Party authorizing the Agent to file appropriate financing statements
on Form UCC-1 without the signature of such Loan Party in such office or offices
as may be necessary or, in the opinion of the Agent, desirable to perfect the
security interests purported to be created by each Security Agreement, each
Pledge Agreement and each Mortgage.
"Uniform Commercial Code" has the meaning specified therefor in
Section 1.03.
"Unused Line Fee" has the meaning specified therefor in Section
2.06(b).
"WARN" has the meaning specified therefor in Section 6.01(z).
Section 1.02 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
27
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any right or interest in or to assets and properties of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
References in this Agreement to "determination" by the Agent include good faith
estimates by the Agent (in the case of quantitative determinations) and good
faith beliefs by the Agent (in the case of qualitative determinations).
Section 1.03 Accounting and Other Terms. Unless otherwise expressly
provided herein, each accounting term used herein shall have the meaning given
it under GAAP applied on a basis consistent with those used in preparing the
Financial Statements. All terms used in this Agreement which are defined in
Article 8 or Article 9 of the Uniform Commercial Code as in effect from time to
time in the State of New York (the "Uniform Commercial Code") and which are not
otherwise defined herein shall have the same meanings herein as set forth
therein, provided that terms used herein which are defined in the Uniform
Commercial Code as in effect in the State of New York on the date hereof shall
continue to have the same meaning notwithstanding any replacement or amendment
of such statute except as the Agent may otherwise determine.
Section 1.04 Time References. Unless otherwise indicated herein, all
references to time of day refer to Eastern Standard Time or Eastern daylight
saving time, as in effect in New York City on such day. For purposes of the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding"; provided, however, that with respect to a computation
of fees or interest payable to the Agent, any Lender or the L/C Issuer, such
period shall in any event consist of at least one full day.
ARTICLE II
THE LOANS
Section 2.01 Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth:
(i) each Revolving Loan Lender severally agrees to make
revolving loans (each a "Revolving Loan") to the Borrowers at any time and from
time to time from the Effective Date to the Final Maturity Date, or until the
earlier reduction of its Revolving Credit Commitment to zero in accordance with
the terms hereof, in an aggregate principal amount of Revolving Loans at any
time outstanding not to exceed the amount of such Lender's Revolving Credit
Commitment; and
(ii) each Term Loan A Lender severally agrees to make a term
loan (each a "Term Loan A") to the Borrowers on the Effective Date, in an
aggregate principal amount not to exceed the amount of such Lender's Term Loan A
Commitment.
(b) Notwithstanding the foregoing:
(i) The aggregate principal amount of Revolving Loans
outstanding on any date to the Borrowers shall not exceed the difference between
(A) the Total Revolving Credit Commitment and (B) the aggregate Letter of Credit
Obligations. The Revolving Credit Commitment of each Lender shall automatically
28
and permanently be reduced to zero on the Final Maturity Date. Within the
foregoing limits, unless terminated earlier in accordance with the terms of this
Agreement, the Borrowers may borrow, repay and reborrow Revolving Loans, on or
after the Effective Date and prior to the Final Maturity Date, subject to the
terms, provisions and limitations set forth herein.
(ii) The aggregate principal amount of the Term Loan A made on
the Effective Date shall not exceed the Total Term Loan A Commitment. Any
principal amount of the Term Loan A which is repaid or prepaid may not be
reborrowed.
(iii) The aggregate principal amount of all Loans and Letter of
Credit Obligations outstanding at any time to the Borrowers shall not exceed the
Total Commitment.
Section 2.02 Making the Loans. The Administrative Borrower shall give
the Agent prior telephonic notice (immediately confirmed in writing, in
substantially the form of Exhibit D hereto (a "Notice of Borrowing")), (x) in
the case of a borrowing consisting of a Reference Rate Loan, not later than
12:00 noon (New York City time) on the date which is one (1) Business Day prior
to the date of the proposed Loan (or such shorter period as the Agent is willing
to accommodate from time to time), and (y) in the case of a borrowing consisting
of a LIBOR Rate Loan, not later than 12:00 noon (New York City time) on the date
which is three (3) Business Days prior to the date of the proposed Loan (or such
shorter period as the Agent is willing to accommodate from time to time). Such
Notice of Borrowing shall be irrevocable and shall specify (i) the principal
amount of the proposed Loan, (ii) whether such Loan is requested to be a
Revolving Loan or the Term Loan A, (iii) whether such Loan is requested to be a
Reference Rate Loan or a LIBOR Rate Loan and, in the case of a LIBOR Rate Loan,
the initial Interest Period with respect thereto, (iv) the use of the proceeds
of such proposed Loan, and (v) the proposed borrowing date, which must be a
Business Day, and, with respect to the Term Loan A, must be the Effective Date.
The Agent and the Lenders may act without liability upon the basis of written,
telecopied or telephonic notice believed by the Agent in good faith to be from
the Administrative Borrower (or from any Authorized Officer thereof designated
in writing purportedly from the Administrative Borrower to the Agent). Each
Borrower hereby waives the right to dispute the Agent's record of the terms of
any such telephonic Notice of Borrowing. The Agent and each Lender shall be
entitled to rely conclusively on any Authorized Officer's authority to request a
Loan on behalf of the Borrowers until the Agent receives written notice to the
contrary. The Agent and the Lenders shall have no duty to verify the
authenticity of the signature appearing on any written Notice of Borrowing.
(b) Each Notice of Borrowing pursuant to this Section 2.02 shall be
irrevocable and the Borrowers shall be bound to make a borrowing in accordance
therewith. Each Revolving Loan shall be made in a minimum amount of $500,000 and
shall be in an integral multiple of $100,000. No more than five (5) Interest
Periods in the aggregate for the Borrowers may exist at any one time.
(c) (i) Except as otherwise provided in this subsection 2.02(c), all
Loans under this Agreement shall be made by the Lenders simultaneously and
proportionately to their Pro Rata Shares of the Total Revolving Credit
Commitment and the Total Term Loan A Commitment, as the case may be, it being
29
understood that no Lender shall be responsible for any default by any other
Lender in that other Lender's obligations to make a Loan requested hereunder,
nor shall the Commitment of any Lender be increased or decreased as a result of
the default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder, and each Lender shall be obligated to make the Loans
required to be made by it by the terms of this Agreement regardless of the
failure by any other Lender.
(ii) Notwithstanding any other provision of this Agreement, and
in order to reduce the number of fund transfers among the Borrowers, the Agent
and the Lenders, the Borrowers, the Agent and the Lenders agree that the Agent
may (but shall not be obligated to), and the Borrowers and the Lenders hereby
irrevocably authorize the Agent to, fund, on behalf of the Revolving Loan
Lenders, Revolving Loans pursuant to Section 2.01, subject to the procedures for
settlement set forth in subsection 2.02(d); provided, however, that (a) the
Agent shall in no event fund any such Revolving Loans if the Agent shall have
received written notice from the Required Lenders on the Business Day prior to
the date of the proposed Revolving Loan that one or more of the conditions
precedent contained in Section 5.02 will not be satisfied at the time of the
proposed Revolving Loan, and (b) the Agent shall not otherwise be required to
determine that, or take notice whether, the conditions precedent in Section 5.02
have been satisfied. If the Administrative Borrower gives a Notice of Borrowing
requesting a Revolving Loan and the Agent elects not to fund such Revolving Loan
on behalf of the Revolving Loan Lenders, then promptly after receipt of the
Notice of Borrowing requesting such Revolving Loan, the Agent shall notify each
Revolving Loan Lender of the specifics of the requested Revolving Loan and that
it will not fund the requested Revolving Loan on behalf of the Revolving Loan
Lenders. If the Agent notifies the Revolving Loan Lenders that it will not fund
a requested Revolving Loan on behalf of the Revolving Loan Lenders, each
Revolving Loan Lender shall make its Pro Rata Share of the Revolving Loan
available to the Agent, in immediately available funds, in the Agent's Account
no later than 3:00 p.m. (New York City time) (provided that the Agent requests
payment from such Revolving Loan Lender not later than 1:00 p.m. (New York City
time)) on the date of the proposed Revolving Loan. The Agent will make the
proceeds of such Revolving Loans available to the Borrowers on the day of the
proposed Revolving Loan by causing an amount, in immediately available funds,
equal to the proceeds of all such Revolving Loans received by the Agent in the
Agent's Account or the amount funded by the Agent on behalf of the Revolving
Loan Lenders to be deposited in an account designated by the Administrative
Borrower.
(iii) If the Agent has notified the Revolving Loan Lenders that
the Agent, on behalf of the Revolving Loan Lenders, will not fund a particular
Revolving Loan pursuant to subsection 2.02(c)(ii), the Agent may assume that
each such Revolving Loan Lender has made such amount available to the Agent on
such day and the Agent, in its sole discretion, may, but shall not be obligated
to, cause a corresponding amount to be made available to the Borrowers on such
day. If the Agent makes such corresponding amount available to the Borrowers and
such corresponding amount is not in fact made available to the Agent by any such
Revolving Loan Lender, the Agent shall be entitled to recover such corresponding
amount on demand from such Revolving Loan Lender together with interest thereon,
for each day from the date such payment was due until the date such amount is
paid to the Agent, at the Federal Funds Rate for three Business Days and
thereafter at the Reference Rate. During the period in which such Revolving Loan
Lender has not paid such corresponding amount to the Agent, notwithstanding
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anything to the contrary contained in this Agreement or any other Loan Document,
the amount so advanced by the Agent to the Borrowers shall, for all purposes
hereof, be a Revolving Loan made by the Agent for its own account. Upon any such
failure by a Revolving Loan Lender to pay the Agent, the Agent shall promptly
thereafter notify the Administrative Borrower of such failure and the Borrowers
shall immediately pay such corresponding amount to the Agent for its own
account.
(iv) Nothing in this subsection 2.02(c) shall be deemed to
relieve any Revolving Loan Lender from its obligations to fulfill its Revolving
Credit Commitment hereunder or to prejudice any rights that the Agent or the
Borrowers may have against any Revolving Loan Lender as a result of any default
by such Revolving Loan Lender hereunder.
(d) With respect to each Revolving Loan that is a LIBOR Rate Loan, on
the first and the last date of each Interest Period, and with respect to all
periods for which the Agent, on behalf of the Lenders, has funded Revolving
Loans that are Reference Rate Loans pursuant to subsection 2.02(c), on Friday of
each week, or if the applicable Friday is not a Business Day, then on the
following Business Day, or such shorter period as the Agent may from time to
time select (any such week or shorter period being herein called a "Settlement
Period"), the Agent shall notify each Revolving Loan Lender of the unpaid
principal amount of the Revolving Loans outstanding as of the last day of each
such Settlement Period. In the event that such amount is greater than the unpaid
principal amount of the Revolving Loans outstanding on the last day of the
Settlement Period immediately preceding such Settlement Period (or, if there has
been no preceding Settlement Period, the amount of the Revolving Loans made on
the date of such Revolving Loan Lender's initial funding), each Revolving Loan
Lender shall promptly (and in any event not later than 2:00 p.m. (New York City
time) if the Agent requests payment from such Lender not later than 12:00 noon
(New York City time) on such day) make available to the Agent its Pro Rata Share
of the difference in immediately available funds. In the event that such amount
is less than such unpaid principal amount, the Agent shall promptly pay over to
each Revolving Loan Lender its Pro Rata Share of the difference in immediately
available funds. In addition, if the Agent shall so request at any time when a
Default or an Event of Default shall have occurred and be continuing, or any
other event shall have occurred as a result of which the Agent shall determine
that it is desirable to present claims against the Borrowers for repayment, each
Revolving Loan Lender shall promptly remit to the Agent or, as the case may be,
the Agent shall promptly remit to each Revolving Loan Lender, sufficient funds
to adjust the interests of the Revolving Loan Lenders in the then outstanding
Revolving Loans to such an extent that, after giving effect to such adjustment,
each such Revolving Loan Lender's interest in the then outstanding Revolving
Loans will be equal to its Pro Rata Share thereof. The obligations of the Agent
and each Revolving Loan Lender under this subsection 2.02(d) shall be absolute
and unconditional. Each Revolving Loan Lender shall only be entitled to receive
interest on its Pro Rata Share of the Revolving Loans which have been funded by
such Revolving Loan Lender.
(ii) In the event that any Revolving Loan Lender fails to make
any payment required to be made by it pursuant to subsection 2.02(d)(i), the
Agent shall be entitled to recover such corresponding amount on demand from such
Revolving Loan Lender together with interest thereon, for each day from the date
such payment was due until the date such amount is paid to the Agent, at the
Federal Funds Rate for three Business Days and thereafter at the Reference Rate.
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During the period in which such Revolving Loan Lender has not paid such
corresponding amount to the Agent, notwithstanding anything to the contrary
contained in this Agreement or any other Loan Document, the amount so advanced
by the Agent to the Borrowers shall, for all purposes hereof, be a Revolving
Loan made by the Agent for its own account. Upon any such failure by a Revolving
Loan Lender to pay the Agent, the Agent shall promptly thereafter notify the
Administrative Borrower of such failure and the Borrowers shall immediately pay
such corresponding amount to the Agent for its own account. Nothing in this
subsection 2.02(d)(ii) shall be deemed to relieve any Revolving Loan Lender from
its obligation to fulfill its Revolving Credit Commitment hereunder or to
prejudice any rights that the Agent or the Borrowers may have against any
Revolving Loan Lender as a result of any default by such Revolving Loan Lender
hereunder.
Section 2.03 Repayment of Loans; Evidence of Debt. (a) The
outstanding principal of all Loans shall be due and payable on the Final
Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the Indebtedness of the Borrowers to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Agent shall maintain accounts in which it shall record (i)
the amount of each Loan made hereunder, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers to each
Lender hereunder and (iii) the amount of any sum received by the Agent hereunder
for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrowers to repay the Loans in
accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrowers shall execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns) in a form furnished
by the Agent and reasonably acceptable to the Administrative Borrower.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 12.07) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
Section 2.04 Interest. (a) Loans. Subject to the terms of this
Agreement, at the option of the Administrative Borrower, each Loan shall be
either a Reference Rate Loan or a LIBOR Rate Loan. Each Loan that is a (i)
Reference Rate Loan shall bear interest on the principal amount thereof from
time to time outstanding, from the date of such Loan until such principal amount
becomes due, at a rate per annum equal to the Reference Rate plus the Applicable
Reference Rate Margin and (ii) LIBOR Rate Loan shall bear interest on the
principal amount thereof from time to time outstanding, from the date of such
Loan until such principal amount becomes due, at a rate per annum equal to the
LIBOR Rate for the Interest Period in effect for such Loan plus the Applicable
LIBOR Rate Margin.
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(b) Default Interest. To the extent permitted by law, upon the
occurrence and during the continuance of an Event of Default, the principal of,
and all accrued and unpaid interest on, all Loans, fees, indemnities,
outstanding Reimbursement Obligations or any other Obligations of the Loan
Parties under this Agreement and the other Loan Documents, shall bear interest,
from the date such Event of Default occurred until the date such Event of
Default is cured or waived in writing in accordance herewith, at a rate per
annum equal at all times to the Post-Default Rate.
(c) Interest Payment. Interest on each Loan shall be payable on the
applicable Interest Payment Date. Interest at the Post-Default Rate shall be
payable on demand. Each Borrower hereby authorizes the Agent to, and the Agent
may, from time to time, charge the Loan Account pursuant to Section 4.02 with
the amount of any interest payment due hereunder.
(d) General. All interest shall be computed on the basis of a year of
360 days for the actual number of days.
Section 2.05 Reduction of Commitment; Prepayment of Loans.
(a) Reduction of Commitments.
(i) Revolving Credit Commitments. The Total Revolving Credit
Commitment shall terminate on the Final Maturity Date. The Borrowers may reduce
the Total Revolving Credit Commitment to an amount (which may be zero) not less
than the sum of (A) the aggregate unpaid principal amount of all Revolving Loans
then outstanding, (B) the aggregate principal amount of all Revolving Loans not
yet made as to which a Notice of Borrowing has been given by the Administrative
Borrower under Section 2.02, (C) the Letter of Credit Obligations at such time
and (D) the stated amount of all Letters of Credit not yet issued as to which a
request has been made and not withdrawn. Each such reduction shall be in an
amount which is an integral multiple of $500,000 (unless the Total Revolving
Credit Commitment in effect immediately prior to such reduction is less than
$500,000), shall be made by providing not less than five (5) Business Days'
prior written notice to the Agent and shall be irrevocable and shall be
accompanied by the payment of the Applicable Prepayment Premium, if any. Once
reduced, the Total Revolving Credit Commitment may not be increased. Each such
reduction of the Total Revolving Credit Commitment shall reduce the Revolving
Credit Commitment of each Lender proportionately in accordance with its Pro Rata
Share thereof.
(ii) Term Loan A. The Total Term Loan A Commitment shall
terminate at 5:00 p.m. (New York City time) on the Effective Date.
(b) Optional Prepayment.
(i) Revolving Loans. The Borrowers may prepay without penalty or
premium the principal of any Revolving Loan, in whole or in part.
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(ii) Term Loan A. The Borrowers may, upon at least five (5)
Business Days' prior written notice to the Agent, prepay the principal of the
Term Loan A, in whole or in part. Each prepayment made pursuant to this clause
(b)(ii) shall be accompanied by the payment of accrued interest to the date of
such payment on the amount prepaid and the Applicable Prepayment Premium, if
any. Each such prepayment of the Term Loan A shall be in an amount which is an
integral multiple of $500,000 (unless the outstanding principal amount of the
Term Loan A immediately prior to such prepayment is less than $500,000).
(iii) Prepayment In Full. The Borrowers may, upon at least sixty
(60) days prior written notice to the Agent, terminate this Agreement by paying
to the Agent, in cash, the Obligations (including either (A) providing cash
collateral to be held by the Agent in an amount equal to 105% of the aggregate
undrawn amount of all outstanding Letters of Credit or (B) causing the original
Letters of Credit to be returned to the Agent), in full, together with the
Applicable Prepayment Premium, if any. If the Administrative Borrower has sent a
notice of termination pursuant to this clause (iii), then the Lenders'
obligations to extend credit hereunder shall terminate and the Borrowers shall
be obligated to repay the Obligations (including either (A) providing cash
collateral to be held by the Agent in an amount equal to 105% of the aggregate
undrawn amount of all outstanding Letters of Credit or (B) causing the original
Letters of Credit to be returned to the Agent), in full, together with the
Applicable Prepayment Premium, if any, on the date set forth as the date of
termination of this Agreement in such notice.
(c) Mandatory Prepayment.
(i) In the event that the aggregate amount of the Cash and Cash
Equivalents of the Loan Parties and their Subsidiaries exceeds at any time
$2,000,000, the Borrowers shall immediately prepay the outstanding principal of
the Revolving Loans in the amount equal to such excess.
(ii) In the event that the aggregate principal amount of all
Loans and Letter of Credit Obligations outstanding at any time to the Borrowers
exceeds the Total Commitment, the Borrowers shall immediately prepay the
outstanding principal of the Loans in the amount equal to such excess. Any
payments required to be made under this paragraph (c)(ii) shall be applied to
the Loans as set forth in Section 2.05(d).
(d) Application of Payments. Each prepayment pursuant to subsection
(c)(ii) above shall be applied, first, to the Term Loan A, and second, to the
Revolving Loans.
(e) Interest and Fees. Any prepayment made pursuant to this Section
2.05 (other than prepayments made pursuant to subsection (c)(ii) of this Section
2.05) shall be accompanied by (i) accrued interest on the principal amount being
prepaid to the date of prepayment, (ii) in the case of any prepayment made
pursuant to Section 2.05(b), the Applicable Prepayment Premium, if any, and
(iii) if such prepayment would reduce the amount of the outstanding Loans to
zero at a time when the Total Revolving Credit Commitment has been terminated,
such prepayment shall be accompanied by the payment of all fees accrued to such
date pursuant to Section 2.06.
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(f) Cumulative Prepayments. Except as otherwise expressly provided in
this Section 2.05, payments with respect to any subsection of this Section 2.05
are in addition to payments made or required to be made under any other
subsection of this Section 2.05.
Section 2.06 Fees.
(a) Closing Fee. On or prior to the Effective Date, the Borrowers
shall pay to the Agent for the account of the Lenders, in accordance with their
Pro Rata Shares, a non-refundable closing fee (the "Closing Fee") equal to
$1,275,000, which shall be deemed fully earned when paid.
(b) Unused Line Fee. From and after the Effective Date and until the
Final Maturity Date, the Borrowers shall pay to the Agent for the account of the
Revolving Loan Lenders, in accordance with their Pro Rata Shares, an unused line
fee (the "Unused Line Fee"), which shall accrue at the rate per annum of 0.5% on
the excess, if any, of the Total Revolving Credit Commitment over the sum of the
average principal amount of all Revolving Loans and Letter of Credit Obligations
outstanding from time to time and shall be payable monthly in arrears on the
first day of each month commencing July 1, 2005, provided, that, for the
purposes of calculating the Unused Line Fee, the Total Revolving Credit
Commitment shall not exceed $40,000,000 at any time.
(c) Loan Servicing Fee. From and after the Effective Date and until
the later of (i) the Final Maturity Date and (ii) the date on which all
outstanding Obligations are paid in full, the Borrowers shall pay to the Agent
for the account of the Agent, a non-refundable loan servicing fee (the "Loan
Servicing Fee") equal to $25,000 each quarter, which shall be deemed fully
earned when paid and which shall be payable on the Effective Date (payable
ratably based on the number of days remaining in the calendar quarter in which
the Effective Date occurs) and quarterly in advance thereafter on the first day
of each calendar quarter commencing on July 1, 2005.
Section 2.07 Securitization. The Loan Parties hereby acknowledge that
the Lenders and their Affiliates may sell or securitize the Loans (a
"Securitization") through the pledge of the Loans as collateral security for
loans to the Lenders or their Affiliates, which loans to the Lenders or their
Affiliates will be rated by ▇▇▇▇▇'▇, Standard & Poor's or one or more other
rating agencies (the "Rating Agencies"). The Loan Parties shall cooperate, at
the Lender's cost, with the Lenders and their Affiliates to effect the
Securitization including, without limitation, by (a) amending this Agreement and
the other Loan Documents, and executing such additional documents, as reasonably
requested by the Lenders in connection with the Securitization, provided that
(i) any such amendment or additional documentation does not impose additional
costs on the Loan Parties and (ii) any such amendment or additional
documentation does not adversely affect the rights, or increase the obligations,
of the Loan Parties under the Loan Documents or change or affect in a manner
adverse to the Loan Parties the financial terms of the Loans, (b) providing such
information as may be reasonably requested by the Lenders in connection with the
rating of the Loans or the Securitization, and (c) providing in connection with
any rating of the Loans a certificate (i) agreeing to indemnify the Lenders and
their Affiliates, any of the Rating Agencies, or any party providing credit
support or otherwise participating in the Securitization (collectively, the
"Securitization Parties") for any losses, claims, damages or liabilities (the
35
"Liabilities") to which the Lenders, their Affiliates or such Securitization
Parties may become subject insofar as the Liabilities arise out of or are based
upon any untrue statement of any material fact contained in any Loan Document or
in any writing delivered by or on behalf of any Loan Party to the Lenders in
connection with any Loan Document or arise out of or are based upon the omission
to state therein a material fact required to be stated therein, or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, and such indemnity shall survive any transfer by
the Lenders or their successors or assigns of the Loans and (ii) agreeing to
reimburse the Lenders and their Affiliates for any legal or other expenses
reasonably incurred by such Persons in connection with defending the
Liabilities. Section 2.08 Taxes. Any and all payments by any Loan Party
hereunder or under any other Loan Document shall be made free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding taxes imposed on the net income of the Agent, any Lender or the L/C
Issuer (or any transferee or assignee thereof, including a participation holder
(any such entity, a "Transferee")) by the jurisdiction in which such Person is
organized or has its principal lending office (all such nonexcluded taxes,
levies, imposts, deductions, charges withholdings and liabilities, collectively
or individually, "Taxes"). If any Loan Party shall be required to deduct any
Taxes from or in respect of any sum payable hereunder to the Agent, any Lender
or the L/C Issuer (or any Transferee), (i) the sum payable shall be increased by
the amount (an "additional amount") necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.08) the Agent, such Lender or the L/C Issuer (or such Transferee)
shall receive an amount equal to the sum it would have received had no such
deductions been made, (ii) such Loan Party shall make such deductions and (iii)
such Loan Party shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, each Loan Party agrees to pay to the relevant
Governmental Authority in accordance with applicable law any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document ("Other Taxes"). Each Loan Party shall deliver to the Agent,
each Lender and the L/C Issuer official receipts in respect of any Taxes or
Other Taxes payable hereunder promptly after payment of such Taxes or Other
Taxes.
(c) The Loan Parties hereby jointly and severally indemnify and agree
to hold each Agent, each Lender and the L/C Issuer harmless from and against
Taxes and Other Taxes (including, without limitation, Taxes and Other Taxes
imposed on any amounts payable under this Section 2.08) paid by such Person,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Such indemnification shall be paid within 10 days from the date on which any
such Person makes written demand therefore specifying in reasonable detail the
nature and amount of such Taxes or Other Taxes.
36
(d) Each Lender that is organized under the laws of a jurisdiction
outside the United States (a "Non-U.S. Lender") agrees that it shall, no later
than the Effective Date (or, in the case of a Lender which becomes a party
hereto pursuant to Section 12.07 hereof after the Effective Date, promptly after
the date upon which such Lender becomes a party hereto) deliver to the Agent
(or, in the case of an assignee of a Lender which (x) is an Affiliate of such
Lender or a Related Fund of such Lender and (y) does not deliver an Assignment
and Acceptance to the Agent pursuant to the last sentence of Section 12.07(b)
for recordation pursuant to Section 12.07(c), to the assigning Lender only, and
in the case of a participant, to the Lender granting the participation only) two
properly completed and duly executed copies of either U.S. Internal Revenue
Service Form ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8IMY or any subsequent versions thereof or
successors thereto, in each case claiming complete exemption from, or reduced
rate of, U.S. Federal withholding tax and payments of interest hereunder. In
addition, in the case of a Non-U.S. Lender claiming exemption from U.S. Federal
withholding tax under Section 871(h) or 881(c) of the Internal Revenue Code,
such Non-U.S. Lender hereby represents to the Agent and the Borrowers that such
Non-U.S. Lender is not a bank for purposes of Section 881(c) of the Internal
Revenue Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Internal Revenue Code) of the Parent and is not a controlled
foreign corporation related to the Parent (within the meaning of Section
864(d)(4) of the Internal Revenue Code), and such Non-U.S. Lender agrees that it
shall promptly notify the Agent in the event any such representation is no
longer accurate. Such forms shall be delivered by each Non-U.S. Lender on or
before the date it becomes a party to this Agreement and on or before the date,
if any, such Non-U.S. Lender changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
such Non-U.S. Lender shall deliver such forms within 20 days after receipt of a
written request therefor from the Agent, the assigning Lender or the Lender
granting a participation, as applicable. Notwithstanding any other provision of
this Section 2.08, a Non-U.S. Lender shall not be required to deliver any form
pursuant to this Section 2.08(d) that such Non-U.S. Lender is not legally able
to deliver.
