CREDIT FACILITIES AGREEMENT among GE COMMERCIAL DISTRIBUTION FINANCE CORPORATION asAdministrative Agent and GECC CAPITAL MARKETS GROUP, INC. as Sole Lead Arranger and Sole Bookrunner and GE COMMERCIAL DISTRIBUTION FINANCE CORPORATION and as Lenders...
EXHIBIT
10.1
among
GE
COMMERCIAL DISTRIBUTION FINANCE CORPORATION
asAdministrative
Agent
and
GECC
CAPITAL MARKETS GROUP, INC.
as
Sole Lead Arranger and Sole Bookrunner
and
GE
COMMERCIAL DISTRIBUTION FINANCE CORPORATION
and
THE
OTHER LENDERS LISTED ON EXHIBIT 3 AND
SIGNATURE PAGES
HERETO
as
Lenders
and
MTM
TECHNOLOGIES (US), INC.,
MTM
TECHNOLOGIES (MASSACHUSETTS), LLC, and
INFO
SYSTEMS, INC.
jointly
and severally
as
Borrower
August
21, 2007
In
consideration of the mutual agreements herein and other sufficient
consideration, the receipt of which is hereby acknowledged, MTM TECHNOLOGIES,
INC., a New York corporation, MTM TECHNOLOGIES (US), INC., a Delaware
corporation, MTM TECHNOLOGIES (MASSACHUSETTS), LLC, a Delaware limited liability
company, and INFO SYSTEMS, INC., a Delaware corporation (collectively, and
separately referred to as, “Borrower” or “the Borrower”), and GE COMMERCIAL
DISTRIBUTION FINANCE CORPORATION (“CDF”), as Administrative Agent, and CDF and
the other lenders listed on Exhibit 3 of this Agreement and the signature
pages hereto (and their respective successors and permitted assigns), as
“Lenders”, agree as follows:
1. Effective
Date. This Agreement is effective August 21,
2007.
2. Definitions;
Rules of Construction; Borrowing Agent; Patriot Act.
2.1. Listed
Definitions. Capitalized words defined in the Glossary and
Index of Defined Terms attached hereto as Exhibit 2.1 shall have such
defined meanings wherever used in this Agreement and the other Loan
Documents.
2.2. Other
Definitions. If a capitalized word in this Agreement is not
defined in the Glossary and Index of Defined Terms, it shall have such meaning
as defined elsewhere herein, or if not defined elsewhere herein, the meaning
defined in the UCC.
2.3. References
to Borrower. The words “a Borrower”, “any Borrower”, “each
Borrower” and “every Borrower” refer to each of MTM Technologies, Inc., MTM
Technologies (US), Inc., MTM Technologies (Massachusetts), LLC, and Info
Systems, Inc., both separately and collectively, as though each such entity
were
actually listed, and their Obligations and liabilities (including, without
limitation, the Loan Obligations) under the Loan Documents are joint and several
in all respects.
2.4. References
to Covered Person. The words “Covered Person”, “a Covered
Person”, “any Covered Person”, “each Covered Person” and “every Covered Person”
refer to Borrower and each of their currently existing or later acquired,
created or organized Subsidiaries separately. The words “Covered
Persons” refers to Borrower and their currently existing or later acquired,
created or organized Subsidiaries collectively.
2.5. References
to Required Lenders. The words “Required Lenders” means any
one or more Lenders whose shares of Lenders’ Exposure at the relevant time
aggregate at least 51.0000% (subject to the terms of Section 7.5);
provided, however, if there are two Lenders, then “Required Lenders” shall mean
both such Lenders.
2.6. Accounting
Terms. Unless the context otherwise requires, accounting
terms herein that are not defined herein shall be determined under
GAAP. All financial measurements contemplated hereunder respecting
Borrower shall be made and calculated for Borrower and all of their now existing
or later acquired, created or organized Subsidiaries, if any, on a consolidated
basis in accordance with GAAP unless expressly provided otherwise
herein.
2.7. Meaning
of Satisfactory. Whenever herein a document or matter is
required to be satisfactory to Administrative Agent or satisfactory to Lenders
or satisfactory to Required Lenders, unless expressly stated otherwise such
document must be reasonably satisfactory to Administrative Agent, Lenders or
Required Lenders (as applicable) in both form and substance, and unless
expressly stated otherwise Administrative Agent, Lenders or Required Lenders
(as
applicable)
shall have the commercially reasonable discretion to determine whether the
document or matter is satisfactory.
2.8. Computation
of Time Periods. In computing or defining periods of time
from a specified date to a later specified date, and in computing the accrual
of
interest or fees, the word “from” shall mean “from and including” and the words
“to” and “until” shall each mean “to but excluding”. Periods of days
referred to in this Agreement shall be counted in calendar days unless Business
Days are expressly prescribed, and references in this Agreement to months and
years are to calendar months and calendar years unless otherwise
specified.
2.9. Syndication
Agent. GECC Capital Markets Group, Inc. is given the titles
“Lead Arranger” and “Bookrunner” under the Credit Agreement and Loan
Documents. Nothing contained in the foregoing sentence, shall give
GECC Capital Markets Group, Inc. any additional rights or obligations under
the
Credit Agreement or the Loan Documents.
2.10. Certificates
of Borrower and Borrowing Officer, Advance Requests; Borrowing
Agent. Each Borrower hereby appoints MTM Technologies, Inc.
as “Borrowing Agent.” Because the operations and business activities
of the Borrowers are highly integrated and interdependent, at any particular
time it is impractical to determine which of the Borrowers will directly receive
the proceeds of a Revolving Loan, Swingline Loan, Interim Floorplan Loan, or
Floorplan Loan. Each of the Borrowers hereby directs the Letter of
Credit Issuer to issue Letters of Credit or cause the issuance of Letters of
Credit, directs the Administrative Agent to disburse the proceeds of each
Revolving Loan, Swingline Loan, Interim Floorplan Loan, and Floorplan Loan
to or
at the direction of the Borrowing Agent, with such directions to be subject
to
approval of the Administrative Agent in its
discretion. Notwithstanding anything herein to the contrary, proceeds
of the initial Revolving Loan, and initial Floorplan Loan used to satisfy the
existing Indebtedness of the applicable Borrower will be advanced directly
to
the holder of such Indebtedness. From time to time, Borrowing Agent
shall further distribute the proceeds of Revolving Loans, and Swingline Loans,
to a particular Borrower or Borrowers, jointly and severally, or direct the
disbursement of the Interim Floorplan Loan and Floorplan Loans for the account
of each Borrower, and each Borrower represents and warrants that the subsequent
receipt and use of such proceeds by any particular Borrower inures to the
economic benefit directly and indirectly of all other Borrowers. For so long
as
the Loan Obligations remain outstanding and any Commitment remains in effect,
each Borrower hereby covenants and agrees, and hereby grants to the Borrowing
Agent an absolute and irrevocable power of attorney coupled with interest,
and
irrevocably designates, appoints, authorizes and directs the Borrowing Agent
to
(a) execute and deliver any Borrowing Base Certificates, (b) certify
the financial statements of Borrower, (c) request Advances and execute and
deliver written requests for Advances, (d) make any other deliveries
required to be delivered periodically hereunder to Administrative Agent and/or
any Lender, (e) act as its Borrowing Officer, and Administrative Agent and
each Lender is entitled to rely on any such document or certificate signed
by
the Borrowing Agent and (f) otherwise take all other actions otherwise
contemplated by this Section, and to act on behalf of such Borrower for purposes
of giving and receiving notices and certifications under this Agreement or
any
other Loan Document. The Administrative Agent is entitled to rely and
act on the instructions of the Borrowing Agent.
2.11. General. Unless
the context of this Agreement clearly requires
otherwise: (i) references to the plural include the singular and
vice versa; (ii) references to any Person include such Person’s
successors and assigns but, if applicable, only if such successors and assigns
are permitted by this Agreement; (iii) references to one gender
include all genders; (iv) ”including” is not
limiting; (v) ”or” has the inclusive meaning represented by the
phrase “and/or;” (vi) the
2
words
“hereof,” “herein,” “hereby,” “hereunder” and similar terms in this Agreement
refer to this Agreement as a whole, including its Exhibits, and not to any
particular provision of this Agreement; (vii) the word “Section”
or “section” and “Page” or “page” refer to a section or page, respectively, of,
and the word Exhibit refers to an Exhibit to, this Agreement unless it expressly
refers to something else; (viii) reference to any agreement, document, or
instrument (including this Agreement and any other Loan Document or other
agreement, document or instrument defined herein), means such agreement,
document, or instrument as amended, modified, restated and/or replaced and
in
effect from time to time in accordance with the terms thereof and, if
applicable, the terms hereof, and includes all attachments thereto and documents
incorporated therein, if any; (ix) general and specific references to any
Law means such Law as amended, modified, codified or reenacted, in whole or
in
part, and in effect from time to time; and (x) unless otherwise expressly
modified, the word “anniversary” shall refer to the annual observance of such an
event on that date in following years. Section captions and the Table
of Contents are for convenience only and shall not affect the interpretation
or
construction of this Agreement or the other Loan Documents.
2.12. Patriot
Act Notification. Administrative Agent and each Lender
hereby notifies the Borrowers and each other Covered Person that, pursuant
to
the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56, signed
into law October 26, 2001 (as amended from time to time (including any successor
statute) and together with all rules promulgated thereunder, collectively,
the
“Act”), it is required to obtain, verify and record information that identifies
the Borrowers and each other Covered Person, which information includes the
name
and address of the Borrowers and each other Covered Person and other information
that will allow Administrative Agent and each Lender to identify the Borrowers
and each other Covered Person in accordance with the Act.
2.13. Other
Deposits and Extensions of Credit. CDF and its Affiliates,
for their own account, may accept deposits from, and extend other credit to,
Borrower and/or any Covered Person other than as set forth in this Agreement
and
the other Loan Documents, and without any duty to account to any Lender
therefor. No Lender will have any interest in any such deposits or
extensions of credit made by or to CDF or its Affiliates, or the proceeds
thereof or any collateral therefor. Without limiting the foregoing,
each Lender acknowledges and agrees that CDF may from time to time provide
purchase order financing to Borrower for CDF’s own account pursuant to CDF’s
“Star” program (or other similar programs created in the future, collectively,
the “Star Program”) and require Borrower to repay any advances made with respect
thereto (“Star Advances”). Any repayments made by Borrower with
respect to Star Advances, or any amounts received by CDF in connection with
any
collateral therefor and/or proceeds thereof, will be applied by CDF to repay
the
Star Advances and will not be included in the Loan Obligations or be subject
to
this Agreement or the other Loan Documents, and no Lender shall have any rights
with respect thereto, but shall be entitled to all the benefits of any
Subordination Agreement and included in each Subordination Agreement as “senior
indebtedness” or similar term(s). Any repayments made by Borrower
with respect to Revolving Loan Advances or Floorplan Loan Advances hereunder
will not be included in the Star Program.
3. Lenders’
Commitments and Facilities. Subject to the terms and
conditions hereof, and in reliance upon the Representations and
Warranties:
3.1. Revolving
Loan Commitments.
3.1.1. Aggregate
Amount. Subject to the limitations in Section 3.1.2,
Section 3.6 and elsewhere herein, each Lender commits to make available to
Borrower, from the
3
Effective
Date to the Revolving Loan Maturity Date, such Lender’s pro-rata share (as
listed on Exhibit 3 hereto) of an “Aggregate Revolving Loan Commitment”
that is initially Twenty Million Dollars ($20,000,000), but which may decrease
from time to time as provided herein, by funding such Lender’s pro-rata share of
Revolving Loan Advances made from time to time by Administrative Agent as
provided herein. Subject to the limitations in Section 3.1.2 and
elsewhere herein, payments and prepayments that are applied to reduce the
Aggregate Revolving Loan may be reborrowed through Revolving Loan Advances
or,
subject to the terms and provisions herein, reborrowed through Swingline
Advances. Each Lender’s Revolving Loan Commitment is its pro-rata
share of the Aggregate Revolving Loan Commitment.
At
anytime after the first Anniversary Date and from time to time thereafter,
Borrower may reduce the amount of the Aggregate Revolving Loan Commitment in
whole multiples of $5,000,000, but only if (i) Borrower gives Administrative
Agent written notice of Borrower’s intention to make such reduction at least
three Business Days prior to the effective date of the reduction, (ii) such
reduction does not reduce the Aggregate Revolving Loan Commitment below the
Maximum Swingline Amount, and (iii) Borrower makes on the effective date of
the
reduction any payment of principal and accrued but unpaid interest on the
Aggregate Revolving Loan required under this Agreement as a consequence of
the
reduction, including, without limitation, as set forth in Section
6.3.2. Any such reduction of the amount of the Aggregate Revolving
Loan Commitment, whether scheduled or voluntary, shall be
permanent.
Upon
any
reduction of the Aggregate Revolving Loan Commitment permitted in this
Agreement, each Lender’s Revolving Loan Commitment will automatically reduce by
such Lender’s pro-rata share of such reduction of the Aggregate Revolving Loan
Commitment.
3.1.2. Limitation
on Revolving Loan Advances. No Revolving Loan Advance will
be made which would result in either: (i) the Aggregate Revolving Loan exceeding
the Maximum Available Amount; or (ii) the Lenders’ Exposure exceeding the Total
Aggregate Facility Limit. No Revolving Loan Advance will be made on
or after the Revolving Loan Maturity Date. Lenders may, however, in
their absolute discretion make such Revolving Loan Advances, but shall not
be
deemed by doing so to have increased the Maximum Available Amount or the Total
Aggregate Facility Limit and shall not be obligated to make any such Revolving
Loan Advances thereafter. At any time that there is an Existing
Default, the Aggregate Revolving Loan Commitment may be canceled as provided
in
Section 16.3. The “Maximum Available Amount” (which can be a
negative number) on any date shall be a Dollar amount equal to (i) the
lesser of (A) the amount of the Aggregate Revolving Loan Commitment and
(B) the Borrowing Base on such date, minus (ii) the sum of
(a) the Swingline Loan, (b) the Floorplan Shortfall, (c) the Letter of
Credit Exposure on such date (except to the extent that a Revolving Loan Advance
will be used immediately to reimburse Letter of Credit Issuer for unreimbursed
draws on a Letter of Credit), (d) without duplication, the outstanding Aggregate
Revolving Loans, (e) the amount of the Other Creditor Indebtedness (unless
an
Intercreditor Agreement in form and substance satisfactory to Administrative
Agent has been executed between Administrative Agent and the holder of such
Other Creditor Indebtedness), and (f) the amount of Bid Bonds.
3.1.3. Revolving
Notes. The obligation of Borrower to repay each Lender’s
Revolving Loans shall, at the request of any Lender, be evidenced by a Revolving
Note
4
payable
to the order of such Lender in a maximum principal amount equal to the amount
of
such Lender’s Revolving Loan Commitment, in a form acceptable to Administrative
Agent. In such event, the Borrower shall execute and deliver to such
Lender such Revolving Note payable to the order of such Lender, with appropriate
insertions, in a face principal amount equal to the Lender’s Revolving
Commitment. Thereafter, the Loans evidenced by each such Revolving
Note and interest thereon shall at all times (prior to any assignment pursuant
to Section 18.4) be represented by such Revolving Note payable to the order
of
the payee named therein, except to the extent that any such Lender subsequently
returns any such Revolving Note for cancellation and requests that such Loans
once again be evidenced as described as set forth herein. The failure
of a Lender to request a Revolving Note, or the failure of the Revolving Loans
to be evidenced by a promissory note shall not affect the enforceability of
the
obligation of the Borrowers to repay such Lender’s Revolving Loans.
3.1.4. Borrowing
Base. The “Borrowing Base” on any date shall
be:
3.1.4.1. 85%
of the total outstanding principal balance of all of Borrowers’ Eligible
Accounts as of the close of business on such date, or as certified in the
Borrowing Base Certificate most recently furnished to Administrative Agent
as
required in Section 13.14.1, whichever is less; minus
3.1.4.2. $1,500,000;
minus
3.1.4.3. any
other reserves or deductions from the “Borrowing Base” which Administrative
Agent or the Required Lenders believe to be appropriate in their respective
commercially reasonable discretion.
3.1.5. Eligible
Accounts. “Eligible Accounts” include all of Borrowers’
Accounts other than the following, unless approved in writing by Administrative
Agent in each case: (i) any Account with respect to which
Administrative Agent does not have a valid and enforceable, perfected first
priority Security Interest; (ii) any Account which remains unpaid as of
90 days after the original date of the applicable invoice, provided,
however, (1) if the Account Debtor is a Governmental Authority or an Account
Debtor whose primary purpose is to provide educational services, then the
foregoing number of days shall be 120; and (2) if the Account Debtor’s primary
purpose is to provide health care services, then, at Administrative Agent’s sole
discretion, the number of days shall be 120, (iii) any Account of a single
Account Debtor if 50% or more of the balances due on all Accounts of such
Account Debtor are ineligible under clause (i) or (ii); (iv) any Account
with respect to which the Account Debtor is a Borrower, a Subsidiary or an
Affiliate thereof or an employee or officer of Borrower or any Subsidiary or
Affiliate thereof, provided, however, that the foregoing shall not be applicable
to arm’s-length transactions with portfolio companies of the Borrowers’ Major
Shareholders; (v) any Account with respect to which the Account Debtor
does not maintain its chief executive office within the United States or any
Account with respect to which the Account Debtor is the government of any
foreign country or any municipality or other political subdivision thereof,
or
any department, agency, public corporation or other instrumentality thereof;
(vi) any Account which is created from the rental or lease of any Inventory
not owned by Borrower; (vii) any Account with respect to goods or services
whose delivery or performance has been rejected by the Account Debtor or whose
earlier acceptance has been revoked; (viii) any Account arising from the
delivery of goods for which an invoice has not been sent to the Account Debtor
within 10 days after such delivery or any
5
Account
arising from the performance of services for which an invoice has not been
sent
to the Account Debtor within thirty (30) days after such performance;
(ix) any Account owing by an Account Debtor that is the subject of a
bankruptcy or similar insolvency proceeding, has made an assignment for the
benefit of creditors, has acknowledged that it is unable to pay its debts as
they mature, or whose assets have been transferred to a receiver or trustee,
or
who has ceased business as a going concern; (x) any Account with respect
to which the Account Debtor’s obligation to pay the Account is conditional upon
the Account Debtor’s approval or is otherwise subject to any repurchase
obligation or return right, as with sales made on a ▇▇▇▇-and-hold, guarantied
sale, sale-and-return, sale on approval (except with respect to Accounts in
connection with which Account Debtors are entitled to return Inventory solely
on
the basis of the quality of such Inventory) or consignment basis, provided,
however, that ▇▇▇▇-and-hold Accounts shall be considered eligible (subject
to
all other eligibility criteria contained herein) for that portion of the related
Accounts which have been performed, earned and invoiced and for which title
to
the Inventory has passed to the Account Debtor, and which the applicable Account
Debtor is unconditionally obligated to pay without offset, defense or
counterclaim under the terms of the specific customer agreements, subject to
the
Administrative Agent’s review and satisfaction with the underlying contract
and/or purchase order associated therewith and as specifically agreed to in
writing by the Administrative Agent, (xi) any Account owing by an Account
Debtor that has disputed liability or made any claim with respect to any other
Account due from such Account Debtor, or that has any right of set-off against
such Account, or to which Borrower is indebted in any way, but only to the
extent of such indebtedness, set-off, dispute or claim; (xii) any Account
subject to a chargeback from a volume discount or an advertising discount,
but
only to the extent of such chargeback or discount; (xiii) [Intentionally
Omitted]; (xiv) any Account of an Account Debtor with respect to particular
goods still in the possession of the creditor on the Account or included in
Inventory of such creditor and against which the Account Debtor has filed a
financing statement under the UCC or has obtained or purported to have obtained
a Security Interest; (xv) any Account with respect to which the delivery of
goods or performance of services is bonded in favor of Borrower; (xvi) any
Account as to which Administrative Agent does not have the right or ability
to
obtain direct payment to Administrative Agent; (xvii) any Account with
respect to which any of the covenants and agreements contained in any of the
Loan Documents or any of the Representations and Warranties are not or have
ceased to be complete and correct or have been breached and not cured within
any
applicable grace period under this Agreement; (xviii) any Account which is
evidenced by a promissory note or other instrument or by chattel paper or which
has been reduced to judgment; (xix) any Account which arises out of a sale
or lease not made in the ordinary course of Borrower’s business; (xx) any
Account for which payment terms greater than net 45 days from the date of
invoice are provided or permitted; (xxi) Accounts arising from payment made
by credit card, debit card, or similar instrument; (xxii) any Account owing
from any supplier or Vendor of any Borrower, including, without limitation
under
or in connection with any rebate, subsidy, incentive or similar program,
(xxiii) any Account owing to any Person other than Borrower,
(xxiv) any Account arising from the leasing of Inventory, (xxv) with
regards to any Accounts arising from the provision of services, any such
Accounts which are invoiced prior to the performance of the applicable services
provided, however, that deferred revenue ▇▇▇▇▇▇▇▇ and progress ▇▇▇▇▇▇▇▇ shall
be
considered eligible (subject to all other eligibility criteria contained herein)
for that portion of the related Accounts which have been performed, earned
and
invoiced and which the applicable Account Debtor is unconditionally obligated
to
pay without offset, defense or counterclaim under the terms of the specific
customer agreements, subject to the Administrative Agent’s review and
6
satisfaction
with the underlying contract and/or purchase order associated therewith and
as
specifically agreed to in writing by the Administrative Agent, (xxvi) any
Account as to which the perfection of Administrative Agent’s Security Interest
is governed by any federal, state or local statutory requirements other than
those of the UCC or the Claims Act; (xxvii) subject to all other eligibility
criteria, if Administrative Agent requests filings and acknowledgements in
accordance with the Claims Act and any other steps necessary to perfect
Administrative Agent’s Security Interest to be complied with to Administrative
Agent’s satisfaction with respect to any Account with respect to which the
Account Debtor is the United States of America or any state or any department,
agency, public corporation or other instrumentality thereof, and such Borrower
does not promptly upon such request begin the process to obtain such filings
and
acknowledgements or such filings and acknowledgments are not obtained within
120
days (or such longer period of time as Administrative Agent may consent to)
of
such request; (xxviii) any Account as to which Administrative Agent has
determined in its reasonable discretion that the prospect of payment or
collection on a timely basis is impaired or that Administrative Agent otherwise
deems in its reasonable discretion to be uncreditworthy.
3.2. Floorplan
Loan Facility.