(e) The Loan Parties shall not be required to indemnify any Non-U.S.
Lender, or pay any additional amounts to any Non-U.S. Lender, in respect of
United States Federal withholding tax pursuant to this Agreement to the extent
that (i) the obligation to withhold amounts with respect to United States
Federal withholding tax existed on the date such Non-U.S. Lender became a party
to this Section 2.08 (or, in the case of a Transferee that is a participation
holder, on the date such participation holder became a Transferee hereunder) or,
with respect to payments to a New Lending Office, the date such Non-U.S. Lender
designated such New Lending Office with respect to a Loan; provided, however,
that this clause (i) shall not apply to the extent the indemnity payment or
additional amounts any Transferee, or Lender (or Transferee) through a New
Lending Office, would be entitled to receive (without regard to this clause (i))
do not exceed the indemnity payment or additional amounts that the Person making
the assignment, participation or transfer to such Transferee, or Lender (or
Transferee) making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation, transfer
or designation, or (ii) the obligation to pay such additional amounts would not
have arisen but for a failure by such Non-U.S. Lender to comply with the
provisions of clause (d) above.
(f) The Agent or any Lender (or Transferee) claiming any indemnity
payment or additional payment amounts payable pursuant to this Section 2.08
shall use reasonable efforts (consistent with legal and regulatory restrictions)
to file any certificate or document reasonably requested in writing by the
Administrative Borrower or to change the jurisdiction of its applicable lending
office if the making of such a filing or change would avoid the need for or
37
reduce the amount of any such indemnity payment or additional amount that may
thereafter accrue, would not require the Agent or such Lender (or Transferee) to
disclose any information the Agent or such Lender (or Transferee) deems
confidential and would not, in the sole determination of the Agent or such
Lender (or Transferee), be otherwise disadvantageous to the Agent or such Lender
(or Transferee).
(g) The obligations of the Loan Parties under this Section 2.08 shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
Section 2.09 LIBOR Not Determinable; Illegality. (a) In the event,
and on each occasion, that on or before the day on which LIBOR is to be
determined for a borrowing that is to include LIBOR Rate Loans, the Agent has
determined in good faith that, or has been advised by the Required Lenders that,
(i) LIBOR cannot be reasonably determined for any reason or (ii) Dollar deposits
in the principal amount of the applicable LIBOR Rate Loans are not available in
the interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of the Lenders' LIBOR Rate Loans are then being
conducted, the Agent shall, as soon as practicable thereafter, give written
notice of such determination to the Administrative Borrower and the other
Lenders. In the event of any such determination, any request by the
Administrative Borrower for a LIBOR Rate Loan pursuant to Section 2.02 shall,
until, (i) in the case of such a determination by the Agent or the Required
Lenders, the Agent has been advised by the Required Lenders and the Agent has so
advised the Administrative Borrower that, or (ii) in the case of a determination
by the Agent, the Agent has advised the Administrative Borrower and the other
Lenders that, the circumstances giving rise to such notice no longer exist, be
deemed to be a request for a Reference Rate Loan. Each determination by the
Agent and/or the Required Lenders hereunder shall be conclusive and binding
absent manifest error.
(b) Subject to Section 4.05(c), in the event that after the Effective
Date, it shall be unlawful for any Lender to make, maintain or fund any LIBOR
Rate Loan as contemplated by this Agreement, then such Lender shall promptly
give notice thereof to the Agent and the Administrative Borrower describing such
illegality in reasonable detail. Effective immediately upon the giving of such
notice, the obligation of such Lender to make LIBOR Rate Loans shall be
suspended for the duration of such illegality and, if and when such illegality
ceases to exist, such suspension shall cease, and such Lender shall notify the
Agent and the Administrative Borrower. If any such change shall make it unlawful
for any Lender to maintain any outstanding LIBOR Rate Loan as a LIBOR Rate Loan,
such Lender shall, upon the happening of such event, notify the Agent and the
Administrative Borrower, and the Borrowers shall immediately, or if permitted by
applicable law, rule, regulation, order, decree, interpretation, request or
directive, at the end of the then current Interest Period for such LIBOR Rate
Loan, convert each such LIBOR Rate Loan into a Reference Rate Loan.
Section 2.10 Indemnity. (a) The Loan Parties hereby jointly and
severally indemnify each Lender against any loss or expense that such Lender
actually sustains or incurs (including, without limitation, any loss or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund or maintain any LIBOR Rate Loan (including loss
of anticipated profits), but excluding losses arising from such Lender's gross
negligence or willful misconduct as formally determined by a court of competent
38
jurisdiction) as a consequence of (i) any failure by the Loan Parties to fulfill
on the date of any borrowing hereunder the applicable conditions set forth in
Article V, (ii) any failure by the Borrowers to borrow any LIBOR Rate Loan
hereunder, to convert any Reference Rate Loan into a LIBOR Rate Loan or to
continue a LIBOR Rate Loan as such after notice of such borrowing, conversion or
continuation has been given pursuant to Section 2.02 or 2.11 hereof, (iii) any
payment, prepayment (mandatory or optional) or conversion of a LIBOR Rate Loan
required by any provision of this Agreement or otherwise made on a date other
than the last day of the Interest Period applicable thereto, (iv) any default in
payment or prepayment of the principal amount of any LIBOR Rate Loan or any part
thereof or interest accrued thereon, as and when due and payable (at the due
date thereof, by notice of prepayment or otherwise), or (v) the occurrence of
any Event of Default, including, in each such case, any loss (including, without
limitation, loss of anticipated profits) or reasonable expense sustained or
incurred in liquidating or employing deposits from third parties acquired to
effect or maintain such Loan or any part thereof as a LIBOR Rate Loan. Such loss
or reasonable expense shall include but not be limited to an amount equal to the
excess, if any, as reasonably determined by such Lender, of (i) its cost of
obtaining the funds for the Loan being paid or prepaid or converted or continued
or not borrowed or converted or continued (based on LIBOR applicable thereto)
for the period from the date of such payment, prepayment, conversion,
continuation or failure to borrow, convert or continue on the last day of the
Interest Period for such Loan (or, in the case of a failure to borrow, convert
or continue, the last day of the Interest Period for such Loan that would have
commenced on the date of such failure to borrow, convert or continue) over (ii)
the amount of interest (as reasonably determined by such Lender) that would be
realized by such Lender in re-employing in the interbank LIBOR market for a
comparable Interest Period the funds so paid, prepaid, converted or continued or
not borrowed, converted or continued for such Interest Period. A certificate of
any Lender setting forth in reasonable detail any amount or amounts that such
Lender is entitled to receive pursuant to this Section 2.10 and the basis for
the determination of such amount or amounts shall be delivered to the Borrowers
and shall be conclusive and binding absent manifest error.
(b) Notwithstanding paragraph (a) of this Section 2.10, the Agent
will use reasonable efforts to minimize or reduce any such loss or expense
resulting from the mandatory prepayments required by Section 2.05(c) by applying
all payments and prepayments to Reference Rate Loans prior to any application of
payments to LIBOR Rate Loans, provided that nothing in this Section 2.10(b)
shall affect the order of application of payments as set forth in Section
2.05(b) and (d) or Section 4.04(b), as applicable.
Section 2.11 Continuation and Conversion of Loans. Subject to Section
2.09 hereof, the Borrowers shall have the right, at any time, on two (2)
Business Days' prior irrevocable written notice by the Administrative Borrower
to the Agent, to continue any LIBOR Rate Loan, or any portion thereof, into a
subsequent Interest Period or to convert any Reference Rate Loan or portion
thereof into a LIBOR Rate Loan, or on one (1) Business Day's prior irrevocable
written notice to the Agent, to convert any LIBOR Rate Loan or portion thereof
into a Reference Rate Loan, subject to the following:
(a) no LIBOR Rate Loan may be continued as such and no Reference Rate
Loan may be converted into a LIBOR Rate Loan, when any Event of Default shall
have occurred and be continuing at such time,
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(b) in the case of a continuation of a LIBOR Rate Loan as such or a
conversion of a Reference Rate Loan into a LIBOR Rate Loan, the aggregate
principal amount of such LIBOR Rate Loan shall not be less than $100,000 and in
multiples of $50,000 if in excess thereof;
(c) any portion of a Loan maturing or required to be repaid in less
than one month may not be converted into or continued as a LIBOR Rate Loan;
(d) if any conversion of a LIBOR Rate Loan shall be effected on a day
other than the last day of an Interest Period, the Borrowers shall reimburse
each Lender on demand for any loss incurred or to be incurred or to be incurred
by it in the reemployment of the funds released by such conversion as provided
in Section 2.10 hereof; and
(e) no more than five (5) Interest Periods in the aggregate for the
Borrowers may exist at anyone time.
In the event that the Administrative Borrower shall not give notice to continue
any LIBOR Rate Loan into a subsequent Interest Period, such LIBOR Rate Loan
shall automatically become a LIBOR Rate Loan at the expiration of the then
current Interest Period with an Interest Period ending one month thereafter.
ARTICLE III
LETTERS OF CREDIT
Section 3.01 Letter of Credit Guaranty. In order to assist the
Borrowers in establishing or opening standby letters of credit, which shall not
have expiration dates that exceed one year from the date of issuance (each a
"Letter of Credit"), with the L/C Issuer, the Borrowers have requested the Agent
to join in the applications for such Letters of Credit, and/or guarantee payment
or performance of such Letters of Credit and any drafts thereunder through the
issuance of a Letter of Credit Guaranty, thereby lending the Agent's credit to
that of the Borrowers, and the Agent has agreed to do so. These arrangements
shall be coordinated by the Agent, subject to the terms and conditions set forth
below. The Agent shall not be required to be the issuer of any Letter of Credit.
The applicable Borrower will be the account party for the application for each
Letter of Credit, which shall be substantially in the form of Exhibit G hereto
or on a computer transmission system approved by the Agent and the L/C Issuer,
or such other written form or computer transmission system as may from time to
time be approved by the Agent and the L/C Issuer, and shall be duly completed in
a manner and at a time reasonably acceptable to the Agent, together with such
other certificates, agreements, documents and other papers and information as
the Agent and the L/C Issuer may reasonably request (the "Letter of Credit
Application"). In the event of any conflict between the terms of any Letter of
Credit Application and this Agreement, for purposes of this Agreement, the terms
of this Agreement shall control.
(b) The aggregate Letter of Credit Obligations shall not exceed the
lowest of (i) the difference between (A) the Total Revolving Credit Commitment
and (B) the aggregate principal amount of all Revolving Loans then outstanding
and (ii) the L/C Subfacility. In addition, the terms and conditions of all
Letters of Credit and all changes or modifications thereof by the Borrowers
40
and/or the L/C Issuer shall in all respects be subject to the prior approval of
the Agent in the reasonable exercise of its sole and absolute discretion;
provided, however, that (i) the expiry date of all Letters of Credit shall be no
later than ten days prior to the Final Maturity Date unless, on or prior to ten
days prior to the Final Maturity Date either (A) such Letters of Credit shall be
cash collateralized in an amount equal to 105% of the face amount of such
Letters of Credit by deposit of cash in such amount in an account under the sole
and exclusive control of the Agent for the benefit of the Agent and/or the L/C
Issuer (the "Letter of Credit Collateral Account") or (B) the Borrowers shall
provide the Agent and the Revolving Loan Lenders with an indemnification, in
form and substance reasonably satisfactory to the Agent, from a commercial bank
or other financial institution acceptable to the Agent for any Letter of Credit
Obligations with respect to such Letters of Credit and (ii) the Letters of
Credit and all documentation in connection therewith shall be in form and
substance reasonably satisfactory to the Agent and the L/C Issuer.
(c) The Agent shall have the right, without notice to the Borrowers,
to charge the Loan Account with the amount of any and all Indebtedness,
liabilities and obligations of any kind (including indemnification for breakage
costs, capital adequacy and reserve requirement charges) incurred by the Agent
or the Revolving Loan Lenders under the Letter of Credit Guaranty or incurred by
the L/C Issuer with respect to a Letter of Credit at the earlier of (i) payment
by the Agent or the Revolving Loan Lenders under the Letter of Credit Guaranty
or (ii) the occurrence of any Default or Event of Default. The Agent shall also
have the right to charge the Loan Account with the amount of any cash collateral
or other collateral support that the L/C Issuer may require from the Agent or
any Lender under a Letter of Credit Guaranty or otherwise, or at the Agent's
option, to require the Borrowers to provide such required amounts of cash
collateral to the Agent in connection to the Agent's obligations under any such
Letter of Credit Guaranty or otherwise with respect to any such Letter of
Credit, in each case provided the Agent provides the Administrative Borrower
with prior written notice of its intent to charge the Loan Account in accordance
with the terms of this Section 3.01(c). Any amount charged to the Loan Account
shall be deemed a Revolving Loan hereunder made by the Revolving Loan Lenders to
the Borrowers, funded by the Agent on behalf of the Revolving Loan Lenders and
subject to Section 2.02 of this Agreement. Any charges, fees, commissions, costs
and expenses charged to the Agent for the Borrowers' account by the L/C Issuer
in connection with or arising out of Letters of Credit or transactions relating
thereto will be charged to the Loan Account in full when charged to or paid by
the Agent and, when charged, shall be conclusive on the Borrowers absent
manifest error. Each of the Revolving Loan Lenders and the Borrowers agrees that
the Agent shall have the right to make such charges regardless of whether any
Default or Event of Default shall have occurred and be continuing or whether any
of the conditions precedent in Section 5.02 have been satisfied.
(d) The Borrowers agree to jointly and severally unconditionally
indemnify the Agent and each Lender and hold the Agent and each Lender harmless
from any and all loss, claim or liability incurred by the Agent or any Lender
arising from any transactions or occurrences relating to Letters of Credit, any
drafts or acceptances thereunder, the Collateral relating thereto, and all
Obligations in respect thereof, including any such loss or claim due to any
action taken by the L/C Issuer, other than for any such loss, claim or liability
arising out of the gross negligence or willful misconduct of the L/C Issuer, the
41
Agent or any Lender as determined by a final judgment of a court of competent
jurisdiction. The Borrowers further agree to jointly and severally hold the
Agent and each Lender harmless from any errors or omission, negligence or
misconduct by the L/C Issuer. The Borrowers' unconditional obligations to the
Agent, each Lender and the L/C Issuer with respect to Letters of Credit
hereunder shall not be modified or diminished for any reason or in any manner
whatsoever, other than as a result of the Agent's, such Lender's or the L/C
Issuer's gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction. The Borrowers agree that any
charges incurred by the Agent or the L/C Issuer for the Borrowers' account
hereunder may be charged to the Loan Account.
(e) Upon any payments made to the L/C Issuer under the Letter of
Credit Guaranty, the Agent or the Revolving Loan Lenders, as the case may be,
shall, without prejudice to their rights under this Agreement (including that
such unreimbursed amounts shall constitute Loans hereunder), acquire by
subrogation, any rights, remedies, duties or obligations granted or undertaken
by the Borrowers in favor of the L/C Issuer in any application for Letters of
Credit, any standing agreement relating to Letters of Credit or otherwise, all
of which shall be deemed to have been granted to the Agent and the Revolving
Loan Lenders and apply in all respects to the Agent and the Revolving Loan
Lenders and shall be in addition to any rights, remedies, duties or obligations
contained herein.
Section 3.02 Participations.
(a) Purchase of Participations. Immediately upon issuance by the L/C
Issuer of any Letter of Credit pursuant to this Agreement, each Revolving Loan
Lender shall be deemed to have irrevocably and unconditionally purchased and
received from the Agent, without recourse or warranty, an undivided interest and
participation, to the extent of such Revolving Loan Lender's Pro Rata Share, in
all obligations of the Agent in such Letter of Credit (including, without
limitation, all Reimbursement Obligations of the Borrowers with respect thereto
pursuant to the Letter of Credit Guaranty or otherwise).
(b) Sharing of Payments. In the event that the Agent makes any
payment in respect of the Letter of Credit Guaranty and the Borrowers shall not
have repaid such amount to the Agent, the Agent shall charge the Loan Account in
the amount of the Reimbursement Obligation, in accordance with Section 3.01(c)
and Section 4.02 of this Agreement.
(c) Obligations Irrevocable. The obligations of a Revolving Loan
Lender to make payments to the Agent for the account of the Agent, the Revolving
Loan Lenders or the L/C Issuer with respect to a Letter of Credit shall be
irrevocable, without any qualification or exception whatsoever and shall be made
in accordance with the terms and conditions of this Agreement under all
circumstances, including any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents;
42
(ii) the existence of any claim, setoff, defense or other right
which the Borrowers may have at any time against a beneficiary named in such
Letter of Credit or any transferee of such Letter of Credit (or any Person for
whom any such transferee may be acting), the Agent, any Lender, or any other
Person, whether in connection with this Agreement, such Letter of Credit, the
transactions contemplated herein or any unrelated transactions (including any
underlying transactions between the Borrowers or any other party and the
beneficiary named in such Letter of Credit);
(iii) any draft, certificate or any other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents;
(v) any failure by the Agent to provide any notices required
pursuant to this Agreement relating to such Letter of Credit;
(vi) any payment by the L/C Issuer under such Letter of Credit
against presentation of a draft or certificate which does not comply with the
terms of such Letter of Credit; or
(vii) the occurrence of any Default or Event of Default.
Section 3.03 Letters of Credit.
(a) Request for Issuance. The Administrative Borrower may, upon
notice not later than 12:00 noon, New York City time, at least two (2) Business
Days in advance of the issuance thereof, request the Agent to assist the
Borrowers in establishing or opening a Letter of Credit by delivering to the
Agent, with a copy to the L/C Issuer, a Letter of Credit Application, together
with any necessary related documents. The Agent shall not provide support,
pursuant to the Letter of Credit Guaranty, if the Agent shall have received
written notice from the Required Lenders on the Business Day immediately
preceding the proposed issuance date for such Letter of Credit that one or more
of the conditions precedent in Section 5.02 will not have been satisfied on such
date, and the Agent shall not otherwise be required to determine that, or take
notice whether, the conditions precedent set forth in Section 5.02 have been
satisfied.
(b) Letter of Credit Fees. (i) The Borrowers shall pay to the Agent
for the account of the Revolving Loan Lenders, in accordance with the Revolving
Loan Lenders' Pro Rata Shares (x) for any Letter of Credit issued hereunder, a
non-refundable fee equal to 4% per annum of the stated amount of such Letter of
Credit, payable on the date such Letter of Credit is issued and (y) for any
amendment to an existing Letter of Credit that increases the stated amount of
such Letter of Credit, a non-refundable fee equal to 4% per annum of the
increase in the stated amount of such Letter of Credit, payable on the date of
such increase (the "Letter of Credit Fees").
(ii) L/C Issuer Charges. The Borrowers shall pay to the Agent
the standard charges customarily charged by the L/C Issuer in connection with
the issuance, administration, amendment, payment or cancellation of Letters of
Credit.
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(iii) Charges to the Loan Account. The Borrowers hereby
authorize the Agent to, and the Agent may, from time to time, charge the Loan
Account pursuant to Section 3.01(c) and Section 4.02 of this Agreement with the
amount of any Letter of Credit fees or charges due under this Section 3.03.
ARTICLE IV
FEES, PAYMENTS AND OTHER COMPENSATION
Section 4.01 Audit and Collateral Monitoring Fees. The Borrowers
acknowledge that pursuant to Section 7.01(f), representatives of the Agent may
visit any or all of the Loan Parties and/or conduct audits, inspections,
valuations and/or field examinations of any or all of the Loan Parties at any
time and from time to time upon reasonable notice (provided that no such notice
shall be required at any time an Event of Default has occurred and is
continuing) in a manner so as to not unduly disrupt the business of the Loan
Parties. The Borrowers agree to pay (i) the examiner's reasonable fees plus
reasonable out-of-pocket costs and reasonable expenses incurred in connection
with all such visits, audits, inspections, valuations and field examinations and
(ii) the reasonable and documented cost of all visits, audits, inspections,
valuations and field examinations conducted by a third party on behalf of the
Agent, provided that so long as no Event of Default has occurred and is
continuing, no more than three such audits, valuations, inspections or field
examinations shall take place, at Borrowers' expense, during any twelve-month
period.
Section 4.02 Payments; Computations and Statements. (a) The Borrowers
will make each payment under this Agreement not later than 12:00 noon (New York
City time) on the day when due, in lawful money of the United States of America
and in immediately available funds, to the Agent's Account. All payments
received by the Agent after 12:00 noon (New York City time) on any Business Day
will be credited to the Loan Account on the next succeeding Business Day. All
payments shall be made by the Borrowers without set-off, counterclaim, deduction
or other defense to the Agent and the Lenders. Except as provided in Section
2.02, after receipt, the Agent will promptly thereafter cause to be distributed
like funds relating to the payment of principal ratably to the Lenders in
accordance with their Pro Rata Shares and like funds relating to the payment of
any other amount payable to any Lender to such Lender, in each case to be
applied in accordance with the terms of this Agreement, provided that the Agent
will cause to be distributed all interest and fees received from or for the
account of the Borrowers not less than once each month and in any event promptly
after receipt thereof. The Lenders and the Borrowers hereby authorize the Agent
to, and the Agent may, from time to time, charge the Loan Account of the
Borrowers with any amount due and payable by the Borrowers under any Loan
Document, provided that the Agent shall promptly notify the Administrative
Borrower of each such charge to the Loan Account. Each of the Lenders and the
Borrowers agrees that the Agent shall have the right to make such charges
whether or not any Default or Event of Default shall have occurred and be
continuing or whether any of the conditions precedent in Section 5.02 have been
satisfied. Any amount charged to the Loan Account of the Borrowers in accordance
with this Section 4.02 shall be deemed a Revolving Loan hereunder made by the
Revolving Loan Lenders to the Borrowers, funded by the Agent on behalf of the
Revolving Loan Lenders and subject to Section 2.02 of this Agreement. The
Lenders and the Borrowers confirm that any charges which the Agent may so make
44
to the Loan Account of the Borrowers as herein provided will be made as an
accommodation to the Borrowers and solely at the Agent's discretion. Whenever
any payment to be made under any such Loan Document shall be stated to be due on
a day other than a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall in such case be
included in the computation of interest or fees, as the case may be. All
computations of fees shall be made by the Agent on the basis of a year of 360
days for the actual number of days (including the first day but excluding the
last day) occurring in the period for which such fees are payable. Each
determination by the Agent of an interest rate or fees hereunder shall be
conclusive and binding for all purposes in the absence of manifest error.
(b) The Agent shall provide the Administrative Borrower, promptly
after the end of each calendar month, a summary statement (in the form from time
to time used by the Agent) of the opening and closing daily balances in the Loan
Account of the Borrowers during such month, the amounts and dates of all Loans
made to the Borrowers during such month, the amounts and dates of all payments
on account of the Loans to the Borrowers during such month and the Loans to
which such payments were applied, the amount of interest accrued on the Loans to
the Borrowers during such month, any Letters of Credit issued by the L/C Issuer
for the account of the Borrowers during such month, specifying the face amount
thereof, the amount of charges to the Loan Account and/or Loans made to the
Borrowers during such month to reimburse the Revolving Loan Lenders for drawings
made under Letters of Credit, and the amount and nature of any charges to the
Loan Account made during such month on account of fees, commissions, expenses
and other Obligations. All entries on any such statement shall be presumed to be
correct and, thirty (30) days after the same is sent, shall be final and
conclusive absent manifest error.
Section 4.03 Sharing of Payments, Etc. Except as provided in Section
2.02 hereof, if any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of any Obligation in excess of its ratable share of payments on account
of similar obligations obtained by all the Lenders, such Lender shall forthwith
purchase from the other Lenders such participations in such similar obligations
held by them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender of any interest or other
amount paid by the purchasing Lender in respect of the total amount so
recovered). The Borrowers agree that any Lender so purchasing a participation
from another Lender pursuant to this Section 4.03 may, to the fullest extent
permitted by law, exercise all of its rights (including the Lender's right of
set-off) with respect to such participation as fully as if such Lender were the
direct creditor of the Borrowers in the amount of such participation.
Section 4.04 Apportionment of Payments. Subject to Section 2.02
hereof:
45
(a) all payments of principal and interest in respect of outstanding
Loans, all payments in respect of the Reimbursement Obligations, all payments of
fees (other than the fees set forth in Section 2.06(c) hereof, fees with respect
to Letters of Credit provided for in Section 3.03(b)(ii) and the audit and
collateral monitoring fee provided for in Section 4.01) and all other payments
in respect of any other Obligations, shall be allocated by the Agent among such
of the Lenders as are entitled thereto, in proportion to their respective Pro
Rata Shares or otherwise as provided herein or, in respect of payments not made
on account of Loans or Letter of Credit Obligations, as designated by the Person
making payment when the payment is made.
(b) After the occurrence and during the continuance of an Event of
Default, the Agent may, and upon the direction of the Required Lenders shall,
apply all payments in respect of any Obligations and all proceeds of the
Collateral, subject to the provisions of this Agreement, (i) first, ratably to
pay the Obligations in respect of any fees, expense reimbursements, indemnities
and other amounts then due to the Agent or the L/C Issuer until paid in full;
(ii) second, ratably to pay the Revolving Loan Obligations in respect of any
fees and indemnities then due to the Revolving Loan Lenders until paid in full;
(iii) third, ratably to pay interest due in respect of the Revolving Loans,
Agent Advances and Reimbursement Obligations until paid in full; (iv) fourth,
ratably to pay principal of the Revolving Loans, Agent Advances and Letter of
Credit Obligations (or, to the extent such Obligations are contingent, to
provide cash collateral in respect of such Obligations) until paid in full; (v)
fifth, ratably to pay the Term Loan Obligations in respect of any fees and
indemnities then due to the Term Loan A Lenders until paid in full; (vi) sixth,
ratably to pay interest due in respect of the Term Loan A until paid in full;
(vii) seventh, ratably to pay principal of the Term Loan A until paid in full;
and (viii) eighth, to the ratable payment of all other Obligations then due and
payable.