3.2.1. Floorplan
Loan Facility Generally. Each Lender shall, subject to the
terms and limitations in this Section 3.2, Section 3.6, and elsewhere herein,
make available to Borrower such Lender’s pro-rata share (as listed on
Exhibit 3 hereto) of an “Aggregate Floorplan Loan Facility” that is
initially Fourteen Million Dollars ($14,000,000) but which will decrease from
time to time as provided herein by funding such Lender’s pro-rata share thereof
as provided for herein. Each Lender’s Floorplan Loan Facility is its
pro-rata share of the Aggregate Floorplan Loan Facility. No Floorplan
Loan Advance will be made which would result in either: (i) the sum of the
Aggregate Floorplan Loan, the Interim Floorplan Loan, and all unfunded
Approvals, exceeding the Aggregate Floorplan Loan Facility; or (ii) the Lenders’
Exposure exceeding the Total Aggregate Facility Limit. Subject to the
terms of this Agreement, payments and prepayments that are applied to reduce
the
Aggregate Floorplan Loan may be reborrowed through subsequent Floorplan Loan
Advances or, subject to the terms and conditions herein, reborrowed through
Interim Floorplan Advances, subject to the terms and conditions of this
Agreement and the Loan Documents. The Aggregate Floorplan Loan
Facility is not a commitment to lend or advance funds but is a discretionary
facility. From and after the date on which the Administrative Agent
has actual knowledge of an Event of Default under Section 16.1.1 or under
Section 16.1.12 (whether or not any time periods referenced therein have
expired), no further Approvals will be issued and except with respect to
existing unfunded Approvals, no further Floorplan Loan Advances shall be
made. From and after the date on which Administrative Agent has
actual knowledge of any other Event of Default, no further Approvals will be
issued if the Administrative Agent so chooses in its discretion to no longer
issue Approvals or if the Required Lenders direct the Administrative Agent
to no
longer issue Approvals, and except with respect to existing unfunded Approvals,
no further Floorplan Loan Advances shall be made.
3.2.2. Interim
Floorplan Loan Advances. In order to reduce the frequency of
fundings of Floorplan Loan Advances by Lenders, but subject to the limitations
in Section 3.2.3 and elsewhere herein, Administrative Agent may in its
absolute discretion make Interim Floorplan Loan Advances for the account of
and
benefit of Borrower with respect to an Approval issued by Administrative Agent
from time to time from the Effective Date to the Floorplan Loan Maturity
Date. From and after the date on which
7
the
Administrative Agent has actual knowledge of an Event of Default under Section
16.1.1 or under Section 16.1.12 (whether or not any time periods referenced
therein have expired), no further Interim Floorplan Loan Advances shall be
made. From and after the date on which Administrative Agent has
actual knowledge of any other Event of Default, at the sole discretion of
Administrative Agent, no further Interim Floorplan Loan Advances shall be
made. Subject to the limitations in Section 3.2.3 and elsewhere
herein, payments and prepayments that are applied to reduce the Interim
Floorplan Loan may be reborrowed through Interim Floorplan Loan Advances or,
subject to the terms and conditions of this Agreement, reborrowed through
Floorplan Loan Advances. The Interim Floorplan Loan Facility is not a
commitment to lend or advance funds, but is a discretionary
facility.
3.2.3. Limitations
on Interim Floorplan Loan Advances. The maximum amount of
the Interim Floorplan Loan amount on any date shall be Ten Million Dollars
($10,000,000). Administrative Agent shall not be obligated to make any
particular Interim Floorplan Loan Advance, the making of any particular Interim
Floorplan Loan Advance at any particular time being absolutely
discretionary. Administrative Agent will not, without the prior
consent (which may be oral or in writing) of each Lender, knowingly make any
Interim Floorplan Loan Advance which would cause the aggregate amount of the
Interim Floorplan Loan plus the Aggregate Floorplan Loan plus all unfunded
Approvals to exceed the Aggregate Floorplan Loan Facility as of such date
immediately prior to the making of any such Interim Floorplan Loan Advance
or
make any Interim Floorplan Loan Advance which would cause the Lenders’ Exposure
to exceed the Total Aggregate Facility Limit. Administrative Agent
shall not be obligated to fund any Interim Floorplan Loan Advances after the
Floorplan Loan Maturity Date or after the Interim Floorplan Loan Facility has
been terminated.
3.2.4. Operation
of Floorplan Loan Facility and Interim Floorplan Loan
Facility. Subject to the terms of this Agreement, the
Floorplan Loan Facility and Interim Floorplan Loan Facility will be
used by Borrower from time to time to purchase Inventory from vendors approved
by Administrative Agent in its sole and absolute discretion
(“Vendors”).
3.2.5. Floorplan
Loan Approvals. Borrower and each Lender acknowledges and
agrees that: (i) Administrative Agent may issue Approvals on a
date that is prior to the date of the funding of any Floorplan Loan Advance
or
Interim Floorplan Loan Advance that are based on such Approvals; (ii) once
an Approval has been issued, then Administrative Agent may, and may require
the
Lenders, to fund the related Advance at any time, notwithstanding (A) any
Default or Event of Default that may arise on or prior to the date of any such
Advance, (B) whether the Loan Obligations have been accelerated,
(C) whether the Commitments have been terminated, or (D) whether any
such Advance shall occur after the Floorplan Loan Maturity Date for an Approval
issued on or prior to the Floorplan Loan Maturity Date; and (iii) each
Lender shall be obligated to fund its pro-rata share of any such Advance once
an
Approval has been issued for such Advance regardless of whether such Advance
has
been funded by Administrative Agent. A request from a Vendor (with
respect to a Borrower) to Administrative Agent to fund Floorplan Inventory
will
be deemed to be a request from the Borrowers for a Floorplan Loan Advance or
an
Interim Floorplan Loan Advance, as the case may be.
3.2.6. Inventory
not Available for Floorplan Loans and Interim Floorplan
Loans. Only Vendors approved by Administrative Agent will be
eligible to receive
8
proceeds
of Aggregate Floorplan Loan Facility and the Interim Floorplan Loan
Facility. Administrative Agent or the Required Lenders may, at any
time and without notice to Borrower, elect not to finance any Inventory sold
by
particular Vendors, including any Vendors who are in default of their
obligations to CDF, or with respect to which CDF or Administrative Agent deems
itself insecure, or any Inventory or Proceeds thereof in which another Person
has a Security Interest. Except with respect to Approvals issued by
Administrative Agent on or before the Floorplan Loan Maturity Date or before
termination as set forth in Section 3.2.7 which such Approvals may be
funded in Administrative Agent’s sole discretion and, in such case, each Lender
shall be obligated to fund its pro rata share of any Advance with respect to
such Approvals, Lenders shall not be obligated to fund any Floorplan Loan
Advances after the Floorplan Loan Maturity Date or after the Aggregate Floorplan
Loan Facility has been terminated.
3.2.7. Termination
of Floorplan Loan Facility and Interim Floorplan Loan
Facility. The Aggregate Floorplan Loan Facility and the
Interim Floorplan Loan Facility are discretionary facilities and may be
terminated by Administrative Agent or the Required Lenders with respect to
any
future Floorplan Loans or Interim Floorplan Loans which have not been funded
(whether or not an Approval has been issued, but subject to any Vendor
Agreements regarding unfunded Approvals) at any time by the Administrative
Agent
or the Required Lenders upon written notice to the Borrower in accordance with
this Section 3.2.7. In addition to any other rights and remedies that
the Lenders and the Administrative Agent may have in this Agreement, including,
without limitation, if there is an Existing Default and all rights and remedies
set forth in Section 16.3 and in this Section, the Administrative Agent may,
or
the Required Lenders by direction to the Administrative Agent may, at any time,
whether or not there is an Existing Default, elect to terminate the Aggregate
Floorplan Loan Facility and/or the Interim Floorplan Loan Facility, and Borrower
agrees that if there is no Existing Default, 60 days prior notice of
termination is reasonable and sufficient (although this provision shall not
be
construed to mean that shorter periods may not, in particular circumstances,
also be reasonable and sufficient) and Lenders will continue to fund Advances
for Approvals issued on or before the expiration of such 60 day period and
repayment shall be in cash in accordance with the applicable Transaction
Statement and billing statement. Any such notice by the Required
Lenders shall be given in writing to Administrative Agent who shall then
promptly send such notice to Borrower, or if given by Administrative Agent,
Administrative Agent shall promptly notify the Lenders after notifying
Borrower. A termination of the Aggregate Floorplan Loan Facility
shall automatically terminate the Interim Floorplan Facility on the date of
any
notice of such termination of the Aggregate Floorplan
Facility. Borrower will not be relieved from any obligation to
Administrative Agent or the Lenders arising out of Floorplan Loans or Interim
Floorplan Loans made before the effective termination date of the Aggregate
Floorplan Loan Facility and/or the Interim Floorplan Loan Facility or made
after
the effective termination date of the Aggregate Floorplan Loan Facility or
Interim Floorplan Loan Facility in connection with Approvals issued on or before
such effective termination date. Notwithstanding a termination of the
Aggregate Floorplan Loan Facility and the Interim Floorplan Loan Facility,
Administrative Agent and Lenders will retain all of their rights, interests
and
remedies hereunder and in all Collateral until Borrower has indefeasibly paid
all of the Loan Obligations in full in cash , all Letters of Credit have expired
and the Letter of Credit Exposure is irrevocably reduced to zero, and the
Administrative Agent and the Lenders have no other commitment to extend credit
or make advances to or for the account of Borrower.
9
3.2.8. Repurchase
Agreements. Administrative Agent and/or CDF have entered
into agreements with the Vendors who will be receiving proceeds of the Aggregate
Floorplan Loan Facility and the Interim Floorplan Loan Facility (each being
a
“Vendor Agreement” and collectively, the “Vendor
Agreements”). Neither Administrative Agent nor CDF makes any
representation or warranty regarding the Vendor Agreements, including, without
limitation regarding the enforceability thereof, whether any particular item
of
Inventory purchased by Borrower is subject to repurchase rights, or any
repurchase rights that may be set forth therein. Each Lender and
Borrower acknowledges and agrees that Administrative Agent and/or CDF may take
or refrain from taking any actions under or in connection with the Vendor
Agreements in Administrative Agent’s or CDF, as the case may be, commercially
reasonable judgment.
3.3. Swingline
Commitment.
3.3.1. Swingline
Advances. In order to reduce the frequency of fundings of
Revolving Loan Advances by Lenders, but subject to the limitations in
Section 3.3.2 and elsewhere herein, Administrative Agent may (provided an
Advance Request in the form of Exhibit 7.10 is received by Administrative
Agent) in its absolute discretion make Swingline Advances to Borrower from
time
to time from the Effective Date to the Revolving Loan Maturity
Date. From and after the date on which the Administrative Agent has
actual knowledge of an Event of Default under Section 16.1.1, no further
Swingline Advances shall be made unless the Required Lenders approve in writing
any further Swingline Advances or unless such Event of Default is waived in
writing by the Required Lenders. Subject to the limitations in
Section 3.3.2 and elsewhere herein, payments and prepayments that are
applied to reduce the Swingline Loan may be reborrowed through Swingline
Advances or, subject to the terms and conditions herein, reborrowed through
Revolving Loan Advances. The Swingline Commitment is not a commitment
to lend money, but is a discretionary facility; Administrative Agent may
terminate the foregoing Swingline Commitment at any time in its absolute
discretion.
3.3.2. Limitations
on Swingline Advances. Administrative Agent shall not be
obligated to make any particular Swingline Advance, the making of any particular
Swingline Advance at any particular time being absolutely
discretionary. In any event, no Swingline Advance will be made on or
after the Revolving Loan Maturity Date, and no Swingline Advance will be made
which would result in either: (i) the Swingline Loan exceeding the Maximum
Swingline Amount; or (ii) the Lenders’ Exposure exceeding the Total Aggregate
Facility Limit. Administrative Agent may, however, in its absolute
discretion make such Swingline Advances, but shall not be deemed by doing so
to
have increased the Maximum Swingline Amount and shall not be obligated to make
any such Swingline Advance thereafter. Administrative Agent will not,
without the prior consent (which may be oral or in writing) of each Lender,
knowingly make any Swingline Advance which would cause the aggregate amount
of
the Aggregate Revolving Loan to exceed the Maximum Available Amount as of such
date immediately prior to the making of any such Swingline
Advance. The Maximum Swingline Amount on any date for any Swingline
Advance shall be a Dollar amount equal to the lesser of (i) Ten Million
Dollars ($10,000,000) or (ii) an amount equal to the Maximum Available
Amount as of such date minus the Aggregate Revolving Loan immediately prior
to
the making of such Swingline Advance; provided, however, at no time shall any
Advance be deemed to be a Swingline Advance, and such Advance shall be deemed
to
be a Revolving Advance, if the sum of the Swingline Loan and the amount of
the
Revolving Loans made by the Lender which is
10
the
Administrative Agent exceeds such Lender’s Revolving Loan Commitment as set
forth on Exhibit 3 hereto.
3.3.3. Swingline
Note. The obligation of Borrower to repay the Swingline
Loans shall, at the request of the Administrative Agent, be evidenced by a
Swingline Note payable to the order of Administrative Agent in a maximum
principal amount equal to the amount of the Swingline Commitment, in a form
acceptable to Administrative Agent. In such event, the Borrower shall
execute and deliver to Administrative Agent a Swingline Note payable to the
order of Administrative Agent, with appropriate insertions, in a face principal
amount equal to the Administrative Agent’s Swingline
Commitment. Thereafter, the Loans evidenced by such Swingline Note
and interest thereon shall at all times (prior to any assignment pursuant to
Section 18.4) be represented by such Swingline Note payable to the order of
the
payee named therein, except to the extent that Administrative Agent subsequently
returns any such Swingline Note for cancellation and requests that such
Swingline Loans once again be evidenced as described as set forth
herein. The failure of Administrative Agent to request a Swingline
Note, or the failure of the Swingline Loans to be evidenced by a promissory
note
shall not affect the enforceability of the obligation of the Borrowers to repay
Administrative Agent’s Swingline Loans.
3.4. Letter
of Credit Facility.
3.4.1. As
may be requested from time to time by Borrower hereunder and subject to the
terms and conditions of this Agreement, the Letter of Credit Issuer will issue
or cause to be issued by any Person acceptable to Administrative Agent standby
letters of credit and commercial (documentary) letters of credit for the account
of Borrower from time to time from the Effective Date to the date notice of
termination of the Aggregate Revolving Loan Commitment is effective or
termination of the Letter of Credit Facility is effective, but only if the
Letter of Credit Exposure will not as a result of such issuance exceed the
lesser of (i) Two Million Dollars ($2,000,000) or (ii) an amount equal to the
difference between (a) the lesser of the Aggregate Revolving Loan Commitment
and
the Borrowing Base, and (b) the sum of (I) the Aggregate Revolving Loan, (II)
the Swingline Loan, and (III) the Floorplan Shortfall. If the Letter
of Credit Issuer does not itself issue Letters of Credit, then it shall, subject
to the terms and conditions of this Agreement, arrange for the issuance of
Letters of Credit and for all purposes of this Agreement and the Loan Documents,
be deemed to have issued the Letters of Credit, and shall be entitled to all
fees payable to the Letter of Credit Issuer hereunder, and reimbursements
relating thereto.
3.4.2. Immediately
upon the issuance of a Letter of Credit in accordance with the terms and
conditions hereof, Letter of Credit Issuer shall be deemed to have sold and
transferred to each other Lender, and each such other Lender shall be deemed
to
have purchased and received from Letter of Credit Issuer, a pro rata undivided
interest and participation in such Letter of Credit, the reimbursement
obligation of Borrower with respect thereto, and any guaranty thereof or
collateral therefor. Each Lender’s (including the Letter of Credit
Issuer’s) pro-rata undivided interest shall be the same as its pro-rata share of
the Aggregate Revolving Loan Commitment.
3.4.3. Subject
to the terms and conditions below, the expiration date of any Letter of Credit
will not be later than the earlier of (i) the first anniversary of the date
of
issuance, and (ii) a Business Day that is not later than the date which is
10
days prior to the earliest to occur of the date of termination of the Aggregate
Revolving Loan Commitment or the
11
date
of
termination of the Letter of Credit Facility (if any such notice of termination
has been previously given); provided, however, that the expiration date for
a
Letter of Credit may be later than such date if Letter of Credit Issuer and
Administrative Agent (if Administrative Agent and the Letter of Credit Issuer
are not the same Person) consent to such issuance and Borrower provides to
the
Administrative Agent at any time at Administrative Agent’s request cash
collateral satisfactory to Letter of Credit Issuer and Administrative Agent
(if
Administrative Agent and the Letter of Credit Issuer are not the same Person)
as
security for Borrower’s obligation to reimburse the Letter of Credit Issuer, the
Administrative Agent and the Lenders for 105% of all draws and expenses
thereunder (“Cash Collateral”). The Cash Collateral is a part of the
Collateral and Borrower hereby unconditionally grants a Security Interest to
Administrative Agent in the Cash Collateral. Borrower also agrees
that if a Letter of Credit has been issued and the Aggregate Revolving Loan
Commitment is subsequently terminated or the Letter of Credit Facility is
subsequently terminated so that the expiry of such Letter of Credit(s) is beyond
the effective date of the termination of the Aggregate Revolving Loan Commitment
or beyond the effective date of termination of the Letter of Credit Facility,
whichever is earliest, then at Agent’s request, Borrower shall, on or before
five Business Days prior to the effective date of such termination, whichever
is
earlier, provide Administrative Agent with Cash Collateral. At any
time, Administrative Agent and the Lenders shall be entitled to make one or
more
Revolving Loans and/or institute reserves to provide Cash Collateral if Borrower
does not timely provide Cash Collateral and all such Revolving Loans shall
be a
part of the Loan Obligations secured by the
Collateral. Administrative Agent shall hold Cash Collateral for the
benefit of the Letter of Credit Issuer, the Lenders and Administrative Agent
as
security for the Letters of Credit and the other Loan Obligations in an account
in its respective name at the Letter of Credit Issuer or such other financial
institution as Administrative Agent may select in its reasonable
discretion.
3.5. Termination.
3.5.1. At
any time an Event of Default has occurred and is continuing, Administrative
Agent or the Required Lenders may, without notice or demand to Borrowers or
any
other Covered Person, terminate some or all of the Commitments, accelerate
the
Loan Obligations or take such other actions as they may have hereunder
(including Section 16.3), the other Loan Documents or at law or at
equity.
3.5.2. Borrower
may at any time terminate all of the Commitments by giving written notice to
Administrative Agent (which shall then promptly send a copy of such notice
to
each Lender) if and only if Borrower repays in full and in cash all of the
Loan
Obligations within 60 days of Administrative Agent’s receipt of such notice,
including cash collateral for all Letters of Credit, Floorplan Loan Advances
and
Interim Floorplan Loan Advances that may be made with respect to any Approval
issued during such 60 day period, and such termination shall be effective on
or
before the end of such 60 day period. Notwithstanding a termination,
Administrative Agent and Lenders will retain all of their rights, interests
and
remedies hereunder and in all Collateral until Borrower has indefeasibly paid
all of the Loan Obligations in full in cash, all Letters of Credit have expired
and the Letter of Credit Exposure is irreversibly zero, and the Administrative
Agent and the Lenders have no other commitment to extend credit or make advances
to or for the account of Borrower.
12
3.6. Total
Aggregate Facility Limit. Notwithstanding the Commitments
herein or anything else contained in this Agreement or any of the other Loan
Documents to the contrary, except in connection with the Administrative Agent’s
ability in its sole discretion to make Loans or incur fees, costs and expenses
to protect the Collateral or preserve its first priority perfected Security
Interest in the Collateral, Borrower, Administrative Agent and each Lender
acknowledge and agree that at no time shall the Aggregate Revolving Loan, the
Swingline Loan, the Aggregate Floorplan Loan, the Interim Floorplan Loan, the
Letter of Credit Exposure and all unfunded Approvals, exceed Thirty Four Million
Dollars ($34,000,000) in the aggregate (the “Total Aggregate Facility
Limit”).
4. Interest;
Yield Protection.
4.1. Interest
on the Swingline Loan. At all times, the Swingline Loan
shall bear interest at the same rate of interest as the Aggregate Revolving
Loan
is then bearing interest.
4.2. Interest
on Draws on Letters of Credit. The unreimbursed amount of
each draw on a Letter of Credit shall bear interest at the rate per annum equal
to the Adjusted LIBOR Rate.
4.3. Interest
on the Floorplan Loan and Interim Floorplan Loan --Administrative Agent and
CDF
as a Lender Only.
4.3.1. The
term “Prime Rate” with respect to any Transaction Statement, to the extent such
term is defined in any such Transaction Statement, shall have the meaning set
forth in any such Transaction Statement. If “Prime Rate” is not
defined in any Transaction Statement, the term “Prime Rate” in such Transaction
Statement shall mean, for any calendar month, the highest “prime rate” published
in the “Money Rates” column of the Wall Street Journal on the first
Business Day of such month. After Maturity or upon the occurrence and
during the continuance of an Event of Default, and if the Required Lenders
so
determine in their absolute discretion, Indebtedness under each Transaction
Statement shall bear interest at the default or post-maturity rate described
therein. In the event no default or post-maturity rate is specified
in any Transaction Statement, then after Maturity or upon the occurrence and
during the continuance of an Event of Default, and if the Required Lenders
so
determine in their absolute discretion, the Indebtedness under such Transaction
Statement shall bear interest at the rate which would otherwise apply under
such
Transaction Statement plus 2.0%.
4.3.2. Borrower,
Administrative Agent and each Lender agrees that certain financial terms of
any
Floorplan Loan Advance or Interim Floorplan Loan Advance made under this
Agreement, whether regarding finance charges, other fees, maturities,
curtailments or other financial terms, are not set forth herein because such
terms depend, in part, upon the availability of Vendor discounts, payment terms
or other incentives, prevailing economic conditions, Administrative Agent’s
and/or CDF’s floorplanning volume with Borrower and with Borrower’s Vendors, and
other economic factors which may vary over time. Borrower,
Administrative Agent and each Lender further agree that it is therefore in
their
mutual best interest to set forth in this Agreement only the general terms
of
the Floorplan Loan Facility and the Interim Floorplan Loan
Facility. Upon agreeing to finance a particular item of Inventory for
Borrower, Administrative Agent will send Borrower a transaction statement
identifying such Inventory and the applicable financial terms (each being a
“Transaction Statement”). Administrative Agent may, without the
consent of the Lenders or the Required Lenders, change any aspect or portion
of
any Transaction Statement. Unless Borrower notifies Administrative
Agent in writing of any objection within thirty (30) days after the earlier
to
occur of the date a Transaction Statement is
13
made
available to Borrower or the date a Transaction Statement is sent to
Borrower: (a) the amount shown on such Transaction Statement
will be an account stated; (b) Borrower will have agreed to all rates,
charges and other terms shown on such Transaction Statement; (c) Borrower
will have agreed that Administrative Agent is financing the items of Inventory
referenced in such Transaction Statement at Borrower’s request; and
(d) such Transaction Statement will be incorporated herein by reference,
will be made a part hereof as if originally set forth herein, and will
constitute an addendum hereto. If Borrower objects to the terms of
any Transaction Statement, Borrower agrees to pay Administrative Agent for
such
Inventory in accordance with the most recent terms for similar Inventory to
which Borrower has not objected (or, if there are no prior terms, at the lesser
of 16% per annum or at the maximum lawful contract rate of interest permitted
under applicable law).