(c) In each instance, so long as no Event of Default has occurred and
is continuing, Section 4.04(b) shall not be deemed to apply to any payment by
the Borrowers specified by the Administrative Borrower to the Agent to be for
the payment of Term Loan Obligations then due and payable under any provision of
this Agreement or the prepayment of all or part of the principal of the Term
Loan A in accordance with the terms and conditions of Section 2.05.
(d) For purposes of Section 4.04(b), "paid in full" means payment of
all amounts owing under the Loan Documents according to the terms thereof,
including loan fees, service fees, professional fees, interest (and specifically
including interest accrued after the commencement of any Insolvency Proceeding),
default interest, interest on interest, and expense reimbursements, in each
case, whether or not the same would be or is allowed or disallowed in whole or
in part in any Insolvency Proceeding.
(e) In the event of a direct conflict between the priority provisions
of this Section 4.04 and other provisions contained in any other Loan Document,
it is the intention of the parties hereto that both such priority provisions in
such documents shall be read together and construed, to the fullest extent
possible, to be in concert with each other. In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the terms and
provisions of this Section 4.04 shall control and govern.
Section 4.05 Increased Costs and Reduced Return. Subject to Section
4.05(c) below, if any Lender, the Agent or the L/C Issuer shall have determined
that the adoption or implementation of, or any change in, any law, rule, treaty
or regulation, or any policy, guideline or directive of, or any change in, the
46
interpretation or administration thereof by, any court, central bank or other
administrative or Governmental Authority, or compliance by any Lender, the Agent
or the L/C Issuer or any Person controlling such Lender, the Agent or the L/C
Issuer with any directive of, or guideline from, any central bank or other
Governmental Authority or the introduction of, or change in, any accounting
principles applicable to any Lender, the Agent or the L/C Issuer or any Person
controlling such Lender, the Agent or the L/C Issuer (in each case, whether or
not having the force of law) (each, a "Change in Law"), shall (i) subject such
Lender, the Agent or the L/C Issuer, or any Person controlling such Lender, the
Agent or the L/C Issuer to any tax, duty or other charge with respect to this
Agreement or any Loan made by such Lender or the Agent or any Letter of Credit
issued by the L/C Issuer, or change the basis of taxation of payments to such
Lender, the Agent or the L/C Issuer or any Person controlling such Lender, the
Agent or the L/C Issuer of any amounts payable hereunder (except for taxes on
the overall net income of such Lender, the Agent or the L/C Issuer or any Person
controlling such Lender, the Agent or the L/C Issuer), (ii) impose, modify or
deem applicable any reserve, special deposit or similar requirement against any
Loan, any Letter of Credit or against assets of or held by, or deposits with or
for the account of, or credit extended by, such Lender, the Agent or the L/C
Issuer or any Person controlling such Lender, the Agent or the L/C Issuer or
(iii) impose on such Lender, the Agent or the L/C Issuer or any Person
controlling such Lender, the Agent or the L/C Issuer any other condition
regarding this Agreement or any Loan or Letter of Credit, and the result of any
event referred to in clauses (i), (ii) or (iii) above shall be to increase the
cost to such Lender, the Agent or the L/C Issuer of making any Loan, issuing,
guaranteeing or participating in any Letter of Credit, or agreeing to make any
Loan or issue, guaranty or participate in any Letter of Credit, or to reduce any
amount received or receivable by such Lender, the Agent or the L/C Issuer
hereunder, then, upon demand by any such Lender, the Agent or the L/C Issuer,
the Borrowers shall pay to such Lender, the Agent or the L/C Issuer such
additional amounts as will compensate such Lender, the Agent or the L/C Issuer
for such increased costs or reductions in amount.
(b) Subject to Section 4.05(c) below, if any Lender, the Agent or the
L/C Issuer shall have determined that any Change in Law either (i) affects or
would affect the amount of capital required or expected to be maintained by such
Lender, the Agent or the L/C Issuer or any Person controlling such Lender, the
Agent or the L/C Issuer, and such Lender, the Agent or the L/C Issuer determines
that the amount of such capital is increased as a direct or indirect consequence
of any Loans made or maintained, Letters of Credit issued or any guaranty or
participation with respect thereto, such Lender's, the Agent's or the L/C
Issuer's or such other controlling Person's other obligations hereunder, or (ii)
has or would have the effect of reducing the rate of return on such Lender's,
the Agent's or the L/C Issuer's or such other controlling Person's capital to a
level below that which such Lender, the Agent or the L/C Issuer or such
controlling Person could have achieved but for such circumstances as a
consequence of any Loans made or maintained, Letters of Credit issued, or any
guaranty or participation with respect thereto or any agreement to make Loans,
to issue Letters of Credit or such Lender's, the Agent's or the L/C Issuer's or
such other controlling Person's other obligations hereunder (in each case,
taking into consideration, such Lender's, the Agent's or the L/C Issuer's or
such other controlling Person's policies with respect to capital adequacy),
then, upon demand by such Lender, the Agent or the L/C Issuer, the Borrowers
shall pay to such Lender, the Agent or the L/C Issuer from time to time such
additional amounts as will compensate such Lender, the Agent or the L/C Issuer
for such cost of maintaining such increased capital or such reduction in the
rate of return on such Lender's, the Agent's or the L/C Issuer's or such other
controlling Person's capital.
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(c) Within fifteen (15) days after receipt by Borrowers of (i)
written notice and demand from any Lender for payment pursuant to Section
4.05(a) or (b) due to increased costs experienced by such Lender or (ii) written
notice from any Lender that it is unlawful for such Lender to make, maintain or
fund any LIBOR Rate Loan as contemplated by this Agreement pursuant to Section
2.09(b) (any such Lender referred to in clause (i) or (ii) herein being referred
to herein as an "Affected Lender"), the Borrowers may, at their option, notify
Agent and such Affected Lender of its intention to do one of the following:
(i) the Borrowers may obtain, at the Borrowers' expense, a
replacement Lender ("Replacement Lender") for such Affected Lender, which
Replacement Lender shall be reasonably satisfactory to Agent. In the event the
Borrowers obtain a Replacement Lender that will purchase all outstanding
Obligations owed to such Affected Lender and assume its commitments hereunder
within ninety (90) days following notice of the Borrowers' intention to do so,
the Affected Lender shall sell and assign all of its rights and delegate all of
its obligations under this Agreement to such Replacement Lender in accordance
with the provisions of Section 12.07, provided that the Borrowers have
reimbursed such Affected Lender for any processing and recordation fee payable
pursuant to Section 12.07(b) and paid all amounts required to be paid to such
Affected Lender pursuant to Section 4.06 through the date of such sale and
assignment; or
(ii) the Borrowers may prepay in full without penalty or premium
all outstanding Obligations owed to such Affected Lender and terminate such
Affected Lender's Pro Rata Share of the Revolving Credit Commitment, in which
case the Revolving Credit Commitment will be reduced by the amount of such Pro
Rata Share. The Borrowers shall, within ninety (90) days following notice of its
intention to do so, prepay in full without penalty or premium all outstanding
Obligations owed to such Affected Lender (including, in any case where such
prepayment occurs as the result of a demand for payment for increased costs,
such Affected Lender's increased costs for which it is entitled to reimbursement
under this Agreement through the date of such prepayment), and terminate such
Affected Lender's obligations under the Revolving Credit Commitment.
(d) All amounts payable under this Section 4.05 shall bear interest
from the date that is ten (10) days after the date of demand by any Lender, the
Agent or the L/C Issuer until payment in full to such Lender, the Agent or the
L/C Issuer at the Reference Rate. A certificate of such Lender, the Agent or the
L/C Issuer claiming compensation under this Section 4.05, specifying the event
herein above described and the nature of such event shall be submitted by such
Lender, the Agent or the L/C Issuer to the Administrative Borrower, setting
forth the additional amount due and an explanation of the calculation thereof,
and such Lender's, the Agent's or the L/C Issuer's reasons for invoking the
provisions of this Section 4.05, and shall be final and conclusive absent
manifest error.
Section 4.06 Joint and Several Liability of the Borrowers. (a)
Notwithstanding anything in this Agreement or any other Loan Document to the
contrary, each of the Borrowers hereby accepts joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Agent and the Lenders under this Agreement
48
and the other Loan Documents, for the mutual benefit, directly and indirectly,
of each of the Borrowers and in consideration of the undertakings of the other
Borrowers to accept joint and several liability for the Obligations. Each of the
Borrowers, jointly and severally, hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several
liability with the other Borrowers, with respect to the payment and performance
of all of the Obligations (including, without limitation, any Obligations
arising under this Section 4.06), it being the intention of the parties hereto
that all of the Obligations shall be the joint and several obligations of each
of the Borrowers without preferences or distinction among them. If and to the
extent that any of the Borrowers shall fail to make any payment with respect to
any of the Obligations as and when due or to perform any of the Obligations in
accordance with the terms thereof, then in each such event, the other Borrowers
will make such payment with respect to, or perform, such Obligation. Subject to
the terms and conditions hereof, the Obligations of each of the Borrowers under
the provisions of this Section 4.06 constitute the absolute and unconditional,
full recourse Obligations of each of the Borrowers, enforceable against each
such Person to the full extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Agreement, the other Loan
Documents or any other circumstances whatsoever.
(b) The provisions of this Section 4.06 are made for the benefit of
the Agent, the Lenders and their successors and assigns, and may be enforced by
them from time to time against any or all of the Borrowers as often as occasion
therefor may arise and without requirement on the part of the Agent, the Lenders
or such successors or assigns first to marshal any of its or their claims or to
exercise any of its or their rights against any of the other Borrowers or to
exhaust any remedies available to it or them against any of the other Borrowers
or to resort to any other source or means of obtaining payment of any of the
Obligations hereunder or to elect any other remedy. The provisions of this
Section 4.06 shall remain in effect until all of the Obligations shall have been
paid in full or otherwise fully satisfied.
(c) Each of the Borrowers hereby agrees that it will not enforce any
of its rights of contribution or subrogation against the other Borrowers with
respect to any liability incurred by it hereunder or under any of the other Loan
Documents, any payments made by it to the Agent or the Lenders with respect to
any of the Obligations or any Collateral, until such time as all of the
Obligations have been paid in full in cash. Any claim which any Borrower may
have against any other Borrower with respect to any payments to the Agent or the
Lenders hereunder or under any other Loan Documents are hereby expressly made
subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations.
ARTICLE V
CONDITIONS TO LOANS
Section 5.01 Conditions Precedent to Effectiveness. This Agreement
shall become effective as of the Business Day (the "Effective Date") when each
of the following conditions precedent shall have been satisfied in a manner
satisfactory to the Agent:
49
(a) Payment of Fees, Etc. The Borrowers shall have paid on or before
the date of this Agreement all fees, costs, expenses and taxes then payable
pursuant to Section 2.06 and Section 12.04.
(b) Representations and Warranties; No Event of Default. The
following statements shall be true and correct: (i) the representations and
warranties contained in ARTICLE VI and in each other Loan Document, certificate
or other writing delivered to the Agent, any Lender or the L/C Issuer pursuant
hereto or thereto on or prior to the Effective Date are true and correct on and
as of the Effective Date as though made on and as of such date and (ii) no
Default or Event of Default shall have occurred and be continuing on the
Effective Date or would result from this Agreement or the other Loan Documents
becoming effective in accordance with its or their respective terms.
(c) Legality. The making of the initial Loans or the issuance of any
Letters of Credit shall not contravene any law, rule or regulation applicable to
the Agent, any Lender or the L/C Issuer.
(d) Delivery of Documents. The Agent shall have received on or before
the Effective Date the following, each in form and substance satisfactory to the
Agent and, unless indicated otherwise, dated the Effective Date:
(i) this Agreement, duly executed by each of the parties
thereto;
(ii) a Security Agreement, duly executed by each Loan Party;
(iii) a Pledge Agreement, duly executed by each Loan Party,
together with the original stock certificates representing all of the common
stock of such Loan Party's subsidiaries, if certificated, and all intercompany
promissory notes of such Loan Party, accompanied by undated stock powers
executed in blank and other proper instruments of transfer;
(iv) the Mortgage with respect to the Facility, duly executed by
the applicable Loan Party;
(v) evidence that the recording of counterparts of the Mortgage
with respect to the Facility in the recording offices specified in the Mortgage
with respect to the Facility will perfect the Lien purported to be created
thereby or to otherwise protect the rights of the Agent and the Lenders
thereunder;
(vi) a Title Insurance Policy with respect to the Mortgage with
respect to the Facility, dated as of the Effective Date;
(vii) a survey of the Facility, in form and substance reasonably
satisfactory to the Agent, certified to the Agent and to the issuer of the Title
Insurance Policy;
(viii) the Contribution Agreement, duly executed by each Loan
Party;
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(ix) a UCC Filing Authorization Letter, duly executed by each
Loan Party, together with appropriate financing statements on Form UCC-1 in
proper form for filing in such office or offices as may be necessary or, in the
reasonable opinion of the Agent, desirable to perfect the security interests
purported to be created by each Security Agreement, each Pledge Agreement and
the Mortgage;
(x) a copy of the resolutions of each Loan Party, certified as
of the Effective Date by an Authorized Officer thereof, authorizing (A) the
borrowings hereunder and the transactions contemplated by the Loan Documents to
which such Loan Party is or will be a party, and (B) the execution, delivery and
performance by such Loan Party of each Loan Document to which such Loan Party is
or will be a party and the execution and delivery of the other documents to be
delivered by such Person in connection herewith and therewith;
(xi) a certificate of an Authorized Officer of each Loan Party,
certifying the names and true signatures of the representatives of such Loan
Party authorized to sign each Loan Document to which such Loan Party is or will
be a party and the other documents to be executed and delivered by such Loan
Party in connection herewith and therewith, together with evidence of the
incumbency of such authorized officers;
(xii) a certificate of the appropriate official(s) of the state
of organization and each state of foreign qualification of each Loan Party
certifying as to the subsistence in good standing of, and the payment of taxes
by, such Loan Party in such states;
(xiii) a true and complete copy of the charter, certificate of
formation, certificate of limited partnership or other publicly filed
organizational document of each Loan Party certified as of a recent date not
more than 30 days prior to the Effective Date by an appropriate official of the
state of organization of such Loan Party which shall set forth the same complete
name of such Loan Party as is set forth herein and the organizational number of
such Loan Party, if an organized number is issued in such jurisdiction;
(xiv) a copy of the charter and by-laws, limited liability
company agreement, operating agreement, agreement of limited partnership or
other organizational document of each Loan Party, together with all amendments
thereto, certified as of the Effective Date by an Authorized Officer of such
Loan Party;
(xv) (a) an opinion of Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel to
the Loan Parties, substantially in the form of Exhibit F and as to such other
matters as the Agent may reasonably request and (b) opinions of a local
Tennessee counsel to the Loan Parties to such matters as the Agent may
reasonably request;
(xvi) a certificate of an Authorized Officer of each Loan Party,
certifying as to the matters set forth in subsection (b) of this Section 5.01;
(xvii) a copy of the Financial Statements and the financial
projections described in Section 6.01(g)(ii) hereof, certified as of the
Effective Date as true and correct by an Authorized Officer of the Parent;
51
(xviii) a certificate of the chief financial officer of the Loan
Parties, certifying as to the solvency of the Loan Parties taken as a whole,
which certificate shall be satisfactory in form and substance to the Agent;
(xix) a certificate of the chief financial officer of the
Parent, setting forth in reasonable detail the calculations required to
establish compliance, on a pro forma basis after giving effect to the Loans,
with each of the financial covenants contained in Section 7.03;
(xx) evidence of the insurance coverage required by Section 7.01
and the terms of each Security Agreement and the Mortgage and such other
insurance coverage with respect to the business and operations of the Loan
Parties as the Agent may reasonably request which shall include, without
limitation, copies of the applicable policies and binders with respect thereto,
in each case, where requested by the Agent, with such endorsements as to the
named insureds or loss payees thereunder as the Agent may reasonably request and
providing that such policy may be terminated or canceled (by the insurer or the
insured thereunder) only upon 30 days' prior written notice to the Agent and
each such named insured or loss payee, together with evidence of the payment of
all premiums due in respect thereof for such period as the Agent may reasonably
request;
(xxi) a certificate of an Authorized Officer of the
Administrative Borrower, certifying the names and true signatures of the persons
that are authorized to provide Notices of Borrowing, Letter of Credit
Applications and all other notices under this Agreement and the other Loan
Documents;
(xxii) a collateral access agreement, in form and substance
satisfactory to the Agent, executed by ▇.▇. ▇▇▇▇▇▇▇ Company;
(xxiii) copies of the NAHC Notes Indenture Documents, the NATC
Notes Indenture and each other Material Contract as in effect on the Effective
Date, certified as true and correct copies thereof by an Authorized Officer of
the Administrative Borrower, together with a certificate of an Authorized
Officer of the Administrative Borrower stating that such agreements remain in
full force and effect and that none of the Loan Parties has materially breached
or defaulted in any of its obligations under such agreements;
(xxiv) a termination and release agreement with respect to the
Existing Credit Facility and all related documents, duly executed by the Loan
Parties and the Existing Lenders, together with UCC-3 termination statements for
all UCC-1 financing statements filed by the agent to the Existing Lenders and
covering any portion of the Collateral;
(xxv) a satisfactory ASTM 1527-00 Phase I Environmental Site
Assessment ("Phase I ESA") of the Facility provided by the Borrowers to the
Agent, in form and substance and by an independent firm reasonably satisfactory
to the Agent;
(xxvi) Cash Management Agreements with respect to those deposit
accounts maintained by the Loan Parties at LaSalle Bank National Association,
each in form and substance satisfactory to the Agent;
52
(xxvii) the Intercompany Subordination Agreement, duly executed
by each Loan Party; and
(xxviii) such other agreements, instruments, approvals, opinions
and other documents, each reasonably satisfactory to the Agent in form and
substance, as the Agent may reasonably request.
(e) Material Adverse Effect. No event or development shall have
occurred since May 12, 2005 which could reasonably be expected to result in a
Material Adverse Effect.
(f) Approvals. All consents, authorizations and approvals of, and
filings and registrations with, and all other actions in respect of, any
Governmental Authority or other Person required in connection with the making of
the Loans or the conduct of the Loan Parties' business shall have been obtained
and shall be in full force and effect.
(g) Proceedings; Receipt of Documents. All proceedings in connection
with the making of the initial Loans or the issuance of the initial Letters of
Credit and the other transactions contemplated by this Agreement and the other
Loan Documents, and all documents incidental hereto and thereto, shall be
reasonably satisfactory to the Agent and its counsel, and the Agent and such
counsel shall have received all such information and such counterpart originals
or certified or other copies of such documents as the Agent or such counsel may
reasonably request.
(h) Liens; Priority. The Agent shall be satisfied that the Agent has
been granted, and holds, for the benefit of the Agent and the Lenders, a
perfected, first priority Lien on and security interest in all of the
Collateral, subject only to Permitted Liens. The Agent shall receive UCC, tax
and judgment Lien searches, and title reports with respect to all real property
of the Loan Parties and other appropriate evidence, evidencing the absence of
any Liens or mortgages on the Collateral, except Liens granted in connection
with the Existing Credit Facility and Permitted Liens.
(i) Due Diligence. The Agent shall have completed its legal and
collateral due diligence with respect to each Loan Party.
Section 5.02 Conditions Precedent to All Loans and Letters of Credit.
The obligation of the Agent or any Lender to make any Loan or of the Agent to
assist the Borrowers in establishing or opening any Letter of Credit after the
Effective Date is subject to the fulfillment, in a manner satisfactory to the
Agent, of each of the following conditions precedent:
(a) Payment of Fees, Etc. The Borrowers shall have paid all fees,
costs, expenses and taxes then payable by the Borrowers pursuant to this
Agreement and the other Loan Documents, including Section 2.06 and Section 12.03
hereof.
(b) Representations and Warranties; No Event of Default. The
following statements shall be true and correct, and the submission by the
Administrative Borrower to the Agent of a Notice of Borrowing with respect to
each such Loan, and the Borrowers' acceptance of the proceeds of such Loan, or
the submission by the Borrowers of a Letter of Credit Application with respect
53
to a Letter of Credit, and the issuance of such Letter of Credit, shall each be
deemed to be a representation and warranty by each Loan Party on the date of
such Loan or the date of issuance of such Letter of Credit that: (i) the
representations and warranties contained in ARTICLE VI and in each other Loan
Document, certificate or other writing delivered to the Agent or any Lender
pursuant hereto or thereto on or prior to the date of such Loan or such Letter
of Credit are true and correct in all material respects on and as of such date
as though made on and as of such date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true and correct in all material
respects as of such earlier date, (ii) at the time of and after giving effect to
the making of such Loan and the application of the proceeds thereof or at the
time of issuance of such Letter of Credit, no Default or Event of Default has
occurred and is continuing or would result from the making of the Loan to be
made, or the issuance of such Letter of Credit to be issued, on such date and
(iii) the other conditions set forth in this Section 5.02 have been satisfied as
of the date of such request.
(c) Legality. The making of such Loan or the issuance of such Letter
of Credit shall not contravene any law, rule or regulation applicable to the
Agent, any Lender or the L/C Issuer.
(d) Notices. The Agent shall have received (i) a Notice of Borrowing
pursuant to Section 2.02 hereof or (ii) a Letter of Credit Application pursuant
to Section 3.03 hereof, as applicable.
(e) Proceedings; Receipt and Delivery of Documents. All proceedings
in connection with the making of such Loan or the issuance of such Letter of
Credit and the other transactions contemplated by this Agreement and the other
Loan Documents, and all documents, agreements, and instruments incidental hereto
and thereto, shall be in compliance with the terms of this Agreement.
(f) Leverage Cap. The making of such Loan shall not cause the
Leverage Ratio to exceed 3.75:1.00 (the "Leverage Cap") calculated assuming such
Loan was outstanding on the proposed borrowing date of such Loan.
Section 5.03 Conditions Subsequent to the Initial Loans. The
obligation of the Lenders to continue to make or maintain Loans is subject to
the fulfillment of the conditions subsequent set forth below (the failure by the
Loan Parties to so perform or cause to be performed constituting an Event of
Default):
(a) Within forty-five (45) days of the Effective Date, Agent shall
have received (i) a survey of the Facility, which shall be in form and substance
satisfactory to the Agent, and certified to the Agent and to the issuer of the
Title Insurance Policy and (ii) an endorsement to the Title Insurance Policy or
equivalent affirmative insurance issued by Commonwealth Land Title Insurance
Company deleting the survey-related exceptions to the Title Insurance Policy.
54
(b) The Loan Parties shall use commercially reasonable efforts to
deliver to Agent a landlord waiver, in form and substance satisfactory to the
Agent, executed by each landlord with respect to each of the Leases set forth on
Schedule 6.01(o).
(c) The Loan Parties shall use commercially reasonable efforts to
deliver to Agent a collateral access agreement, in form and substance
satisfactory to the Agent, executed by each Person listed on Schedule 6.01(ee)
(other than ▇.▇. ▇▇▇▇▇▇▇ Company) who possesses Inventory of any Loan Party.
(d) Within 5 Business Days of the Effective Date, the Agent shall
have received Cash Management Agreements with respect to those deposit accounts
maintained by the Loan Parties at JPMorgan Chase Bank, N.A. and BancorpSouth,
which agreements shall be in form and substance satisfactory to the Agent.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01 Representations and Warranties. Each Loan Party hereby
represents and warrants to the Agent, the Lenders and the L/C Issuer as follows:
(a) Organization, Good Standing, Etc. Each Loan Party (i) is a
corporation, limited liability company or limited partnership duly organized,
validly existing and in good standing under the laws of the state or
jurisdiction of its organization, (ii) has all requisite power and authority to
conduct its business as now conducted and as presently contemplated and, in the
case of the Borrowers, to make the borrowings hereunder, and to execute and
deliver each Loan Document to which it is a party, and to consummate the
transactions contemplated thereby, and (iii) is duly qualified to do business
and is in good standing in each jurisdiction in which the character of the
properties owned or leased by it or in which the transaction of its business
makes such qualification necessary.
(b) Authorization, Etc. The execution, delivery and performance by
each Loan Party of each Loan Document to which it is or will be a party, (i)
have been duly authorized by all necessary action, (ii) do not and will not
contravene its charter or by-laws, its limited liability company or operating
agreement or its certificate of partnership or partnership agreement, as
applicable, or any applicable law or any contractual restriction binding on or
otherwise affecting it or any of its properties, (iii) do not and will not
result in or require the creation of any Lien (other than pursuant to any Loan
Document) upon or with respect to any of its properties, and (iv) do not and
will not result in any default, noncompliance, suspension, revocation,
impairment, forfeiture or nonrenewal of any permit, license, authorization or
approval applicable to its operations or any of its properties which could
reasonably be expected to have a Material Adverse Effect.
(c) Governmental Approvals. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority is
required in connection with the due execution, delivery and performance by any
Loan Party of any Loan Document to which it is or will be a party, except for
(i) consents, authorizations, notices and filings described in Schedule 6.01(c),
55
all of which have been obtained or made or have the status described in such
Schedule 6.01(c), (ii) filings to perfect the Liens created by the Loan
Documents and (iii) consents, authorizations, filings, notices or other acts the
failure to make or obtain could not reasonably be expected to have a Material
Adverse Effect.
(d) Enforceability of Loan Documents. This Agreement is, and each
other Loan Document to which any Loan Party is or will be a party, when
delivered hereunder, will be, a legal, valid and binding obligation of such
Person, enforceable against such Person in accordance with its terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws.
(e) Capitalization; Subsidiaries.
(i) On the Effective Date, after giving effect to the
transactions contemplated hereby to occur on the Effective Date, the authorized
Capital Stock of the Parent and the issued and outstanding Capital Stock of the
Parent are as set forth on Schedule 6.01(e). All of the issued and outstanding
shares of Capital Stock of the Parent have been validly issued and are fully
paid and nonassessable, and the holders thereof are not entitled to any
preemptive, first refusal or other similar rights. Except as described on
Schedule 6.01(e), as of the Effective Date, there are no outstanding debt or
equity securities of the Parent or any of its Subsidiaries and no outstanding
obligations of the Parent or any of its Subsidiaries convertible into or
exchangeable for, or warrants, options or other rights for the purchase or
acquisition from the Parent, or other obligations of the Parent to issue,
directly or indirectly, any shares of Capital Stock of the Parent.
(ii) Schedule 6.01(e) is a complete and correct description of
the name, jurisdiction of incorporation and ownership of the outstanding Capital
Stock of such Subsidiaries of the Parent in existence on the date hereof. All of
the issued and outstanding shares of Capital Stock of such Subsidiaries have
been validly issued and are fully paid and nonassessable, and the holders
thereof are not entitled to any preemptive, first refusal or other similar
rights. Except as described on Schedule 6.01(e), all such Capital Stock is owned
by the Parent or one or more of its wholly-owned Subsidiaries, free and clear of
all Liens (other than Permitted Liens). There are no outstanding debt or equity
securities of the Parent or any of its Subsidiaries and no outstanding
obligations of the Parent or any of its Subsidiaries convertible into or
exchangeable for, or warrants, options or other rights for the purchase or
acquisition from the Parent or any of its Subsidiaries, or other obligations of
any Subsidiary to issue, directly or indirectly, any shares of Capital Stock of
any Subsidiary of the Parent.
(f) Litigation; Commercial Tort Claims. Except as set forth in
Schedule 6.01(f), (i) there is no pending or, to the knowledge of any Loan
Party, threatened action, suit or proceeding affecting any Loan Party before any
court or other Governmental Authority (including, without limitation, the ATF)
or any arbitrator that (A) if adversely determined (and provided there is a
reasonable chance of an adverse determination), could reasonably be expected to
have a Material Adverse Effect or (B) relates to this Agreement or any other
Loan Document or any transaction contemplated hereby or thereby and (ii) as of
the Effective Date, none of the Loan Parties holds any commercial tort claims in
respect of which a claim has been filed in a court of law or a written notice by
an attorney has been given to a potential defendant.
56
(g) Financial Condition.
(i) The Financial Statements, copies of which have been
delivered to the Agent and each Lender, fairly present the consolidated
financial condition of the Parent and its Subsidiaries as at the respective
dates thereof and the consolidated results of operations of the Parent and its
Subsidiaries for the fiscal periods ended on such respective dates, all in
accordance with GAAP, and since May 12, 2005 no event or development has
occurred that has had or could reasonably be expected to have a Material Adverse
Effect.
(ii) NATC has heretofore furnished to the Agent (A) projected
quarterly balance sheets, income statements and statements of cash flows of NATC
and its Subsidiaries for the period from January 1, 2005, through December 31,
2007, and (B) projected annual balance sheets, income statements and statements
of cash flows of the Parent for the Fiscal Years ending in 2005 through 2009,
which projected financial statements shall be updated from time to time pursuant
to Section 7.01(a)(vii). Such projections, as so updated, shall be believed by
NATC at the time furnished to be reasonable, shall have been prepared on a
reasonable basis and in good faith by NATC, and shall have been based on
assumptions believed by NATC to be reasonable at the time made and upon the best
information then reasonably available to NATC, and NATC shall not be aware of
any facts or information that would lead it to believe that such projections, as
so updated, are incorrect or misleading in any material respect.
(h) Compliance with Law, Etc. No Loan Party is in violation of its
organizational documents. No Loan Party is in violation of any law, rule,
regulation, judgment or order of any Governmental Authority (including, without
limitation, the ATF) applicable to it or its property or assets, or any material
term of any agreement or instrument (including any Material Contract) binding on
or otherwise affecting it or any of its properties, which violation could
reasonably be expected to have a Material Adverse Effect, and no Default or
Event of Default has occurred and is continuing.
(i) ERISA. Except as set forth on Schedule 6.01(i), (i) each Employee
Plan is in substantial compliance with ERISA and the Internal Revenue Code, (ii)
no Termination Event has occurred nor is reasonably expected to occur with
respect to any Employee Plan, (iii) copies of each agreement entered into with
the PBGC, the U.S. Department of Labor or the Internal Revenue Service with
respect to any Employee Plan have been delivered to the Agent, (iv) no Employee
Plan had an accumulated or waived funding deficiency or permitted decrease which
would create a deficiency in its funding standard account or has applied for an
extension of any amortization period within the meaning of Section 412 of the
Internal Revenue Code at any time during the previous 60 months, and (v) no Lien
imposed under the Internal Revenue Code or ERISA exists on account of any
Employee Plan within the meaning of Section 412 of the Internal Revenue Code.
Except as set forth on Schedule 6.01(i), no Loan Party or any of its ERISA
Affiliates has incurred any withdrawal liability under ERISA with respect to any
Multiemployer Plan. No Loan Party or any of its ERISA Affiliates nor any
fiduciary of any Employee Plan has (i) engaged in a nonexempt prohibited
57
transaction described in Sections 406 of ERISA or 4975 of the Internal Revenue
Code which could reasonably be expected to have a Material Adverse Effect, (ii)
failed to pay any required installment or other payment required under Section
412 of the Internal Revenue Code on or before the due date for such required
installment or payment, (iii) engaged in a transaction within the meaning of
Section 4069 of ERISA or (iv) incurred any liability to the PBGC which remains
outstanding other than the payment of premiums which are overdue. There are no
pending or, to the best knowledge of any Loan Party, threatened claims, actions,
proceedings or lawsuits (other than claims for benefits in the normal course)
asserted or instituted against (i) any Employee Plan or its assets or (ii) any
Loan Party or any of its ERISA Affiliates with respect to any Employee Plan
which could reasonably be expected to have a Material Adverse Effect. Except as
set forth on Schedule 6.01(i) and except as required by Section 4980B of the
Internal Revenue Code, no Loan Party or any of its ERISA Affiliates maintains an
employee welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides health or welfare benefits coverage (through the purchase of insurance
or otherwise) for any retired or former employee of any Loan Party or any of its
ERISA Affiliates or coverage after a participant's termination of employment.
(j) Taxes, Etc. All Federal, state and local tax returns and other
reports required by applicable law to be filed by any Loan Party have been
filed, or extensions have been obtained, and all taxes, assessments and other
governmental charges imposed upon any Loan Party or any property of any Loan
Party and which have become due and payable on or prior to the date hereof have
been paid, except to the extent contested in good faith by proper proceedings
which stay the imposition of any penalty, fine or Lien resulting from the
non-payment thereof and with respect to which adequate reserves have been set
aside for the payment thereof on the Financial Statements in accordance with
GAAP.
(k) Regulations T, U and X. No Loan Party is or will be engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation T, U or X), and no proceeds of
any Loan will be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock.
(l) Nature of Business. No Loan Party is engaged in any business
other than the manufacturing, marketing and distributing of premium cigarette
papers, tobacco related products, including, loose leaf chewing tobacco and
manufactured cigarettes, and such other businesses currently conducted by any
Loan Party or permitted to be entered into from time to time in accordance with
this Agreement.
(m) Adverse Agreements, Etc. No Loan Party is a party to any
agreement or instrument, or subject to any charter, limited liability company
agreement, partnership agreement or other corporate, partnership or limited
liability company restriction or any judgment, order, regulation, ruling or
other requirement of a court or other Governmental Authority, which has, or in
the future could reasonably be expected to have, a Material Adverse Effect.
(n) Permits, Etc. Each Loan Party has, and is in compliance with, all
permits, licenses, authorizations, approvals, entitlements and accreditations
required for such Person lawfully to own, lease, manage or operate, or to
acquire, each business currently owned, leased, managed or operated, or to be
acquired, by such Person, except when such failure to obtain or comply could not
reasonably be expected to have a Material Adverse Effect. No condition exists or
58
event has occurred which, in itself or with the giving of notice or lapse of
time or both, would result in the suspension, revocation, impairment, forfeiture
or non-renewal of any such permit, license, authorization, approval, entitlement
or accreditation, and there is no claim that any thereof is not in full force
and effect, except for such conditions or events which could not reasonably be
expected to have a Material Adverse Effect
(o) Properties. (i) Each Loan Party has good and marketable title to,
valid leasehold interests in, or valid licenses to use, all property and assets
material to its business, free and clear of all Liens, except Permitted Liens.
All such properties and assets are in good working order and condition, ordinary
wear and tear excepted.
(ii) Schedule 6.01(o) sets forth a complete and accurate list,
as of the Effective Date, of the location, by state and street address, of all
real property owned or leased by each Loan Party. As of the Effective Date, each
Loan Party has valid leasehold interests in the Leases described on Schedule
6.01(o) to which it is a party. Schedule 6.01(o) sets forth with respect to each
such Lease, the commencement date, termination date, renewal options (if any)
and annual base rents. Each such Lease is valid and enforceable in accordance
with its terms in all material respects and, to the Loan Parties' knowledge, is
in full force and effect. No consent or approval of any landlord or other third
party in connection with any such Lease is necessary for any Loan Party to enter
into and execute the Loan Documents to which it is a party, except as set forth
on Schedule 6.01(o). To the knowledge of any Loan Party, no other party to any
such Lease is in default of its obligations thereunder, and no Loan Party (or,
to the knowledge of any Loan Party, any other party to any such Lease) has at
any time delivered or received any notice of default which remains uncured under
any such Lease and, as of the Effective Date, no event has occurred which, with
the giving of notice or the passage of time or both, would constitute a default
under any such Lease by any Loan Party.
(p) Full Disclosure. Each Loan Party has disclosed to the Agent the
Material Contracts, instruments and corporate or other restrictions to which it
is subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
None of the other reports, financial statements, certificates or other
information furnished by or on behalf of any Loan Party to the Agent in
connection with the negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which it
was made, not misleading; provided that, with respect to projected financial
information, each Loan Party represents only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time
prepared. There is no contingent liability or fact that could reasonably be
expected to have a Material Adverse Effect which has not been set forth in a
footnote included in the Financial Statements or a Schedule hereto.
(q) Operating Lease Obligations. On the Effective Date, none of the
Loan Parties has any Operating Lease Obligations other than the Operating Lease
Obligations set forth on Schedule 6.01(q).
59
(r) Environmental Matters. Except as set forth on Schedule 6.01(r),
(i) the operations of each Loan Party are in material compliance with all
Environmental Laws; (ii) there has been no Release at any of the properties
owned or operated by any Loan Party or a predecessor in interest, or at any
disposal or treatment facility which received Hazardous Materials generated by
any Loan Party or any predecessor in interest which could have a Material
Adverse Effect; (iii) no Environmental Action has been asserted against any Loan
Party or any predecessor in interest nor does any Loan Party have knowledge or
notice of any threatened or pending Environmental Action against any Loan Party
or any predecessor in interest which could have a Material Adverse Effect; (iv)
no Environmental Actions have been asserted against any facilities that may have
received Hazardous Materials generated by any Loan Party or any predecessor in
interest which could reasonably be expected to result in the imposition of
Environmental Liabilities and Costs upon any Loan Party that could reasonably be
expected to have a Material Adverse Effect; (v) no property now or formerly
owned or operated by a Loan Party has been used as a treatment or disposal site
for any Hazardous Material except as in material compliance with applicable
Environmental Laws; (vi) no Loan Party has failed to report to the proper
Governmental Authority any Release which is required to be so reported by any
Environmental Laws which could have a Material Adverse Effect; (vii) each Loan
Party holds all licenses, permits and approvals required under any Environmental
Laws in connection with the operation of the business carried on by it, except
for such licenses, permits and approvals as to which a Loan Party's failure to
maintain or comply with could not reasonably be expected to have a Material
Adverse Effect; and (viii) no Loan Party has received any notification pursuant
to any Environmental Laws that (A) any work, repairs, construction or Capital
Expenditures are required to be made in respect as a condition of continued
compliance with any Environmental Laws, or any license, permit or approval
issued pursuant thereto or (B) any license, permit or approval referred to above
is about to be reviewed, made, subject to limitations or conditions, revoked,
withdrawn or terminated, in each case, except as could not reasonably be
expected to have a Material Adverse Effect.
(s) Insurance. Each Loan Party keeps its property adequately insured
and maintains (i) insurance to such extent and against such risks, including
fire, as is customary with companies in the same or similar businesses, (ii)
workmen's compensation insurance in the amount required by applicable law, (iii)
public liability insurance, which shall include product liability insurance, in
the amount customary with companies in the same or similar business against
claims for personal injury or death on properties owned, occupied or controlled
by it, and (iv) such other insurance as may be required by law or as may be
reasonably required by the Agent (including, without limitation, against
larceny, embezzlement or other criminal misappropriation). Schedule 6.01(s) sets
forth a list of all insurance maintained by each Loan Party on the Effective
Date.
(t) [Intentionally Omitted.]
(u) Solvency. After giving effect to the transactions contemplated by
this Agreement and before and after giving effect to each Loan and Letter of
Credit, the Loan Parties on a consolidated basis are Solvent.
(v) Location of Bank Accounts. Schedule 6.01(v) sets forth a complete
and accurate list as of the Effective Date of all deposit, checking and other
bank accounts, all securities and other accounts maintained with any broker
dealer and all other similar accounts maintained by each Loan Party, together
with a description thereof (i.e., the bank or broker dealer at which such
deposit or other account is maintained and the account number and the purpose
thereof).
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(w) Intellectual Property. Except as set forth on Schedule 6.01(w),
each Loan Party owns or licenses or otherwise has the right to use all licenses,
permits, patents, patent applications, trademarks, trademark applications,
service marks, tradenames, copyrights, copyright applications, franchises,
authorizations, non-governmental licenses and permits and other intellectual
property rights that are necessary for the operation of its business, without
infringement upon or conflict with the rights of any other Person with respect
thereto, except for such infringements and conflicts which, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect. Set forth on Schedule 6.01(w) is a complete and accurate list as of the
Effective Date of all such material licenses, permits, patents, patent
applications, trademarks, trademark applications, service marks, tradenames,
copyrights, copyright applications, franchises, authorizations, non-governmental
licenses and permits and other intellectual property rights of each Loan Party.
Except as set forth on Schedule 6.01(w) and to each Loan Party's knowledge,
neither the business of each Loan Party as currently conducted, nor any slogan
or other advertising device, product, process, method, substance, part or other
material now employed, or now contemplated to be employed, by any Loan Party,
infringes upon any rights owned by any other Person, none of the Loan Parties
has received notice of any claim or litigation regarding any of the foregoing,
nor is any such claim or litigation pending or, to its knowledge, threatened,
except for such infringements and conflicts which could not have, individually
or in the aggregate, a Material Adverse Effect. To the best knowledge of each
Loan Party, no patent, invention, device, application, principle or any statute,
law, rule, regulation, standard or code is pending or proposed, which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(x) Material Contracts. Set forth on Schedule 6.01(x) is a complete
and accurate list as of the Effective Date of the Material Contracts of each
Loan Party, showing the parties and subject matter thereof and amendments and
modifications thereto. Each Material Contract (i) is in full force and effect
and is binding upon and enforceable against each Loan Party that is a party
thereto and, to the knowledge of such Loan Party, all other parties thereto in
accordance with its terms, (ii) has not been otherwise amended or modified, and
(iii) is not in default due to the action of any Loan Party or, to the knowledge
of any Loan Party, any other party thereto.
(y) Holding Company and Investment Company Acts. None of the Loan
Parties is (i) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended, or (ii) an
"investment company" or an "affiliated person" or "promoter" of, or "principal
underwriter" of or for, an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended.
(z) Employee and Labor Matters. There is (i) no unfair labor practice
complaint pending or, to the best knowledge of any Loan Party, threatened
against any Loan Party before any Governmental Authority and no grievance or
arbitration proceeding pending or threatened against any Loan Party which arises
out of or under any collective bargaining agreement, (ii) no strike, labor
dispute, slowdown, stoppage or similar action or grievance pending or, to the
knowledge of any Loan Party, threatened against any Loan Party or (iii) to the
61
knowledge of any Loan Party, no union representation question existing with
respect to the employees of any Loan Party and no union organizing activity
taking place with respect to any of the employees of any Loan Party, in each
case which could reasonably be expected to have a Material Adverse Effect.
Except as set forth on Schedule 6.01(i), no Loan Party or any of its ERISA
Affiliates has incurred any liability or obligation under the Worker Adjustment
and Retraining Notification Act ("WARN") or similar state law, which remains
unpaid or unsatisfied. The hours worked and payments made to employees of any
Loan Party have not been in violation of the Fair Labor Standards Act or any
other applicable legal requirements, except to the extent such violations could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect. All material payments due from any Loan Party on
account of wages and employee health and welfare insurance and other benefits
have been paid or accrued in accordance with GAAP as a liability on the books of
such Loan Party.
(aa) Customers and Suppliers. There exists no actual or, to the
knowledge of any Loan Party, threatened termination, cancellation or limitation
of, or modification to or change in, the business relationship between (i) any
Loan Party, on the one hand, and any customer or any group thereof, on the other
hand, whose agreements with any Loan Party are individually or in the aggregate
material to the business or operations of such Loan Party, (ii) any Loan Party,
on the one hand, and any material supplier thereof (other than Bollore), on the
other hand or (iii) any Loan Party, on the one hand, and Bollore, on the other
hand; and, to the knowledge of each Loan Party, there exists no present state of
facts or circumstances that could give rise to or result in any such
termination, cancellation, limitation, modification or change, except in the
case of clauses (i) and (ii) above, for any threatened termination, cancellation
or limitation of, or modification to or change in any of the above mentioned
business relationships, that could not reasonably be expected to have a Material
Adverse Effect.
(bb) No Bankruptcy Filing. No Loan Party is contemplating either an
Insolvency Proceeding or the liquidation of all or a major portion of such Loan
Party's assets or property, and no Loan Party has any knowledge of any Person
contemplating an Insolvency Proceeding against it.
(cc) Name; Jurisdiction of Organization; Organizational ID Number;
Chief Place of Business; Chief Executive Office; FEIN. Schedule 6.01(cc) sets
forth a complete and accurate list as of the date hereof of (i) the exact legal
name of each Loan Party, (ii) the jurisdiction of organization of each Loan
Party, (iii) the organizational identification number of each Loan Party (or
indicates that such Loan Party has no organizational identification number),
(iv) each place of business of each Loan Party, (v) the chief executive office
of each Loan Party and (vi) the federal employer identification number of each
Loan Party.
(dd) Tradenames. Schedule 6.01(dd) hereto sets forth a complete and
accurate list as of the Effective Date of all tradenames, business names or
similar appellations used by each Loan Party or any of its divisions or other
business units during the past five years.
62
(ee) Locations of Collateral. There is no location at which any Loan
Party has any Collateral (except for Inventory in transit) other than (i) those
locations listed on Schedule 6.01(ee) and (ii) any other locations approved in
writing by the Agent from time to time. Schedule 6.01(ee) hereto contains a
true, correct and complete list, as of the Effective Date, of the legal names
and addresses of each warehouse at which Collateral of each Loan Party is
stored. None of the receipts received by any Loan Party from any warehouse
states that the goods covered thereby are to be delivered to bearer or to the
order of a named Person or to a named Person and such named Person's assigns.
(ff) Inactive Subsidiaries. Neither International Flavors and
Technology, Inc. or Select Tobacco Brands, Inc. is obligated in respect of any
Indebtedness or other liabilities, grants or suffers to exist any Lien on its
assets or property, conducts any operations or business, or owns or acquires any
assets or properties, other than, in the case of Select Tobacco Brands, Inc.,
maintaining a commercial checking account (with a zero balance) and an MSA
investment account (holding a bond with a value of $172,000) with JPMorgan Chase
Bank, N.A.
(gg) Security Interests. Each Security Agreement creates in favor of
the Agent, for the benefit of the Lenders, a legal, valid and enforceable
security interest in the Collateral secured thereby. Upon the filing of the
UCC-1 financing statements described in Section 5.01(d)(ix) and the recording of
the Collateral Assignments for Security referred to in each Security Agreement
in the United States Patent and Trademark Office and the United States Copyright
Office, as applicable, such security interests in and Liens on the Collateral
granted thereby shall be perfected, first priority security interests, and no
further recordings or filings are or will be required in connection with the
creation, perfection or enforcement of such security interests and Liens, other
than (i) the filing of continuation statements in accordance with applicable
law, (ii) the recording of the Collateral Assignments for Security pursuant to
each Security Agreement in the United States Patent and Trademark Office and the
United States Copyright Office, as applicable, with respect to after-acquired
U.S. patent and trademark applications and registrations and U.S. copyrights and
(iii) the recordation of appropriate evidence of the security interest in the
appropriate foreign registry with respect to all foreign intellectual property.
(hh) Brokerage Fees. The Loan Parties have not utilized the services
of any broker of finder in connection with obtaining financing from the Agent
and the Lenders under this Agreement and no brokerage commission or finders fee
is payable by the Loan Parties in connection herewith.
(ii) Schedules. All of the information which is required to be
scheduled to this Agreement is set forth on the Schedules attached hereto, is
correct and accurate and does not omit to state any information material thereto
(other than immaterial inaccuracies that do not affect the substance thereof).
(jj) Representations and Warranties in Documents; No Default. All
representations and warranties set forth in this Agreement and the other Loan
Documents are true and correct in all material respects at the time as of which
such representations were made and on the Effective Date. No Event of Default
has occurred and is continuing and no condition exists which constitutes a
Default or an Event of Default.
63
ARTICLE VII
COVENANTS OF THE LOAN PARTIES
Section 7.01 Affirmative Covenants. So long as any principal of or
interest on any Loan, Reimbursement Obligation, Letter of Credit Obligation or
any other Obligation (whether or not due) shall remain unpaid or any Lender
shall have any Commitment hereunder, each Loan Party will, unless the Required
Lenders shall otherwise consent in writing:
(a) Reporting Requirements. Furnish to the Agent and each Lender:
(i) as soon as available and in any event within 50 days after
the end of each fiscal quarter of NATC and its Subsidiaries commencing with the
first fiscal quarter of NATC and its Subsidiaries ending after the Effective
Date, consolidated balance sheets, consolidated and consolidating income
statements and consolidated statements of cash flows of NATC and its
Subsidiaries as at the end of such quarter, and for the period commencing at the
end of the immediately preceding Fiscal Year and ending with the end of such
quarter, setting forth in each case in comparative form the figures for the
corresponding date or period of the immediately preceding Fiscal Year, all in
reasonable detail and certified by an Authorized Officer of NATC as fairly
presenting, in all material respects, the financial position of NATC and its
Subsidiaries as of the end of such quarter and the results of operations and
cash flows of NATC and its Subsidiaries for such quarter, in accordance with
GAAP applied in a manner consistent with that of the most recent audited
financial statements of NATC and its Subsidiaries furnished to the Agent and the
Lenders, subject to normal year-end adjustments;
(ii) as soon as available, and in any event within 95 days after
the end of each Fiscal Year of NATC and its Subsidiaries, consolidated balance
sheets, consolidated and consolidating income statements and consolidated
statements of cash flows of NATC and its Subsidiaries as at the end of such
Fiscal Year, setting forth in each case in comparative form the corresponding
figures for the immediately preceding Fiscal Year, all in reasonable detail and
prepared in accordance with GAAP, and accompanied by a report and an unqualified
opinion in respect to such consolidated financial statements, prepared in
accordance with generally accepted auditing standards, of independent certified
public accountants of recognized standing selected by NATC and reasonably
satisfactory to the Agent (which opinion shall be without (A) a "going concern"
or like qualification or exception, (B) any qualification or exception as to the
scope of such audit, or (C) any qualification which relates to the treatment or
classification of any item and which, as a condition to the removal of such
qualification, would require an adjustment to such item, the effect of which
would be to cause any noncompliance with the provisions of Section 7.03),
together with a written statement of such accountants (1) to the effect that, in
making the examination necessary for their certification of such financial
statements, they have not obtained any knowledge of the existence of an Event of
Default under Section 7.03 and (2) if such accountants shall have obtained any
knowledge of the existence of such an Event of Default, describing the nature
thereof;
64
(iii) as soon as available, and in any event within 35 days
after the end of each fiscal month of NATC and its Subsidiaries commencing with
the first fiscal month of NATC and its Subsidiaries ending after the Effective
Date, (A) internally prepared consolidated balance sheets, consolidated and
consolidating income statements and consolidated statements of cash flows as at
the end of such fiscal month, and for the period commencing at the end of the
immediately preceding Fiscal Year and ending with the end of such fiscal month,
all in reasonable detail and certified by an Authorized Officer of NATC as
fairly presenting, in all material respects, the financial position of NATC and
its Subsidiaries as at the end of such fiscal month and the results of
operations and cash flows of NATC and its Subsidiaries for such fiscal month, in
accordance with GAAP applied in a manner consistent with that of the most recent
audited financial statements furnished to the Agent and the Lenders, subject to
normal year-end adjustments, and (B) payables, inventory and receivables aging
reports, prepared in accordance with NATC's customary and ordinary practice.
(iv) simultaneously with the delivery of the financial
statements of NATC and its Subsidiaries required by clauses (i), (ii) and (iii)
of this Section 7.01(a), (A) a certificate of an Authorized Officer of NATC (x)
stating that such Authorized Officer has reviewed the provisions of this
Agreement and the other Loan Documents and has made or caused to be made under
his or her supervision a review of the condition and operations of NATC and its
Subsidiaries during the period covered by such financial statements with a view
to determining whether NATC and its Subsidiaries were in compliance with all of
the provisions of this Agreement and such Loan Documents at the times such
compliance is required hereby and thereby, and that such review has not
disclosed, and such Authorized Officer has no knowledge of, the existence during
such period of an Event of Default or Default or, if an Event of Default or
Default existed, describing the nature and period of existence thereof and the
action which NATC and its Subsidiaries propose to take or have taken with
respect thereto and (y) attaching a schedule showing the calculations of (1) the
financial covenants specified in Section 7.03 and (2) the Leverage Ratio for the
applicable period for purposes of determining the Applicable LIBOR Rate Margin
and Applicable Reference Rate Margin in accordance with the terms of the
definition thereof and (B) a report setting forth the figures for the
corresponding date or period set forth in the projections delivered to the Agent
pursuant to Section 6.01(g)(i) and (g)(ii), all in reasonable detail and
certified by an Authorized Officer of NATC ;
(v) [Intentionally Omitted.]
(vi) [Intentionally Omitted.]