4.3.3. Borrower
will pay the interest, fees, and finance charges to Administrative Agent (on
the
Interim Floorplan Loan) for its own account and to CDF (on the Aggregate
Floorplan Loan) for its own account on the outstanding principal amount of
the
Interim Floorplan Loans and the Aggregate Floorplan Loans, respectively, at
the
rate(s) and in the amount(s) shown on the applicable Transaction Statement,
unless Borrower objects thereto as provided in
Section 4.3.2. All such amounts (whether interest, fees or late
charges, but excluding principal) due and owing as set forth in each Transaction
Statements shall be retained by Administrative Agent for its own account (on
the
Interim Floorplan Loans) and by CDF for its own account (on the Aggregate
Floorplan Loans). Interest on the Aggregate Floorplan Loans will be
paid by Administrative Agent to the Lenders (other than CDF) from the proceeds
Administrative Agent receives from the Borrower and the Vendors, as provided
in,
and subject to the terms of, Section 4.5. All discounts and subsidies
as agreed to between a Vendor and CDF or Administrative Agent from a Vendor
shall be for the sole account of Administrative Agent and
CDF. Principal received by the Administrative Agent from the Borrower
on the Aggregate Floorplan Loans will be paid to the Lenders as set forth in
Section 17.10. The finance charges attributable to the rate shown on
each Transaction Statement will: (a) be computed based on a 360 day
year; (b) be calculated by multiplying the Daily Charge (as defined below)
by
the actual number of days in the applicable billing period; and (c) accrue
at
the applicable interest rate set forth in the applicable Transaction Statement
(which such rate may be zero percent for a period of time) from the invoice
date
of the Collateral identified on such Transaction Statement until Administrative
Agent receives full payment as provided in this Agreement for each item of
such
Collateral. The “Daily Charge” is the product of the Daily Rate (as
defined below) multiplied by the Average Daily Balance (as defined
below). The “Daily Rate” is the quotient of the annual rate shown on
each Transaction Statement divided by 360, or the monthly rate shown on each
Transaction Statement divided by 30. The “Average Daily Balance” is
the quotient of (i) the sum of the outstanding principal under the Aggregate
Floor Plan Facility plus the Interim Floorplan Loan Facility on each day of
a
billing period for each item of Collateral identified on a Transaction
Statement, divided by (ii) the actual number of days in such billing
period. With respect to the Interim Floorplan Loans and the Floorplan
Loans, the annual percentage rate of the finance charges relating to any item
of
Collateral financed thereby will be calculated from the invoice date of such
Collateral (which rate may be zero percent for a period of time), regardless
of
any period during which any finance charge subsidy shall be paid or payable
by
any third party.
4.3.4. Administrative
Agent will send Borrower a monthly billing statement identifying all charges,
including any late fees assessed, due to Administrative Agent on
14
the
Interim Floorplan Loans and to CDF, as a Lender, on the Floorplan Loan
Facility. The charges specified on each billing statement will be due
and payable in full within ten (10) Business Days of receipt.
4.4. Interest
on Aggregate Loans--Other than Floorplan Loans. Each LIBOR
Advance when made will become a LIBOR Loan, which shall bear interest at the
Adjusted LIBOR Rate.
4.5. Interest
on Floorplan Loans; Administrative Agent Deficiency
Amount. Administrative Agent, Borrower and each Lender
acknowledges and agrees that the rate of return paid on any Floorplan Loan
or
Interim Floorplan Loan is dependent on numerous factors, including discounts
and
subsidies offered by the Vendors. Accordingly, Administrative Agent,
Borrower and each Lender agrees that due to the difficulty in determining the
actual rate of return on any particular Floorplan Loan or Interim Floorplan
Loan
or with respect to any particular invoice underlying any such Loan the Lenders
(other than CDF) will be paid the interest rate specified in this
Agreement. With respect to each Lender (other than CDF), interest on
each Floorplan Loan Advance for such Lender shall be paid to such Lender by
Administrative Agent based on the interest rates set forth in Sections
4.6, and 4.7 and as provided in Section 6.1.1 from the date of funding by
such Lender to Administrative Agent of its pro rata share of such Floorplan
Loan
Advance to the date of repayment; provided, however if a Floorplan Payment
Default occurs, then until such Floorplan Payment Default has been cured to
the
reasonable satisfaction of the Required Lenders or waived in writing by the
Required Lenders, to the extent there exists an Administrative Agent Deficiency
Amount (defined below) which is greater than zero, Administrative Agent may
suspend the making of payments of principal and interest on the Floorplan Loans
to each Lender (other than CDF) or reduce the amount of such payments on the
Floorplan Loans to each Lender (other than CDF) on a pro-rata basis (based
on
the principal amount of Floorplan Loans outstanding) and setoff such amounts
against the Administrative Agent Deficiency Amount until the Administrative
Agent Deficiency Amount is reduced to zero, or to the extent necessary to
prevent the Administrative Agent Deficiency Amount from becoming greater than
zero. The “Administrative Agent Deficiency Amount” at any time is a Dollar
amount equal to (i) the cumulative amount of interest distributed by
Administrative Agent to the Lenders (other than CDF) solely with respect to
each
specific Transaction Statement for which a Floorplan Payment Default exists
as
outlined above in this Section 4.5 under the portion of the Aggregate
Floorplan Loan attributable to Lenders (other than CDF) for the period
commencing with the date interest begins accruing under the Transaction
Statement (excluding any interest distributed which is attributable to the
period of time during any free floor plan period) and to the extent such
interest has not been paid by Borrower under each such specific Transaction
Statement relating to such Floorplan Payment Default through the date of
calculation (provided, however, that in no event shall any interest paid to
the
Lenders (other than CDF) relating to any specific Transaction Statement during
any period for which no Floorplan Payment Default exists or existed be included
in the calculation under this clause (i)), minus (ii) the cumulative amount
of
interest collected from Borrower by Administrative Agent solely with respect
to
each specific Transaction Statement for which a Floorplan Payment Default exists
as outlined above in this Section 4.5 under the portion of the Aggregate
Floorplan Loan attributable to Lenders (other than CDF) for the period
commencing with the date interest begins accruing under the Transaction
Statement (excluding any interest distributed which is attributable to the
period of time during any free floor plan period). For purposes of
determining the interest payable by Administrative Agent to each Lender (other
than CDF) on each such Lender’s respective Floorplan Loans, each Floorplan Loan
Advance or any part of a Floorplan Loan Advance owing to a Lender (other than
CDF) shall be considered a LIBOR Advance for interest rate calculation purposes
under this Section.
15
4.6. Adjusted
LIBOR Rate. The “Adjusted LIBOR Rate” for any LIBOR Loan is
the LIBOR Rate plus the LIBOR Increment. The LIBOR Rate for each
LIBOR Loan shall be determined by Administrative Agent in accordance with the
terms herein. For each LIBOR Loan, the Adjusted LIBOR Rate shall
fluctuate as provided for herein. The “LIBOR Rate” shall be, for each
calendar week commencing on Tuesday of such week, the rate per annum, as
determined by Administrative Agent, as reported by The Wall Street
Journal and identified as the “London Interbank Offered Rate” for an
interest period of 30 days, on (a) each Monday immediately preceding, or (b)
if
any such Monday is not a Business Day, then on the Business Day immediately
preceding such Monday. If for any reason such rate is not available,
the term “LIBOR Rate” shall mean, for any LIBOR Loan, the rate per annum
appearing on Reuters Screen LIBOR01 Page as the London interbank offered rate
for deposits in Dollars at approximately 11:00 a.m. (London time) for an
interest period of 30 days, on (a) each Monday immediately preceding, or (b)
if
any such Monday is not a Business Day, then on the Business Day immediately
preceding such Monday; provided, however, if more than one rate is specified
on
Reuters Screen LIBOR01 Page, the applicable rate shall be the arithmetic mean
of
all such rates (rounded upwards, if necessary, to the nearest 1/1000 of
1%).
4.7. LIBOR
Increments. The LIBOR Increment shall be 3.00%. For all the
Revolving Loans, the LIBOR Increment is used for determining that interest
rate
paid by Borrower to Administrative Agent to be distributed to the
Lenders. For the Floorplan Loan and Interim Floorplan Loan, the LIBOR
Increment is used only for determining that interest rate paid by Administrative
Agent to the Lenders (other than CDF) pursuant to Section 4.5, provided,
however, the rate paid to the Lenders (other than CDF) on the Floorplan Loans
shall be the Adjusted LIBOR Rate, unless the LIBOR Rate is not available as
provided in this Agreement. The interest rate paid by Borrower on the
Floorplan Loan and Interim Floorplan Loan is the interest rate described in
each
Transaction Statement, as provided in Section 4.3.
4.8. Time
of Accrual. Interest shall accrue on all principal amounts
outstanding from the date when first outstanding to the date when no longer
outstanding. Amounts shall be deemed outstanding until payments are
applied thereto as provided herein.
4.9. Computation. Interest
shall be computed for the actual days elapsed over a year deemed to consist
of
360 days for all LIBOR Loans. The LIBOR Rate will be determined
by Administrative Agent before the initial Advance on the Effective Date and
with respect to LIBOR Rate Loans, each week. Interest rates that are
based on the LIBOR Rate shall change simultaneously with any change as
determined in the preceding sentence in the LIBOR Rate, and shall be effective
for the entire day on which such change becomes effective.
4.10. Rate
After Maturity and Rate After An Event of Default. Subject
to Section 4.3.1, Borrower shall pay interest on the Loan Obligations (excluding
the Interim Floorplan Loans and Aggregate Floorplan Loans), including, without
limitation, the Aggregate Revolving Loans and the
Swingline Loans after their Maturity, and if the Required Lenders so determine
in their absolute discretion, on the Loan Obligations (excluding the Interim
Floorplan Loans and Aggregate Floorplan Loans), including, without limitation,
the Aggregate Revolving Loans and the Swingline Loans,
after the occurrence and during the continuance of an Event of Default, at
a
rate per annum of 1.0% plus the LIBOR Increment on each Aggregate Revolving
Loan
and each Swingline Loan (the “Default Rate”); provided, however, Administrative
Agent shall have no obligation to pay a Default Rate to any Lender unless such
Default Rate is paid by Borrower to Administrative Agent. The default
rate on the Interim Floorplan Loans and the Aggregate Floorplan Loans is
described in Section 4.3.1.
16
4.11.
Taxes.
4.11.1. Any
and all payments by the Borrower to or for the account of any Lender or the
Administrative Agent 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,
excluding, in the case of each Lender and the Administrative Agent, Taxes
imposed on its income, and franchise Taxes imposed on it, by the jurisdiction
(or any political subdivision thereof) under the laws of which such Lender
(or
its Applicable Lending Office) or the Administrative Agent (as the case may
be)
is organized or any political subdivision thereof. If the Borrower
shall be required by Law to deduct any Taxes from or in respect of any sum
payable under this Agreement or any other Loan Document to any Lender or the
Administrative Agent, (i) the sum payable shall be increased as necessary
so that after making all required deductions (including deductions applicable
to
additional sums payable under this Section) such Lender or the Administrative
Agent receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable Law, and
(iv) the Borrower shall furnish to the Administrative Agent, at its address
referred to herein, the original or a certified copy of a receipt evidencing
payment thereof.
4.11.2. In
addition, the Borrower agrees to pay any and all present or future stamp or
documentary taxes and any other excise or property taxes or charges or similar
levies which arise from any payment made under this Agreement or any other
Loan
Document or from the execution or delivery of, or otherwise with respect to,
this Agreement or any other Loan Document (hereinafter referred to as
“Impositions”), except income and franchise Taxes imposed by any jurisdiction
referred to in Section 4.11.1.
4.11.3. The
Borrower agrees to indemnify each Lender and the Administrative Agent for the
full amount of Taxes and Impositions (including, without limitation, any Taxes
or Impositions imposed or asserted by any jurisdiction on amounts payable under
this Section) that are required to be paid by the Borrower hereunder but are
paid by such Lender or the Administrative Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or
with
respect thereto; provided, however, that neither Administrative Agent nor any
Lender shall have any obligation to pay any such Taxes, Impositions or other
liability.
4.11.4. Each
Lender organized under the laws of a jurisdiction outside the United States,
on
or prior to the date of its execution and delivery of this Agreement in the
case
of each Lender listed on the signature pages hereof and on or prior to the
date
on which it becomes a Lender in the case of each other Lender, and from time
to
time thereafter if requested in writing by the Borrower or the Administrative
Agent (but only so long as such Lender remains lawfully able to do so), shall
provide the Borrower and the Administrative Agent with (i) IRS
Form 1001 or 4224, as appropriate, or any successor form prescribed by the
IRS, certifying that such Lender is entitled to benefits under an income tax
treaty to which the United States is a party which reduces the rate of
withholding Tax on payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the United States, (ii) IRS Form W-8 or W-9, as
appropriate, or any successor form prescribed by the IRS, and (iii) any
other form or certificate required by any Governmental Authority (including
any
certificate required by Sections 871(h) and
17
881(c)
of
the Code), certifying that such Lender is entitled to an exemption from or
a
reduced rate of Tax on payments pursuant to this Agreement or any of the other
Loan Documents.
4.11.5. For
any period with respect to which a Lender has failed to provide the Borrower
and
the Administrative Agent with the appropriate form pursuant to
Section 4.11.4 (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to indemnification
under this Section 4.11 with respect to Taxes imposed by or within the
United States; provided, however, that should a Lender, which is
otherwise exempt from or subject to a reduced rate of withholding Tax, become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Lender shall reasonably request
to
assist such Lender to recover such Taxes.
4.11.6. If
the Borrower is required to pay additional amounts to or for the account of
any
Lender or Administrative Agent pursuant to this Section, then such Lender or
the
Administrative Agent will agree to use reasonable efforts to change the
jurisdiction of its Applicable Lending Office so as to eliminate or reduce
any
such additional payment which may thereafter accrue if such change, in the
judgment of such Lender or the Administrative Agent, as the case may be, is
not
otherwise disadvantageous to such Lender or the Administrative Agent, as the
case may be. Each Lender agrees, with respect to the provisions of
this Section 4.11, to treat Borrower in a manner substantially similar to
that of its other similarly situated customers.
4.11.7. Within
thirty (30) days after the date of any payment of Taxes described in this
Section 4.11, the Borrower shall furnish to the Administrative Agent the
original or a certified copy of a receipt evidencing such payment.
4.11.8. Without
prejudice to the survival of any other agreement of the Borrower hereunder,
the
agreements and obligations of the Borrower contained in this Section shall
survive the termination of the Commitments and the indefeasible payment in
full
in cash of the Loan Obligations.
4.12. Compensation
for Increased Costs and Reduced Returns; Capital Adequacy.
4.12.1. If,
after the date hereof, any Lender shall have reasonably determined that the
adoption of any applicable Law regarding capital adequacy or any change therein
or in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation
or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority,
central bank, or comparable agency, has or would have the effect of reducing
the
rate of return on the capital of such Lender or any corporation controlling
such
Lender as a consequence of such Lender’s obligations hereunder to a level below
that which such Lender or such corporation could have achieved but for such
adoption, change, request, or directive (taking into consideration its policies
with respect to capital adequacy), then from time to time upon demand the
Borrower shall pay to such Lender such additional amount or amounts as will
reasonably compensate such Lender for such reduction.
4.12.2. Each
Lender shall promptly notify the Borrower and the Administrative Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle
18
such
Lender to compensation pursuant to this Section and will designate a different
Applicable Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Lender,
be otherwise disadvantageous to it. Any Lender claiming compensation
under this Section shall furnish to the Borrower and the Administrative Agent
a
statement setting forth the additional amount or amounts to be paid to it
hereunder which shall be conclusive in the absence of manifest
error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods. Each Lender agrees, with respect
to the provisions of this Section, to treat Borrower in a manner substantially
similar to that of its other similarly situated customers.
4.13. Usury. Notwithstanding
any provisions to the contrary in Section 4 or elsewhere in any of the Loan
Documents, Borrower shall not be obligated to pay interest at a rate which
exceeds the maximum rate permitted by Law. If, but for this
Section 4.13, Borrower would be deemed obligated to pay interest at a rate
which exceeds the maximum rate permitted by Law, or if any of the Loan
Obligations is paid or becomes payable before its originally scheduled Maturity
and as a result Borrower has paid or would be obligated to pay interest at
such
an excessive rate, then (i) Borrower shall not be obligated to pay interest
to the extent it exceeds the interest that would be payable at the maximum
rate
permitted by Law; (ii) if the outstanding Loan Obligations have not been
accelerated as provided in Section 16.3.2, any such excess interest that
has been paid by Borrower shall be refunded; (iii) if the outstanding Loan
Obligations have been accelerated as provided in Section 16.3.2, any such
excess that has been paid by Borrower shall be applied to the Loan Obligations
as provided in Section 16.4; and (iv) the effective rate of interest
shall be deemed automatically reduced to the maximum rate permitted by
Law.
5. Fees.
5.1.
Annual Facility Fee. On each Anniversary Date,
Borrower shall pay to Administrative Agent for the account of Lenders an Annual
Facility Fee equal to twenty basis points (.20%) of the then-Aggregate Revolving
Loan Commitment on such date to be shared pro-rata among the Lenders based
upon
each Lenders’ pro rata share of the Aggregate Revolving Loan
Commitment. The Annual Facility Fee is not refundable under any
circumstance.
5.2. Unused
Revolving Fee. Borrower shall pay to Administrative Agent
for the account of Lenders, based on each Lender’s pro-rata share, a
non-refundable, recurring Unused Revolving Fee calculated by applying rate
of
fifteen (15) basis points to the Unused Revolving Commitment as of the last
day
of each fiscal month of Borrower. The “Unused Revolving Commitment”
for each fiscal month shall be the difference between (i) the Aggregate
Revolving Loan Commitment as of the last day of such fiscal month and
(ii) the sum of the (a) the Aggregate Revolving Loan (b) the
Swingline Loan and (c) the Letter of Credit Exposure, in each case as of each
Business Day of such fiscal month divided by the number of Business Days in
such
month. The Unused Revolving Fee shall be payable monthly in arrears
on or before the 25th day of each month for the prior fiscal month, and on
the
Revolving Loan Maturity Date. Notwithstanding the foregoing, if the
Dollar amount of clause (ii) above is greater than 67% of the Aggregate
Revolving Loan Commitment as of the last day of such fiscal month, and no Event
of Default shall have occurred and was continuing as of the last day of such
month, then the Borrower shall not be obligated to pay the Unused Revolving
Fee
for such month.
5.3. Letter
of Credit Fees. Borrower shall pay to Administrative Agent
for the account of each Lender with a Revolving Loan Commitment (pro rata based
on each Lender’s Revolving Loan Commitment), a non-refundable recurring Letter
of Credit Fee for each Letter of Credit
19
issued
or
caused to be issued hereunder. The Letter of Credit Fee for any Letter of Credit
shall be an amount equal to the aggregate undrawn amount of such Letter of
Credit multiplied by 3.00% (per annum). The Letter of Credit Fee for
each Letter of Credit shall be payable in advance on the date of issuance for
the remaining portion of the quarter when issued and quarterly thereafter in
advance on the first day of each full calendar quarter thereafter while such
Letter of Credit is outstanding.
5.4. Letter
of Credit Fronting Fee. Borrower shall pay to Letter of
Credit Issuer a non-refundable, one-time Fronting Fee equal to .125% of the
face
amount of each Letter of Credit issued by Letter of Credit
Issuer. The Fronting Fee due for any Letter of Credit shall be
payable in advance, commencing on the issuance date of such Letter of
Credit.
5.5. Other
Letter of Credit Fees. Borrower shall pay to the Letter of
Credit Issuer, Letter of Credit Issuer’s other customary fees for issuance,
amendment, or renewal of a Letter of Credit and, as Letter of Credit Issuer
and
Borrower may agree with respect to each Letter of Credit, for each negotiation
of a draft drawn under such Letter of Credit.
5.6. Calculation
of Fees. All of the foregoing fees and all other fees
payable to Administrative Agent or any Lender that are based on an annual
percentage shall be calculated on the basis of a year deemed to consist of
360 days and for the actual number of days elapsed.
6. Payments.
6.1. Scheduled
Payments on Loans; Applications to Loans.
6.1.1. Interest.
6.1.1.1. Borrower
shall pay interest accrued on each Aggregate Revolving Loan and on the Swingline
Loan monthly in arrears beginning on the last day of the calendar month in
which
the Effective Date occurs and continuing on the last day of each calendar month
thereafter, and on the Revolving Loan Maturity Date, with such interest payment
being due no later than ten (10) days after the last day of such month. Borrower
shall pay interest accrued on each Revolving Loan and the Swingline Loan after
the Revolving Loan Maturity Date on demand.
6.1.1.2. Borrower
shall pay to Administrative Agent for its own account and the account of CDF,
all interest, fees and charges accrued on the Aggregate Floorplan Loan and
the
Interim Floorplan Loan in accordance with the Transaction
Statements. Subject to the terms of Sections 4.3 and 4.5 and
elsewhere in this Agreement, interest on the Floorplan Loans to the Lenders,
other than CDF, shall be distributed by Administrative Agent monthly in arrears
(with the right of set off in favor of Administrative Agent and CDF as set
forth
in Section 4.5) beginning on the last day of the first calendar month in
which the Effective Date occurs and continuing on the last day of each calendar
month thereafter, on the Floorplan Loan Maturity Date, and, subject to the
terms
of this Agreement, monthly thereafter for Approvals in effect and not funded
on
the Floorplan Loan Maturity Date (subject to the Borrower’s obligation to
provide cash collateral for such Approvals).
20
6.1.2. Principal.
6.1.2.1. Borrower
shall, and
shall cause each other Covered Person to, direct all Account Debtors to remit
payments on their Accounts to one or another lockboxes maintained at financial
institutions acceptable to Administrative Agent, each under a lockbox agreement
with such financial institutions in form and substance satisfactory to
Administrative Agent (collectively, the “Lockboxes”) with all payments received
in any such Lockboxes being deposited into an account at such financial
institution (all such accounts that may exist from time to time, are
collectively referred to as the “Blocked Accounts”). Each of the
Blocked Accounts and Lockboxes shall be blocked in favor of Administrative
Agent
and subject to the Administrative Agent’s exclusive control pursuant to one or
more agreements in form and substance satisfactory to Administrative
Agent. Borrower hereby assigns and grants to Administrative Agent for
the benefit of Lenders, a first priority Security Interest in, and control
over,
any and all Blocked Accounts and Lockboxes, and all amounts deposited or
received in the Blocked Accounts and the Lockboxes from time to time, as
security for payment and performance of the Loan Obligations. All
payments received in the Lockboxes, Blocked Accounts and other proceeds of
Collateral shall be paid to Administrative Agent, as payment on the Advances,
as
provided for herein, and deposited into Administrative Agent’s account at such
financial institutions as Administrative Agent shall direct and instruct from
time to time (any such account of Administrative Agent being the “Cash
Collateral Account”). In addition, any other funds Borrower receives
directly (other than from Floorplan Loan Advances, Interim Floorplan Loan
Advances, Revolving Loan Advances, and Swingline Advances), shall be deposited
into an investment account described in Section 14.1.4.
(i) Subject
to Section 6.1.2.1(ii) and the last sentence of this Section, payments
shall be paid or applied by the Administrative Agent (in each case up to the
outstanding principal amount of the applicable Loan) (i) first, to reduce
the Swingline Loan to zero, (ii) second, to the extent of any excess, to
the Lender also acting as Administrative Agent in its capacity as a Lender
and
not as Administrative Agent, to reduce any LIBOR Loans included in the Aggregate
Revolving Loan owing to the Lender acting as Administrative Agent that are
not
also Swingline Loans until reduced to zero, and if the Aggregate Revolving
Loan
is reduced to zero and there is no Existing Default, the remainder shall be
promptly returned to Borrower, or, if there is an Existing Default, distributed
by the Administrative Agent to the other Lenders after consultation by
Administrative Agent with the other Lenders including payment of cash collateral
satisfactory to Administrative Agent as security for Borrower’s obligation to
reimburse the Letter of Credit Issuer, the Administrative Agent and the Lenders
for 105% of all draws and expenses under all outstanding Letters of Credit
and
100% of any unfunded Approvals. Notwithstanding the foregoing,
payments, whether from a Borrower or a Vendor on the Interim Floorplan Loan
and
the Aggregate Floorplan Loan
21
owing
to
Administrative Agent and the Lender acting as Administrative Agent shall be
applied to the Interim Floorplan Loan of the Administrative Agent and the
Aggregate Floorplan Loan of such Lender as it deems appropriate in its sole
discretion.