(vii) as soon as available and in any event not later than 31
days after the end of each Fiscal Year, financial projections, supplementing and
superseding the financial projections referred to in Section 6.01(g)(ii)(A),
prepared on a monthly basis and otherwise in form and substance reasonably
satisfactory to the Agent, for the immediately succeeding Fiscal Year for NATC
and its Subsidiaries, all such financial projections to be reasonable, to be
prepared on a reasonable basis and in good faith, and to be based on assumptions
believed by NATC to be reasonable at the time made and from the information then
available to NATC;
65
(viii) promptly after submission to any Governmental Authority,
all documents and information furnished to such Governmental Authority in
connection with any material investigation of any Loan Party other than routine
inquiries by such Governmental Authority;
(ix) as soon as possible, and in any event within 3 Business
Days after the occurrence of an Event of Default or Default or the occurrence of
any event or development that could reasonably be expected to have a Material
Adverse Effect, the written statement of an Authorized Officer of the
Administrative Borrower setting forth the details of such Event of Default or
Default or other event or development that could reasonably be expected to have
a Material Adverse Effect and the action which the affected Loan Party proposes
to take with respect thereto;
(x) (A) as soon as possible and in any event within 10 Business
Days after any Loan Party or any ERISA Affiliate thereof knows or has reason to
know that (1) any Reportable Event with respect to any Employee Plan has
occurred, (2) any other Termination Event with respect to any Employee Plan has
occurred, or (3) an accumulated funding deficiency has been incurred or an
application has been made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including installment payments) or
an extension of any amortization period under Section 412 of the Internal
Revenue Code with respect to an Employee Plan, a statement of an Authorized
Officer of the Administrative Borrower setting forth the details of such
occurrence and the action, if any, which such Loan Party or such ERISA Affiliate
proposes to take with respect thereto, (B) promptly and in any event within 3
Business Days after receipt thereof by any Loan Party or any ERISA Affiliate
thereof from the PBGC, copies of each notice received by any Loan Party or any
ERISA Affiliate thereof of the PBGC's intention to terminate any Plan or to have
a trustee appointed to administer any Plan, (C) promptly and in any event within
10 days after the filing thereof with the Internal Revenue Service if requested
by the Agent, copies of each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) with respect to each Employee Plan and Multiemployer
Plan, (D) promptly and in any event within 10 days after any Loan Party or any
ERISA Affiliate thereof knows or has reason to know that a required installment
within the meaning of Section 412 of the Internal Revenue Code has not been made
when due with respect to an Employee Plan, (E) promptly and in any event within
3 Business Days after receipt thereof by any Loan Party or any ERISA Affiliate
thereof from a sponsor of a Multiemployer Plan or from the PBGC, a copy of each
notice received by any Loan Party or any ERISA Affiliate thereof concerning the
imposition or amount of withdrawal liability under Section 4202 of ERISA or
indicating that such Multiemployer Plan may enter reorganization status under
Section 4241 of ERISA, and (F) promptly and in any event within 10 days after
any Loan Party or any ERISA Affiliate thereof sends notice of a plant closing or
mass layoff (as defined in WARN) to employees, copies of each such notice sent
by such Loan Party or such ERISA Affiliate thereof;
(xi) promptly after the commencement thereof but in any event
not later than 5 Business Days after service of process with respect thereto on,
or the obtaining of knowledge thereof by, any Authorized Officer of any Loan
Party, notice of each action, suit or proceeding before any court or other
Governmental Authority or other regulatory body or any arbitrator which, if
adversely determined (and provided there is a reasonable chance of an adverse
determination), could reasonably to expected to have a Material Adverse Effect;
66
(xii) as soon as possible and in any event within 5 Business
Days after execution, receipt or delivery thereof, copies of any material
notices that any Loan Party executes or receives in connection with any Material
Contract (including the NAHC Notes Indenture Documents and the NATC Notes
Indenture Documents);
(xiii) as soon as possible and in any event within 5 Business
Days after execution, receipt or delivery thereof, copies of any material
notices that any Loan Party executes or receives in connection with the sale or
other Disposition of the Capital Stock of, or all or substantially all of the
assets of, any Loan Party;
(xiv) as soon as possible and in any event within 5 Business
Days after an Authorized Officer of any Loan Party has actual knowledge thereof,
copies of any notices with respect to product recalls that any Loan Party
receives from any Governmental Authority;
(xv) as soon as possible and in any event within 15 days after
each meeting of the Board of Directors of the Parent, a copy of the meeting
agenda for such board meeting;
(xvi) as soon as possible and in any event within 5 Business
Days after submission to ATF, copies of any ATF Form 5000.24 and ATF Form
5230.3;
(xvii) promptly after the sending or filing thereof, copies of
all statements, reports and other information any Loan Party sends to any
holders of its public Indebtedness or its securities or files with the SEC or
any national (domestic or foreign) securities exchange;
(xviii) promptly upon receipt thereof, copies of all management
letters, if any, submitted to any Loan Party by its auditors in connection with
any annual or interim audit of the books thereof; and
(xix) promptly upon request, such other information concerning
the condition or operations, financial or otherwise, of any Loan Party as the
Agent may from time to time may reasonably request.
(b) Additional Guaranties and Collateral Security. Cause:
(i) each Subsidiary of any Loan Party not in existence on the
Effective Date, and each Subsidiary of any Loan Party which is a non-borrowing
Subsidiary on the Effective Date or upon formation or acquisition but later
ceases to be a non-borrowing Subsidiary, to execute and deliver to the Agent
promptly and in any event within 10 days (except that, with respect to clause
(D) below, 30 days) after the formation, acquisition or change in status thereof
(A) a Guaranty guaranteeing the Obligations, (B) a Security Agreement, (C) if
such Subsidiary has any Subsidiaries, a Pledge Agreement together with (x)
certificates evidencing all of the Capital Stock of any Person owned by such
Subsidiary, if certificated, (y) undated stock powers executed in blank with
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signature guaranteed, and (z) such opinion of counsel and such approving
certificate of such Subsidiary as the Agent may reasonably request in respect of
complying with any legend on any such certificate or any other matter relating
to such shares, (D) one or more Mortgages creating, on the owned real property
of such Subsidiary, a perfected, first priority Lien on such real property, a
Title Insurance Policy covering such real property, a current ALTA survey
thereof and a surveyor's certificate, each in form and substance reasonably
satisfactory to the Agent, together with such other agreements, instruments and
documents as the Agent may reasonably require whether comparable to the
documents required under Section 7.01(o) or otherwise, and (E) such other
agreements, instruments, approvals, legal opinions or other documents reasonably
requested by the Agent in order to create, perfect, establish the first priority
of or otherwise protect any Lien purported to be covered by any such Security
Agreement, Pledge Agreement or Mortgage or otherwise to effect the intent that
such Subsidiary shall become bound by all of the terms, covenants and agreements
applicable to the Loan Party contained in the Loan Documents and that all
property and assets of such Subsidiary shall become Collateral for the
Obligations; and
(ii) each owner of the Capital Stock of any such Subsidiary to
execute and deliver promptly and in any event within 10 days after the formation
or acquisition of such Subsidiary a Pledge Agreement, together with (A)
certificates evidencing all of the Capital Stock of such Subsidiary, if
certificated, (B) undated stock powers or other appropriate instruments of
assignment executed in blank with signature guaranteed, (C) such opinion of
counsel and such approving certificate of such Subsidiary as the Agent may
reasonably request in respect of complying with any legend on any such
certificate or any other matter relating to such shares and (D) such other
agreements, instruments, approvals, legal opinions or other documents reasonably
requested by the Agent.
(c) Compliance with Laws, Etc. (i) Comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations, orders (including, all ATF regulations and all Environmental
Laws), judgments and awards (including any settlement of any claim that, if
breached, could give rise to any of the foregoing), except to the extent
non-compliance could not reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect, and (ii) pay, and cause each of its
Subsidiaries to pay, before the same become delinquent all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or profits
or upon any of its properties, and all lawful claims which if unpaid might
become a Lien or charge upon any of its properties, except to the extent
contested in good faith by proper proceedings which stay the imposition of any
penalty, fine or Lien resulting from the non-payment thereof and with respect to
which adequate reserves have been set aside for the payment thereof in
accordance with GAAP.
(d) Preservation of Existence, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, its existence, rights and
privileges, and become or remain, and cause each of its Subsidiaries to become
or remain, duly qualified and in good standing in each jurisdiction in which the
character of the properties owned or leased by it or in which the transaction of
its business makes such qualification necessary.
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(e) Keeping of Records and Books of Account. Keep, and cause each of
its Subsidiaries to keep, adequate records and books of account, with complete
entries made to permit the preparation of financial statements in accordance
with GAAP.
(f) Inspection Rights. Subject to Section 4.01, permit, and cause
each of its Subsidiaries to permit, the agents and representatives of the Agent
at any time and from time to time during normal business hours, at the
reasonable expense of the Borrowers, to examine and make copies of and abstracts
from its records and books of account, to visit and inspect its properties, to
verify materials, leases, notes, accounts receivable, deposit accounts and its
other assets, to conduct audits, physical counts, valuations, appraisals, Phase
I Environmental Site Assessments or examinations and to discuss its affairs,
finances and accounts with any of its directors, officers, managerial employees,
independent accountants or any of its other representatives. In furtherance of
the foregoing, each Loan Party hereby authorizes its independent accountants,
and the independent accountants of each of its Subsidiaries, to discuss the
affairs, finances and accounts of such Person (independently or together with
representatives of such Person) with the agents and representatives of the Agent
in accordance with this Section 7.01(f).
(g) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties which
are necessary or useful in the proper conduct of its business in good working
order and condition, ordinary wear and tear excepted, and comply in all material
respects, and cause each of its Subsidiaries to comply in all material respects,
at all times with the provisions of all leases to which it is a party as lessee
or under which it occupies property, so as to prevent any loss or forfeiture
thereof or thereunder.
(h) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations (including, without limitation, comprehensive general
liability, hazard, rent and business interruption insurance) with respect to its
properties (including all real properties leased or owned by it) and business,
in such amounts and covering such risks as is required by any Governmental
Authority having jurisdiction with respect thereto or as is carried generally in
accordance with sound business practice by companies in similar businesses
similarly situated. All policies covering the Collateral are to be made payable
to the Agent for the benefit of the Lenders, as its interests may appear, in
case of loss, under a standard non-contributory "lender" or "secured party"
clause and are to contain such other provisions as the Agent may reasonably
require to fully protect the Lenders' interest in the Collateral and to any
payments to be made under such policies which, if paid during the absence of an
Event of Default, will be promptly delivered by Agent to Administrative
Borrower. All certificates of insurance are to be delivered to the Agent and the
policies are to be premium prepaid, with the loss payable and additional insured
endorsement in favor of the Agent and such other Persons as the Agent may
designate from time to time, and shall provide for not less than 30 days' prior
written notice to the Agent of the exercise of any right of cancellation. If any
Loan Party or any of its Subsidiaries fails to maintain such insurance, the
Agent may arrange for such insurance, but at the Borrowers' expense and without
any responsibility on the Agent's part for obtaining the insurance, the solvency
of the insurance companies, the adequacy of the coverage, or the collection of
claims. Upon the occurrence and during the continuance of an Event of Default,
the Agent shall have the sole right, in the name of the Lenders, any Loan Party
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and its Subsidiaries, to file claims under any insurance policies, to receive,
receipt and give acquittance for any payments that may be payable thereunder,
and to execute any and all endorsements, receipts, releases, assignments,
reassignments or other documents that may be necessary to effect the collection,
compromise or settlement of any claims under any such insurance policies, and
the Agent shall promptly notify the Administrative Borrower if the Agent
undertakes any of the foregoing actions.
(i) Obtaining of Permits, Etc. Obtain, maintain and preserve, and
cause each of its Subsidiaries to obtain, maintain and preserve, and take all
necessary action to timely renew, all material permits, licenses,
authorizations, approvals, entitlements and accreditations which are necessary
or useful in the proper conduct of its business.
(j) Environmental. (i) Keep any property either owned or operated by
it or any of its Subsidiaries free of any Environmental Liens; (ii) comply, and
cause each of its Subsidiaries to comply, in all material respects with
Environmental Laws and provide to the Agent any documentation of such compliance
which the Agent may reasonably request; (iii) provide the Agent written notice
within ten (10) days of any Release of a Hazardous Material in excess of any
reportable quantity from or onto property at any time owned or operated by it or
any of its Subsidiaries and take any Remedial Actions required to ▇▇▇▇▇ said
Release; (iv) provide the Agent with written notice within ten (10) days of the
receipt of any of the following: (A) notice that an Environmental Lien has been
filed against any property of any Loan Party or any of its Subsidiaries; (B)
commencement of any Environmental Action or notice that an Environmental Action
will be filed against any Loan Party or any of its Subsidiaries; and (C) notice
of a violation, citation or other administrative order which could have a
Material Adverse Effect.
(k) Further Assurances. Take such action and execute, acknowledge and
deliver, and cause each of its Subsidiaries to take such action and execute,
acknowledge and deliver, at its sole cost and expense, such agreements,
instruments or other documents as the Agent may reasonably require from time to
time in order (i) to carry out more effectively the purposes of this Agreement
and the other Loan Documents, (ii) to subject to valid and perfected first
priority Liens (subject to Permitted Liens) any of the Collateral, (iii) to
establish and maintain the validity and effectiveness of any of the Loan
Documents and the validity, perfection and priority of the Liens intended to be
created thereby, and (iv) to better assure, convey, grant, assign, transfer and
confirm unto the Agent, each Lender and the L/C Issuer the rights now or
hereafter intended to be granted to it under this Agreement or any other Loan
Document. In furtherance of the foregoing, to the maximum extent permitted by
applicable law, each Loan Party (i) so long as an Event of Default has occurred
and is continuing, authorizes the Agent to execute any such agreements,
instruments or other documents in such Loan Party's name and to file such
agreements, instruments or other documents in any appropriate filing office,
(ii) authorizes the Agent to file any financing statement required hereunder or
under any other Loan Document, and any continuation statement or amendment with
respect thereto, in any appropriate filing office without the signature of such
Loan Party, and (iii) ratifies the filing of any financing statement, and any
continuation statement or amendment with respect thereto, filed without the
signature of such Loan Party prior to the date hereof.
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(l) Change in Collateral; Collateral Records. (i) Give the Agent not
less than 15 days' prior written notice of any change in the location of any
Collateral, other than to locations set forth on Schedule 6.01(ee) and with
respect to which the Agent has filed financing statements and otherwise fully
perfected its Liens thereon, (ii) advise the Agent promptly, in sufficient
detail, of any material adverse change relating to the type, quantity or quality
of the Collateral or the Lien granted thereon and (iii) execute and deliver, and
cause each of its Subsidiaries to execute and deliver, to the Agent for the
benefit of the Lenders from time to time, solely for the Agent's convenience in
maintaining a record of Collateral, such written statements and schedules as the
Agent may reasonably require, designating, identifying or describing the
Collateral.
(m) Landlord Waivers; Collateral Access Agreements. (i) At any time
any Collateral with a book value in excess of $1,000,000 (when aggregated with
all other Collateral at the same location) is located on any real property of a
Loan Party (whether such real property is now existing or acquired after the
Effective Date) which is not owned by a Loan Party, use commercially reasonable
efforts to obtain written subordinations or waivers, in form and substance
satisfactory to the Agent, of all present and future Liens to which the owner or
lessor of such premises may be entitled to assert against the Collateral.
(ii) Use commercially reasonably efforts to obtain written
access agreements, in form and substance satisfactory to the Agent, providing
access to Collateral having an aggregate value in excess of $1,000,000 that is
located on any premises not owned by a Loan Party in order to remove such
Collateral from such premises during an Event of Default.
(n) Subordination. Cause all Indebtedness and other obligations now
or hereafter owed by it to any of its Affiliates, to be subordinated in right of
payment and security to the Indebtedness and other Obligations owing to the
Agent and the Lenders in accordance with the Intercompany Subordination
Agreement.
(o) After Acquired Real Property. Upon the acquisition by it or any
of its Subsidiaries after the date hereof of any fee interest in any real
property (wherever located) (each such interest being an "After Acquired
Property") with a Current Value (as defined below) in excess of $500,000,
immediately so notify the Agent, setting forth with specificity a description of
the interest acquired, the location of the real property, any structures or
improvements thereon and either an appraisal or such Loan Party's good-faith
estimate of the current value of such real property (for purposes of this
Section, the "Current Value"). The Agent shall notify such Loan Party whether it
intends to require a Mortgage and the other documents referred to below. Upon
receipt of such notice requesting a Mortgage, the Person which has acquired such
After Acquired Property shall promptly furnish to the Agent the following, each
in form and substance reasonably satisfactory to the Agent: (i) a Mortgage with
respect to such real property and related assets located at the After Acquired
Property, each duly executed by such Person and in recordable form; (ii)
evidence of the recording of the Mortgage referred to in clause (i) above in
such office or offices as may be necessary or, in the reasonable opinion of the
Agent, desirable to create and perfect a valid and enforceable first priority
lien on the property purported to be covered thereby or to otherwise protect the
rights of the Agent and the Lenders thereunder, (iii) a Title Insurance Policy,
(iv) a survey of such real property, certified to the Agent and to the issuer of
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the Title Insurance Policy by a licensed professional surveyor reasonably
satisfactory to the Agent, (v) Phase I Environmental Site Assessments with
respect to such real property, certified to the Agent by a company reasonably
satisfactory to the Agent, and (vi) such other documents or instruments
(including guarantees and opinions of counsel) as the Agent may reasonably
require. The Borrowers shall pay all fees and expenses, including reasonable
attorneys' fees and expenses, and all title insurance charges and premiums, in
connection with each Loan Party's obligations under this Section 7.01(o).
(p) Fiscal Year. Cause the Fiscal Year of the Parent and its
Subsidiaries to end on December 31st of each calendar year unless the Agent
consents to a change in such Fiscal Year (and appropriate related changes to
this Agreement).
(q) License Agreement. Maintain in effect NATC's Distribution
Agreements with Bollore Technologies S.A. ("Bollore") during the term of this
Agreement. The term "Bollore Distribution Agreements" means, collectively (i)
the Amended and Restated Distribution and License Agreement, dated as of
November 30, 1992, as amended, between NATC and Bollore in regard to the
territory of the United States and the District of Columbia and (ii) the Amended
and Restated Distribution and License Agreement, dated as of November 30, 1992,
as amended, between NATC and Bollore in regard to the territory of Canada.
(r) Chief Executive Officer. The Chief Executive Officer of the
business of the Parent shall be reasonably acceptable to Agent and the Lenders;
for purposes of this Section 7.01(r), ▇▇▇▇▇▇▇ & Marsal, LLC is deemed to be
reasonably acceptable.
(s) Use of Proceeds. The proceeds of the Loans shall be used to
refinance existing bank indebtedness of the Borrowers and for working capital
requirements and other general corporate purposes of the Borrowers.
Section 7.02 Negative Covenants. So long as any principal of or
interest on any Loan, Reimbursement Obligation, Letter of Credit Obligation or
any other Obligation (whether or not due) shall remain unpaid or any Lender
shall have any Commitment hereunder, each Loan Party shall not, unless the
Required Lenders shall otherwise consent in writing:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien
upon or with respect to any of its properties, whether now owned or hereafter
acquired; file or suffer to exist under the Uniform Commercial Code or any
similar law or statute of any jurisdiction, a financing statement (or the
equivalent thereof) that names it or any of its Subsidiaries as debtor; sign or
suffer to exist any security agreement authorizing any secured party thereunder
to file such financing statement (or the equivalent thereof); sell any of its
property or assets subject to an understanding or agreement, contingent or
otherwise, to repurchase such property or assets (including sales of accounts
receivable) with recourse to it or any of its Subsidiaries or assign or
otherwise transfer, or permit any of its Subsidiaries to assign or otherwise
transfer, any account or other right to receive income; other than, as to all of
the above, Permitted Liens.
(b) Indebtedness. Create, incur, assume, guarantee or suffer to
exist, or otherwise become or remain liable with respect to, or permit any of
its Subsidiaries to create, incur, assume, guarantee or suffer to exist or
otherwise become or remain liable with respect to, any Indebtedness other than
Permitted Indebtedness.
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(c) Fundamental Changes; Dispositions. Wind-up, liquidate or
dissolve, or merge, consolidate or amalgamate with any Person, or convey, sell,
lease or sublease, transfer or otherwise dispose of, whether in one transaction
or a series of related transactions, all or any part of its business, property
or assets, whether now owned or hereafter acquired (or agree to do any of the
foregoing), or purchase or otherwise acquire, whether in one transaction or a
series of related transactions, all or substantially all of the assets of any
Person (or any division thereof) (or agree to do any of the foregoing), or
permit any of its Subsidiaries to do any of the foregoing; provided, however,
that:
(i) any wholly-owned Subsidiary of NATC may be merged into any
Borrower, may consolidate with any Borrower or may sell, transfer or otherwise
dispose of all or any part of its business, property or assets to any Borrower,
so long as (A) no other provision of this Agreement would be violated thereby,
(B) such Loan Party gives the Agent at least 30 days' prior written notice of
such merger, disposition or consolidation, (C) no Default or Event of Default
shall have occurred and be continuing either before or after giving effect to
such transaction, (D) the Lenders' rights in any Collateral, including, without
limitation, the existence, perfection and priority of any Lien thereon, are not
adversely affected by such merger or consolidation and (E) the surviving
Subsidiary, if any, is joined as a Loan Party hereunder and is a party to a
Guaranty and a Security Agreement and the Capital Stock of which Subsidiary is
the subject of a Pledge Agreement, in each case, which is in full force and
effect on the date of and immediately after giving effect to such merger or
consolidation; and
(ii) any Loan Party and its Subsidiaries may (A) sell Inventory
and excess raw materials in the ordinary course of business, (B) sell, liquidate
or otherwise transfer assets used in or relating to the manufactured cigarette
business of such Persons, (C) cancel any NAHC Notes held by NATC, (D) dispose of
obsolete or worn-out equipment in the ordinary course of business, and (E) sell
or otherwise dispose of other property or assets for cash in an aggregate amount
not less than the fair market value of such property or assets, provided that
the Net Cash Proceeds of such Dispositions (x) in the case of clauses (D) and
(E) above, shall not exceed $1,500,000 in the aggregate in any Fiscal Year.
(d) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any change in the nature of its business as described in
Section 6.01(l).
(e) Loans, Advances, Investments, Etc. Make or commit or agree to
make any loan, advance guarantee of obligations, other extension of credit or
capital contributions to, or hold or invest in or commit or agree to hold or
invest in, or purchase or otherwise acquire or commit or agree to purchase or
otherwise acquire any shares of the Capital Stock, bonds, notes, debentures or
other securities of, or make or commit or agree to make any other investment in,
any other Person, or purchase or own any futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or permit any of its Subsidiaries to
do any of the foregoing, except for: (i) investments existing on the date
hereof, as set forth on Schedule 7.02(e) hereto, but not any increase in the
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amount thereof as set forth in such Schedule or any other modification of the
terms thereof, (ii) so long as no Event of Default has occurred and is
continuing, intercompany loans and advances (A) by it to any Loan Party (other
than the Parent ) and by any Loan Party to it (other than the Parent), made in
the ordinary course of business and (B) by any Loan Party to the Parent, so long
as the proceeds of such loans are used for the purposes described in Section
7.02(h)(A) as if such funds were paid to the Parent by means of a dividend
rather than a loan, (iii) the repurchase of any NAHC Notes or NATC Notes to the
extent permitted under Section 7.02(m)(ii), (iv) Permitted Investments and (v)
Permitted Acquisitions.
(f) Lease Obligations. Create, incur or suffer to exist, or permit
any of its Subsidiaries to create, incur or suffer to exist, any obligations as
lessee (i) for the payment of rent for any real or personal property in
connection with any sale and leaseback transaction, or (ii) for the payment of
rent for any real or personal property under leases or agreements to lease other
than (A) Capitalized Lease Obligations which would not cause the aggregate
amount of all obligations under Capitalized Leases entered into after the
Effective Date owing by all Loan Parties and their Subsidiaries in any Fiscal
Year to exceed the amounts set forth in subsection (g) of this Section 7.02, and
(B) Operating Lease Obligations which would not cause the aggregate amount of
all Operating Lease Obligations owing by all Loan Parties and their Subsidiaries
in any Fiscal Year to exceed $5,000,000.
(g) Capital Expenditures. Make or commit or agree to make, or permit
any of its Subsidiaries to make or commit or agree to make, any Capital
Expenditure (by purchase or Capitalized Lease) that would cause the aggregate
amount of all Capital Expenditures made by the Borrowers and their Subsidiaries
for the Fiscal Year set forth below to exceed the amount set forth opposite such
date, provided that (i) the lesser of (x) 100% of any such amount referred to
below, if not so expended in any Fiscal Year for which it is permitted and (y)
$3,000,000, may be carried over for expenditure in any succeeding Fiscal Year
and (ii) Capital Expenditures made pursuant to this Section during any Fiscal
Year shall be deemed made, first, in respect of amounts permitted for such
Fiscal Year as provided above and, second, in respect of amounts carried over
from prior Fiscal Years pursuant to clause (i) above:
Fiscal Year End Capital Expenditures
--------------- --------------------
December 31, 2005 $5,000,000
December 31, 2006 $3,000,000
December 31, 2007 $2,000,000
December 31, 2008 $2,000,000
December 31, 2009 $2,000,000
(h) Restricted Payments. (i) Declare or pay any dividend or other
distribution, direct or indirect, on account of any Capital Stock of any
Borrower or any of its Subsidiaries, now or hereafter outstanding, (ii) make any
repurchase, redemption, retirement, defeasance, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Capital
Stock of any Borrower or any direct or indirect parent of any Borrower, now or
hereafter outstanding, (iii) make any payment to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights for the purchase
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or acquisition of shares of any class of Capital Stock of any Borrower, now or
hereafter outstanding, (iv) return any Capital Stock to any shareholders or
other equity holders of any Borrower or any of its Subsidiaries, or make any
other distribution of property, assets, shares of Capital Stock, warrants,
rights, options, obligations or securities thereto as such or (v) pay any
management fees or any other fees or expenses (including the reimbursement
thereof by any Borrower or any of its Subsidiaries) pursuant to any management,
consulting or other services agreement to any of the shareholders or other
equityholders of any Borrower or any of its Subsidiaries or other Affiliates, or
to any other Subsidiaries or Affiliates of any Borrower; provided, however, (A)
any Loan Party may pay dividends to the Parent (1) in amounts necessary to pay
customary expenses of the Parent in the ordinary course of its business as a
public holding company (including salaries and related reasonable and customary
expenses incurred by employees of the Parent), (2) in amounts necessary to pay
taxes when due and owing by the Parent, (3) in amounts necessary to pay
scheduled interest on the NAHC Notes and (4) to enable the Parent to repurchase
the NAHC Notes to the extent the making of such dividends to fund such
repurchase is permitted under the NATC Indenture, (B) any Subsidiary of any
Borrower may pay dividends to such Borrower, and (C) the Parent may pay
dividends in the form of common Capital Stock, provided that, in each case of
clauses (A) through (C) above, at the election of the Agent, which the Agent may
and, upon the direction of the Required Lenders, shall make by notice to the
Administrative Borrower, no such payment shall be made if an Event of Default
shall have occurred and be continuing or would result from the making of any
such payment or, if either immediately before or after giving effect to any such
payment, on a pro forma basis the Loans and Letter of Credit Obligations exceed
the Leverage Cap.
(i) Federal Reserve Regulations. Permit any Loan or the proceeds of
any Loan under this Agreement to be used for any purpose that would cause such
Loan to be a margin loan under the provisions of Regulation T, U or X of the
Board.
(j) Transactions with Affiliates. Enter into, renew, extend or be a
party to, or permit any of its Subsidiaries to enter into, renew, extend or be a
party to, any transaction or series of related transactions (including, without
limitation, the purchase, sale, lease, transfer or exchange of property or
assets of any kind or the rendering of services of any kind) with any Affiliate,
except (i) in the ordinary course of business in a manner and to an extent
consistent with past practice and necessary or desirable for the prudent
operation of its business, for fair consideration and on terms no less favorable
to it or its Subsidiaries than would be obtainable in a comparable arm's length
transaction with a Person that is not an Affiliate thereof, (ii) transactions
with another Loan Party and (iii) transactions permitted by Section 7.02(e).
(k) Limitations on Dividends and Other Payment Restrictions Affecting
Subsidiaries. Create or otherwise cause, incur, assume, suffer or permit to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Subsidiary of any Loan Party (i) to pay dividends or to
make any other distribution on any shares of Capital Stock of such Subsidiary
owned by any Loan Party or any of its Subsidiaries, (ii) to pay or prepay or to
subordinate any Indebtedness owed to any Loan Party or any of its Subsidiaries,
(iii) to make loans or advances to any Loan Party or any of its Subsidiaries or
(iv) to transfer any of its property or assets to any Loan Party or any of its
Subsidiaries, or permit any of its Subsidiaries to do any of the foregoing;
provided, however, that nothing in any of clauses (i) through (iv) of this
Section 7.02(k) shall prohibit or restrict compliance with:
(A) this Agreement and the other Loan Documents;
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(B) the NAHC Notes Indenture Documents or the NATC Notes
Indenture Documents;
(C) any agreements in effect on the date of this Agreement
and described on Schedule 7.02(k);
(D) any applicable law, rule or regulation (including,
without limitation, applicable currency control laws and applicable state
corporate statutes restricting the payment of dividends in certain
circumstances);
(E) in the case of clause (iv) any agreement setting forth
customary restrictions on the subletting, assignment or transfer of any property
or asset that is a lease, license, conveyance or contract of similar property or
assets; or
(F) in the case of clause (iv) any agreement, instrument or
other document evidencing a Permitted Lien from restricting on customary terms
the transfer of any property or assets subject thereto.
(l) Limitation on Issuance of Capital Stock. Issue or sell or enter
into any agreement or arrangement for the issuance and sale of, or permit any of
its Subsidiaries to issue or sell or enter into any agreement or arrangement for
the issuance and sale of, any shares of its Capital Stock, any securities
convertible into or exchangeable for its Capital Stock or any warrants other
than issuances by the Parent of Capital Stock or options, warrants and other
convertible securities for Capital Stock to the extent not otherwise prohibited
by the other terms of this Agreement or the other Loan Documents.
(m) Modifications of Indebtedness, Organizational Documents and
Certain Other Agreements; Etc. (i) Amend, modify or otherwise change (or permit
the amendment, modification or other change in any manner of) any of the
provisions of any of its or its Subsidiaries' Indebtedness (including, without
limitation, the NAHC Notes and the NATC Notes) or of any instrument or agreement
(including, without limitation, any purchase agreement, indenture, loan
agreement or security agreement) relating to any such Indebtedness if such
amendment, modification or change would shorten the final maturity or average
life to maturity of, or require any payment to be made earlier than the date
originally scheduled on, such Indebtedness, would increase the interest rate
applicable to such Indebtedness, would change the subordination provision, if
any, of such Indebtedness, or would otherwise be adverse to the Lenders or the
issuer of such Indebtedness in any respect, (ii) except for the Obligations and
(in the absence of a continuing Event of Default and to the extent permitted
under the NATC Indenture) the NAHC Notes and the NATC Notes, make any voluntary
or optional payment, prepayment, purchase, redemption, defeasance, sinking fund
payment or other acquisition for value of any of its, the Parent's or its
Subsidiaries' Indebtedness (including, without limitation, by way of depositing
money or securities with the trustee therefor before the date required for the
purpose of paying any portion of such Indebtedness when due), or refund,
refinance, replace or exchange any other Indebtedness for any such Indebtedness
(except to the extent such Indebtedness is otherwise expressly permitted by the
definition of "Permitted Indebtedness"), or make any payment, prepayment,
redemption, defeasance, sinking fund payment or repurchase of any outstanding
Indebtedness as a result of any asset sale, change of control, issuance and sale
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of debt or equity securities or similar event, or give any notice with respect
to any of the foregoing, (iii) except as permitted by Section 7.02(c), amend,
modify or otherwise change its name, jurisdiction of organization,
organizational identification number or FEIN or (iv) amend, modify or otherwise
change its certificate of incorporation or bylaws (or other similar
organizational documents), including, without limitation, by the filing or
modification of any certificate of designation, or any agreement or arrangement
entered into by it, with respect to any of its Capital Stock (including any
shareholders' agreement), or enter into any new agreement with respect to any of
its Capital Stock, except any such amendments, modifications or changes or any
such new agreements or arrangements pursuant to this clause (iv) that either
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(n) Investment Company Act of 1940. Engage in any business, enter
into any transaction, use any securities or take any other action or permit any
of its Subsidiaries to do any of the foregoing, that would cause it or any of
its Subsidiaries to become subject to the registration requirements of the
Investment Company Act of 1940, as amended, by virtue of being an "investment
company" or a company "controlled" by an "investment company" not entitled to an
exemption within the meaning of such Act.
(o) [Intentionally Omitted]
(p) Properties. Permit any property to become a fixture with respect
to real property or to become an accession with respect to other personal
property with respect to which real or personal property the Agent does not have
a valid and perfected first priority Lien.
(q) ERISA. (i) Engage, or permit any ERISA Affiliate to engage, in
any transaction described in Section 4069 of ERISA; (ii) engage, or permit any
ERISA Affiliate to engage, in any prohibited transaction described in Section
406 of ERISA or 4975 of the Internal Revenue Code for which a statutory or class
exemption is not available or a private exemption has not previously been
obtained from the U.S. Department of Labor; (iii) adopt or permit any ERISA
Affiliate to adopt any employee welfare benefit plan within the meaning of
Section 3(1) of ERISA which provides benefits coverage to retired employees
after termination of employment other than as required by Section 601 of ERISA
or applicable law in addition to any such plan or plans previously adopted; (iv)
fail to make any contribution or payment to any Multiemployer Plan which it or
any ERISA Affiliate may be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto; or (v) fail, or permit any
ERISA Affiliate to fail, to pay any required installment or any other payment
required under Section 412 of the Internal Revenue Code on or before the due
date for such installment or other payment, in each case which could reasonably
be expected to have a Material Adverse Effect.
(r) Environmental. Permit the use, handling, generation, storage,
treatment, Release or disposal of Hazardous Materials at any property owned or
leased by it or any of its Subsidiaries, except in compliance with Environmental
Laws and so long as such use, handling, generation, storage, treatment, Release
or disposal of Hazardous Materials could not reasonably be expected to result in
a Material Adverse Effect.
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(s) Certain Agreements. Agree to any material amendment or other
material change to or material waiver of any of its rights under any Material
Contract (excluding any amendments to the Bollore Distribution Agreements
relating to the quantity and cost of the cigarette paper booklets subject to the
distribution provisions thereunder).
(t) Certain Inactive Subsidiaries. Permit International Flavors and
Technology, Inc. or Select Tobacco Brands, Inc. to (i) conduct or transact or
otherwise engage in any business or operations, or own or acquire any assets or
properties, other than, in the case of Select Tobacco Brands, Inc., maintaining
a commercial checking account (with a zero balance) and an MSA investment
account (holding a bond with a value of $172,000) with JPMorgan Chase Bank,
N.A., (ii) incur any Indebtedness or grant or suffer to exist any Lien on its
assets or property or (iii) enter into any agreement or contract not in effect
on the Effective Date.
Section 7.03 Financial Covenants. So long as any principal of or
interest on any Loan, Reimbursement Obligation, Letter of Credit Obligation or
any other Obligation (whether or not due) shall remain unpaid or any Lender
shall have any Commitment hereunder, each Loan Party shall not, unless the
Required Lenders shall otherwise consent in writing:
(a) Leverage Ratio. Permit the Leverage Ratio as of the end of each
calendar month to be greater than 3.75:1.00.
(b) Consolidated EBITDAR. Permit Consolidated EBITDAR of NATC and its
Subsidiaries for each period of four (4) consecutive fiscal quarters of NATC and
its Subsidiaries for which the last quarter ends on a date set forth below to be
less than the applicable amount set forth below:
Fiscal Quarter End Consolidated EBITDAR
------------------ --------------------
June 30, 2005 $18,532,000
September 30, 2005 $17,072,000
December 31, 2005 $21,067,000
March 31, 2006 $22,189,000
June 30, 2006 $23,652,000
September 30, 2006 $24,701,000
December 31, 2006 $25,460,000
March 31, 2007 $26,121,000
June 30, 2007 $27,037,000
September 30, 2007 $27,738,000
December 31, 2007 $28,414,000
March 31, 2008 $28,702,000
June 30, 2008 $29,068,000
September 30, 2008 $29,431,000
December 31, 2008 $29,810,000
March 31, 2009 $30,104,000
June 30, 2009 $30,481,000
September 30, 2009 $30,851,000
December 31, 2009 $31,238,000
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ARTICLE VIII
MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS RECEIVABLE AND OTHER COLLATERAL
Section 8.01 Collection of Accounts Receivable; Management of
Collateral. On or prior to the Effective Date, the Loan Parties shall (i)
establish and maintain cash management services of a type and on terms
satisfactory to Agent at one or more of the banks set forth on Schedule 8.01
(each a "Cash Management Bank"), and shall take such reasonable steps to
enforce, collect and receive all amounts owing on the Accounts Receivable of
Loan Parties or any of their Subsidiaries, (ii) deposit or cause to be deposited
promptly, and in any event no later than the first Business Day after the date
of receipt thereof, all proceeds in respect of any Collateral and all
collections and other amounts received by any Loan Party (including payments
made by the Account Debtors directly to any Loan Party) into a Cash Management
Account and (iii) establish, and during the term of this Agreement, maintain a
Cash Management Account with each Cash Management Bank. The Loan Parties shall
cause each Cash Management Bank identified on Schedule 8.01 hereto to execute
and deliver to the Agent a control agreement, in form and substance reasonably
satisfactory to the Agent, or enter into other arrangements in form and
substance satisfactory to the Agent, pursuant to which each Cash Management Bank
shall irrevocably agree that it will comply at any time with the instructions
originated by the Agent to such Cash Management Bank directing the disposition
of cash, securities, payments and all other items from time to time credited to
such account, without the further consent of such Loan Party, provided that the
Agent and the Lenders agree that they will not give such instructions to such
Cash Management Banks in the absence of a continuing Event of Default.
(b) All checks, drafts, notes, money orders, acceptances, cash and
other evidences of Indebtedness received directly by the Loan Parties from any
of their Account Debtors, as proceeds from Accounts Receivable of the Loan
Parties, or as proceeds of any other Collateral, shall be held by the Loan
Parties in trust for the Agent and the Lenders and upon receipt be deposited by
the Loan Parties in original form and no later than the next Business Day after
receipt thereof into a Cash Management Account. The Loan Parties shall not
commingle such collections with the Loan Parties' own funds or the funds of any
of their Subsidiaries or Affiliates or with the proceeds of any assets not
included in the Collateral. No checks, drafts or other instruments received by
the Agent shall constitute final payment to the Agent unless and until such
checks, drafts or instruments have actually been collected.
(c) After the occurrence and during the continuance of an Event of
Default, the Agent may send a notice of assignment and/or notice of the Lenders'
security interest to any and all Account Debtors or third parties holding or
otherwise concerned with any of the Collateral, and after providing written
notice to the Administrative Borrower, the Agent shall have the sole right to
collect the Accounts Receivable and/or take possession of the Collateral and the
books and records relating thereto.
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(d) Each Loan Party hereby appoints the Agent or its designee on
behalf of the Agent as the Loan Parties' attorney-in-fact with power exercisable
during the continuance of an Event of Default to endorse any Loan Party's name
upon any notes, acceptances, checks, drafts, money orders or other evidences of
payment relating to the Accounts Receivable, to sign any Loan Party's name on
any invoice or ▇▇▇▇ of lading relating to any of the Accounts Receivable, drafts
against Account Debtors with respect to Accounts Receivable, assignments and
verifications of Accounts Receivable and notices to Account Debtors with respect
to Accounts Receivable, to send verification of Accounts Receivable, and to
notify the Postal Service authorities to change the address for delivery of mail
addressed to any Loan Party to such address as the Agent may designate and to do
all other acts and things necessary to carry out this Agreement. All acts of
said attorney or designee in accordance with Section 8.01(c) are hereby ratified
and approved, and said attorney or designee shall not be liable for any acts of
omission or commission (other than acts of omission or commission constituting
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction), or for any error of judgment or mistake of
fact or law; this power being coupled with an interest is irrevocable until no
Event of Default shall be continuing or all of the Loans, Reimbursement
Obligations, Letter of Credit Obligations and other Obligations under the Loan
Documents are paid in full and all of the Loan Documents are terminated.
(e) Nothing herein contained shall be construed to constitute the
Agent as agent of any Loan Party for any purpose whatsoever, and the Agent shall
not be responsible or liable for any shortage, discrepancy, damage, loss or
destruction of any part of the Collateral wherever the same may be located and
regardless of the cause thereof (other than from acts of omission or commission
constituting gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction). The Agent shall not, under any
circumstance or in any event whatsoever, have any liability for any error or
omission or delay of any kind occurring in the settlement, collection or payment
of any of the Accounts Receivable or any instrument received in payment thereof
or for any damage resulting therefrom (other than acts of omission or commission
constituting gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction). The Agent, by anything herein or
in any assignment or otherwise, do not assume any of the obligations under any
contract or agreement assigned to the Agent and shall not be responsible in any
way for the performance by any Loan Party of any of the terms and conditions
thereof.
(f) If any Account Receivable includes a charge for any tax payable
to any Governmental Authority, the Agent is hereby authorized (but in no event
obligated) in its discretion, after the occurrence and during the continuance of
an Event of Default, to pay the amount thereof to the proper taxing authority
for the Loan Parties' account and to charge the Loan Parties therefor. The Loan
Parties shall notify the Agent if any Account Receivable includes any taxes due
to any such Governmental Authority and, in the absence of such notice, the Agent
shall have the right to retain the full proceeds of such Account Receivable and
shall not be liable for any taxes that may be due by reason of the sale and
delivery creating such Account Receivable.
(g) Notwithstanding any other terms set forth in the Loan Documents,
the rights and remedies of the Agent and the Lenders herein provided, and the
obligations of the Loan Parties set forth herein, are cumulative of, may be
exercised singly or concurrently with, and are not exclusive of, any other
rights, remedies or obligations set forth in any other Loan Document or as
provided by law.
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Section 8.02 Accounts Receivable Documentation. After the occurrence
and during the continuance of an Event of Default, the Loan Parties will at such
intervals as the Agent may reasonably require, execute and deliver confirmatory
written assignments of the Accounts Receivable to the Agent and furnish such
further schedules and/or information as the Agent may reasonably require
relating to the Accounts Receivable, including, without limitation, sales
invoices or the equivalent, credit memos issued, remittance advices, reports and
copies of deposit slips and copies of original shipping or delivery receipts for
all merchandise sold. The items to be provided under this Section 8.02 are to be
in form reasonably satisfactory to the Agent and are to be executed and
delivered to the Agent from time to time solely for its convenience in
maintaining records of the Collateral. The Loan Parties' failure to give any of
such items to the Agent shall not affect, terminate, modify or otherwise limit
the Agent's Lien on the Collateral.
Section 8.03 Status of Accounts Receivable and Other Collateral. With
respect to Collateral of any Loan Party at the time the Collateral becomes
subject to the Agent's Lien, each Loan Party covenants, represents and warrants:
(a) such Loan Party shall be the sole owner, free and clear of all Liens (except
for the Liens granted in the favor of the Agent for the benefit of the Lenders
and Permitted Liens), and shall be fully authorized to sell, transfer, pledge
and/or grant a security interest in each and every item of said Collateral; (b)
none of the transactions underlying or giving rise to any Account Receivable
shall violate any applicable state or federal laws or regulations; (c) such Loan
Party shall maintain books and records pertaining to said Collateral in such
detail, form and scope as the Agent shall reasonably require; (d) such Loan
Party shall promptly notify the Agent if any Account Receivable arises out of
contracts with any Governmental Authority, and will execute any instruments and
take any steps required by the Agent in order that all monies due or to become
due under any such contract shall be assigned to the Agent and notice thereof
given to such Governmental Authority under the Federal Assignment of Claims Act
or any similar state or local law to the extent the aggregate amount of Accounts
Receivable arising under such contract exceeds $1,000,000 at any time; (e) such
Loan Party will, promptly upon learning thereof, report to the Agent any
material loss or destruction of, or substantial damage to, any of the
Collateral, and any other matters affecting the value, enforceability or
collectibility of any of the Collateral; (f) if any amount payable under or in
connection with any Account Receivable is evidenced by a promissory note or
other instrument, such promissory note or instrument shall be promptly pledged,
endorsed, assigned and delivered to the Agent for the benefit of the Lenders as
additional Collateral; (g) such Loan Party shall not re-date any invoice or sale
or make sales on extended dating beyond that which is customary in the ordinary
course of its business; and (h) such Loan Party is not and shall not be entitled
to pledge the Agent's or any Lender's credit on any purchases or for any purpose
whatsoever.
Section 8.04 Collateral Custodian. Upon the occurrence and during the
continuance of any Event of Default, the Agent may at any time and from time to
time employ and maintain on the premises of any Loan Party a custodian selected
by the Agent who shall have full authority to do all acts necessary to protect
the Agent's and the Lenders' interests in the Collateral. Each Loan Party hereby
agrees to, and to cause its Subsidiaries to, cooperate with any such custodian
and to do whatever the Agent may reasonably request to preserve the Collateral.
All reasonable costs and expenses incurred by the Agent by reason of the
employment of the custodian shall be the responsibility of the Borrowers and
charged to the Loan Account.
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ARTICLE IX
EVENTS OF DEFAULT
Section 9.01 Events of Default. If any of the following Events of
Default shall occur and be continuing:
(a) any Borrower shall fail to pay (i) any principal of any Loan
payable under this Agreement when due or (ii) interest on any Loan, any Agent
Advance, any Reimbursement Obligation or any fee, indemnity or other amount
payable under this Agreement or any other Loan Document within 3 Business Days
from the date due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise);
(b) any representation or warranty made or deemed made by or on
behalf of any Loan Party or by any officer of the foregoing under or in
connection with any Loan Document or under or in connection with any report,
certificate, or other document delivered to the Agent, any Lender or the L/C
Issuer pursuant to any Loan Document shall have been incorrect in any material
respect when made or deemed made;
(c) any Loan Party shall fail to perform or comply with any covenant
or agreement contained in paragraphs (b), (c), (f), (h), (j), (m), (q), (r) or
(s) of Section 7.01, Section 7.02 or Section 7.03 or ARTICLE VIII, or any Loan
Party shall fail to perform or comply with any covenant or agreement contained
in any Security Agreement to which it is a party, any Pledge Agreement to which
it is a party or any Mortgage to which it is a party;
(d) any Loan Party shall fail to perform or comply with (i) any term,
covenant or agreement contained in Section 7.01(a) of this Agreement (other than
subparagraphs (vii), (viii), (ix), (x), (xi), (xii) and (xvii) thereof) and such
failure, if capable of being remedied, shall remain unremedied for a period of
10 days, or (ii) any term, covenant or agreement contained in subparagraphs
(vii), (viii), (ix), (x), (xi), (xii) and (xvii) of Section 7.01(a) of this
Agreement and such failure, if capable of being remedied, shall remain
unremedied for a period of 5 days;
(e) any Loan Party shall fail to perform or comply with any other
term, covenant or agreement contained in any Loan Document to be performed or
observed by it and, except as set forth in subsections (a), (b), (c) and (d) of
this Section 9.01, such failure, if capable of being remedied, shall remain
unremedied for 20 days after the earlier of the date a senior officer of any
Loan Party becomes aware of such failure and the date written notice of such
default shall have been given by the Agent to such Loan Party;
(f) any Loan Party or any of its Subsidiaries shall fail to pay any
principal of or interest or premium on any of its Indebtedness (excluding
Indebtedness evidenced by this Agreement), to the extent that the aggregate
principal amount of all such Indebtedness exceeds $2,000,000, when due (whether
by scheduled maturity, required prepayment, acceleration, demand or otherwise)
and such failure shall continue after the applicable grace period, if any,
82
specified in the agreement or instrument relating to such Indebtedness, or any
other default under any agreement or instrument relating to any such
Indebtedness, or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or any such Indebtedness
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), redeemed, purchased or defeased
or an offer to prepay, redeem, purchase or defease such Indebtedness shall be
required to be made, in each case, prior to the stated maturity thereof;
(g) any Loan Party or any of its Subsidiaries (i) shall institute any
proceeding or voluntary case seeking to adjudicate it a bankrupt or insolvent,
or seeking dissolution, liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for any such Person or for any
substantial part of its property, (ii) shall be generally not paying its debts
as such debts become due or shall admit in writing its inability to pay its
debts generally, (iii) shall make a general assignment for the benefit of
creditors, or (iv) shall take any action to authorize or effect any of the
actions set forth above in this subsection (g);
(h) any proceeding shall be instituted against any Loan Party or any
of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief of debtors, or seeking the entry of an order for relief or
the appointment of a receiver, trustee, custodian or other similar official for
any such Person or for any substantial part of its property, and either such
proceeding shall remain undismissed or unstayed for a period of 60 days or any
of the actions sought in such proceeding (including the entry of an order for
relief against any such Person or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
property) shall occur;
(i) any provision of any Loan Document shall at any time for any
reason (other than pursuant to the express terms thereof) cease to be valid and
binding on or enforceable against any Loan Party intended to be a party thereto,
or the validity or enforceability thereof shall be contested by any party
thereto, or a proceeding shall be commenced by any Loan Party or any
Governmental Authority having jurisdiction over any of them, seeking to
establish the invalidity or unenforceability thereof, or any Loan Party shall
deny in writing that it has any liability or obligation purported to be created
under any Loan Document;
(j) any Security Agreement, any Pledge Agreement, any Mortgage or any
other security document, after delivery thereof pursuant hereto, shall for any
reason fail or cease to create a valid and perfected and, except to the extent
permitted by the terms hereof or thereof, first priority Lien in favor of the
Agent for the benefit of the Lenders on any Collateral purported to be covered
thereby;
83
(k) any bank at which any deposit account, blocked account, or
lockbox account of any Loan Party is maintained shall fail to comply with any of
the terms of any Cash Management Agreement or similar agreement to which such
bank is a party or any securities intermediary, commodity intermediary or other
financial institution at any time in custody, control or possession of any
investment property of any Loan Party shall fail to comply with any of the terms
of any investment property control agreement to which such Person is a party;
(l) one or more judgments, orders or awards (or any settlement of any
claim that, if breached, could result in a judgment, order or award) for the
payment of money exceeding $1,000,000 in the aggregate shall be rendered against
any Loan Party or any of its Subsidiaries and remain unsatisfied and either (i)
enforcement proceedings shall have been commenced by any creditor upon any such
judgment, order, award or settlement, or (ii) there shall be a period of 20
consecutive days after entry thereof during which a stay of enforcement of any
such judgment, order, award or settlement, by reason of a pending appeal,
agreement between the parties subject to such judgment or otherwise, shall not
be in effect; provided, however, that any such judgment, order, award or
settlement shall not give rise to an Event of Default under this subsection (l)
if and for so long as (A) the amount of such judgment, order, award or
settlement is covered by a valid and binding policy of insurance between the
defendant and the insurer covering full payment thereof and (B) such insurer has
been notified, and has not disputed the claim made for payment, of the amount of
such judgment, order, award or settlement;
(m) any Loan Party or any of its Subsidiaries is enjoined, restrained
or in any way prevented by the order of any court or any Governmental Authority
from conducting all or any material part of its business for more than thirty
(30) days;
(n) any material damage to, or loss, theft or destruction of, any
Collateral, whether or not insured, or any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other casualty which
causes, for more than thirty (30) consecutive days, the cessation or substantial
curtailment of revenue producing activities at any facility of any Loan Party or
any of its Subsidiaries, if any such event or circumstance could reasonably be
expected to have a Material Adverse Effect;
(o) the indictment of any Loan Party or any of its Subsidiaries under
any criminal statute, or commencement of criminal or civil proceedings against
any Loan Party or any of its Subsidiaries, pursuant to which statute or
proceedings the penalties or remedies sought or available include forfeiture to
any Governmental Authority of any material portion of the property of such
Person;
(p) any Loan Party or any of its ERISA Affiliates shall have made a
complete or partial withdrawal from a Multiemployer Plan, and, as a result of
such complete or partial withdrawal, any Loan Party or any of its ERISA
Affiliates incurs a withdrawal liability in an annual amount exceeding
$1,000,000; or a Multiemployer Plan enters reorganization status under Section
4241 of ERISA, and, as a result thereof any Loan Party's or any of its ERISA
Affiliates' annual contribution requirements with respect to such Multiemployer
Plan increases in an annual amount exceeding $1,000,000;
84
(q) any Termination Event with respect to any Employee Plan shall
have occurred, and, 30 days after notice thereof shall have been given to any
Loan Party by the Agent, (i) such Termination Event (if correctable) shall not
have been corrected, and (ii) the then current value of such Employee Plan's
vested benefits exceeds the then current value of assets allocable to such
benefits in such Employee Plan by more than $1,000,000 (or, in the case of a
Termination Event involving liability under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of
the Internal Revenue Code, the liability is in excess of such amount);
(r) a Change of Control shall have occurred;
(s) any Loan Party shall (i) receive a product recall notice or (ii)
fail to be in substantial compliance with all current applicable statutes,
rules, regulations, guides, policies, orders or directives administered or
issued by a Governmental Authority, in each case, to the extent such notice or
failure could reasonably be expected to have a Material Adverse Effect;
(t) the occurrence of any "Event of Default" under and as defined in
the NAHC Notes Indenture;
(u) the occurrence of any "Event of Default" under and as defined in
the NATC Notes Indenture; or
(v) an event or development occurs which results in a Material
Adverse Effect, as determined by the Agent in its reasonable business judgment;
then, and in any such event, the Agent may, and shall at the request
of the Required Lenders, by written notice to the Administrative Borrower, (i)
terminate or reduce all Commitments, whereupon all Commitments shall immediately
be so terminated or reduced, (ii) declare all or any portion of the Loans and
Reimbursement Obligations then outstanding to be due and payable, whereupon all
or such portion of the aggregate principal of all Loans and Reimbursement
Obligations, all accrued and unpaid interest thereon, all fees and all other
amounts payable under this Agreement and the other Loan Documents shall become
due and payable immediately, without presentment, demand, protest or further
notice of any kind, all of which, to the extent permitted by applicable law, are
hereby expressly waived by each Loan Party and (iii) exercise any and all of its
other rights and remedies under applicable law, hereunder and under the other
Loan Documents; provided, however, that upon the occurrence of any Event of
Default described in subsection (g) or (h) of this Section 9.01 with respect to
any Loan Party, without any notice to any Loan Party or any other Person or any
act by the Agent or any Lender, all Commitments shall automatically terminate
and all Loans and Reimbursement Obligations then outstanding, together with all
accrued and unpaid interest thereon, all fees and all other amounts due under
this Agreement and the other Loan Documents shall become due and payable
automatically and immediately, without presentment, demand, protest or notice of
any kind, all of which are expressly waived by each Loan Party. Subject to
Section 4.04(b), the Agent may, after the occurrence and during the continuation
of any Event of Default, require the Borrowers to deposit with the Agent with
respect to each Letter of Credit then outstanding cash in an amount equal to
105% of the greatest amount for which such Letter of Credit may be drawn. Such
deposits shall be held by the Agent in the Letter of Credit Collateral Account
as security for, and to provide for the payment of, the Letter of Credit
Obligations.