(ii) Prior
to 4:00 p.m. (Local Time) on the last Business Day of each calendar week or
any other Business Day of each calendar week as may be selected by
Administrative Agent (a “Settlement Date”), based on funds collected pursuant to
Section 6.1.2.1 as of 12:00 p.m. (Local Time) on the Business Day
immediately preceding such Settlement Date (under all circumstances, including
without limitation, during the existence of an Event of Default), each Lender
shall, to the extent it does not hold its pro-rata share of the outstanding
Aggregate Floorplan Loan (including, without limitation, any amounts for which
an Approval has been issued, whether or not funding has occurred), and the
Aggregate Revolving Loan, but excluding any Swingline Loan or Interim Floorplan
Loan, purchase from or sell to one or more other Lenders, at par, which may
occur by a funding through the Administrative Agent, that portion of its Loans
as is necessary for it to thereafter hold its pro-rata share of the outstanding
Aggregate Floorplan Loan and the Aggregate Revolving Loan. In order
that the foregoing settlement among the Lenders can be effected on each
Settlement Date, the Administrative Agent shall, on or before 12:00 p.m. (Local
Time) on such Settlement Date, notify each Lender who shall purchase or sell
a
Loan, or fund through the Administrative Agent, of (i) the principal amount
of the Loan to be purchased or sold, (ii) the name of the Lender(s) which
will be purchasing from or selling to such Lender a Loan, and (iii) if such
Lender is to purchase a Loan, the name of and wire transfer instructions for
the
Lender(s) from which the Loan shall be purchased. On or before
4:00 p.m. (Local Time) on such Settlement Date, each such purchasing Lender
shall wire transfer immediately available funds to the applicable selling
Lender(s) the amount necessary to effect the settlement.
6.1.2.2.
Administrative
Agent may, at any time, in its sole discretion, cause the Settlement Date to
occur more frequently, including, without limitation, each Business Day of
each
week. Administrative Agent shall notify each Lender that a given
Business Day shall be a Settlement Date by no later than 12:30 p.m. (Local
Time)
on the Business Day immediately preceding any such date.
6.1.2.3. Maturity. Borrower
shall repay the entire amount of the Aggregate Revolving Loan on August 21,
2009
and Borrower shall repay the entire amount of the Swingline Loan on demand,
or
if no demand is made, on August 21, 2009, and plus at such time, payment of
cash
collateral satisfactory to Administrative Agent as security for Borrower’s
obligation to reimburse the Letter of Credit Issuer for 105% of all draws and
expenses under all
22
outstanding
Letters of Credit. Borrower shall repay the entire amount of the
Aggregate Floorplan Loan and the Interim Floorplan Loan on the date as provided
in Section 3.2.7 or specified elsewhere in this Agreement or if no demand
is made as set forth in Section 3.2.7 or elsewhere in this Agreement, then
on August 21, 2009 (such date being, the “Floorplan Loan Maturity Date”), plus
cash collateral equal to 100% of any unfunded Approvals, in which case such
Approvals shall be otherwise paid in accordance with the applicable Transaction
Statements.
6.2. Special
Requirement for Payments on Floorplan Loans and Interim Floorplan
Loans. Borrower will immediately pay Administrative Agent
the principal indebtedness owed the Administrative Agent and the Lenders on
each
item of Collateral financed by the Lenders and Administrative Agent (as shown
on
the Transaction Statement identifying such Collateral) under the Floorplan
Loan
Facility or the Interim Floorplan Loan Facility on the earliest occurrence
of
any of the following events: (a) when such Collateral is (i)
lost, (ii) stolen, or (iii) damaged and no longer merchantable; (b) in
strict accordance with any curtailment schedule for such Collateral (as shown
on
the Transaction Statement identifying such Collateral); (c) for Collateral
financed under Scheduled Payment Program (“SPP”) terms (as shown on the
Transaction Statement identifying such Collateral), in strict accordance with
the installment payment schedule; and (d) when otherwise required under the
terms of any financing program agreed to in writing by the Borrower and
Administrative Agent. Any third party discount, rebate, subsidy,
bonus or credit granted to Borrower for any Collateral will not reduce the
Loan
Obligations until Administrative Agent has received payment as provided in
this
Agreement. The Floorplan Shortfall, if any, will remain in effect,
until the next determination of the Floorplan Shortfall by Administrative
Agent. The Administrative Agent may determine the Floorplan Shortfall
as often as it chooses in its sole discretion. Borrower shall pay all
amounts owing to Administrative Agent and the Lenders under the Floorplan Loan
Facility and the Interim Floorplan Loan Facility as set forth herein and in
the
Transaction Statement.
6.3. Prepayments.
6.3.1. Voluntary
Prepayments. Subject to the limitations in the following
sentences, except for mandatory prepayments and funds received by Administrative
Agent as contemplated by Section 6.1, Borrower may wholly prepay any LIBOR
Loan that is included in the Aggregate Revolving Loan, or the Swingline Loan,
or
prepay any Floorplan Loan or Interim Floorplan Loan, at any time and may make
a
partial prepayment thereon from time to time, without penalty or premium if
Borrower pays any amount that is due as a consequence of the prepayment of
any
LIBOR Loan and as otherwise provided for in this Agreement. All such
prepayments, unless otherwise expressly stated in writing by Borrower to
Administrative Agent prior to the making of such prepayment, will be deemed
made
on the Swingline Loan until it is reduced to zero, thereafter to the Interim
Floorplan Loan until it is reduced to zero, thereafter to the Aggregate
Floorplan Loan until it is reduced to zero, and thereafter to the Aggregate
Revolving Loan until it is reduced to zero (with, in each case, the payment
of
any and all penalties and premiums due hereunder in connection therewith),
and
will be applied by Lenders to reduce the Floorplan Loans and the Revolving
Loans, as appropriate, in accordance with their respective pro-rata
shares. In addition, on any date that the sum of the Aggregate
Revolving Loans, the Swingline Loans, the Aggregate Floorplan Loans, the Interim
Floorplan Loans, the unfunded Approvals, the Letter of Credit Exposure and
the
Floorplan Shortfall exceeds the Borrowing Base plus the Floorplan Inventory
Value,
23
then
the
Borrower shall immediately make a payment of the amount of such excess to the
Administrative Agent.
6.3.2. Mandatory
Prepayments. If at any time the Aggregate Revolving Loan
plus the Swingline Loans, exceeds the Maximum Available Amount (which can be
a
negative number), whether as a result of optional Swingline Advance made by
Administrative Agent as contemplated by Section 3.3.2, or otherwise,
Borrower shall on demand make a payment in the amount of the difference to
Administrative Agent for the account of Administrative Agent on the Swingline
Loan and Lenders on the Aggregate Revolving Loan together with all accrued
but
unpaid interest thereon. Each such prepayment will be applied by
Administrative Agent and Lenders first to reduce the Swingline Loan until it
is
reduced to zero, then to reduce the LIBOR Loans (which Borrower acknowledges
may
result in the payment of fees and costs) that are included in the Aggregate
Revolving Loan (and consequently a ratable portion of each Lender’s Revolving
Loan). In addition, on any date that the Interim Floorplan Loan plus
the Aggregate Floorplan Loan plus unfunded Approvals exceeds the Aggregate
Floorplan Loan Facility, then the Borrower shall, on such date, pay such excess
to the Administrative Agent for the pro-rata benefit of the Lenders and failure
to pay such excess on such date shall be an immediate Event of
Default.
6.3.3. Other
Mandatory Prepayments.
6.3.3.1. Proceeds
from Sales of Assets. If any Covered Person sells any of its
assets in a single transaction or related series of transactions that are not
in
the ordinary course of business, Borrower shall make a payment to Administrative
Agent for the benefit of the Lenders in the amount of the gross proceeds
therefrom less reasonable selling expenses and the increment in federal, state
and local income Taxes, if any, and applicable transfer Taxes, if any, payable
as a consequence of such sale. Borrower need not make such
prepayment, however, unless the net proceeds from such sale or sales exceed
$250,000 in the aggregate in any calendar year, in the aggregate for all Covered
Persons.
6.3.3.2. Proceeds
from Sale of Securities or Indebtedness. If after the
Execution Date, Borrower issues any Capital Securities (except Capital
Securities issued in connection with stock splits or dividends payable in stock)
or debt securities, or warrants or options therefor, or otherwise incurs any
Indebtedness other than Permitted Indebtedness, Borrower shall promptly after
such sale make a payment to Administrative Agent for the benefit of the Lenders,
based on each Lender’s pro-rata share, to be applied to the Loan Obligations, in
an aggregate amount equal to the gross proceeds therefrom less reasonable
brokers’ and underwriters’ fees and commissions and other reasonable issuing
expenses (such amount being the “Net Proceeds”); provided, however, if (i) no
Event of Default has occurred and is continuing, (ii) no Change of Control
has
occurred (unless consented to in writing by the Required Lenders), (iii) the
terms and provisions of such issuance of Capital Securities of MTM Technologies,
Inc. are reasonably acceptable to Administrative Agent, and (iv) the Net
Proceeds of any issuance of Capital Securities (except Capital Securities issued
in connection with stock splits or dividends payable in stock) MTM Technologies,
Inc. is greater than $25,000,000, then 50% of the amount in excess of
$25,000,000 may be used to
24
prepay
the Subordinated Indebtedness and the remaining 50% shall be used to repay
the
Loan Obligations.
6.3.3.3. Insurance
Proceeds. All Insurance Proceeds (excluding proceeds from
directors’ and officers’ insurance policies) shall be deposited in the Cash
Collateral Account and shall be applied by Administrative Agent to the Loan
Obligations. Administrative Agent is hereby authorized to participate
in any proceeding for the condemnation or other taking of any of Borrower’s
property and Borrower from time to time will deliver to Administrative Agent
all
instruments reasonably requested by Administrative Agent to permit such
participation.
Every
prepayment under this Section shall be applied to reduce the Aggregate
Revolving Loans and shall be distributed by Administrative Agent to Lenders
in
accordance with their pro-rata shares of the Aggregate Revolving Loan Commitment
and applied by Lenders to reduce their Revolving Loans in accordance with their
respective pro-rata shares of the Aggregate Revolving Loan Commitment, provided,
however, with respect to the prepayments described in Section 6.3.3.2, if there
is no Existing Default at the time of receipt thereof by the Borrower, such
prepayments shall be delivered by Borrower, at Borrower’s option, to the
Administrative Agent to reduce the Aggregate Revolving Loan and to be
distributed as described above or deposited into an investment account permitted
under Section 14.1.4. If application to the Revolving Loans of any
prepayment required under this Section reduces the Revolving Loans (and
consequently the Aggregate Revolving Loan) to zero, then the remaining amount
of
such prepayment shall be applied by Lenders to reduce the Floorplan Loans to
zero (and consequently the Aggregate Floorplan Loan).
6.4. Reimbursement
Obligations of Borrower. Borrower hereby unconditionally
agrees to pay immediately to the Letter of Credit Issuer on demand at the Letter
of Credit Issuer’s Applicable Lending Office all amounts required to pay all
drafts drawn under Letters of Credit issued for the account of Borrower and
all
reasonable expenses incurred by Letter of Credit Issuer in connection with
such
Letters of Credit and in any event and without demand to remit to Letter of
Credit Issuer (which may be through obtaining Advances if permitted under this
Agreement) sufficient funds to pay all debts and liabilities arising under
any
Letter of Credit issued for the account of such Borrower. Letter of
Credit Issuer, if it is not also the Administrative Agent, shall simultaneously
send to Administrative Agent copies of all notices, demands and correspondence
sent by Letter of Credit Issuer to Borrower relating to Letters of
Credit.
6.5. Manner
of Payments and Timing of Application of Payments.
6.5.1. Payment
Requirement. Except as provided in Section 6.1.2.1 with
respect to payments from collected funds in the Cash Collateral Account and
unless expressly provided to the contrary elsewhere herein, Borrower shall
make
each payment on the Loan Obligations to Administrative Agent for the account
of
Lenders (based on each Lender’s pro-rata share) as required under the Loan
Documents at the Applicable Lending Office of the Administrative Agent on the
date when due, without deduction, set-off or counterclaim (provided, however,
the making of such payment shall not constitute a waiver by Borrower of
counterclaims arising from the willful misconduct or gross negligence of
Administrative Agent or the Lenders). All such payments will be
distributed by Administrative Agent to Lenders as provided in Section 17.10
for application to the Loan Obligations as provided herein.
6.5.2. Application
of Payments and Proceeds. All immediately available funds
collected pursuant to Section 6.1.2.1 at or before 12:00 noon (Local
Time) on a Business
25
Day
excluding a Settlement Date, will be distributed by Administrative Agent as
provided in Section 6.1.2.1(i). Such funds received on a day
that is not a Business Day, or if on a Business Day, after 12:00 noon
(Local Time), will be deemed received on the immediately following Business
Day,
and distributed by Administrative Agent on a Settlement Date as provided in
Section 17.10. The amount so distributed to a Lender will be
applied by such Lender to the relevant Loan Obligation on the Business Day
when
received. Borrower will also pay to Administrative Agent, for its own account,
such fees as Administrative Agent generally charges its customers for each
check
returned unpaid for insufficient funds (an “NSF check”) (such payment repays
Administrative Agent’s estimated administrative costs; it does not waive any
Default or Event of Default caused by the NSF check).
6.5.3. Interest
Calculation. Interest shall begin accruing, and be owing and
payable on an Advance on the day such Advance is made by a Lender to the
Administrative Agent (provided, however, that interest on the Aggregate
Floorplan Loan and Interim Floorplan Loan shall begin accruing on the date
of
the applicable invoice, as provided in the applicable Transaction Statement
at
the applicable rate set forth therein (which rate may be zero percent for a
period of time)). Section 6.5.2 notwithstanding, for purposes of
interest calculation only, (i) a payment by check, draft or other
instrument received at or before 12:00 noon (Local Time) on a Business Day
shall be deemed to have been applied to the relevant Loan Obligation on the
second following Business Day, (ii) a payment by check, draft or other
instrument received on a day that is not a Business Day or after 12:00 noon
(Local Time) on a Business Day shall be deemed to have been applied to the
relevant Loan Obligation on the third following Business Day, (iii) a
payment received by ACH (Automatic Clearing House) received at or before
12:00 noon (Local Time) on a Business Day shall be deemed to have been
applied to the relevant Loan Obligation on the same Business Day, (iv) a
payment by ACH received on a day that is not a Business Day or after
12:00 noon (Local Time) on a Business Day shall be deemed to have been
applied to the relevant Loan Obligation on the next following Business Day,
(v) a payment received by wire transfer received at or before
12:00 noon (Local Time) on a Business Day shall be deemed to have been
applied to the relevant Loan Obligation on the Business Day when it is received,
and (vi) a payment by wire transfer received on a day that is not a
Business Day or after 12:00 noon (Local Time) on a Business Day shall be
deemed to have been applied to the relevant Loan Obligation on the next Business
Day. Borrower acknowledges that payments in cash on the Loan
Obligations will not be accepted by Administrative Agent.
6.6. Returned
Instruments. If a payment is made by check, draft or other
instrument and the check, draft or other instrument is returned unpaid, any
application of the payment to the Loan Obligations will be reversed and will
be
treated as never having been made.
6.7. Compelled
Return of Payments or Proceeds. If the Administrative Agent
or any Lender is for any reason compelled to surrender any payment or any
proceeds of the Collateral because such payment or the application of such
proceeds is for any reason invalidated, declared fraudulent, set aside, or
determined to be void or voidable as a preference, an impermissible set-off,
or
a diversion of trust funds, then this Agreement and the Loan Obligations to
which such payment or proceeds was applied or intended to be applied shall
be
revived as if such application was never made; and Borrower shall be liable
to
pay to Administrative Agent or such Lender, and shall indemnify Administrative
Agent and/or such Lender for and hold Administrative Agent and/or such Lender
harmless from any loss with respect to, the amount of such payment or proceeds
surrendered. This Section shall be effective notwithstanding any
contrary action that
26
Administrative
Agent and/or such Lender may take in reliance upon its receipt of any such
payment or proceeds. Any such contrary action so taken by
Administrative Agent and/or such Lender shall be without prejudice to
Administrative Agent and/or such Lender’s rights under this Agreement and shall
be deemed to have been conditioned upon the application of such payment or
proceeds having become final and indefeasible. The provisions of this
Section shall survive termination of the Commitments and the indefeasible
payment and satisfaction of all of the Loan Obligations.
6.8. Due
Dates Not on Business Days. If any payment required
hereunder becomes due on a date that is not a Business Day, then such due date
shall be deemed automatically due the preceding Business Day.
7. Procedure
for Obtaining Advances.
7.1. Initial
Advances. Provided that all conditions thereto hereunder are
satisfied and subject to the limitations contained herein, Lenders will fund
and
Administrative Agent will make the initial Revolving Loan Advance, on the
Effective Date as directed by Borrower in a written direction delivered to
Administrative Agent. The manner of disbursement shall be subject to
Administrative Agent’s approval. Administrative Agent will fund the
initial Interim Floorplan Loan in accordance with its policies and
procedures.
7.2. Subsequent
Revolving Loan Advances. Borrower may request subsequent
Revolving Loan Advances at any time, but not more often than once each Business
Day, by submitting a request therefor to Administrative Agent as provided in
Section 7.10. All requests for a Revolving Loan Advance must be
submitted by Borrowing Agent. Administrative Agent may treat every
request for a Revolving Loan Advance as a request for a Swingline Advance to
the
extent the requested amount does not exceed the Maximum Swingline Amount and
as
a request for a Revolving Loan Advance in the amount of the
excess. Every request for an Revolving Loan Advance shall be
irrevocable. A request for a Revolving Loan Advance received by
Administrative Agent on a day that is not a Business Day or that is received
by
Administrative Agent after 11:00 a.m. (Local Time) on a Business Day shall
be treated as having been received by Administrative Agent at 11:00 a.m.
(Local Time) on the next Business Day.
7.3. Subsequent
Floorplan Loan Advances. Administrative Agent may treat
every request for a Floorplan Loan Advance as a request for an Interim Floorplan
Loan Advance to the extent the requested amount does not exceed the Floorplan
Loan Facility (when added to the Aggregate Floorplan Loan and the Interim
Floorplan Loan and all unfunded Approvals) and as a request for a Floorplan
Loan
Advance in the amount of the excess.
7.3.1. Repayment
of the Swingline Loan and the Interim Floorplan Loan.
7.3.1.1.
Administrative Agent may in its absolute discretion on any Business Day give
notice to Lenders of the amount of the Swingline Loan and/or Interim Floorplan
Loan after application of all payments to be applied thereto as provided
elsewhere herein. Such notice shall be given no later than 1:00 p.m.
(Local Time) and may include a demand that the Swingline Loan and/or the Interim
Floorplan Loan be fully paid. If Administrative Agent demands that
the Swingline Loan and/or the Interim Floorplan Loan be fully paid, then prior
to 4:00 p.m. (Local Time) on such date, Lenders shall remit funds to
Administrative Agent sufficient to reduce the Swingline Loan and/or the Interim
Floorplan Loan to zero. The aggregate of such remittances shall be
treated as a Revolving Loan Advance and the Aggregate Revolving Loan
27
increased
accordingly (in the case of payments on the Swingline Loan) and as a Floorplan
Loan Advance and the Aggregate Floorplan Loan increased accordingly (in the
case
of payments on the Interim Floorplan Loan).
7.3.1.2.
If for any reason, including the commencement of a proceeding in bankruptcy
with
respect to any Borrower, remittances by Lenders as provided above cannot be
made
on the date otherwise required above, then each Lender shall be deemed
automatically to have purchased from Administrative Agent as of such date an
undivided interest and participation in the Swingline Loan and the Interim
Floorplan Loan equal to such Lender’s pro-rata share, so as to cause such Lender
to share in the Swingline Loan and the Interim Floorplan Loan in accordance
with
its pro-rata share. Each Lender shall remit its pro-rata share of the
Swingline Loan and the Interim Floorplan Loan to Administrative Agent promptly
on demand. All interest payable with respect to such Lender’s
pro-rata share of the Swingline Loan and the Interim Floorplan Loan shall be
for
the account of Administrative Agent to the date such remittance is made, and
shall be for the account of and remitted by Administrative Agent to such Lender
(except in the case of the Floorplan Loan, at the rate designated in
Section 4.4 with respect to CDF and the other Lenders) as a participant
from such date. Further, until such remittance is made, such Lender
shall pay to Administrative Agent, on demand, interest on such Lender’s pro-rata
share of the Swingline Loan and the Floorplan Loan at the Federal Funds Rate,
and such Lender shall be subject to the restrictions contained in
Section 7.5.
7.3.2. Administrative
Agent’s Right to Make Other Certain Advances.
7.3.2.1. Payment
of Loan Obligations. Administrative Agent shall have the
right to make Revolving Loan Advances at any time and from time to time to
cause
timely payment of any of the Loan Obligations, including without limitation,
to
pay any fees, interest or principal on the Swingline Loan, the Interim Floorplan
Loan, the Aggregate Floorplan Loan, and the Aggregate Revolving Loan, and to
pay
the Unused Revolving Fee and any other fees owing to the Lenders or the
Administrative Agent; provided, however, with respect to third party fees,
if
there is no Existing Default, Administrative Agent shall use its reasonable
efforts to give prior notice to the Borrower of the payment of any such fees
from an Advance (but shall have no liability for its failure to notify Borrower,
and any such failure shall not give rise to a claim or cause of action by
Borrower against Administrative Agent or any Lender). If there is no
Existing Default, Administrative Agent shall use reasonable efforts to notify
Borrower (but shall have no liability for its failure to notify Borrower and
such failure shall not give rise to a claim or cause of action by Borrower
against Administrative Agent or any Lender) on the day it makes an Advance
to
pay any interest owing hereunder or the Unused Revolving
Fee. Administrative Agent may select the Advance Date for any such
Advance, but such Advance Date may only be a Business
Day. Administrative Agent will give notice to Borrower after any such
Advance is made.
7.3.2.2. Payments
to Other Creditors. If Administrative Agent becomes
obligated to reimburse or pay to any creditor of Borrower any amount in order
to
(i) obtain a release of such creditor’s Security Interest in any of the
Collateral, other than Permitted Security Interests, or (ii) otherwise
satisfy an
28
Obligation
of Borrower to such creditor to the extent not indefeasibly satisfied by the
initial Advances, then Administrative Agent shall have the right (but shall
have
no obligation) to make Advances for that purpose. Administrative
Agent may select the Advance Date for any such Advance, but such Advance Date
may only be a Business Day. Administrative Agent will give notice to
Borrower after any such Advance is made.
7.4. Fundings.
7.4.1. Advances. Not
later than 1:00 p.m. (Local Time) on each Advance Date for a Floorplan Loan
Advance, and/or a Revolving Loan Advance, Administrative Agent shall promptly
notify each Lender of the amount of the Floorplan Loan Advance or the Revolving
Loan Advance to be made on that Advance Date. Each Lender shall make
immediately available to Administrative Agent by 4:00 p.m. (Local Time) on
the Advance Date funds consisting solely of Dollars in the amount of its
pro-rata share of such Floorplan Loan Advance, or Revolving Loan Advance,
rounded to the nearest ▇▇▇▇▇, in accordance with such remittance instructions
as
may be given by Administrative Agent to Lenders from time to time.