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ARTICLE X
AGENT
Section 10.01 Appointment. Each Lender (and each subsequent maker of
any Loan by its making thereof) hereby irrevocably appoints and authorizes the
Agent to perform the duties of the Agent as set forth in this Agreement
including: (i) to receive on behalf of each Lender any payment of principal of
or interest on the Loans outstanding hereunder and all other amounts accrued
hereunder for the account of the Lenders and paid to the Agent, and, subject to
Section 2.02 of this Agreement, to distribute promptly to each Lender its Pro
Rata Share of all payments so received; (ii) to distribute to each Lender copies
of all material notices and agreements received by the Agent and not required to
be delivered to each Lender pursuant to the terms of this Agreement, provided
that the Agent shall not have any liability to the Lenders for the Agent's
inadvertent failure to distribute any such notices or agreements to the Lenders;
(iii) to maintain, in accordance with its customary business practices, ledgers
and records reflecting the status of the Obligations, the Loans, and related
matters and to maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Collateral and related matters;
(iv) to execute or file any and all financing or similar statements or notices,
amendments, renewals, supplements, documents, instruments, proofs of claim,
notices and other written agreements with respect to this Agreement or any other
Loan Document; (v) to make the Loans and Agent Advances, for the Agent or on
behalf of the applicable Lenders as provided in this Agreement or any other Loan
Document; (vi) to perform, exercise, and enforce any and all other rights and
remedies of the Lenders with respect to the Loan Parties, the Obligations, or
otherwise related to any of same to the extent reasonably incidental to the
exercise by the Agent of the rights and remedies specifically authorized to be
exercised by the Agent by the terms of this Agreement or any other Loan
Document; (vii) to incur and pay such fees necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to this
Agreement or any other Loan Document; and (viii) subject to Section 10.03 of
this Agreement, to take such action as the Agent deems appropriate on its behalf
to administer the Loans and the Loan Documents and to exercise such other powers
delegated to the Agent by the terms hereof or the other Loan Documents
(including, without limitation, the power to give or to refuse to give notices,
waivers, consents, approvals and instructions and the power to make or to refuse
to make determinations and calculations) together with such powers as are
reasonably incidental thereto to carry out the purposes hereof and thereof. As
to any matters not expressly provided for by this Agreement and the other Loan
Documents (including, without limitation, enforcement or collection of the
Loans), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions of the Required Lenders shall be
binding upon all Lenders and all makers of Loans; provided, however, that the
L/C Issuer shall not be required to refuse to honor a drawing under any Letter
of Credit and the Agent shall not be required to take any action which, in the
reasonable opinion of the Agent, exposes the Agent to liability or which is
contrary to this Agreement or any other Loan Document or applicable law.
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Section 10.02 Nature of Duties. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
other Loan Documents. The duties of the Agent shall be mechanical and
administrative in nature. The Agent shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any other Loan Document, express or implied, is
intended to or shall be construed to impose upon the Agent any obligations in
respect of this Agreement or any other Loan Document except as expressly set
forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of the Loan Parties in
connection with the making and the continuance of the Loans hereunder and shall
make its own appraisal of the creditworthiness of the Loan Parties and the value
of the Collateral, and the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the initial Loan hereunder or at any time or times thereafter, provided
that, upon the reasonable request of a Lender, the Agent shall provide to such
Lender any documents or reports delivered to the Agent by the Loan Parties
pursuant to the terms of this Agreement or any other Loan Document. If the Agent
seeks the consent or approval of the Required Lenders to the taking or
refraining from taking any action hereunder, the Agent shall send notice thereof
to each Lender. The Agent shall promptly notify each Lender any time that the
Required Lenders have instructed the Agent to act or refrain from acting
pursuant hereto.
Section 10.03 Rights, Exculpation, Etc. The Agent and its directors,
officers, agents or employees shall not be liable for any action taken or
omitted to be taken by them under or in connection with this Agreement or the
other Loan Documents, except for their own gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction. Without limiting the generality of the foregoing, the Agent (i)
may treat the payee of any Loan as the owner thereof until the Agent receives
written notice of the assignment or transfer thereof, pursuant to Section 12.07
hereof, signed by such payee and in form satisfactory to the Agent; (ii) may
consult with legal counsel (including, without limitation, counsel to the Agent
or counsel to the Loan Parties), independent public accountants, and other
experts selected by any of them and shall not be liable for any action taken or
omitted to be taken in good faith by any of them in accordance with the advice
of such counsel or experts; (iii) make no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements,
certificates, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (iv) 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
Person, the existence or possible existence of any Default or Event of Default,
or to inspect the Collateral or other property (including, without limitation,
the books and records) of any Person; (v) 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 (vi) shall not
be deemed to have made any representation or warranty regarding the existence,
value or collectibility of the Collateral, the existence, priority or perfection
of the Agent's Lien thereon, or any certificate prepared by any Loan Party in
connection therewith, nor shall the Agent be responsible or liable to the
Lenders for any failure to monitor or maintain any portion of the Collateral.
The Agent shall not be liable for any apportionment or distribution of payments
made in good faith pursuant to Section 4.04, and if any such apportionment or
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distribution is subsequently determined to have been made in error the sole
recourse of any Lender to whom payment was due but not made, shall be to recover
from other Lenders any payment in excess of the amount which they are determined
to be entitled. The Agent may at any time request instructions from the Lenders
with respect to any actions or approvals which by the terms of this Agreement or
of any of the other Loan Documents the Agent is permitted or required to take or
to grant, and if such instructions are promptly requested, the Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval under any of the Loan Documents until it shall have received such
instructions from the Required Lenders. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against the Agent as a result
of the Agent acting or refraining from acting under this Agreement or any of the
other Loan Documents in accordance with the instructions of the Required
Lenders.
Section 10.04 Reliance. The Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the other Loan Documents and its
duties hereunder or thereunder, upon advice of counsel selected by it.
Section 10.05 Indemnification. To the extent that the Agent or the
L/C Issuer is not reimbursed and indemnified by any Loan Party, the Lenders will
reimburse and indemnify the Agent and the L/C Issuer from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, advances or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the Agent
or the L/C Issuer in any way relating to or arising out of this Agreement or any
of the other Loan Documents or any action taken or omitted by the Agent or the
L/C Issuer under this Agreement or any of the other Loan Documents, in
proportion to each Lender's Pro Rata Share, including, without limitation,
advances and disbursements made pursuant to Section 10.08; provided, however,
that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements for which there has been a final judicial determination that
such liability resulted from the Agent's or the L/C Issuer's gross negligence or
willful misconduct. The obligations of the Lenders under this Section 10.05
shall survive the payment in full of the Loans and the termination of this
Agreement.
Section 10.06 Agent Individually. With respect to its Pro Rata Share
of the Total Commitment hereunder and the Loans made by it, the Agent shall have
and may exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender or maker of a Loan. The terms "Lenders" or "Required Lenders" or any
similar terms shall, unless the context clearly otherwise indicates, include the
Agent in its individual capacity as a Lender or one of the Required Lenders. The
Agent and its Affiliates may accept deposits from, lend money to, and generally
engage in any kind of banking, trust or other business with any Borrower as if
it were not acting as the Agent pursuant hereto without any duty to account to
the other Lenders.
Section 10.07 Successor Agent. (a) The Agent may resign from the
performance of all its functions and duties hereunder and under the other Loan
Documents at any time by giving at least thirty (30) Business Days' prior
written notice to the Administrative Borrower and each Lender. Such resignation
shall take effect upon the acceptance by a successor Agent of appointment
pursuant to clauses (b) and (c) below or as otherwise provided below.
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(b) Upon any such notice of resignation, the Required Lenders shall
appoint a successor Agent which, so long as no Event of Default has occurred and
is continuing, shall be acceptable to the Administrative Borrower. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the Agent, and the Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. After the Agent's resignation hereunder as the Agent, the
provisions of this ARTICLE X shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was the Agent under this Agreement and the
other Loan Documents.
(c) If a successor Agent shall not have been so appointed within said
thirty (30) Business Day period, the Agent shall then appoint a successor Agent
who shall serve as the Agent until such time, if any, as the Required Lenders
appoint a successor Agent as provided above.
Section 10.08 Collateral Matters.
(a) After the occurrence and during the continuation of an Event of
Default, the Agent may from time to time make such disbursements and advances
("Agent Advances") which the Agent, in its sole discretion, deems necessary or
desirable to preserve, protect, prepare for sale or lease or dispose of the
Collateral or any portion thereof, to enhance the likelihood or maximize the
amount of repayment by the Borrowers of the Loans, Reimbursement Obligations,
Letter of Credit Obligations and other Obligations or to pay any other amount
chargeable to the Borrowers pursuant to the terms of this Agreement, including,
costs, fees and expenses as described in Section 12.04. The Agent Advances shall
be repayable on demand and be secured by the Collateral. The Agent Advances
shall constitute Obligations hereunder which may be charged to the Loan Account
in accordance with Section 4.02. The Agent shall notify each Lender and the
Administrative Borrower in writing of each such Agent Advance, which notice
shall include a description of the purpose of such Agent Advance. Without
limitation to its obligations pursuant to Section 10.05, each Lender agrees that
it shall make available to the Agent, upon the Agent's demand, in Dollars in
immediately available funds, the amount equal to such Lender's Pro Rata Share of
each such Agent Advance. If such funds are not made available to the Agent by
such Lender, the Agent shall be entitled to recover such funds on demand from
such Lender, together with interest thereon for each day from the date such
payment was due until the date such amount is paid to the Agent, at the Federal
Funds Rate for three Business Days and thereafter at the Reference Rate.
(b) The Lenders hereby irrevocably authorize the Agent, at its option
and in its discretion, to release any Lien granted to or held by the Agent upon
any Collateral upon termination of the Total Commitment and payment and
satisfaction of all Loans, Reimbursement Obligations, Letter of Credit
Obligations, and all other outstanding Obligations in accordance with the terms
hereof; or constituting property being sold or disposed of in compliance with
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the terms of this Agreement and the other Loan Documents; or constituting
property in which the Loan Parties owned no interest at the time the Lien was
granted or at any time thereafter; or if approved, authorized or ratified in
writing by the Lenders. Upon request by the Agent at any time, the Lenders will
confirm in writing the Agent's authority to release particular types or items of
Collateral pursuant to this Section 10.08(b).
(c) Without in any manner limiting the Agent's authority to act
without any specific or further authorization or consent by the Lenders (as set
forth in Section 10.08(b)), each Lender agrees to confirm in writing, upon
request by the Agent, the authority to release Collateral conferred upon the
Agent under Section 10.08(b). Upon receipt by the Agent of confirmation from the
Lenders of its authority to release any particular item or types of Collateral,
and upon prior written request by any Loan Party, the Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to the Agent for the
benefit of the Lenders upon such Collateral; provided, however, that (i) the
Agent shall not be required to execute any such document on terms which, in the
Agent's opinion, would expose the Agent to liability or create any obligations
or entail any consequence other than the release of such Liens without recourse
or warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Lien upon (or obligations of any Loan Party in
respect of) all interests in the Collateral retained by any Loan Party.
(d) The Agent shall have no obligation whatsoever to any Lender to
assure that the Collateral exists or is owned by the Loan Parties or is cared
for, protected or insured or has been encumbered or that the Lien granted to the
Agent pursuant to this Agreement or any other Loan Document has been properly or
sufficiently or lawfully created, perfected, protected or enforced or is
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
the Agent in this Section 10.08 or in any other Loan Document, it being
understood and agreed that in respect of the Collateral, or any act, omission or
event related thereto, the Agent may act in any manner it may deem appropriate,
in its sole discretion, given the Agent's own interest in the Collateral as one
of the Lenders and that the Agent shall have no duty or liability whatsoever to
any other Lender, except as otherwise provided herein.
Section 10.09 Agency for Perfection. Each Lender hereby appoints the
Agent and each other Lender as agent and bailee for the purpose of perfecting
the security interests in and liens upon the Collateral in assets which, in
accordance with Article 9 of the Uniform Commercial Code, can be perfected only
by possession or control (or where the security interest of a secured party with
possession or control has priority over the security interest of another secured
party) and the Agent and each Lender hereby acknowledges that it holds
possession of or otherwise controls any such Collateral for the benefit of the
Agent and the Lenders as secured party. Should any Lender obtain possession or
control of any such Collateral, such Lender shall notify the Agent thereof, and,
promptly upon the Agent's request therefor shall deliver such Collateral to the
Agent or in accordance with the Agent's instructions. In addition, the Agent
shall also have the power and authority hereunder to appoint such other
sub-agents as may be necessary or required under applicable state law or
otherwise to perform its duties and enforce its rights with respect to the
Collateral and under the Loan Documents. Each Loan Party by its execution and
delivery of this Agreement hereby consents to the foregoing.
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ARTICLE XI
GUARANTY
Section 11.01 Guaranty. Each Guarantor hereby jointly and severally
and unconditionally and irrevocably guarantees the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all Obligations of
the Borrowers now or hereafter existing under any Loan Document, whether for
principal, interest (including, without limitation, all interest that accrues
after the commencement of any Insolvency Proceeding of any Borrower, whether or
not a claim for post-filing interest is allowed in such Insolvency Proceeding),
Letter of Credit Obligations, fees, commissions, expense reimbursements,
indemnifications or otherwise (such obligations, to the extent not paid by the
Borrowers, being the "Guaranteed Obligations"), and agrees to pay any and all
expenses (including reasonable counsel fees and expenses) incurred by the Agent,
the Lenders and the L/C Issuer in enforcing any rights under the guaranty set
forth in this ARTICLE XI. Without limiting the generality of the foregoing, each
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by the Borrowers to the Agent, the
Lenders and the L/C Issuer under any Loan Document but for the fact that they
are unenforceable or not allowable due to the existence of an Insolvency
Proceeding involving any Borrower.
Section 11.02 Guaranty Absolute. Each Guarantor jointly and severally
guarantees that the Guaranteed Obligations will be paid strictly in accordance
with the terms of the Loan Documents, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Agent, the Lenders or the L/C Issuer with respect thereto.
Each Guarantor agrees that this ARTICLE XI constitutes a guaranty of payment
when due and not of collection and waives any right to require that any resort
be made by the Agent or any Lender to any Collateral. The obligations of each
Guarantor under this ARTICLE XI are independent of the Guaranteed Obligations,
and a separate action or actions may be brought and prosecuted against each
Guarantor to enforce such obligations, irrespective of whether any action is
brought against any Loan Party or whether any Loan Party is joined in any such
action or actions. The liability of each Guarantor under this ARTICLE XI shall
be irrevocable, absolute and unconditional irrespective of, and each Guarantor
hereby irrevocably waives any defenses it may now or hereafter have in any way
relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan Document or
any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or any other amendment
or waiver of or any consent to departure from any Loan Document, including,
without limitation, any increase in the Guaranteed Obligations resulting from
the extension of additional credit to any Loan Party or otherwise;
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(c) any taking, exchange, release or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed Obligations;
(d) the existence of any claim, set-off, defense or other right that
any Guarantor may have at any time against any Person, including, without
limitation, the Agent, any Lender or the L/C Issuer;
(e) any change, restructuring or termination of the corporate,
limited liability company or partnership structure or existence of any Loan
Party; or
(f) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any representation by
the Agent, the Lenders or the L/C Issuer that might otherwise constitute a
defense available to, or a discharge of, any Loan Party or any other guarantor
or surety.
This ARTICLE XI shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agent, the Lenders, the L/C Issuer or any
other Person upon the insolvency, bankruptcy or reorganization of any Borrower
or otherwise, all as though such payment had not been made.
Section 11.03 Waiver. Each Guarantor hereby waives (i) promptness and
diligence, (ii) notice of acceptance and any other notice with respect to any of
the Guaranteed Obligations and this ARTICLE XI and any requirement that the
Agent, the Lenders or the L/C Issuer exhaust any right or take any action
against any Loan Party, any other Person or any Collateral, (iii) any right to
compel or direct the Agent, any Lender or the L/C Issuer to seek payment or
recovery of any amounts owed under this ARTICLE XI from any one particular fund
or source or to exhaust any right or take any action against any other Loan
Party, any other Person or any Collateral, (iv) any requirement that the Agent,
any Lender or the L/C Issuer protect, secure, perfect or insure any security
interest or Lien on any property subject thereto or exhaust any right to take
any action against any Loan Party, any other Person or any Collateral, and (v)
any other defense available to any Guarantor. Each Guarantor agrees that the
Agent, the Lenders and the L/C Issuer shall have no obligation to marshal any
assets in favor of any Guarantor or against, or in payment of, any or all of the
Obligations. Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated herein and that
the waiver set forth in this Section 11.03 is knowingly made in contemplation of
such benefits. Each Guarantor hereby waives any right to revoke this ARTICLE XI,
and acknowledges that this ARTICLE XI is continuing in nature and applies to all
Guaranteed Obligations, whether existing now or in the future.
Section 11.04 Continuing Guaranty; Assignments. This ARTICLE XI is a
continuing guaranty and shall (a) remain in full force and effect until the
later of the cash payment in full of the Guaranteed Obligations (other than
indemnification obligations as to which no claim has been made) and all other
amounts payable under this ARTICLE XI and the Final Maturity Date, (b) be
binding upon each Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Agent, the Lenders and the L/C Issuer and
their successors, pledgees, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender may pledge, assign or
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otherwise transfer all or any portion of its rights and obligations under this
Agreement (including, without limitation, all or any portion of its Commitments,
its Loans, the Reimbursement Obligations and the Letter of Credit Obligations
owing to it) to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted such Lender herein or
otherwise, in each case as provided in Section 12.07.
Section 11.05 Subrogation. No Guarantor will exercise any rights that
it may now or hereafter acquire against any Loan Party or any other guarantor
that arise from the existence, payment, performance or enforcement of such
Guarantor's obligations under this ARTICLE XI, including, without limitation,
any right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of the
Agent, the Lenders and the L/C Issuer against any Loan Party or any other
guarantor or any Collateral, whether or not such claim, remedy or right arises
in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from any Loan Party or any other
guarantor, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security solely on account of such claim, remedy or
right, unless and until all of the Guaranteed Obligations and all other amounts
payable under this ARTICLE XI shall have been paid in full in cash and the Final
Maturity Date shall have occurred. If any amount shall be paid to any Guarantor
in violation of the immediately preceding sentence at any time prior to the
later of the payment in full in cash of the Guaranteed Obligations and all other
amounts payable under this ARTICLE XI and the Final Maturity Date, such amount
shall be held in trust for the benefit of the Agent, the Lenders and the L/C
Issuer and shall forthwith be paid to the Agent, the Lenders and the L/C Issuer
to be credited and applied to the Guaranteed Obligations and all other amounts
payable under this ARTICLE XI, whether matured or unmatured, in accordance with
the terms of this Agreement, or to be held as Collateral for any Guaranteed
Obligations or other amounts payable under this ARTICLE XI thereafter arising.
If (i) any Guarantor shall make payment to the Agent, the Lenders and the L/C
Issuer of all or any part of the Guaranteed Obligations, (ii) all of the
Guaranteed Obligations and all other amounts payable under this ARTICLE XI shall
be paid in full in cash and (iii) the Final Maturity Date shall have occurred,
the Agent, the Lenders and the L/C Issuer will, at such Guarantor's request and
expense, execute and deliver to such Guarantor appropriate documents, without
recourse and without representation or warranty, necessary to evidence the
transfer by subrogation to such Guarantor of an interest in the Guaranteed
Obligations resulting from such payment by such Guarantor.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed, telecopied or
delivered, if to any Loan Party, at the following address:
North Atlantic Trading Company, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
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with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
if to the Agent, to it at the following address:
Fortress Credit Corp.
1251 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
or, as to each party, at such other address as shall be designated by
such party in a written notice to the other parties complying as to delivery
with the terms of this Section 12.01. All such notices and other communications
shall be effective, (i) if mailed, when received or three days after deposited
in the mails, whichever occurs first, (ii) if telecopied, when transmitted and
confirmation received, or (iii) if delivered, upon delivery, except that notices
to the Agent or the L/C Issuer pursuant to ARTICLE II and ARTICLE III shall not
be effective until received by the Agent or the L/C Issuer, as the case may be.
Section 12.02 Amendments, Etc. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by any Loan Party
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Required Lenders (and, in the case of amendments, the
Borrowers) or by the Agent with the consent of the Required Lenders, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given, provided, however, that no amendment,
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waiver or consent shall (i) increase the Commitment of any Lender, reduce the
principal of, or interest on, the Loans or the Reimbursement Obligations payable
to any Lender, reduce the amount of any fee payable for the account of any
Lender, or postpone or extend any date fixed for any payment of principal of, or
interest or fees on, the Loans or Letter of Credit Obligations payable to any
Lender, in each case without the written consent of any Lender affected thereby,
(ii) increase the Total Commitment without the written consent of each Lender,
(iii) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans that is required for the Lenders or any of them to
take any action hereunder, (iv) amend the definition of "Required Lenders" or
"Pro Rata Share", (v) release all or a substantial portion of the Collateral
(except as otherwise provided in this Agreement and the other Loan Documents),
subordinate any Lien granted in favor of the Agent for the benefit of the
Lenders, or release any Borrower or any Guarantor, or (vi) amend, modify or
waive Section 4.04 or this Section 12.02 of this Agreement, in each case,
without the written consent of each Lender. Notwithstanding the foregoing, no
amendment, waiver or consent shall, unless in writing and signed by the Agent,
affect the rights or duties of the Agent (but not in its capacity as a Lender)
under this Agreement or the other Loan Documents.
Section 12.03 No Waiver; Remedies, Etc. No failure on the part of the
Agent or any Lender to exercise, and no delay in exercising, any right hereunder
or under any other Loan Document shall operate as a waiver thereof; nor shall
any single or partial exercise of any right under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right. The rights
and remedies of the Agent and the Lenders provided herein and in the other Loan
Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights of the Agent and the Lenders
under any Loan Document against any party thereto are not conditional or
contingent on any attempt by the Agent and the Lenders to exercise any of their
rights under any other Loan Document against such party or against any other
Person.
Section 12.04 Expenses; Taxes; Attorneys' Fees. The Borrowers will
pay on demand, all reasonable costs and expenses incurred by or on behalf of the
Agent (and, in the case of clauses (b) through (i) below, each Lender),
regardless of whether the transactions contemplated hereby are consummated,
including, reasonable fees, costs, client charges and expenses of counsel for
the Agent (and subject to Section 4.01, in the case of clauses (b) through (i)
below, each Lender), accounting, due diligence, periodic field audits, physical
counts, valuations, investigations, searches and filings, monitoring of assets,
appraisals of Collateral, title searches and reviewing environmental
assessments, miscellaneous disbursements, examination, travel, lodging and
meals, arising from or relating to: (a) the negotiation, preparation, execution,
delivery, performance and administration of this Agreement and the other Loan
Documents (including, without limitation, the preparation of any additional Loan
Documents pursuant to Section 7.01(b) or the review of any of the agreements,
instruments and documents referred to in Section 7.01(f)), (b) any amendments,
waivers or consents to this Agreement or the other Loan Documents whether or not
such documents become effective or are given, (c) the defense of any claim or
action asserted or brought against the Agent or any Lender by any Person that
arises from or relates to this Agreement, any other Loan Document, the Agent's
or the Lenders' claims against any Loan Party, or any and all matters in
connection therewith, unless such defense has been rejected due to such Person's
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction, (d) the commencement or defense of, or
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intervention in, any court proceeding arising from or related to this Agreement
or any other Loan Document, (e) the filing of any petition, complaint, answer,
motion or other pleading by the Agent or any Lender, or the taking of any action
in respect of their interest in the Collateral or other security granted to such
Person under any Loan Document, in accordance with this Agreement or any other
Loan Document, (f) the protection, collection, lease, sale, taking possession of
or liquidation of, any Collateral or other security in accordance with this
Agreement or any other Loan Document, (g) any attempt to enforce any Lien or
security interest in any Collateral or other security in accordance with this
Agreement or any other Loan Document, (h) any attempt to collect from any Loan
Party following and during the continuance of an Event of Default, or (i) the
receipt by the Agent or any Lender of any advice from professionals with respect
to any of the foregoing. Without limitation of the foregoing or any other
provision of any Loan Document: (x) the Borrowers agree to pay all broker fees
that may become due in connection with the transactions contemplated by this
Agreement and the other Loan Documents, and (y) after the occurrence and during
the continuance of an Event of Default, if the Borrowers fail to perform any
covenant or agreement contained herein or in any other Loan Document, the Agent
may itself perform or cause performance of such covenant or agreement, and the
expenses of the Agent incurred in connection therewith shall be reimbursed on
demand by the Borrowers.