7.4.2. Draws
on Letters of Credit. If a draw is made on a Letter of
Credit and Borrower does not reimburse the amount of such draw in full to Letter
of Credit Issuer on the same Business Day as demand is made by the Letter of
Credit Issuer, then the Letter of Credit Issuer shall promptly notify
Administrative Agent (if Administrative Agent and the Letter of Credit Issuer
are not the same Person) of such failure. Upon Administrative Agent’s receipt of
such notice from Letter of Credit Issuer, Administrative Agent may notify each
Lender thereof and shall have the right to cause a Revolving Loan Advance to
be
made, regardless whether such Revolving Loan Advance would result in the
Aggregate Revolving Loan exceeding the Maximum Available Amount or regardless
as
to whether an Event of Default exists, by notifying each Lender of the draw,
the
amount of the Revolving Loan Advance required to fund reimbursement of such
draw, and the amount of such Lender’s ratable share of such Revolving Loan
Advance. The Advance Date and time for such Revolving Loan Advance
shall not be later than 4:00 p.m. (Local Time) on the first Business Day
following Administrative Agent’s delivery of such notice to Lenders. By no later
than such Advance Date and time, each Lender shall make immediately available
to
Administrative Agent funds consisting solely of Dollars in the amount of its
pro-rata share of such Revolving Loan Advance, rounded to the nearest ▇▇▇▇▇,
in
accordance with such remittance instructions as may be given by Administrative
Agent to each Lender from time to time.
7.4.3. All
Fundings Ratable. All fundings of Advances (other than
Swingline Advances and Interim Floorplan Loan Advances) shall be made by Lenders
as provided herein in accordance with their pro-rata shares of the respective
Aggregate Commitments, as applicable. Except as otherwise expressly provided
herein, a Lender shall not be obligated to fund Revolving Loan Advances plus
such Lender’s pro-rata share of the Letter of Credit Exposure that would result
in such Lender’s Revolving Loan exceeding its Revolving Loan Commitment, fund
Floorplan Loan Advances that would result in its Floorplan Loan exceeding its
Floorplan Loan Facility, or make available any more than its pro-rata share
of
any Advance.
7.5. Administrative
Agent’s Availability Assumption.
29
7.5.1.
Unless Administrative Agent has been given written notice by a Lender prior
to
an Advance Date that such Lender does not intend to make immediately available
to Administrative Agent such Lender’s pro-rata share of the Advance which
Administrative Agent may be obligated to make on the Advance Date, including,
without limitation, any Advance that may be made based on the issuance of an
Approval Administrative Agent may assume that such Lender has made the required
amount available to Administrative Agent on the Advance Date and Administrative
Agent may, in reliance upon such assumption, make available to Borrower a
corresponding amount. Failure of any Lender to pay its pro-rata share
of the Swingline Loan, any Floorplan Loan (whether based on the issuance of
an
Approval or otherwise), the Interim Floorplan Loan (whether based on the
issuance of an Approval or otherwise), or any Revolving Loan or any other amount
owing hereunder by a Lender upon demand shall make such Lender a “Defaulting
Lender”. If such corresponding amount is not in fact made immediately
available to Administrative Agent by such Defaulting Lender on the Advance
Date,
Administrative Agent shall be entitled to recover such corresponding amount
on
demand from such Defaulting Lender. If such Defaulting Lender does
not pay such corresponding amount immediately upon Administrative Agent’s demand
therefor, then Administrative Agent shall promptly notify Borrower and the
other
Lenders and Borrower shall pay such corresponding amount to Administrative
Agent
within one (1) Business Day. Administrative Agent shall also be
entitled to recover, either from such Defaulting Lender or Borrower, interest
on
such corresponding amount for each day from the date such corresponding amount
was made available by Administrative Agent to Borrower to the date such
corresponding amount is recovered by Administrative Agent, at a rate per annum
equal to (i) if paid by such Lender, the cost to Administrative Agent of
funding such amount at the Federal Funds Rate, or (ii) if paid by Borrower,
the applicable rate for the Advance in question determined from the request
therefor. Each Lender shall be obligated only to fund its pro-rata
share of an Advance subject to the terms and conditions hereof, regardless
of
the failure of another Lender to fund its pro-rata share thereof.
7.5.2.
Each remittance or payment or Advance required to be made by a Lender shall
be
made in accordance with its pro-rata share and shall be made notwithstanding
that (i) the amount of the aggregate of such remittances by Lenders may not
be in the minimum amount for Revolving Loan Advances, or Floorplan Loan Advances
or otherwise required hereunder, (ii) any conditions to Advances in
Section 10 may not be then satisfied, (iii) there is an Existing
Default, (iv) the aggregate amount of such remittances by Lenders would
result in the Aggregate Revolving Loan exceeding the Maximum Available Amount
or
the aggregate amount of such remittances by Lenders would result in the
Aggregate Floorplan Loan plus the Interim Floorplan Loan exceeding the value
of
the Collateral advanced against thereunder or the Aggregate Floorplan Loan
Facility, or (v) such remittances by Lenders may be made after the
Revolving Loan Maturity Date or the Floorplan Loan Maturity Date, as the case
may be; provided, however, that in no event shall any Lender be required to
make
any such remittance that would result in the sum of the Revolving Loan of such
Lender plus such Lender’s pro-rata share of the Letter of Credit Exposure
exceeding such Lender’s Revolving Loan Commitment, or the Floorplan Loan of such
Lender exceeding such Lender’s Floorplan Loan Facility.
7.5.3.
In addition, with respect to any Defaulting Lender, until a payment or Advance
is paid to Administrative Agent (with interest at described above),
(i) such Defaulting Lender shall permit the Administrative Agent the
unconditional and
30
irrevocable
right of setoff against any amounts (including, without limitation, payments
of
principal, interest, and fees, as well as indemnity payments) received by
Administrative Agent hereunder for the benefit of any such Defaulting Lender,
and (ii) if such failure to pay shall continue for a period of three
Business Days, result in any such Defaulting Lender forfeiting any right to
vote
on any matter that the Required Lenders or all Lenders are permitted to vote
for
hereunder (and the calculation of Required Lenders shall exclude such Defaulting
Lender’s interest in the Lenders’ Exposure); provided, however, once such a
failure is cured, then such Lender shall, subsequent thereto, have all rights
hereunder; provided, further, however, if any Lender shall fail to make such
a
payment within the three Business Day period specified in clause (ii) above
(other than by reason of events beyond the reasonable control of such Lender)
three or more times during the term hereof, such Lender shall permanently
forfeit its right to vote hereunder (and the calculation of Required Lenders
shall exclude such Defaulting Lender’s interest in the Lenders’
Exposure).
7.6. Letters
of Credit. Borrower may request the issuance of a Letter of
Credit by submitting an issuance request to Letter of Credit Issuer and also
Administrative Agent (if Administrative Agent and the Letter of Credit Issuer
are not the same Person) and executing the reimbursement agreement required
under Section 7.11 no less than five Business Days prior to the requested issue
date for such Letter of Credit.
7.7. Disbursement.
Provided that all conditions precedent herein to a requested Advance or, if
applicable, a Swingline Advance or Interim Floorplan Loan Advance, have been
satisfied, Administrative Agent will make the amount of such requested Advance
available to Borrower or in the case of an Interim Floorplan Loan Advance or
a
Floorplan Loan Advance to the appropriate Vendor, on the applicable Advance
Date
in immediately available funds in Dollars at the Applicable Lending
Office.
7.8. Restrictions
on Advances. No more than one Revolving Loan Advance and no
more than one Swingline Advance will be made on any one day pursuant to a
request for a Revolving Loan Advance. Advances will only be made for
the purposes permitted in Section 13.1.
7.9. Each
Advance Request and Request for Letter of Credit a
Certification. Each submittal of a request for an Advance
and each submittal of a request for the issuance of a Letter of Credit by a
Borrowing Officer shall constitute a certification by Borrower that
(i) there is no Existing Default, (ii) all conditions precedent
hereunder to the making of the requested Advance have been satisfied, and
(iii) the Representations and Warranties are then true, with such
exceptions as have been disclosed to Lenders in writing by Borrower or any
Guarantor making such Representations and Warranties from time to time and
are
satisfactory to the Required Lenders, and will be true on the Advance Date,
as
applicable, as if then made with such exceptions.
7.10. Requirements
for Every Advance Request. Subject to the terms of
Section 10 and the other provisions of this Agreement, with regards to
Swingline Loans, and Revolving Loan Advances, only a request (which shall be
in
writing in the form attached hereto as Exhibit 7.10 and mailed, sent via
email from an authorized person with such email containing a signed PDF copy
of
such duly signed request, personally delivered or telecopied as provided in
Section 20.1) from a Borrowing Officer of Borrowing Agent to Administrative
Agent that specifies the amount of the Advance to be made, the Advance Date
for
the requested Advance shall be treated as a request for an
Advance. No Advance Date for any requested Advance may be other than
a Business Day. With regards to Swingline Loans and Revolving Loan
Advances, a request for an
31
Advance
must be given prior to 11:00 a.m., Local Time, on the Advance Date for such
Advance. Subject to the terms of Section 10 and the other provisions
of this Agreement, Floorplan Loan Advances and Interim Floorplan Loan Advances
will be funded in accordance with Administrative Agent’s
procedures.
7.11. Requirements
for Every Letter of Credit Request. Only a written request
(which may be mailed, sent via email from an authorized person with such email
containing a signed PDF copy of such duly signed request, personally delivered
or telecopied as provided in this Agreement) from a Borrowing Officer to Letter
of Credit Issuer and Administrative Agent (if Administrative Agent and the
Letter of Credit Issuer are not the same Person) or an electronic initiation
over an online service provided by Letter of Credit Issuer (with a written
copy
to Administrative Agent if Administrative Agent and the Letter of Credit Issuer
are not the same Person) that specifies the amount, requested issue date (which
shall be a Business Day and in no event later than thirty days before the
effective date of termination of the Aggregate Revolving Loan Commitment) and
beneficiary of the requested Letter of Credit and other information necessary
for its issuance shall be treated as a request for issuance of a Letter of
Credit together with such Letter of Credit applications and reimbursement
agreements as the Letter of Credit Issuer may reasonably request.
7.12. Exoneration
of Administrative Agent and Lenders. Neither Administrative
Agent nor any Lender shall incur any liability to Borrower for treating a
request that meets the express requirements of Sections 7.10, and 7.11 as a
request for an Advance or as a request for the issuance of a Letter of Credit,
as applicable, Letter of Credit Issuer and Administrative Agent (if
Administrative Agent and the Letter of Credit Issuer are not the same Person),
as the case may be, believes in good faith that the Person making the request
is
a Borrowing Officer of Borrowing Agent. Neither Administrative Agent
nor any Lender shall incur any liability to Borrower for failing to treat any
such request as a request for an Advance or the issuance of a Letter of Credit,
as applicable, the Letter of Credit Issuer or Administrative Agent (if
Administrative Agent and the Letter of Credit Issuer are not the same Person)
believes in good faith that the Person making the request is not a Borrowing
Officer of Borrowing Agent.
8. Security. As
security for the payment and performance of the Loan Obligations, and also
as
security for the payment and performance of all Obligations to Administrative
Agent, Borrower shall on the Execution Date and from time to time thereafter
execute and deliver, or cause to be executed and delivered, to Administrative
Agent such security agreements, mortgages and other security documents as they
relate to the Collateral as reasonably requested by Administrative Agent from
time to time, including, without limitation, the following documents, each
in
form and substance satisfactory to Administrative Agent and the Required
Lenders:
8.1. Landlord
Consents. With respect to any real property leased (whether
pursuant to a lease, bailment or otherwise) by Borrower or any other Covered
Person, whether on, prior to or after the Effective Date, Borrower shall cause
to be delivered to Administrative Agent such landlord consents and/or
warehousemen’s letters and nondisturbance and attornment agreements as
Administrative Agent shall reasonably request.
8.2. Mortgagee
Consent Agreements. With respect to any real property owned
by Borrower or any other Covered Person, whether on, prior to or after the
Effective Date if there shall be a mortgagee or other lienholder with respect
to
such real property, Borrower shall cause to be delivered to Administrative
Agent
such consents and nondisturbance and attornment agreements from each such
mortgagee or lienholder as Administrative Agent shall reasonably
request.
32
8.3. Security
Agreements. Security agreements granting to Administrative
Agent for the benefit of Lenders a first priority Security Interest under the
UCC in all of the Accounts, Chattel Paper, Commercial Tort Claims, Deposit
Accounts, Documents, Equipment, Fixtures, General Intangibles, Health Care
Insurance Receivables, Farm Products, Goods, Instruments, Intellectual Property,
Inventory, Investment Property, leases, Letter-of-Credit Rights, money,
Supporting Obligations, and other personal property of Borrower, any other
Covered Person and every Subsidiary of Borrower or any other Covered Person,
all
books and records pertaining to any of the foregoing, all proceeds, insurance
proceeds, and products of any of the foregoing, and all collateral security
and
guaranties given by any Person with respect to any of the foregoing, whether
now
owned or hereafter acquired, and wherever located, subject only to Permitted
Security Interests affecting such property (each being, a “Security
Agreement”).
8.4. Stock
Pledge Agreements. Stock pledge agreements granting to
Administrative Agent for the benefit of Lenders a first priority Security
Interest in all of the capital stock and other securities (and all options
and
warrants therefor) of every Subsidiary of Borrower, now or hereafter issued
and
outstanding, and all proceeds thereof.
8.5. Collateral
Assignments. Each of the following Collateral Assignments
from Borrower or any other Covered Person, each subject to no other Security
Interests except Permitted Security Interests affecting the item
assigned:
8.5.1. Intellectual
Property Assignments. Assignments assigning to
Administrative Agent for the benefit of Lenders all of Borrower’s or such other
Covered Person’s rights and interest in all Intellectual Property.
8.5.2. Control
Agreements. Control Agreements granting to the
Administrative Agent for the benefit of Lenders control over all of Borrower’s
rights and interest in all Blocked Accounts and Lockboxes other than employee
benefit accounts and ▇▇▇▇▇ cash accounts.
9. Power
of Attorney. Each Borrower hereby authorizes (and shall
cause each other Covered Person to do the same) Administrative Agent and
irrevocably appoints Administrative Agent (acting by any of its officers) as
such Borrower’s agent and attorney-in-fact (which appointment is coupled with an
interest and is therefore irrevocable) to do any of the following until all
of
the Loan Obligations are fully and indefeasibly paid and satisfied in cash,
the
expiration or termination of all Letters of Credit and reduction of the Letter
of Credit Exposure to zero, the Commitments are terminated, and the
Administrative Agent and the Lenders have no other commitment to extend credit
or make advances to or for the account of Borrower:
9.1.
At any time while there is an Existing Default,
(i) demand payment of any Account; (ii) enforce payment of any Account
by legal proceedings or otherwise; (iii) exercise all of such Borrower’s
rights and remedies in proceedings brought to collect any Account;
(iv) sell or assign any Account upon such terms, for such amount and at
such time or times as Administrative Agent deems advisable; (v) settle,
adjust, compromise, extend or renew any Account; (vi) discharge and release
any Account; (vii) prepare, file and sign such Borrower’s name on any proof
of claim in bankruptcy or other similar documents against an Account Debtor;
(viii) notify the postal authorities of any change of the address for
delivery of such Borrower’s mail to any address designated by Administrative
Agent and open and process all mail addressed to such Borrower;
(ix) endorse such Borrower’s name on any verification of Accounts and
notices thereof to Account Debtors; (x) make one or more Revolving Loan
Advances, or Floorplan Loan Advances to pay the costs and expenses of any of
the
foregoing; and (xi) do anything that Administrative Agent deems necessary
in its reasonable discretion to assure that the Loan Obligations are fully
33
and
indefeasibly paid and satisfied in cash and that Borrower complies with each
covenant and agreement contained herein and in the other Loan
Documents.
9.2.
At any time, (i) take control in any manner of any item of payment or
proceeds of any Account; (ii) have access to any lockbox or postal box into
which such Borrower’s mail is deposited; (iii) endorse such Borrower’s name
upon any items of payment and deposit the same in the Cash Collateral Account
and apply the proceeds thereof to the Loan Obligations as provided herein;
(iv) endorse such Borrower’s name upon any chattel paper, document,
instrument, invoice, or similar document or agreement relating to any Account
or
other item of the Collateral; and (v) execute in such Borrower’s name and
on such Borrower’s behalf any financing statement or amendments thereto, or such
mortgages, deeds of trust or other security documents deemed necessary or
appropriate by Administrative Agent to assure the perfection or continued
perfection of Administrative Agent’s Security Interests in the Collateral for
the benefit of Lenders.
The
foregoing power of attorney and authorization shall be deemed irrevocable,
but
shall be automatically revoked only upon the full and indefeasible payment
in
cash of all of the Loan Obligations, there are no Letters of Credit outstanding
and the Letter of Credit Exposure is irreversibly zero, the termination of
the
Commitments, and the Administrative Agent and the Lenders have no other
commitment to extend credit or make advances to or for the account of
Borrower.
10. Conditions
of Lending.
10.1. Conditions
to Initial Advance. Lenders will have no obligation to fund
the initial Revolving Loan Advance, or the initial Floorplan Loan
Advance or any
subsequent Revolving Loan Advance, or Floorplan Loan Advance unless the
following conditions are satisfied or waived by Administrative Agent and the
Required Lenders:
10.1.1. Listed
Documents and Other Items. Administrative Agent shall have
received on or before the Effective Date all of the documents and other items
listed or described in Exhibit 10.1.1 hereto, with each being satisfactory
to Lenders and (as applicable) duly executed and (also as applicable) sealed,
attested, acknowledged, certified, or authenticated.
10.1.2. Financial
Condition. Lenders shall have determined to their
satisfaction that the financial statements of Borrower for the periods ended
March 31, 2007 and June 30, 2007 (the “Initial Financial Statements”), and the
projections of Borrower’s financial condition, results of operations, and cash
flow statements of Borrower for the period ending as of March 31, 2008 (the
“Proforma Financial Statements”, as furnished to Administrative Agent and other
information furnished to Administrative Agent by Borrower (i) for the
periods ended on or before the Effective Date, fairly and accurately reflect
the
business and financial condition of Borrower, its cash flows and the results
of
its operations for such periods in accordance with GAAP, and (ii) for the
periods that will end after the Effective Date, fairly forecast on a reasonable
basis and in Borrower’s good faith the business and financial condition of
Borrower, its cash flows, and the results of its operations for such periods
in
accordance with GAAP.
10.1.3. Intercreditor
Agreements. The Other Creditor Indebtedness Documents shall
be executed and in form and substance satisfactory to Administrative Agent
and
the Required Lenders, and each Intercreditor Agreement shall be in form and
substance satisfactory to Administrative Agent and the Required Lenders and
shall have been executed and shall remain in effect.
34
10.1.4. Subordination
Agreements. The Subordination Indebtedness Documents shall
be executed and amended and in form and substance satisfactory to Administrative
Agent and the Required Lenders, and each Subordination Agreement shall be in
form and substance satisfactory to Administrative Agent and the Required Lenders
and shall have been executed and shall remain in effect.
10.1.5. Default. There
shall be no Existing Default and no Default or Event of Default will occur
as a
result of such Advance being requested or made or the application of the
proceeds thereof.
10.1.6. Perfection
of Security Interests. Every Security Interest required to
be granted by Borrower to Administrative Agent under Section 8 shall have
been perfected and shall be, except for Permitted Security Interests, as
otherwise satisfactory to Lenders, a first priority Security
Interest.
10.1.7. Representations
and Warranties. The Representations and Warranties shall be
true and correct.
10.1.8. Material
Adverse Change. Since the date of the last audited Financial
Statements delivered to Administrative Agent for the period ending March 31,
2007, there shall not have been any change which has or is reasonably likely
to
have a Material Adverse Effect on any Covered Person.
10.1.9. Pending
Material Proceedings. There shall be no pending Material
Proceedings.
10.1.10. Payment
of Fees. Borrower shall have paid and reimbursed to
Administrative Agent and the Lenders all fees, costs and expenses that are
payable or reimbursable to Administrative Agent and the Lenders hereunder on
or
before the Effective Date.
10.1.11. Other
Items. Administrative Agent shall have received such other
consents, approvals, opinions, certificates, documents or information as it
reasonably deems necessary or shall have issued an Approval as
necessary.
10.2. Conditions
to Subsequent Advances. Lenders will have no obligation to
fund any Advance after the initial Revolving Loan Advance and the initial
Floorplan Loan Advance, unless the following conditions are satisfied or waived
by Administrative Agent and the Required Lenders:
10.2.1. General
Conditions. All of the conditions to the initial Advances in
Section 10.1 (except the condition in Section 10.1.7) shall have been
and shall remain satisfied.
10.2.2. Representations
and Warranties. The Representations and Warranties are then
true, with such exceptions as have been disclosed to Lenders in writing by
Borrower or each Guarantor from time to time and are satisfactory to the
Required Lenders, and will be true as of the time of such Advance, as if then
made with such exceptions.
10.2.3. Approvals. With
regards to a Floorplan Loan Advance or Interim Floorplan Loan Advance, an
Approval has been issued by Administrative Agent.
35
10.2.4. Default. There
shall be no Existing Default and no Default or Event of Default will occur
as a
result of such Advance being requested or made or the application of the
proceeds thereof.
10.3. Conditions
to Issuance of Letters of Credit. As conditions precedent to
the issuance of any Letter of Credit unless any of the following conditions
are
satisfied or waived by Administrative Agent and the Required
Lenders:
10.3.1. Letter
of Credit Application/Reimbursement Agreement. Borrower
shall have executed and delivered to Letter of Credit Issuer a letter of credit
application/reimbursement agreement satisfactory to Letter of Credit Issuer
and
Administrative Agent (if Administrative and the Letter of Credit Issuer are
not
the same Person) under which Borrower further evidences its obligation to
reimburse to Letter of Credit Issuer on demand the amount of each draw on such
Letter of Credit as provided in Section 6.4, together with interest from the
date of the draw at the rate provided in Section 4.2 and (without duplication)
all reasonable expenses incurred by Letter of Credit Issuer in connection with
such Letter of Credit.
10.3.2. No
Prohibitions. No order, judgment or decree of any
Governmental Authority shall exist which purports by its terms to enjoin or
restrain Letter of Credit Issuer, Administrative Agent, or any other Lender
from
issuing such Letter of Credit, and no Law or request or directive (whether
or
not having the force of law) from any Governmental Authority with jurisdiction
over Letter of Credit Issuer, Administrative Agent, or any other Lender shall
exist which prohibits, or requests that Letter of Credit Issuer, Administrative
Agent, or any other Lender refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular, or imposes upon Letter of
Credit Issuer, Administrative Agent, or any other Lender with respect
to such Letter of Credit any restriction or reserve or capital requirement
(for
which Letter of Credit Issuer or any other Lender is not otherwise compensable
by Borrower hereunder).
10.3.3. Representations
and Warranties. The Representations and Warranties are then
true and correct, and as of the time of the issuance of such Letter of Credit
will be true and correct with such exceptions as have been disclosed to Lenders
in writing by Borrower or each Guarantor from time to time and are satisfactory
to the Required Lenders, and will be true as of the time of the issuance of
such
Letter of Credit, as if then made with such exceptions.
10.3.4. No
Material Proceedings. No Material Proceedings are pending
or, to the best knowledge of Borrower, threatened, against Borrower or any
Covered Person.
10.3.5. No
Default. No Event of Default and no Default has occurred and
is continuing or Event of Default is reasonably likely to occur as a result
of
such Letter of Credit being issued or a draw thereon being made or
paid.
10.3.6. Other
Conditions. All of the conditions to the initial Advances in
Section 10.1 (except the conditions in Section 10.1.7) shall have been and
shall
remain satisfied.
11. Representations
and Warranties. Except as otherwise described in the
Disclosure Schedule attached hereto as Exhibit 11, Borrower represents and
warrants to Administrative Agent, Lenders and the Letter of Credit Issuer,
as
follows:
36
11.1. Organization
and Existence. Each Covered Person is duly organized and
existing in good standing under the Laws of the state of its organization and
is
duly qualified to do business and is in good standing in every state where
the
nature or extent of its business or properties require it to be qualified to
do
business, except where the failure to so qualify will not have a Material
Adverse Effect on any Covered Person. Each Covered Person has the
power and authority to own its properties and carry on its business as now
being
conducted. Section 11.1 of the Disclosure Schedule, as updated
from time to time as permitted herein, set forth (a) the Borrower’s and each
other Covered Person’s jurisdiction of organization, (b) the location of the
Borrower’s and each other Covered Person’s chief executive office, (c) the
Borrower’s and each other Covered Person’s exact legal name as it appears on its
organizational documents, (d) all prior legal names and trade names of each
Borrower and each other Covered Person since January 1, 2001, (e) the Borrower’s
and each other Covered Person’s organizational identification number (to the
extent the Company’s and each other Loan Party’s is organized in a jurisdiction
which assigns such numbers), and (f) the Borrower’s and each other Covered
Person’s federal employer identification number.
11.2. Authorization. Each
Covered Person is duly authorized to execute and perform every Loan Document
to
which such Covered Person is a party, and Borrower is duly authorized to borrow
hereunder, and this Agreement and the other Loan Documents have been duly
authorized by all requisite corporate action (or in the case of Covered Persons
which are not corporations, other organizational action) of each Covered
Person. No consent, approval or authorization of, or declaration or
filing with, any Governmental Authority, and no consent of any other Person,
is
required in connection with any Covered Person’s execution, delivery or
performance of this Agreement and the other Loan Documents to which it is a
party, except for those already duly obtained.
11.3. Due
Execution. Every Loan Document to which a Covered Person is
a party has been executed on behalf of such Covered Person by a Person duly
authorized to do so.
11.4. Enforceability
of Obligations. Each of the Loan Documents to which a
Covered Person is a party constitutes the legal, valid and binding obligation
of
such Covered Person, enforceable against such Covered Person in accordance
with
its terms, except to the extent that the enforceability thereof against such
Covered Person may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar Laws affecting creditors’ rights generally or by equitable
principles of general application.
11.5. Burdensome
Obligations. No Covered Person is a party to or bound by any
Contract or is subject to any provision in the Charter Documents of such Covered
Person which would, if performed by such Covered Person, result in a Default
or
Event of Default either immediately or upon the elapsing of time.
11.6. Legal
Restraints. The execution and performance of any Loan
Document by a Covered Person does not and will not violate or constitute a
default under the Charter Documents of such Covered Person, any Material
Agreement of such Covered Person, or any Material Law, and does not and will
not, except as expressly contemplated or permitted in this Agreement, result
in
any Security Interest being imposed on any of such Covered Person’s
property.
11.7. Labor
Contracts and Disputes. There is no collective bargaining
agreement or other labor contract covering employees of a Covered
Person. To Borrower’s knowledge, no union or other labor organization
is seeking to organize, or to be recognized as, a collective bargaining unit
of
employees of a Covered Person. There is no pending or, to Borrower’s
knowledge, threatened,
37
strike,
work stoppage or other material labor dispute against or affecting any Covered
Person or its employees, which has or could reasonably likely to have a Material
Adverse Effect.
11.8. No
Material Proceedings. There are no Material Proceedings
pending or, to the knowledge of Borrower, threatened.
11.9. Material
Licenses. All Material Licenses have been obtained or exist
for each Covered Person.
11.10. Compliance
with Material Laws. Each Covered Person is in compliance
with all Material Laws. Without limiting the generality of the
foregoing:
11.10.1. General
Compliance with Environmental Laws. The operations of every
Covered Person comply with all applicable Environmental Laws except where the
failure to be in compliance would not reasonably be likely to give rise to
a
Material Adverse Effect.
11.10.2. Proceedings. None
of the operations of any Covered Person are the subject of any judicial or
administrative complaint, order or proceeding alleging the violation of any
applicable Environmental Laws which could reasonably be likely to give rise
to a
Material Adverse Effect.
11.10.3. Investigations
Regarding Hazardous Materials. To Borrower’s knowledge, none
of the operations of any Covered Person are the subject of investigation by
any
Governmental Authority regarding the improper transportation, storage, disposal,
generation or release into the environment of any Hazardous Material, the
results of which have or are reasonably likely to have a Material Adverse Effect
on such Covered Person, or reduce materially the value of the
Collateral.
11.10.4. Notices
and Reports Regarding Hazardous Materials. No notice or
report under any Environmental Law indicating a past or present spill or release
into the environment of any Hazardous Material has been filed within the four
years ending on the Execution Date, or is required to be filed, by any Covered
Person.
11.10.5. Hazardous
Materials on Real Property. No Covered Person has at any
time, and to Borrower’s knowledge, no other Person has at any time during any
Covered Person’s occupancy of such real property, transported, stored, disposed
of, generated or released any Hazardous Material on the surface, below the
surface, or within the boundaries of any real property owned or operated by
such
Covered Person or any improvements thereon in violation of applicable
Law. No property of any Covered Person is subject to a Security
Interest in favor of any Governmental Authority for any liability under any
Environmental Law or damages arising from or costs incurred by such Governmental
Authority in response to a spill or release of Hazardous Material into the
environment.
11.10.6. Environmental
Property Transfer Acts. No environmental property transfer
acts are applicable to the transactions contemplated by this Agreement and
each
Covered Person has provided all notices and obtained all necessary environmental
permit transfers and consents, if any, required in order to consummate the
transactions contemplated by this Agreement, to perfect Administrative Agent’s
Security Interests for the benefit of Lenders and to operate such Covered
Person’s business as presently or proposed to be operated.
38
11.11. Other
Names. Except as disclosed in the Disclosure Schedules or in
writing to the Administrative Agent from time to time with no less than thirty
(30) days prior written notice to Administrative Agent (unless
Administrative Agent agrees in writing to a shorter period) (i) no Covered
Person has used any name other than the full name which identifies such Covered
Person in this Agreement, and (ii) the only trade name or style under which
a Covered Person sells Inventory or creates Accounts, or to which instruments
in
payment of Accounts are made payable, is the name which identifies such Covered
Person in this Agreement.
11.12. Prior
Transactions. Except as described in section 11.12 of the
Disclosure Schedule, Since January 1, 2001, no Covered Person has been a
party to any merger or consolidation, or acquired all or substantially all
of
the assets of any Person, or acquired any of its property outside of the
ordinary course of business.
11.13. Capitalization. Each
Covered Person’s authorized capital stock, partnership interests and membership
interests and issued and outstanding capital stock, partnership interests and
membership interests is as described in section 11.13 of the Disclosure
Schedule; provided, however, Borrower shall update the Disclosure Schedule
with
respect to any newly-created Subsidiary (in each case, without the necessity
of
obtaining Required Lender consent but with obtaining the prior written consent
of the Administrative Agent, and Borrower shall comply with the terms of Section
14.19 hereof); and all issued and outstanding shares, partnership interests
and
membership interests of each Covered Person are validly issued and outstanding,
fully paid and non-assessable, and are owned beneficially and of record by
the
Persons listed.
11.14. Solvency. Each
Borrower is Solvent prior to and after giving effect to, the making of each
Advance and after giving effect to the contribution provisions of Section
16.3.9.
11.15. Projections.
The
projections of Borrower’s financial condition, results of operations, and cash
flow for the period through March 31, 2008, a copy of which have been delivered
to Administrative Agent, represent Borrower’s good faith estimate of Borrower’s
future financial performance for the periods set forth therein. Such
projections have been prepared on the basis of the assumptions set forth therein
reasonably believed by Borrower in good faith to be fair and
reasonable.
11.16. Financial
Statements. The Financial Statements are complete and
correct in all material respects, have been prepared in accordance with GAAP,
and fairly reflect the financial condition, results of operations and cash
flows
of the Persons covered thereby as of the dates and for the periods stated
therein.
11.17. No
Change in Condition. Since the date of the initial Financial
Statements and the Financial Statements delivered to Lenders as required herein,
there has been no change which has or is reasonably likely to have a Material
Adverse Effect.
11.18. No
Defaults. No Covered Person is in breach or violation under
any Material Agreement or any Material Obligation of such Covered
Person. No Default has occurred which is continuing and no Event of
Default has occurred and is continuing.
11.19. Investments. No
Covered Person has any Investments in other Persons except Permitted
Investments.
11.20. Indebtedness. No
Covered Person has any Indebtedness except existing Permitted
Indebtedness.
39
11.21. Indirect
Obligations. No Covered Person has any Indirect Obligations
except existing Permitted Indirect Obligations.
11.22. Encumbrances. None
of the real property purported to be owned by a Covered Person is subject to
any
Encumbrances except Permitted Encumbrances.
11.23. Capital
Leases. No Covered Person has an interest as a lessee under
any Capital Leases other than Capital Leases that are Permitted
Indebtedness.
11.24. Other
Creditor Indebtedness; Intercreditor Documents; Subordinated ndebtedness. There
is no breach or default with respect to the Other Creditor Indebtedness, and
the
Other Creditor Indebtedness has been incurred in accordance with the terms
of
this Agreement. There is no breach or default by or attributable to a
Covered Person of any obligation set forth in any Intercreditor Agreement or
any
Other Creditor Indebtedness Document. There is no breach or default
with respect to the Subordinated Indebtedness, and the Subordinated Indebtedness
has been incurred in accordance with the terms of this
Agreement. There is no breach or default by or attributable to any
holder of the Subordinated Indebtedness under the Subordination
Agreement.
11.25. Tax
Liabilities; Governmental Charges. Each Covered Person has
filed or caused to be filed all tax reports and returns required to be filed
by
it with any Governmental Authority, except where extensions have been properly
obtained. Each Covered Person has paid or made adequate provision for
payment of all Taxes of such Covered Person, except Taxes which are being
diligently contested in good faith by appropriate proceedings and as to which
such Covered Person has established adequate reserves in conformity with
GAAP. No Security Interest for any such Taxes has been filed and no
claims are being asserted with respect to any such Taxes which, if adversely
determined, has or is reasonably likely to have a Material Adverse Effect on
such Covered Person. There are no material unresolved issues
concerning any liability of a Covered Person for any Taxes which, if adversely
determined, has or is reasonably likely to have a Material Adverse Effect on
such Covered Person.
11.26. Pension
Benefit Plans. No Borrower or an ERISA Affiliate maintains,
sponsors, or contributes to any Pension Benefit Plan, or, during the past 5
years, has maintained, sponsored, or contributed to any Pension Benefit
Plan.
11.27. Welfare
Benefit Plans. No Covered Person or ERISA Affiliate of any
Covered Person maintains a Welfare Benefit Plan that has a liability which,
if
enforced or collected, has or is reasonably likely to have a Material Adverse
Effect on any Covered Person. Each Covered Person and each ERISA
Affiliate of any Covered Person has complied in all respects with the applicable
requirements of Section 4980B of the Code pertaining to continuation coverage
as
mandated by COBRA, except any failure that does not have or is reasonably likely
not to have a Material Adverse Effect.
11.28. Retiree
Benefits. No Covered Person or ERISA Affiliate of such
Covered Person has an obligation to provide any Person with any medical, life
insurance, or similar benefit following such Person’s retirement or termination
of employment (or to such Person’s beneficiary subsequent to such Person’s
death) other than (i) such benefits provided to Persons at such Person’s
sole expense and (ii) obligations under COBRA.
40
11.29. Distributions/Redemptions. No
Distribution/Redemptions has been declared, paid or made upon or in respect
of
any capital stock or other securities of Borrower on and after the Execution
Date, except as expressly permitted hereby.
11.30. Real
Property. Section 11.30 of the Disclosure Schedule
contains a correct and complete list of (i) the street addresses and a
general description of all real property owned by each Covered Person, and
(ii) a list of all leases, subleases, and licenses of real property by each
Covered Person, with such Covered Person identified for each as the lessee,
sublessee, licensee, lessor, sublessor, or licensor, as is the case, together
with the street addresses and a general description of the real property
involved and the names and addresses of the other parties to such leases,
subleases, and licenses. Each of such leases, subleases, and licenses
is valid and enforceable in accordance with its terms and is in full force
and
effect, and no default by such Covered Person, or to Borrower’s knowledge, any
other party to any such lease, sublease, or license exists which could
reasonably be likely to have a Material Adverse Effect. To Borrower’s
knowledge no rental payment for any of the properties listed on
section 11.30 of the Disclosure Schedule materially exceeds a fair market
rental rate for such property.
11.31. State
of Collateral and other Property. Each Covered Person has
good and marketable or merchantable title to all real and personal property
purported to be owned by it or reflected in the Financial Statements, except
for
personal property sold or leased in the ordinary course of business after the
date of the Initial Financial Statements as permitted by and in accordance
with
the terms of the Loan Documents. There are no Security Interests on
any of the property purported to be owned by any Covered Person, including
the
Collateral, except Permitted Security Interests. Each item of
Inventory purported to be owned or leased by a Covered Person is in good
operating condition and repair and is suitable for the use to which it is
customarily put by its owner, ordinary wear and tear and damage by acts of
God
excepted. Without limiting the generality of the
foregoing:
11.31.1. Accounts. With
respect to each Account scheduled, listed or referred to in reports submitted
by
any Covered Person to Administrative Agent pursuant to the Loan Documents,
except as disclosed therein: (i) the Account arose from a bona fide
transaction completed in accordance with the terms of any documents pertaining
to such transaction; (ii) the Account is not evidenced by a judgment and
there is no material dispute respecting it; (iii) the amount of the Account
as shown on the applicable Covered Person’s books and records and all invoices
and statements which may be delivered to Administrative Agent with respect
thereto are owing to the applicable Covered Person and are not in any way
contingent; (iv) there are no known set-offs, counterclaims or disputes
existing or asserted with respect to the Account and the applicable Covered
Person has not made any agreement with any Account Debtor for any deduction
therefrom except a discount or allowance allowed by the applicable Covered
Person in the ordinary course of its business for prompt payment; (v) there
are no facts, events or occurrences which in any way impair the validity or
enforcement of the Account or tend to reduce the amount payable thereunder
as
shown on the applicable Covered Person’s books and records and all invoices and
statements delivered to Administrative Agent with respect thereto; (vi) the
Account is assignable; (vii) the Account arose in the ordinary course of
the applicable Covered Person’s business; (viii) to Borrower’s knowledge, the
Account Debtor with respect to the Account has the capacity to contract;
(ix) the services furnished, goods sold and/or goods leased giving rise to
the Account are not subject to any Security Interest except the perfected
Security Interest granted to Administrative Agent for the benefit of Lenders
and
except the Permitted Security Interests; (x) there are no proceedings or
actions which are pending or to Borrower’s knowledge threatened
41
against
the Account Debtor with respect to the Account; and (xi) no payments have
been or will be permitted to be made on the Account except payments promptly
delivered to the Blocked Accounts at the financial institutions as provided
in
this Agreement.
11.31.2. Inventory. With
respect to Inventory of each Borrower: (i) such Inventory
(except for Inventory in transit or in the possession of such Covered Person’s
customers) is located at one or another of the premises listed in
section 11.31.2 of the Disclosure Schedule as being a location of such
Borrower’s Inventory; (ii) the applicable Covered Person has good and
merchantable title to such Inventory or a good and valid leasehold interest
as
lessee to such Inventory, subject to no Security Interest whatsoever except
for
the perfected Security Interest granted to Administrative Agent for the benefit
of Lenders and except for Permitted Security Interests; (iii) such is of
good and merchantable quality, free from any material defects; (iv) such
Inventory is not subject to any licensing, patent, royalty, trademark, trade
name or copyright agreements with any third parties; and (v) the completion
of manufacture and sale, lease, or other disposition of such Inventory by
Administrative Agent or Lenders following an Event of Default shall not require
the consent of any Person and shall not constitute a breach or default under
any
contract or agreement to which any Covered Person is a party or to which the
Inventory is subject.
11.31.3. Equipment. With
respect to each Covered Person’s equipment: (i) such Covered Person has
good and marketable title thereto; (ii) none of such equipment is subject
to any Security Interests except for the perfected Security Interest granted
to
Administrative Agent for the benefit of Lenders pursuant hereto and except
for
Permitted Security Interests; (iii) such equipment (except for equipment in
transit) is located at one or another of the premises listed in
section 11.31.2 of the Disclosure Schedule as a location of such Covered
Person’s equipment; and (iv) such equipment is of good and merchantable
quality, free from any material defects, ordinary wear and tear and damage
by
acts of God excepted.
11.31.4. Intellectual
Property. With respect to the Intellectual Property of the
Covered Persons: (i) section 11.31.4 of the Disclosure Schedule
contains a complete and correct list of all of each Covered Person’s
Intellectual Property, (ii) the Covered Person listed on the Disclosure
Schedule as the owner thereof owns all right, title and interest in, under
and
to such Intellectual Property, subject to no licenses or any interest therein
or
other agreements relating thereto, except for the Intellectual Property
Assignments; (iii) none of such Intellectual Property is subject to any
pending or, to such Covered Person’s knowledge, threatened challenge;
(iv) to the knowledge of such Covered Person, such Covered Person has not
committed any patent, trademark, trade name, service ▇▇▇▇ or copyright
infringement, and the present conduct of such Covered Person’s
business does not infringe any patents, trademarks, trade name rights, service
marks, copyrights, publication rights, trade secrets or other proprietary rights
of any Person; and (v) there are no claims or demands of any Person
pertaining to, or any proceedings which are pending or, to the knowledge of
such
Covered Person, threatened, which challenge such Covered Person’s rights in
respect of any proprietary or confidential information or trade secrets used
in
the conduct of such Covered Person’s business.
11.31.5. Documents,
Instruments and Chattel Paper. All documents, instruments
and chattel paper describing, evidencing or constituting Collateral, and all
signatures and endorsements thereon by a Covered Person are complete, valid,
and
genuine as to Borrower and, to Borrower’s knowledge, as to third parties, and
all goods evidenced by
42
such
documents, instruments and chattel paper are owned by a Covered Person free
and
clear of all Security Interests other than Permitted Security
Interests.
11.32. Chief
Place of Business; Locations of Collateral. As of the
Execution Date,
11.32.1. the
chief executive office and principal place of business of each Covered Person
is
identified in section 11.32.1 of the Disclosure Schedule and the location
of the books and records of each Covered Person, and all of such Covered
Person’s chattel paper and all records of Accounts, are located only at the
places listed and so identified in section 11.32.1 of the Disclosure
Schedule;
11.32.2. the
States in which any Covered Person is qualified to conduct its business and
other foreign jurisdictions if any in which any Covered Person conducts its
business are listed and so identified in section 11.32.2 of the Disclosure
Schedule; and
11.32.3. all
of the Collateral is located within one or more of the locations listed in
section 11.31.2 of the Disclosure Schedule, provided, however, if any
Collateral will remain outside of any location listed on section 11.31.2 of
the Disclosure schedule for longer than 30 consecutive days, Borrower
shall, prior to the expiration of such 30-day period, give written notice to
Administrative Agent of such event as required under
Section 13.23.
11.33.
Warranties and
Representations-Inventory. For each item of Inventory,
Borrower represents and warrants to Administrative Agent and each of the Lenders
that at all times: (a) all Inventory, except as otherwise
provided in Section 11.32.3, will be kept only at the locations indicated on
section 11.31.2 of the Disclosure Schedule; (b) Borrower now keeps and will
keep correct and accurate records itemizing and describing the kind, type,
quality and quantity of Inventory, Borrower’s cost therefor and the selling
price thereof and/or the rental/lease rate thereof, the daily withdrawals
therefrom and the additions thereto; (c) Inventory not on rent are not and
will not be stored with a bailee, repairman, warehouseman or similar party
without Administrative Agent’s prior written consent, and if Administrative
Agent consents, Borrower will, concurrently with delivery to such party, cause
any such party to issue and deliver to Administrative Agent, in form acceptable
to Administrative Agent, warehouse receipts, in Administrative Agent’s name
evidencing the storage of such Inventory, and waivers of warehouseman’s liens in
favor of Administrative Agent; (d) Borrower will timely pay or cause to be
timely paid all taxes, rents, business taxes, and other charges relating to
the
premises where the Inventory is located which Borrower is contractually or
legally obligated to pay; and (e) a landlord consent of the type described
in
Section 8.1, satisfactory to Administrative Agent, has been obtained for its
headquarters location, and each location in which Borrower keeps Inventory
with
a value in excess of $50,000 or any of its material books and
records.
11.34.
No Negative Pledges. No Covered
Person is a party to or bound by any Contract which prohibits the creation
or
existence of any Security Interest upon or assignment or conveyance of any
of
the Collateral or any other asset (regardless of type or nature) of any Covered
Person, except as expressly set forth on Section 11.34 of the Disclosure
Schedule.
11.35.
Security Documents.
11.35.1. Security
Agreements. Each Security Agreement is effective to grant to
Administrative Agent for the pro-rata benefit of Lenders an enforceable Security
Interest in the Personal Property Collateral described therein. Upon
appropriate filing (as to all Personal Property Collateral in which
a Security Interest may be perfected under the
43
applicable
state’s UCC by filing a financing statement or statements) or Administrative
Agent’s taking possession (as to items of the Personal Property Collateral of
which a secured party must take possession in order to perfect a Security
Interest under the applicable state’s UCC), Administrative Agent will have a
fully perfected Security Interest in the Personal Property Collateral described
in each Security Agreement, subject only to Permitted Security Interests
affecting such Personal Property Collateral.
11.35.2. Collateral
Assignments.
11.35.2.1. Control
Agreements. The control agreements are effective to grant to
Administrative Agent for the benefit of Lenders an enforceable first priority
Security Interest in the Blocked Accounts and the other accounts specified
therein.
11.35.2.2. Intellectual
Property Assignments. Each Intellectual Property Assignment
is effective to grant to Administrative Agent for the benefit of Lenders an
enforceable first priority Security Interest in all the Intellectual Property
described therein, subject only to Permitted Security Interests affecting such
Intellectual Property.
11.35.2.3. Stock
Pledge Agreement. Each Stock Pledge Agreement is effective
to grant to Administrative Agent for the benefit of Lenders an enforceable
first
priority Security Interest in all the stock and other securities described
therein.
11.36.
S Corporation. There is no election
for any Covered Person in effect under Section 1362(a) of the Code to be treated
as an S Corporation as defined in Section 1361(a) of the Code.
11.37.