Section 12.05 Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, the Agent or any Lender may, and is hereby
authorized to, at any time and from time to time, without notice to any Loan
Party (any such notice being expressly waived by the Loan Parties) and to the
fullest extent permitted by law, set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other
Indebtedness at any time owing by the Agent or such Lender to or for the credit
or the account of any Loan Party against any and all obligations of the Loan
Parties either now or hereafter existing under any Loan Document, irrespective
of whether or not the Agent or such Lender shall have made any demand hereunder
or thereunder and although such obligations may be contingent or unmatured. The
Agent and each Lender agrees to notify such Loan Party promptly after any such
set-off and application made by the Agent or such Lender provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Agent and the Lenders under this Section 12.05
are in addition to the other rights and remedies (including other rights of
set-off) which the Agent and the Lenders may have under this Agreement or any
other Loan Documents of law or otherwise.
Section 12.06 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 12.07 Assignments and Participations.
(a) This Agreement and the other Loan Documents shall be binding upon
and inure to the benefit of each Loan Party and the Agent and each Lender and
their respective successors and assigns; provided, however, that none of the
Loan Parties may assign or transfer any of its rights hereunder or under the
other Loan Documents without the prior written consent of each Lender and any
such assignment without the Lenders' prior written consent shall be null and
void.
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(b) Each Lender may assign to one or more other lenders or other
entities all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments, the Loans
made by it and its Pro Rata Share of Letter of Credit Obligations); provided,
however, that (i) such assignment is in an amount which is at least $5,000,000
or a multiple of $1,000,000 in excess thereof (or the remainder of such Lender's
Commitment) (except such minimum amount shall not apply to an assignment by a
Lender to (x) an Affiliate of such Lender or a Related Fund of such Lender or
(y) a group of new Lenders, each of whom is an Affiliate or Related Fund of each
other to the extent the aggregate amount to be assigned to all such new Lenders
is at least $5,000,000 or a multiple of $1,000,000 in excess thereof), (ii)
except as provided in the last sentence of this Section 12.07(b), the parties to
each such assignment shall execute and deliver to the Agent, for its acceptance,
an Assignment and Acceptance, together with any promissory note subject to such
assignment and such parties shall deliver to the Agent a processing and
recordation fee of $5,000 (except the payment of such fee shall not be required
in connection with an assignment by a Lender to an Affiliate of such Lender or a
Related Fund), (iii) except as provided in Section 12.07(b)(iv), any such
assignment shall be made with the written consent of the Agent and, in the
absence of a continuing Event of Default pursuant to Section 9.01(a), (g) or
(h), the Administrative Borrower (such consent not to be unreasonably withheld
or delayed), and (iv) no written consent of the Agent shall be required (1) in
connection with any assignment by a Lender to an Affiliate of such Lender or a
Related Fund, (2) if such assignment is in connection with any merger,
consolidation, sale, transfer, or other disposition of all or any substantial
portion of the business or loan portfolio of such Lender or (3) if such
assignment is to Ableco Finance LLC, CapitalSource Finance LLC, NewStar
Financial LLC or any of their Affiliates or Related Funds. Upon such execution,
delivery and acceptance, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least three Business
Days after the delivery thereof to the Agent (or such shorter period as shall be
agreed to by the Agent and the parties to such assignment), (A) the assignee
thereunder shall become a "Lender" hereunder and, in addition to the rights and
obligations hereunder held by it immediately prior to such effective date, have
the rights and obligations hereunder that have been assigned to it pursuant to
such Assignment and Acceptance and (B) the assigning Lender thereunder shall, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto). Notwithstanding anything contained to the contrary in this
Section 12.07(b), a Lender may assign any or all of its rights under the Loan
Documents to an Affiliate of such Lender or a Related Fund of such Lender
without delivering an Assignment and Acceptance to the Agent; provided, that (x)
the Borrowers and the Agent may continue to deal solely and directly with such
assigning Lender in connection with the interest so assigned until such Lender
and its assignee shall have executed and delivered an Assignment and Acceptance
to the Agent for recordation, (y) the failure of such assigning Lender to
deliver an Assignment and Acceptance to the Agent or any other Person shall not
affect the legality, validity or binding effect of such assignment and (z) such
assignment shall be effective from and after the date specified in such
Assignment and Acceptance.
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(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document
furnished pursuant hereto; (ii) the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Loan Party or any of its Subsidiaries or the performance or observance by
any Loan Party of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement and the other Loan Documents, together with
such other documents and information it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the assigning
Lender, the Agent or any 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 and the other Loan
Documents; (v) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to the Agent by the terms hereof
and thereof, together with such powers as are reasonably incidental hereto and
thereto; and (vi) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement and the
other Loan Documents are required to be performed by it as a Lender.
(d) The Agent shall, acting solely for this purpose as a
non-fiduciary agent of the Borrowers, maintain, or cause to be maintained at the
Payment Office, a copy of each Assignment and Acceptance delivered to and
accepted by it and a register (the "Register") for the recordation of the names
and addresses of the Lenders and the Commitments of, and the principal amount of
the Loans (and stated interest thereon) (the "Registered Loans") and Letter of
Credit Obligations owing to each Lender from time to time. Other than in
connection with an assignment by a Lender to an Affiliate of such Lender or a
Related Fund of such Lender, the entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrowers, the Agent
and the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Administrative Borrower and any Lender at any
reasonable time and from time to time upon reasonable prior notice. In the case
of an assignment pursuant to the last sentence of Section 12.07(b) as to which
an Assignment and Acceptance is not delivered to the Agent, the assigning Lender
shall, acting solely for this purpose as a non-fiduciary agent of the Borrowers,
maintain a register (the "Related Party Register") comparable to the Register on
behalf of the Borrowers.
(e) Upon its receipt by the Agent of an Assignment and Acceptance
subject to any consent required from the Agent and/or the Administrative
Borrower pursuant to Section 12.07(b), the Agent shall (i) accept such
assignment and (ii) record the information contained therein in the Register.
(f) A Registered Loan (and the registered note, if any, evidencing
the same) may be assigned or sold in whole or in part only by registration of
such assignment or sale on the Register or the Related Party Register (and each
registered note shall expressly so provide). Any assignment or sale of all or
part of such Registered Loan (and the registered note, if any, evidencing the
same) may be effected only by registration of such assignment or sale on the
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Register or the Related Party Register, together with the surrender of the
registered note, if any, evidencing the same duly endorsed by (or accompanied by
a written instrument of assignment or sale duly executed by) the holder of such
registered note, whereupon, at the request of the designated assignee(s) or
transferee(s), one or more new registered notes in the same aggregate principal
amount shall be issued to the designated assignee(s) or transferee(s). Prior to
the registration of assignment or sale of any Registered Loan (and the
registered note, if any, evidencing the same), the Agent shall treat the Person
in whose name such Registered Loan (and the registered note, if any, evidencing
the same) is registered as the owner thereof for the purpose of receiving all
payments thereon and for all other purposes, notwithstanding notice to the
contrary.
(g) In the event that any Lender sells participations in a Registered
Loan, such Lender shall maintain a register for this purpose as a non-fiduciary
agent of the Borrowers on which it enters the name of all participants in the
Registered Loans held by it and the principal amount (and stated interest
thereon) of the portion of the Registered Loan that is the subject of the
participation (the "Participant Register"). A Registered Loan (and the
registered note, if any, evidencing the same) may be participated in whole or in
part only by registration of such participation on the Participant Register (and
each registered note shall expressly so provide). Any participation of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by the registration of such participation on the Participant
Register.
(h) Any Non-U.S. Lender who is assigned an interest in any portion of
such Registered Loan pursuant to an Assignment and Acceptance shall comply with
Section 2.08(d).
(i) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, all or a
portion of its Commitments, the Loans made by it and its Pro Rata Share of the
Letter of Credit Obligations); provided, that (i) such Lender's obligations
under this Agreement (including its Commitments hereunder) and the other Loan
Documents shall remain unchanged; (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
and the Borrowers, the Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents; (iii) any such
participation shall be made with the written consent of the Agent and the
Administrative Borrower to the extent the consent of such Person would be
required under Section 12.07(b) if such transfer was effected as an assignment
rather than a participation; and (iv) a participant shall not be entitled to
require such Lender to take or omit to take any action hereunder except (A)
action directly effecting an extension of the maturity dates or decrease in the
principal amount of the Loans or Letter of Credit Obligations, (B) action
directly effecting an extension of the due dates or a decrease in the rate of
interest payable on the Loans or the fees payable under this Agreement, or (C)
actions directly effecting a release of all or a substantial portion of the
Collateral or any Loan Party (except as set forth in Section 10.08 of this
Agreement or any other Loan Document). The Loan Parties agree that each
participant shall be entitled to the benefits of Section 2.08 and Section 4.05
of this Agreement with respect to its participation in any portion of the
Commitments and the Loans as if it was a Lender.
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Section 12.08 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement. Delivery of an executed counterpart
of this Agreement by telecopier shall be equally as effective as delivery of an
original executed counterpart of this Agreement. Any party delivering an
executed counterpart of this Agreement by telecopier also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement. The foregoing shall apply to each other Loan
Document mutatis mutandis.
Section 12.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN
RESPECT OF SUCH OTHER LOAN DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK.
Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE.
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ IN THE COUNTY OF
NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO HEREBY
IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
THE JURISDICTION OF THE AFORESAID COURTS. EACH PARTY HERETO HEREBY IRREVOCABLY
APPOINTS THE SECRETARY OF STATE OF THE STATE OF NEW YORK AS ITS AGENT FOR
SERVICE OF PROCESS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING AND FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE ADMINISTRATIVE BORROWER AT
ITS ADDRESS FOR NOTICES AS SET FORTH IN SECTION 12.01 AND TO THE SECRETARY OF
STATE OF THE STATE OF NEW YORK, SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS
AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE PARTIES HERETO
TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PARTY HERETO IN ANY OTHER
JURISDICTION. EACH PARTY HERETO HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY PARTY HERETO HAS OR
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HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT
OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
Section 12.11 WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, THE AGENT
AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT,
DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN
CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN
PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT
OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR ANY
LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK
TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING INTO
THIS AGREEMENT.
Section 12.12 Consent by the Agent and Lenders. Except as otherwise
expressly set forth herein to the contrary, if the consent, approval,
satisfaction, determination, judgment, acceptance or similar action (an
"Action") of the Agent or any Lender shall be permitted or required pursuant to
any provision hereof or any provision of any other agreement to which any Loan
Party is a party and to which the Agent or any Lender has succeeded thereto,
such Action shall be required to be in writing and may be withheld or denied by
the Agent or such Lender, in its sole discretion, with or without any reason,
and without being subject to question or challenge on the grounds that such
Action was not taken in good faith.
Section 12.13 No Party Deemed Drafter. Each of the parties hereto
agrees that no party hereto shall be deemed to be the drafter of this Agreement.
Section 12.14 Reinstatement; Certain Payments. If any claim is ever
made upon the Agent, any Lender or the L/C Issuer for repayment or recovery of
any amount or amounts received by the Agent, such Lender or the L/C Issuer in
payment or on account of any of the Obligations, the Agent, such Lender or the
L/C Issuer shall give prompt notice of such claim to each other Lender and the
Administrative Borrower, and if the Agent, such Lender or the L/C Issuer repays
all or part of such amount by reason of (i) any judgment, decree or order of any
court or administrative body having jurisdiction over the Agent, such Lender or
the L/C Issuer or any of its property, or (ii) any good faith settlement or
compromise of any such claim effected by the Agent, such Lender or the L/C
Issuer with any such claimant, then and in such event each Loan Party agrees
that (A) any such judgment, decree, order, settlement or compromise shall be
binding upon it notwithstanding the cancellation of any Indebtedness hereunder
or under the other Loan Documents or the termination of this Agreement or the
other Loan Documents, and (B) it shall be and remain liable to the Agent, such
Lender or the L/C Issuer hereunder for the amount so repaid or recovered to the
same extent as if such amount had never originally been received by the Agent,
such Lender or the L/C Issuer.
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Section 12.15 Indemnification.
(a) General Indemnity. In addition to each Loan Party's other
Obligations under this Agreement, each Loan Party agrees to, jointly and
severally, defend, protect, indemnify and hold harmless the Agent, each Lender
and the L/C Issuer and all of their respective officers, directors, employees,
attorneys, consultants and agents (collectively called the "Indemnitees") from
and against any and all losses, damages, liabilities, obligations, penalties,
fees, reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees, costs and expenses) incurred by such Indemnitees, whether prior
to or from and after the Effective Date, whether direct, indirect or
consequential, as a result of or arising from or relating to or in connection
with any of the following: (i) the negotiation, preparation, execution or
performance or enforcement of this Agreement, any other Loan Document or of any
other document executed in connection with the transactions contemplated by this
Agreement, (ii) the Agent's or any Lender's furnishing of funds to the Borrowers
or the L/C Issuer's issuing of Letters of Credit for the account of the
Borrowers under this Agreement or the other Loan Documents, including, without
limitation, the management of any such Loans, the Reimbursement Obligations or
the Letter of Credit Obligations, (iii) any matter relating to the financing
transactions contemplated by this Agreement or the other Loan Documents or by
any document executed in connection with the transactions contemplated by this
Agreement or the other Loan Documents, (iv) any claims, liabilities or losses
with respect to or resulting from any omission of any Loan Party to pay or delay
in paying any taxes, fees or similar impositions to be paid by it or (v) any
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto (collectively, the "Indemnified
Matters"); provided, however, that the Loan Parties shall not have any
obligation to any Indemnitee under this subsection (a) for any Indemnified
Matter caused by the gross negligence or willful misconduct of such Indemnitee,
as determined by a final judgment of a court of competent jurisdiction.
(b) Environmental Indemnity. Without limiting Section 12.15(a)
hereof, each Loan Party agrees to, jointly and severally, defend, indemnify, and
hold harmless the Indemnitees against any and all Environmental Liabilities and
Costs and all other claims, demands, penalties, fines, liability (including
strict liability), losses, damages, costs and expenses (including without
limitation, reasonable legal fees and expenses, consultant fees and laboratory
fees), arising out of (i) any Releases or threatened Releases (x) at any
property presently or formerly owned or operated by any Loan Party or any
Subsidiary of any Loan Party, or any predecessor in interest or (y) of any
Hazardous Materials generated and disposed of by any Loan Party or any
Subsidiary of any Loan Party, or any predecessor in interest; (ii) any
violations of Environmental Laws; (iii) any Environmental Action relating to any
Loan Party or any Subsidiary of any Loan Party, or any predecessor in interest;
(iv) any personal injury (including wrongful death) or property damage (real or
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personal) arising out of exposure to Hazardous Materials used, handled,
generated, transported or disposed by any Loan Party or any Subsidiary of any
Loan Party, or any predecessor in interest; (v) any Environmental Liabilities
and Costs relating to any investigation, removal, cleanup and/or remediation of
any Hazardous Materials present or arising out of the operations of any facility
of any Loan Party, (vi) any Environmental Liabilities and Costs incurred in
connection with any Environmental Lien and (vii) any breach of any warranty or
representation regarding environmental matters made by the Loan Parties in
Section 6.01(r) or the breach of any covenant made by the Loan Parties in
Section 7.01(j). Notwithstanding the foregoing, the Loan Parties shall not have
any obligation to any Indemnitee under this subsection (b) regarding any
potential environmental matter covered hereunder which is caused by the gross
negligence or willful misconduct of such Indemnitee, as determined by a final
judgment of a court of competent jurisdiction.
(c) The indemnification for all of the foregoing losses, damages,
fees, costs and expenses of the Indemnitees are chargeable against the Loan
Account. To the extent that the undertaking to indemnify, pay and hold harmless
set forth in this Section 12.15 may be unenforceable because it is violative of
any law or public policy, each Loan Party shall, jointly and severally,
contribute the maximum portion which it is permitted to pay and satisfy under
applicable law, to the payment and satisfaction of all Indemnified Matters
incurred by the Indemnitees. The indemnities set forth in this Section 12.15
shall survive the repayment of the Obligations and discharge of any Liens
granted under the Loan Documents.
Section 12.16 NATC as Agent for Borrowers. Each Borrower hereby
irrevocably appoints NATC as the borrowing agent and attorney-in-fact for the
Borrowers (the "Administrative Borrower") which appointment shall remain in full
force and effect unless and until the Agent shall have received prior written
notice signed by all of the Borrowers that such appointment has been revoked and
that another Borrower has been appointed Administrative Borrower. Each Borrower
hereby irrevocably appoints and authorizes the Administrative Borrower (i) to
provide to the Agent and receive from the Agent all notices with respect to
Loans obtained for the benefit of any Borrower and all other notices and
instructions under this Agreement and (ii) to take such action as the
Administrative Borrower deems appropriate on its behalf to obtain Loans and to
exercise such other powers as are reasonably incidental thereto to carry out the
purposes of this Agreement. It is understood that the handling of the Loan
Account and Collateral of the Borrowers in a combined fashion, as more fully set
forth herein, is done solely as an accommodation to the Borrowers in order to
utilize the collective borrowing powers of the Borrowers in the most efficient
and economical manner and at their request, and that neither the Agent nor the
Lenders shall incur liability to the Borrowers as a result hereof. Each of the
Borrowers expects to derive benefit, directly or indirectly, from the handling
of the Loan Account and the Collateral in a combined fashion since the
successful operation of each Borrower is dependent on the continued successful
performance of the integrated group. To induce the Agent and the Lenders to do
so, and in consideration thereof, each of the Borrowers hereby jointly and
severally agrees to indemnify the Indemnitees and hold the Indemnitees harmless
against any and all liability, expense, loss or claim of damage or injury, made
against such Indemnitee by any of the Borrowers or by any third party whosoever,
arising from or incurred by reason of (a) the handling of the Loan Account and
Collateral of the Borrowers as herein provided, (b) the Agent and the Lenders
relying on any instructions of the Administrative Borrower, or (c) any other
action taken by the Agent or any Lender hereunder or under the other Loan
Documents, provided that the Borrowers shall not have any obligation to any
Indemnitee under this Section 12.16 for any matter covered hereunder which is
caused by the gross negligence or willful misconduct of such Indemnitee, as
determined by a final judgment of a court of competent jurisdiction
103
Section 12.17 Records. The unpaid principal of and interest on the
Loans, the interest rate or rates applicable to such unpaid principal and
interest, the duration of such applicability, the Commitments, and the accrued
and unpaid fees payable pursuant to Section 2.06 hereof, including, without
limitation, the Closing Fee, Loan Servicing Fee, the Unused Line Fee and the
Letter of Credit Fee, shall at all times be ascertained from the records of the
Agent, which shall be conclusive and binding absent manifest error.
Section 12.18 Binding Effect. This Agreement shall become effective
when it shall have been executed by each Loan Party, the Agent and each Lender
and when the conditions precedent set forth in Section 5.01 hereof have been
satisfied or waived in writing by the Agent, and thereafter shall be binding
upon and inure to the benefit of each Loan Party, the Agent and each Lender, and
their respective successors and assigns, except that the Loan Parties shall not
have the right to assign their rights hereunder or any interest herein without
the prior written consent of each Lender, and any assignment by any Lender shall
be governed by Section 12.07 hereof.
Section 12.19 Interest. It is the intention of the parties hereto
that the Agent and each Lender shall conform strictly to usury laws applicable
to it. Accordingly, if the transactions contemplated hereby or by any other Loan
Document would be usurious as to the Agent or any Lender under laws applicable
to it (including the laws of the United States of America and the State of New
York or any other jurisdiction whose laws may be mandatorily applicable to the
Agent or such Lender notwithstanding the other provisions of this Agreement),
then, in that event, notwithstanding anything to the contrary in this Agreement
or any other Loan Document or any agreement entered into in connection with or
as security for the Obligations, it is agreed as follows: (i) the aggregate of
all consideration which constitutes interest under law applicable to the Agent
or any Lender that is contracted for, taken, reserved, charged or received by
the Agent or such Lender under this Agreement or any other Loan Document or
agreements or otherwise in connection with the Obligations shall under no
circumstances exceed the maximum amount allowed by such applicable law, any
excess shall be canceled automatically and if theretofore paid shall be credited
by the Agent or such Lender on the principal amount of the Obligations (or, to
the extent that the principal amount of the Obligations shall have been or would
thereby be paid in full, refunded by the Agent or such Lender, as applicable, to
the Borrowers); and (ii) in the event that the maturity of the Obligations is
accelerated by reason of any Event of Default under this Agreement or otherwise,
or in the event of any required or permitted prepayment, then such consideration
that constitutes interest under law applicable to the Agent or any Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for in this Agreement or otherwise shall be
canceled automatically by the Agent or such Lender, as applicable, as of the
date of such acceleration or prepayment and, if theretofore paid, shall be
credited by the Agent or such Lender, as applicable, on the principal amount of
the Obligations (or, to the extent that the principal amount of the Obligations
shall have been or would thereby be paid in full, refunded by the Agent or such
Lender to the Borrowers). All sums paid or agreed to be paid to the Agent or any
104
Lender for the use, forbearance or detention of sums due hereunder shall, to the
extent permitted by law applicable to the Agent or such Lender, be amortized,
prorated, allocated and spread throughout the full term of the Loans until
payment in full so that the rate or amount of interest on account of any Loans
hereunder does not exceed the maximum amount allowed by such applicable law. If
at any time and from time to time (x) the amount of interest payable to the
Agent or any Lender on any date shall be computed at the Highest Lawful Rate
applicable to the Agent or such Lender pursuant to this Section 12.19 and (y) in
respect of any subsequent interest computation period the amount of interest
otherwise payable to the Agent or such Lender would be less than the amount of
interest payable to the Agent or such Lender computed at the Highest Lawful Rate
applicable to the Agent or such Lender, then the amount of interest payable to
the Agent or such Lender in respect of such subsequent interest computation
period shall continue to be computed at the Highest Lawful Rate applicable to
the Agent or such Lender until the total amount of interest payable to the Agent
or such Lender shall equal the total amount of interest which would have been
payable to the Agent or such Lender if the total amount of interest had been
computed without giving effect to this Section 12.19.
For purposes of this Section 12.19, the term "applicable law" shall
mean that law in effect from time to time and applicable to the loan transaction
between the Borrowers, on the one hand, and the Agent and the Lenders, on the
other, that lawfully permits the charging and collection of the highest
permissible, lawful non-usurious rate of interest on such loan transaction and
this Agreement, including laws of the State of New York and, to the extent
controlling, laws of the United States of America.
The right to accelerate the maturity of the Obligations does not
include the right to accelerate any interest that has not accrued as of the date
of acceleration.
Section 12.20 Confidentiality. The Agent and each Lender agrees (on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with industry practices for handling confidential information of this
nature and in accordance with safe and sound practices of comparable commercial
finance companies, any non-public information supplied to it by the Loan Parties
pursuant to this Agreement or the other Loan Documents which is identified in
writing by the Loan Parties as being confidential at the time the same is
delivered to such Person (and which at the time is not, and does not thereafter
become, publicly available or available to such Person from another source not
known to be subject to a confidentiality obligation to such Person not to
disclose such information), provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for the Agent or any Lender,
(iii) to examiners, auditors, accountants or Securitization Parties, (iv) in
connection with any litigation to which the Agent or any Lender is a party or
(v) to any assignee or participant (or prospective assignee or participant) so
long as such assignee or participant (or prospective assignee or participant)
first agrees, in writing, to be bound by confidentiality provisions similar in
substance to this Section 12.20. Notwithstanding the foregoing, the Agent and
each Lender may disclose to any and all Persons, without limitation of any kind,
the tax treatment and tax structure of the financing contemplated by this
Agreement, and all materials of any kind (including opinions or other tax
analyses) that are provided to the Agent or any Lender relating to such tax
treatment and tax structure. The Agent and each Lender agrees that, upon receipt
of a request or identification of the requirement for disclosure pursuant to
clause (iv) hereof, it will make reasonable efforts to keep the Loan Parties
informed of such request or identification; provided that the each Loan Party
105
acknowledges that the Agent and each Lender may make disclosure as required or
requested by any Governmental Authority or representative thereof and that the
Agent and each Lender may be subject to review by Securitization Parties or
other regulatory agencies and may be required to provide to, or otherwise make
available for review by, the representatives of such parties or agencies any
such non-public information.
Section 12.21 Integration. This Agreement, together with the other
Loan Documents, reflects the entire understanding of the parties with respect to
the transactions contemplated hereby and shall not be contradicted or qualified
by any other agreement, oral or written, before the date hereof.
Section 12.22 Public Disclosures. Each Loan Party agrees that neither
it nor its Affiliates will in the future issue any press releases or other
public disclosure using the name of the Agent or any Lender or referring to this
Agreement or the other Loan Documents without at least 3 Business Days' prior
notice to the Agent and the Lenders and without the prior written consent of the
Agent and the Lenders unless (and only to the extent that) such Loan Party or
such Affiliate is required to do so under law and then, in any event, such Loan
Party or such Affiliate will consult with the Agent and the Lenders before
issuing such press release or other public disclosures. Each Loan Party consents
to the publication by the Agent and the Lenders of a tombstone or similar
advertising materials relating to the financing transactions contemplated by
this Agreement. The Agent and the Lenders shall provide a draft of any such
tombstone or similar advertising material to each Loan Party for review and
comment prior to the publication thereof. Subject to Section 12.20, the Agent
and the Lenders reserve the right to provide to industry trade organizations
information necessary and customary for inclusion in league table measurements.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWERS:
----------
NORTH ATLANTIC TRADING COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer and Senior
Vice President
NORTH ATLANTIC OPERATING COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer and Senior
Vice President
NATIONAL TOBACCO COMPANY, L.P.
By: National Tobacco Finance Corporation, as
its general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer and Senior
Vice President
NATIONAL TOBACCO FINANCE CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer and Senior
Vice President
NORTH ATLANTIC CIGARETTE COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer and Senior
Vice President
▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer and Senior
Vice President
RBJ SALES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer and Senior
Vice President
▇▇▇▇ ▇▇▇▇▇▇ & SONS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer and Senior
Vice President
GUARANTORS:
-----------
NORTH ATLANTIC HOLDING COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer and Senior
Vice President
AGENT AND LENDER:
-----------------
FORTRESS CREDIT CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Operating Officer
SCHEDULE 1.01(A)
LENDERS AND LENDERS' COMMITMENTS
Revolving Credit
----------------
Lenders' Name and Addre ss Term Loan A Commitment Commitment % of Total Commitment
-------------------------- ---------------------- ---------- ---------------------
Fortress Credit Corp. $30,000,000 $55,000,000 100%
1251 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