Subsidiaries and Affiliates. Borrower
has no Subsidiaries and has no Affiliates (excluding portfolio companies of
the
Borrowers’ Major Shareholders, and individual directors and officers), except
those Persons listed in section 11.37 of the Disclosure Schedule; provided,
however, Borrower shall update the Disclosure Schedule with respect to a new
Subsidiary created any newly-created Subsidiary (in each case, without the
necessity of obtaining Required Lender consent but with obtaining the prior
written consent of the Administrative Agent) and Borrower shall comply with
the
terms of Section 14.19 hereof. MTM Technologies, Inc. has no
Subsidiaries that are not Wholly-Owned Subsidiaries. As of the
Effective Date, except as set forth in section 11.37 of the Disclosure Schedule
and except for employee or director stock option programs, employee stock
purchase plans, benefit plans, and restricted stock programs, there are no
pre-emptive or other outstanding rights, options, warrants, conversion rights
or
other similar agreements or understandings for the purchase or acquisition
of
any Capital Securities of any Borrower or other Covered Person.
11.38. Bank
Accounts and Lockboxes. No Covered Person has any lockbox
other than the Lockboxes allowed or required hereunder. No Covered
Person has any bank accounts other than the bank accounts allowed or required
hereunder. All bank accounts maintained by any Covered Person with
any bank or other financial institution are described in section 11.38 of
the Disclosure Schedule, as well as such other bank accounts used solely for
employee benefit purposes which such accounts may be opened by Borrower from
time to time.
11.39. Margin
Stock. No Covered Person is engaged or will engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U), and no part of the proceeds of any Advance
44
will
be
used to purchase or carry any such margin stock or to extend credit to others
for the purpose of purchasing or carrying any such margin stock or for any
purpose which violates, or which would be inconsistent with, the provisions
of
Regulation U. None of the transactions contemplated by any of the
Loan Documents will violate Regulations T, U or X of the FRB.
11.40.
Securities Matters. No proceeds of any
Advance will be used to acquire any security in any transaction which is subject
to Sections 13 and 14 of the Securities Exchange Act of 1934.
11.41.
Investment Company Act, Etc. No Covered
Person is an investment company registered or required to be
registered under the Investment Company Act of 1940, or a company controlled
(within the meaning of such Investment Company Act) by such an investment
company or an affiliated person of, or promoter or principal underwriter for,
an
investment company, as such terms are defined in the Investment Company Act
of
1940. No Covered Person is subject to regulation under the Public
Utility Holding Company Act of 2005, the Federal Power Act, the Interstate
Commerce Act or any other Law limiting or regulating its ability to incur
Indebtedness for money borrowed.
11.42.
No Material Misstatements or
Omissions. Neither the Loan Documents, any of the Financial
Statements nor any statement, list, certificate or other information furnished
or to be furnished by Borrower or any other Covered Person to Administrative
Agent or Lenders in connection with the Loan Documents or any of the
transactions contemplated thereby contains any untrue statement of a material
fact, or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances in which it was made, not
misleading. To Borrower’s knowledge, Borrower has disclosed to
Administrative Agent and Lenders everything regarding the business, operations,
property, financial condition, or business prospects of itself and every Covered
Person that has or is reasonably likely to have a Material Adverse Effect on
any
Covered Person.
11.43.
Filings. Since May 2004, All registration
statements, reports, proxy statements and other documents, if any, required
to
be filed by Borrower with the Securities and Exchange Commission pursuant to
the
Securities Act of 1933, and the Securities Exchange Act of 1934, have been
filed, and such filings are complete and accurate in all material respects
and
contain no untrue statements of material fact or omit to state any material
facts required to be stated therein or necessary in order to make the statements
therein not misleading.
11.44. Broker’s
Fees. No broker or finder is entitled to compensation for
services rendered with respect to the transactions contemplated by this
Agreement.
11.45. Eligibility
of Collateral. Each Account which Borrower, expressly or by
implication, requests Administrative Agent to classify as an Eligible Account
will, as of the time when such request is made, conform in all respects to
the
requirements of such classification set forth in the definition of Eligible
Accounts herein.
11.46. Loans
to
Shareholders. No loans or advances have been made to any
shareholder of any Borrower by any Borrower which are outstanding, nor has
any
shareholder of any Borrower incurred any Indebtedness to any Borrower which
are
outstanding.
11.47. No
Improper
Payment or Influence. Neither Borrower nor any other Covered
Person has directly or indirectly paid or delivered any fee, commission or
other
money or property, or engaged in any lobbying, influencing or other behavior,
however characterized, to any agent, government official, regulatory body,
governmental agency or other Person, in the United States or any other country,
related to the business or operations of the Borrower or any other Covered
45
Person,
that the Borrower and each other Covered Person knows or has reason to believe
to have been illegal under any federal, state, or local law of the United States
or any other country having jurisdiction, or to have been for the purpose of,
and to have had the effect of, inducing or encouraging the breach by the
recipient thereof of any legal duties, whether as an employee or otherwise
to
another Person.
11.48. Foreign
Enemies and Regulations. The use of the proceeds of the
Loans as contemplated by this Agreement will not violate (A) any regulations
promulgated or administered by the Office of Foreign Assets Control, United
States Department of the Treasury, including without limitation, the Foreign
Assets Control Regulations, the Transaction Control Regulations, the Cuban
Assets Control Regulations, the Foreign Funds Control Regulations, the Iranian
Assets Control Regulations, the Nicaraguan Trade Control Regulations, the South
African Transaction Regulations, the Iranian Transactions Regulations, the
Iraqi
Sanctions Regulations, the Soviet Gold Coin Regulations, the Panamanian
Transaction Regulations or the Libyan Sanctions Regulations of the United States
Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as amended, (B) the
Trading with the Enemy Act, as amended, (C) Executive Orders 8389, 9095, 9193,
12543 (Libya), 12544 (Libya), 12722 or 12724 (Iraq), 12775 or 12779 (Haiti),
or
12959 (Iran), as amended, of the President of the United States or (D) any
rule,
regulation or executive order issued or promulgated pursuant to the laws or
regulations described in the foregoing clauses (A) -(C).
12. Modification
and Survival of Representations. Borrower may at any time
after the initial Advances are made propose to Lenders in writing to modify
the
Representations and Warranties in Section 11, and any other representation
or warranty made in any certificate, report, opinion or other document delivered
by Borrower pursuant to the Loan Documents. If the proposed
modifications are satisfactory to the Administrative Agent as evidenced by
its
written assent thereto, then such representations and warranties shall be deemed
and treated as so modified, but only as of the date of Borrower’s written
modification proposal. If such proposed modifications are not
satisfactory to the Administrative Agent, then such proposed modifications
shall
not be deemed or treated as modifying such Representations and
Warranties. All such representations and warranties, as made or
deemed made as of a particular time, shall survive execution of each of the
Loan
Documents and the making of every Advance, and may be relied upon by
Administrative Agent and Lenders as being true and correct as of the date when
made or deemed made until all of the Loan Obligations are fully and indefeasibly
paid in cash, no Letters of Credit are outstanding and the Letter of Credit
Exposure is irreversibly zero, all of the Commitments have been terminated,
and
the Administrative Agent and the Lenders have no other commitment to extend
credit or make advances to or for the account of Borrower.
13. Affirmative
Covenants. Each Borrower covenants and agrees that, while
any of the Commitments remains in effect and until all of the Loan Obligations
are fully and indefeasibly paid in cash, and until no Letters of Credit are
outstanding, the Letter of Credit Exposure is irreversibly zero, all of the
Commitments have been terminated, and the Administrative Agent and the Lenders
have no other commitment to extend credit or make advances to or for the account
of Borrower each Borrower shall do, and each Borrower shall cause each other
Borrower and each other Covered Person to do, the following:
13.1. Use
of Proceeds. The proceeds of Swingline Advances, Interim
Floorplan Loan Advances, the initial and subsequent Floorplan Loan Advances,
and
the initial and subsequent Revolving Loan Advances, shall be used to fund
working capital, purchase Inventory, Permitted Acquisitions, and general
corporate (or limited liability partnership or limited liability company)
purposes.
46
13.2. Corporate
Existence. Each Covered Person shall maintain its existence
in good standing and shall maintain in good standing its right to transact
business in those states in which it is now or hereafter doing business, except
where the failure to so qualify will not have and will not be reasonably likely
to have a Material Adverse Effect on any Covered Person. Each Covered
Person shall obtain and maintain all Material Licenses for such Covered
Person.
13.3. Maintenance
of Property and Leases. Each Covered Person shall maintain
in good condition and working order (ordinary wear and tear and damage by acts
of God excepted), and repair and replace as required, all buildings, equipment,
machinery, fixtures, Inventory, and other real and personal property owned
or
leased by such Covered Person whose useful economic life has not elapsed and
which is necessary for the ordinary conduct of the business of such Covered
Person, except where failure to do so does not have or reasonably will likely
not have a Material Adverse Effect. Each Covered Person shall
maintain in good standing and free of defaults all of its leases of buildings,
equipment, machinery, fixtures, Inventory, and other real and personal property
whose useful economic life has not elapsed and which is necessary for the
ordinary conduct of the business of such Covered Person, except where the
failure to be in good standing or free of default would not reasonably be likely
to give rise to a Material Adverse Effect. No Covered Person shall
permit any of its equipment, Inventory, or other property to become a fixture
to
real property or an accession to other personal property unless Administrative
Agent has a valid, perfected and first priority Security Interest for the
benefit of Lenders in such real or personal property. No Covered
Person shall, without Administrative Agent’s prior written consent, alter or
remove any identifying symbol or number on its equipment.
13.4. Inventory. Each
Covered Person shall keep its Inventory and Equipment, taken as a whole, in
good
and merchantable condition (subject to ordinary wear and tear) at its own
expense and shall hold such Inventory and Equipment for lease, or to be
furnished in connection with the rendition of services, in the ordinary course
of such Covered Person’s business, on terms which do not include consignment or
similar terms.
13.5. Insurance. Each
Covered Person shall at all times keep insured or cause to be kept insured,
in
insurance companies having a rating of at least “A-” by Best’s Rating Service,
all property owned by it of a character usually insured by others carrying
on
businesses similar to that of such Covered Person in such manner and to such
extent and covering such risks as such properties are usually
insured. At all times, all Inventory shall be insured for full
replacement value. Each Covered Person shall carry, however, business
interruption insurance in such amounts as are satisfactory to Administrative
Agent, with all such policies showing Administrative Agent as loss payee for
the
benefit of Lenders. Each Covered Person shall timely pay all premiums
for such insurance. Each Covered Person shall at all times carry
insurance, in insurance companies having a rating of at least “A-” by Best’s
Rating Service, against liability on account of damage to persons or property
(including product liability insurance and insurance required under all Laws
pertaining to workers’ compensation) and covering all other liabilities common
to such Covered Person’s business, in such manner and to such extent as such
coverage is usually carried by others conducting businesses similar to that
of
such Covered Person. At all times, Borrower shall maintain
replacement value insurance for all Collateral on any ocean, waterway,
interstate, highway, or other public way. All policies of liability
insurance maintained hereunder shall name Administrative Agent as an additional
insured for the benefit of Lenders; all policies of property insurance
maintained hereunder with respect to the Collateral shall reflect Administrative
Agent’s interest therein as a loss payee on a form acceptable to Administrative
Agent for the benefit of Lenders. Administrative Agent is authorized,
but not obligated, as the attorney-in-fact for Borrower, and every other Covered
Person and for the benefit of Lenders, (i) prior to the occurrence of an
Event of Default, with Borrower’s consent (which consent shall
47
not
be
unreasonably withheld), and upon the occurrence of an Event of Default, without
Borrower’s or any other Covered Person’s consent, to adjust and compromise
proceeds payable under such policies of insurance, (ii) to collect, receive
and give receipts for such proceeds in the name of Borrower or any other Covered
Person, Administrative Agent and Lenders, and (iii) to endorse Borrower or
any other Covered Person’s name upon any instrument in payment
thereof. Such power granted to Administrative Agent shall be deemed
coupled with an interest and shall be irrevocable (until all of the Loan
Obligations are fully and indefeasibly paid in cash and the Commitments have
terminated, no Letters of Credit are outstanding and the Letter of Credit
Exposure is irreversibly zero, and the Administrative Agent and the Lenders
have
no other commitment to extend credit or make advances to or for the account
of
Borrower) as set forth in Section 9. All policies of insurance
maintained hereunder shall contain a clause providing that such policies may
not
be canceled, reduced in coverage or otherwise modified without 30 days’ prior
written notice to Administrative Agent. Borrower shall or shall cause
any other Covered Person upon request of Administrative Agent at any time to
furnish to Administrative Agent updated evidence of insurance (in the form
required as a condition to Administrative Agent’s lending hereunder) for such
insurance.
13.6. Payment
of Taxes and Other Obligations. Each Covered Person shall
promptly pay and discharge or cause to be paid and discharged, as and when
due,
any and all income taxes, federal or otherwise, lawfully assessed and imposed
upon it, and any and all lawful taxes, rates, levies, and assessments whatsoever
upon its properties and every part thereof, or upon the income or profits
therefrom and all claims of materialmen, mechanics, carriers, warehousemen,
landlords and other like Persons for labor, materials, supplies, storage or
other items or services which if unpaid might be or become a Security Interest
or charge upon any of its property; provided, however, that a Covered Person
may
diligently contest in good faith by appropriate proceedings the validity of
any
such taxes, rates, levies, or assessments and claims, provided such Covered
Person has established adequate reserves therefor in conformity with GAAP on
the
books of such Covered Person, and no Security Interest, other than a Permitted
Security Interest, results from such non-payment.
13.7. Compliance
With Laws. Each Covered Person shall comply with all
Material Laws. Without limiting the generality of the
foregoing:
13.7.1. Environmental
Laws. Each Covered Person shall comply and shall use
commercially reasonable efforts to ensure compliance by all of its tenants,
subtenants and other occupants, if any, with all Environmental Laws, any of
which if not so complied with will or is reasonably likely to have a Material
Adverse Effect on any Covered Person.
13.7.2. Pension
Benefit Plans. Each Covered Person and each ERISA Affiliate
of such Covered Person shall at all times make prompt payments or contributions
to meet the minimum funding standards under ERISA and the Code with respect
to
any Pension Benefit Plan maintained by such Covered Person or such ERISA
Affiliate, and shall comply with all reporting and disclosure requirements
and
all provisions of the Code and ERISA applicable to any Pension Benefit Plan
maintained by such Covered Person or such ERISA Affiliate except to the extent
that any such failure could not reasonably be expected to have a Material
Adverse Effect.
13.8. Discovery
and Clean-Up of Hazardous Material.
13.8.1. In
General. Upon any Covered Person receiving notice of any
violation of Environmental Laws or any similar notice described in
Section 13.10.4, or upon any
48
Covered
Person otherwise discovering Hazardous Material on any property owned or leased
by such Covered Person which is in violation of, or which would result in
liability under, any Environmental Law, the violation of which or which
liability will or is reasonably likely to have a Material Adverse Effect on
any
Covered Person, Borrower shall: (i) promptly take such acts as may be
necessary to prevent danger or harm to the property or any Person therein as
a
result of such Hazardous Material; (ii) at the request of Administrative
Agent, and at Borrower’s sole cost and expense, obtain and deliver to
Administrative Agent promptly, but in no event later than 90 days after
such request, a then currently dated environmental assessment of the property
certified to Administrative Agent and any future holder of the Loan Obligations,
a proposed plan for responding to any environmental problems described in such
assessment, and an estimate of the costs thereof; and (iii) take all
necessary steps to initiate and expeditiously complete all removal, remedial,
response, corrective and other action to eliminate any such environmental
problems, and keep Administrative Agent informed of such actions and the results
thereof.
13.9.
Termination of Pension Benefit
Plan. No Covered Person or ERISA Affiliate of such Covered
Person shall terminate or amend any Pension Benefit Plan maintained by such
Covered Person or such ERISA Affiliate if such termination or amendment would
result in any liability to such Covered Person or such ERISA Affiliate under
ERISA or any increase in current liability for the plan year for which such
Covered Person or such ERISA Affiliate is required to provide security to such
Pension Benefit Plan under the Code except to the extent any such termination
or
amendment could not reasonably be expected to have a Material Adverse
Effect.
13.10.
Notice to Administrative Agent and Lenders of Material
Events. Borrower shall, promptly upon any Responsible
Officer of Borrower obtaining knowledge or notice thereof, give notice to
Administrative Agent and each Lender of (i) any breach of any of the
covenants in Sections 13, 14, or 15; (ii) any Default or Event of
Default; (iii) the commencement of any Material Proceeding; and
(iv) any loss of or damage to any assets of a Covered Person or the
commencement of any proceeding for the condemnation or other taking of any
of
the assets of a Covered Person, if such loss, damage or proceeding has or is
reasonably likely to have a Material Adverse Effect on such Covered Person,
whether or not Insurance Proceeds are likely to be payable as a consequence
of
such loss, damage or proceeding. In addition,
13.10.1. Borrower
shall furnish to Administrative Agent from time to time all information which
Administrative Agent reasonably requests with respect to the status of any
Material Proceeding.
13.10.2. Borrower
shall furnish to Administrative Agent from time to time all information which
Administrative Agent reasonably requests with respect to any Pension Benefit
Plan established by a Covered Person or an ERISA Affiliate of any Covered
Person.
13.10.3. Borrower
shall deliver notice to Administrative Agent of the establishment of any Pension
Benefit Plan by a Covered Person or an ERISA Affiliate of such Covered
Person.
13.10.4. Borrower
shall promptly inform Administrative Agent of its receipt of, and deliver to
Administrative Agent a copy of, any (i) notice that any violation of any
Environmental Law or Employment Law may have been committed or is about to
be
committed by any Covered Person that has or which could reasonably be likely
to
have a Material Adverse Effect, (ii) notice that any administrative or
judicial complaint or order
49
has
been
filed or is about to be filed against any Covered Person alleging violations
of
any Environmental Law or Employment Law or requiring such Covered Person to
take
any action in connection with the release of any Hazardous Material into the
environment, which has or could reasonably be likely to have a Material Adverse
Effect, (iii) notice from a Governmental Authority or private party
alleging that a Covered Person may be liable or responsible for costs associated
with a response to or cleanup of a release of Hazardous Material into the
environment or any damages caused thereby, which has or could reasonably be
likely to have a Material Adverse Effect, (iv) notice that a Covered Person
is subject to federal, state or local investigation regarding the improper
transportation, storage, disposal, generation or release into the environment
of
any Hazardous Material which has or could reasonably be expected to have a
Material Adverse Effect, or (v) notice that any properties or assets of a
Covered Person are subject to a Security Interest in favor of any Governmental
Authority for any liability under any Environmental Law or damages arising
from
or costs incurred by such Governmental Authority in response to a release of
Hazardous Material into the environment.
13.10.5. Borrower
shall deliver to Administrative Agent notice of each of the following events
promptly after they occur: (i) the failure of any Covered Person or
ERISA Affiliate of such Covered Person to make any required installment or
any
other required payment to any Pension Benefit Plan in sufficient amount to
comply with ERISA and the Code on or before the due date for such installment
or
payment and any applicable grace period; (ii) the occurrence of any
Reportable Event, or a prohibited transaction or accumulated funding deficiency
(as those terms are defined in ERISA), with respect to any Pension Benefit
Plan
maintained or contributed to by a Covered Person or an ERISA Affiliate of such
Covered Person; (iii) receipt by a Covered Person or ERISA Affiliate of such
Covered Person of any notice from a Multi-employer Plan regarding the imposition
of withdrawal liability; and (iv) receipt by a Covered Person or ERISA
Affiliate of such Covered Person of any notice of the institution, or a Covered
Person’s expectancy of the institution, of any proceeding or receipt by such
Covered Person or such ERISA Affiliate of any notice of the taking, or such
Covered Person’s or such ERISA Affiliate’s expectancy of the taking, of any
other action which may be reasonably expected to result in the termination
of
any Pension Benefit Plan maintained or contributed to by such Covered Person
or
such ERISA Affiliate, or the withdrawal or partial withdrawal by a Covered
Person or ERISA Affiliate of such Covered Person from any Pension Benefit Plan,
and the filing or receipt by a Covered Person or ERISA Affiliate of such Covered
Person of any such notice and filing or receipt of all subsequent reports or
notices under ERISA with or from the IRS, the PBGC, or the DOL relating to
the
same; and, in addition to such notice, deliver to Administrative Agent a
certificate of a Responsible Officer of Borrower, setting forth details as
to
such events and the action that the affected Covered Person or ERISA Affiliate
of such Covered Person proposes to take with respect thereto. For
purposes of this Section, each Covered Person and any ERISA Affiliate of such
Covered Person shall be deemed to know all facts known by the administrator
of
any Plan of which such Covered Person or such ERISA Affiliate is the plan
sponsor.
13.10.6. Borrower
shall promptly deliver to Administrative Agent notice of any default or event
of
default, or the occurrence of any event which would with the passage of time,
giving of notice or otherwise, constitute a default or event of default with
respect to any of the Permitted Indebtedness in excess of $250,000.
50
13.10.7. Borrower
shall promptly deliver notice to Administrative Agent of the assertion by the
holder of any Capital Securities in a Covered Person or the Subordinated
Indebtedness or any other Indebtedness of a Covered Person in the outstanding
principal amount in the aggregate in excess of $500,000 that a default exists
with respect thereto or that such Covered Person is not in compliance with
the
terms thereof, or of the threat or commencement by such holder of any
enforcement action because of such asserted default or
noncompliance.
13.10.8. Borrower
shall, promptly after becoming aware thereof, deliver notice to Administrative
Agent of any pending or threatened strike, work stoppage, or other material
labor dispute affecting a Covered Person which could reasonably be likely to
have a Material Adverse Effect.
13.10.9. Borrower
shall promptly deliver notice to Administrative Agent of any change in the
name,
state of incorporation or organization or form of any Covered Person, or the
trade names or styles under which a Covered Person will sell Inventory or create
Accounts, or to which instruments in payment of Accounts may be made payable,
at
least 30 days prior to such change unless Administrative Agent agrees in writing
to a shorter period.
13.10.10. Borrower
shall, promptly after becoming aware thereof, deliver notice to Administrative
Agent of any event that has or is reasonably likely to have a Material Adverse
Effect on any Covered Person.
13.10.11. Borrower
shall, promptly after becoming aware thereof, deliver notice to Administrative
Agent of an actual, alleged, or potential violation of any Material Law
applicable to a Covered Person or the property of a Covered Person.
13.10.12. Borrower
shall notify Administrative Agent promptly in writing of any fact or condition
of which Borrower is aware which adversely affects the value of the Collateral
taken as a whole, including disclosing the amount of such loss or depreciation
and disclosing any adverse fact or condition or the occurrence of any event
which causes loss or depreciation in the value of the Collateral, of more than
$250,000 taken as a whole. Borrower shall provide such additional
information to Administrative Agent regarding the amount of any loss or
depreciation in value of the Collateral as Administrative Agent may request
from
time to time.
13.10.13. Borrower
shall keep on file with Administrative Agent at all times an appropriate
instrument naming each Borrowing Officer.
13.11.
Maintenance of Security Interests of Security
Documents.
13.11.1. Preservation
and
Perfection of Security Interests. Borrower shall promptly,
upon the reasonable request of Administrative Agent and at Borrower’s expense,
execute, acknowledge and deliver, or cause the execution, acknowledgment and
delivery of, and thereafter file or record in the appropriate governmental
office, any document or instrument supplementing or confirming the Security
Documents or otherwise reasonably deemed necessary by Administrative Agent
to
create, preserve or perfect any Security Interest purported to be created by
the
Security Documents or to fully consummate the transactions contemplated by
the
Loan Documents. The foregoing actions by Borrower shall include,
without limitation, (i) filing financing or continuation statements, and
amendments thereof, and executing such mortgages, deeds of trust, assignments
or
51
security
agreements, in form and substance satisfactory to Administrative Agent;
(ii) delivering to Administrative Agent the original certificates of title
for motor vehicles, or applications therefor duly executed, with Administrative
Agent’s Security Interest for the benefit of Lenders properly shown thereon;
(iii) delivering to Administrative Agent the originals of all instruments,
documents and chattel paper, and all other Collateral of which Administrative
Agent determines it should have physical possession in order to perfect and
protect Administrative Agent’s Security Interest for the benefit of Lenders
therein, duly endorsed or assigned to Administrative Agent without restriction;
(iv) delivering to Administrative Agent warehouse receipts covering any
portion of the Collateral located in warehouses and for which warehouse receipts
are issued; (v) transferring Inventory to warehouses designated by
Administrative Agent; (vi) delivering to Administrative Agent all letters
of credit on which Borrower is named beneficiary; (vii) placing a durable
notice of the existence of Administrative Agent’s Security Interest for the
benefit of Lenders, acceptable to Administrative Agent, upon such items of
the
Collateral as are designated by Administrative Agent; and (viii) placing a
notice of the existence of Administrative Agent’s Security Interest for the
benefit of Lenders, acceptable to Administrative Agent, upon those writings
evidencing the Collateral and the books and records of Borrower pertaining
to
the Collateral, as designated by Administrative Agent.
13.11.2. Collateral
Held by Warehouseman, Bailee, etc. If any Collateral with a
value greater than $50,000 or if any of its material books and records are
at
any time in the possession or control of a warehouseman, bailee or any of
Borrower’s agents or processors (not including any lessee or other person to
whom Inventory is leased or rented in the ordinary course of such Covered
Person’s business) , or with respect to any national or regional headquarters
location, then Borrower shall notify Administrative Agent thereof and shall
notify such Person of Administrative Agent’s Security Interest for the benefit
of Lenders in such Collateral and, upon Administrative Agent’s request, instruct
such Person to hold all such Collateral for Administrative Agent’s account
subject to Administrative Agent’s instructions. If at any time any
Collateral with a value greater than $50,000 or any of its material books and
records are located on any premises that are not owned by Borrower (not
including any lessee or other person to whom Inventory is leased or rented
in
the ordinary course of such Covered Person’s business, or other locations where
Borrower is not obligated to pay rent for up to 30 consecutive days), or
with respect to any national or regional headquarters location, then Borrower
shall obtain or cause to be obtained written waivers or consents, in form and
substance satisfactory to Administrative Agent, of all present and future
Security Interests to which the owner or lessor or any mortgagee of such
premises may be entitled to assert against the Collateral.
13.11.3. Compliance
With Terms of Security Documents. Each Covered Person shall
comply with all of the terms, conditions and covenants in the Security Documents
to which such Covered Person is a party.
13.12.
Accounting System. Each Covered
Person shall maintain a system of accounting established and administered in
accordance with GAAP. Without limiting the generality of the
foregoing:
13.12.1. Account
Records. Each Covered Person shall maintain a record of
Accounts at its principal place of business that itemizes each Account of such
Covered Person and describe the names and addresses of the Account Debtors
on
such Accounts, all relevant
52
invoice
numbers, invoice dates, and shipping dates, and the due dates, collection
histories, and aging of such Accounts.
13.12.2. Inventory
Records. Each Covered Person shall maintain an Inventory
system satisfactory to Administrative Agent.
13.12.3. Tracing
of
Proceeds. Each Borrower shall maintain detailed and accurate
accounting and records of proceeds of the Loans and transfers of proceeds of
the
Loans (i) received by it from the Lenders or Administrative Agent,
(ii) transferred from it to any other Covered Person, and
(iii) received by it from another Borrower. Each Borrower
acknowledges that its ability to obtain the Loans hereunder is made possible
by
the fact that the Borrowers are co-borrowers under this Agreement and the other
Loan Documents, and are engaged in a common enterprise. Each Borrower
agrees that (i) the business operations of each Borrower and each other
Covered Person are interrelated and complement one another, and such entities
have a common business purpose and common management, and (ii) the proceeds
of Advances hereunder will benefit each Borrower, severally and jointly,
regardless of which Borrower requests or receives part or all of any
Advance. Not in any way in limitation of any other provisions set
forth herein, such books and records may be reviewed and copied by the
Administrative Agent at Borrower’s expense at reasonable intervals and upon
reasonable notice given by the Administrative Agent to Borrower.
13.13. Financial
Statements. Borrower shall deliver to Administrative
Agent:
13.13.1. Annual
Financial Statements. Within 90 days after the close of each
fiscal year of Borrower, year-end audited consolidated financial statements
of
each Borrower and its Subsidiaries, containing a balance sheet, income
statement, statement of cash flows and a report by an independent certified
public accounting firm selected by Borrower and satisfactory to Administrative
Agent (and the Administrative Agent and Lenders agree that ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
& ▇▇▇▇▇▇▇ is satisfactory), certified by such public accounting firm without
qualification, including without adverse reference to going concern value and
without reference to material inadequacy in any respect of the Borrower’s or any
other Covered Person’s internal controls, together with all related tax returns
and filings (except for tax returns for which the required filing date has
been
extended, in which case Borrower shall deliver such tax returns to
Administrative Agent simultaneously with the filing thereof in accordance with
such extension) and accompanied by a Compliance Certificate of
Borrower.
13.13.2. Monthly
Financial Statements. Within 30 days after the end of
each fiscal month of Borrower management-prepared unaudited financial statements
of each Borrower and every Subsidiary of a Borrower for the fiscal quarters
not
covered by the latest year-end financial statements, in each case containing
a
balance sheet, income statement, statement of cash flows, and unaudited
consolidated financial statements of Borrower and its Subsidiaries, in each
case
accompanied by (i) for the third month of each fiscal quarter, a statement
comparing such financial statements with budgeted projections for such fiscal
quarter and for the elapsed portion of the fiscal year of Borrower as contained
in the annual budget prepared for such fiscal year, and (ii) a Compliance
Certificate (for each month, only the monthly financial covenants in Section
15,
and for the third month of each fiscal quarter, all financial covenants in
Section 15).
Each
Compliance Certificate shall be in the form of Exhibit 13.13, shall contain
detailed calculations of the financial measurements referred to in
Section 15 for the relevant periods, and shall
53
contain
statements by the signing authorized officer on behalf of Borrower (either
the
president, any vice president or the chief financial officer) to the effect
that, except as explained in reasonable detail in such Compliance Certificate,
(i) the attached Financial Statements are complete and correct in all
material respects (subject, in the case of Financial Statements other than
annual, to normal year-end audit adjustments and with respect to Financial
Statements other than annual, without footnote disclosures) and have been
prepared in accordance with GAAP applied consistently throughout the periods
covered thereby and with prior periods (except as disclosed therein),
(ii) all of the Representations and Warranties are true and correct as of
the date such certification is given as if made on such date (with such
exceptions as have been disclosed to Lenders in writing by Borrower or any
Guarantor and are satisfactory to the Required Lenders), and (iii) there is
no Existing Default. If any Compliance Certificate delivered to
Lenders discloses that a representation or warranty is not true and correct,
or
that there is an Existing Default that has not been waived in writing by Lender,
such Compliance Certificate shall state what action Borrower has taken or
proposes to take with respect thereto.
13.14. Other
Financial Information. Borrower shall also deliver the
following to the Administrative Agent and to each Lender each in a form
satisfactory to Administrative Agent:
13.14.1. Borrowing
Base Certificate. On the Effective Date and weekly
thereafter, delivered on the first Business Day of each calendar week
following the end of each calendar week, a Borrowing Base Certificate in
substantially the form of Exhibit 13.14.1 duly completed and signed by the
Chief Financial Officer or other Borrowing Officer of the Borrowing
Agent. If there is an Existing Default, Borrower shall provide a
Borrowing Base Certificate more often if so requested by Administrative Agent
in
its sole and absolute discretion. Each Borrowing Base Certificate
shall be substantially in the form attached hereto as
Exhibit 13.14.1.
13.14.2. Sales
Report. With the provision of each Borrowing Base
Certificate, a report showing each item of Inventory sold or leased by Borrower
for the preceding calendar week.
13.14.3. Cash
Journal Report. With the provision of each Borrowing Base
Certificate, a cash journal report, by day, for the preceding calendar
week.
13.14.4. Schedule
of
Inventory. With the provision of each Borrowing Base
Certificate, a Schedule of Inventory.
13.14.5. Schedule
of
Accounts, Schedule of Accounts Payable. Within twenty (20)
days after the end of each fiscal month, a Schedule of Accounts and Schedule
of
Accounts Payable.
13.14.6. Report
of Indebtedness. Within twenty (20) days after the end of
each fiscal month, a report summarizing all Indebtedness, including, Permitted
Indebtedness, and with respect thereto, the amounts outstanding thereon,
including interest and fees.
13.14.7. Report
of Deferred Revenue. Within twenty (20) days after the end
of each fiscal month, a report summarizing all deferred revenues by customer
and
balance, and any other information reasonably requested by Administrative
Agent.
13.14.8. Other
Reports or Information Concerning Accounts or
Inventory. Such other reports and information, in form and
detail reasonably satisfactory to Administrative Agent, and documents as
Administrative Agent may reasonably request from time to time concerning
Accounts or Inventory including, to the extent requested by
54
Administrative
Agent, copies of all invoices, leases, bills of lading, shipping receipts,
purchase orders, and warehouse receipts.
13.14.9. Stockholder
and SEC Reports. Contemporaneously with their filing by or
on behalf of Borrower or any other Covered Person, copies of any (i) proxy
statements, financial statements and reports which Borrower makes available
to
its stockholders, and (ii) reports, registration statements and
prospectuses with any securities exchange or the Securities and Exchange
Commission or any Governmental Authority succeeding to any of its
functions.
13.14.10. Pension
Benefit Plan Reports. Promptly upon the request of
Administrative Agent at any time or from time to time, a copy of each annual
report or other filing or notice filed with respect to each Pension Benefit
Plan
of a Covered Person or an ERISA Affiliate of a Covered Person.
13.14.11. Tax
Returns. Promptly upon the request of Administrative Agent
at any time or from time to time, a copy of each federal, state, or local tax
return or report filed by any Covered Person.
13.14.12. Locations
of Inventory Report. Within twenty (20) days after the end
of each fiscal month, a listing, by jurisdiction (including counties) of the
locations of Inventory.
13.15. Review
of Accounts. Not less often than annually, and promptly at
Administrative Agent’s request if there is an Existing Default, Borrower shall
conduct a review of its Accounts, bad debt reserves, and collection histories
of
Account Debtors and promptly following such review provide Administrative Agent
with a report of such review in form and detail satisfactory to Administrative
Agent.
13.16. Inventory. Not
less often than annually, and promptly at Administrative Agent’s request if
there is an Existing Default, Borrower shall conduct a physical count of its
and
each other Covered Person’s Inventory and promptly following the completion of
such count provide Administrative Agent with a report thereof in form and detail
satisfactory to Administrative Agent, including the value of such Inventory
in
accordance with GAAP.
13.17. Annual
Projections; Operating Plan. No less than 30 days prior to
the first day of each fiscal year of all Borrowers, projected balance sheets,
statements of income and expense, and statements of cash flows for such fiscal
year and the fiscal year immediately thereafter, on a consolidated basis, and
with such other detail as Administrative Agent may require, together with an
operating plan approved by the board of directors of each Borrower.
13.18. Other
Information. Upon the request of Administrative Agent,
Borrower shall promptly deliver to Administrative Agent such other information
about the business, operations, revenues, financial condition, property, or
business prospects of Borrower and every other Covered Person as Administrative
Agent may, from time to time, reasonably request.
13.19. Examinations
and Site Visits by Administrative Agent. Administrative
Agent or Persons authorized by and acting on behalf of Administrative Agent
or
any Lender may at any time (upon reasonable prior notice, except if there is
an
Existing Default, no prior notice shall be required) during normal business
hours examine the books, records, and assets of, and inspect any of the
property, locations or operations of, each Covered Person from time to time,
and
in the course thereof may make copies or abstracts of such books and records
and
discuss the affairs, finances and books and records of such Covered Person
with
its accountants, officers and
55
employees,
and make such inspections as it deems necessary. Administrative Agent
may (or shall at the direction of the Required Lenders) undertake examinations
up to six times in each calendar year. Each Covered Person shall
cooperate with Administrative Agent, Lenders and such Persons in the conduct
of
such exams, site visits and inspections and shall deliver to Administrative
Agent any instrument necessary for Administrative Agent to obtain records from
any service bureau maintaining records for such Covered
Person. Administrative Agent may, while there is an Existing Default,
perform as many as examinations as it may choose. Borrower is
required to reimburse Administrative Agent for all reasonable fees, costs and
expenses incurred in connection with any such examinations, provided however,
if
any such examination is performed while there is no Existing Default, then
the
Borrower shall not be obligated to reimburse Administrative Agent for an amount
in excess of $3,500 per such examination.
13.20. Verification
of Accounts and Notices to Account Debtors. Administrative
Agent shall have the right at any time and from time to time, to verify the
validity and amount of any Account and any other matter relating to an Account,
by communicating in writing or orally directly with the Account Debtor or any
Person who represents or Administrative Agent believes represents the Account
Debtor.
13.21. Appraisals
of Collateral. Administrative Agent or Persons authorized by
and acting on behalf of Administrative Agent may, as often as Administrative
Agent deems desirable, perform or have performed on its behalf an appraisal
of
Borrower’s Inventory, equipment, and other assets by an appraiser reasonably
acceptable to Administrative Agent and prepared on a basis reasonably
satisfactory to Administrative Agent. Each Covered Person shall
cooperate with Administrative Agent and such Persons in the conduct of such
appraisals and shall deliver to Administrative Agent or such Persons any
documents or instruments necessary for Administrative Agent or such Person’s to
perform such appraisals. If there is an Existing Default at the time
of any such appraisal, then Borrower shall reimburse Administrative Agent for
all reasonable costs and expenses actually incurred by it in conducting or
having conducted such appraisal plus Administrative Agent’s other actual
out-of-pocket costs and expenses, and if there is no Existing Default at the
time of any such appraisal, Borrower shall not be obligated to reimburse
Administrative Agent for its costs and expenses actually incurred by it in
conducting or having conducted such appraisal including Administrative Agent’s
other actual out-of-pocket costs and expenses.
13.22. Access
to Officers and Auditors. Each Covered Person shall permit
Administrative Agent, any Lender and Persons authorized by Administrative Agent
or any Lender to discuss the business, operations, revenues, financial
condition, property, or business prospects of such Covered Person with its
officers, employees, accountants and independent auditors as often as
Administrative Agent or any Lender may request in its reasonable discretion,
and
such Covered Person shall direct such officers, employees, accountants and
independent auditors to cooperate with Administrative Agent.
13.23. Movement
of Inventory. Borrower shall notify Administrative Agent in
writing if Borrower has knowledge that any Inventory will be located for more
than thirty (30) consecutive days outside any of the locations listed in
section 11.31.2 of the Disclosure Schedule.
13.24. Titled
Assets. After an Event of Default has occurred, upon
Administrative Agent’s request, Borrower shall promptly cause the respective
titles of all Collateral which are titled in the name of any Covered Person
to
reflect thereon that Administrative Agent, as agent for itself and the other
Lenders, as the first and only lienholder thereon, and shall deliver, at
Administrative Agent’s request, originals of all such titles to Administrative
Agent.
56
13.25. Claims
Act. At any time, Borrower shall, at Administrative Agent’s
request, promptly make such filings and obtain such acknowledgements in
accordance with the Claims Act and take any other steps necessary to perfect
Administrative Agent’s Security Interest to Administrative Agent’s satisfaction
in any Account with respect to which the Account Debtor is the United States
of
America, any state, or any department, agency, public corporation or other
instrumentality thereof.
13.26. Further
Assurances. Borrower shall execute and deliver, or cause to
be executed and delivered, to Administrative Agent such documents and
agreements, and shall take or cause to be taken such actions, as Administrative
Agent may from time to time request to carry out the terms and conditions of
this Agreement and the other Loan Documents.
14. Negative
Covenants. Borrower covenants and agrees that, while any of
the Commitments remains in effect and until all of the Loan Obligations are
fully and indefeasibly paid in cash, until no Letters of Credit are outstanding,
the Letter of Credit Exposure is irreversibly zero, all of the Commitments
have
been terminated, and the Administrative Agent and the Lenders have no other
commitment to extend credit or make advances to or for the account of Borrower,
Borrower shall not, directly or indirectly, do any of the following, or permit
any other Borrower or any other Covered Person to do any of the following,
without the prior written consent of Required Lenders:
14.1. Investments. Make
any Investments in any other Person except the following:
14.1.1.
Subject to Section 14.1.4, Investments in which Administrative Agent has a
first
priority perfected Security Interest in (i) interest-bearing
United States government obligations; (ii) certificates of deposit issued
by any Lender; (iii) prime commercial paper rated A1 or better by Standard
and Poor’s Corporation or Prime P1 or better by ▇▇▇▇▇’▇ Investor Service, Inc.;
(iv) agreements involving the sale to Borrower of United States government
securities and their guarantied repurchase the next Business Day by a commercial
bank chartered under the Laws of the United States or any state thereof which
has capital and surplus of not less than $500,000,000, or (v) certificates
of deposit issued by and time deposits with any commercial bank chartered under
the Laws of the United States or any state thereof which has capital and surplus
of not less than $500,000,000 (or such lesser amount if approved in writing
by
Administrative Agent).
14.1.2.
Accounts arising in the ordinary course of business and payable in accordance
with Borrower’s customary trade terms.
14.1.3.
Other than the Investment identified in Section 14.1.4, Investments
existing on the Execution Date and disclosed in section 11.19 of the
Disclosure Schedule.
14.1.4.
Investments in cash or marketable securities at domestic financial institutions,
provided, however, at all times such Investments shall be subject to control
and
pledge agreements in form and substance reasonably satisfactory to
Administrative Agent that provide, inter alia, that at any time after an Event
of Default, following Administrative Agent’s request to such domestic financial
institutions, such Investments shall be promptly pledged to Administrative
Agent
and Administrative Agent shall be granted by Borrower a first priority Security
Interest in such Investments and control over any securities account containing
such Investments.
14.1.5.
Notes or securities received by a Covered Person in settlement of Indebtedness
of other Persons to such Covered Person that was incurred in the ordinary course
of such Covered Person’s business.
57
14.1.6.
Investments by any Covered Person in any other Covered Person.
14.1.7.
Investments held in overnight Investment accounts, provided, during an
Existing Default, no such overnight Investment accounts shall be allowed and
provided further, all overnight investment accounts shall at all times be
subject to control agreements in favor of the Administrative Agent.
14.1.8. Permitted
Acquisitions, if any.
14.2. Indebtedness. Create,
incur, assume, or allow to exist any Indebtedness of any kind or description,
except the following:
14.2.1.
Excluding the Other Creditor Indebtedness, Indebtedness to trade creditors
incurred in the ordinary course of business.
14.2.2.
Without duplication of any Indebtedness otherwise permitted by this Section
14.2, Indebtedness listed on section 11.20 of the Disclosure Schedule, which
is
satisfactory to Administrative Agent.
14.2.3.
The Loan Obligations.
14.2.4.
The Subordinated Indebtedness up to an aggregate of $30,000,000 outstanding
in
principal at any time if a Subordination Agreement remains in effect with
respect thereto and the Subordinated Indebtedness contains terms and provisions
acceptable to Administrative Agent.
14.2.5.
Indebtedness (except for bona fide inter-company sales of Inventory) of any
Borrower or Subsidiary to any other Borrower or Subsidiary provided that (i)
complete and accurate records of such Indebtedness are maintained by each such
Borrower, (ii) such Indebtedness, if it is in excess of $100,000 in the
aggregate in any given case, at the option of the Administrative Agent, shall
be
evidenced by a promissory note and collaterally assigned and pledged to the
Administrative Agent for the benefit of the Lenders pursuant to documents
satisfactory to Administrative Agent, and (iii) if at any time such Indebtedness
is evidenced by a promissory note, it shall be immediately collaterally assigned
and pledged to the Administrative Agent for the benefit of the
Lenders.
14.2.6.
The Other Creditor Indebtedness secured by Inventory if an Intercreditor
Agreement remains in effect with respect thereto.
14.2.7.
Indebtedness constituting Liabilities (as defined by GAAP)
under any Capital Lease under which a Covered Person is a lessee existing on
the
Execution Date and disclosed in section 11.23 of the Disclosure Schedule
which is acceptable to Administrative Agent, and any Capital Leases under which
a Covered Person is a lessee entered into by any Covered Person after the
Execution Date for capital assets up to $200,000 in the aggregate outstanding
at
any one time (such amount to be calculated as the amount which would have been
the aggregate cost of the property leased if it had been purchased rather than
leased).
14.2.8.
Indebtedness constituting purchase money secured Indebtedness with respect
to equipment disclosed in section 11.20 of the Disclosure Schedule which is
acceptable to Administrative Agent, and purchase money Security Interests in
equipment entered into
58
by
any
Covered Person after the Execution Date up to $200,000 in the aggregate
outstanding at any time.
14.2.9.
Indebtedness constituting deferred compensation or retirement benefits to
Borrower’s employees incurred in the ordinary course of business for actual
services rendered and which is reflected on the most recent Financial
Statements.
14.2.10.
Any Preferred Capital Stock to the extent treated as Indebtedness under GAAP,
if
such Preferred Capital Stock is subordinated to the Loan Documents and otherwise
issued on terms and conditions reasonably satisfactory to the Administrative
Agent and not subject to redemption, optional or mandatory, during the term
of
this Agreement.
14.2.11.
Bid Bonds up to $2,500,000 in the aggregate outstanding at any
time.
14.3. Payments
on Other Creditor Indebtedness; Subordinated
Indebtedness. Make any nonscheduled prepayment of principal
or interest on any Other Credit Indebtedness unless both immediately before
and
after giving effect to any such prepayment, there shall be no Default or Event
of Default; make any payment of principal on the Subordinated Indebtedness;
make
any payment of interest on the Subordinated Indebtedness unless such payment
of
interest is schedule to be made under the Subordinated Indebtedness Documents
and such payment is expressly permitted by the terms of the applicable
Subordination Agreement and Section 6.3.3.2 hereof; or modify, amend,
supplement, compromise, satisfy, release or discharge any of the Subordinated
Indebtedness Documents, any collateral securing the same, or any Person liable
directly or indirectly with respect thereto.
14.4. Prepayments. Prepay,
whether voluntarily or otherwise, any Indebtedness, including without
limitation, the Subordinated Indebtedness, other than (a) the Loan
Obligations in accordance with the terms of the Loan Documents, (b) trade
payables in the ordinary course of business consistent with past practices,
(c) as permitted by Section 14.3.
14.5. Indirect
Obligations. Create, incur, assume or allow to exist any
Indirect Obligations except (i) Indirect Obligations existing on the Execution
Date and disclosed on section 11.21 of the Disclosure Schedule, and (ii)
Indirect Obligations of a Borrower with respect to Permitted Indebtedness of
another Borrower, or in connection with the Obligations of another Borrower
incurred in such Borrower’s ordinary course of business consistent with past
practices.
14.6. Security
Interests. Create, incur, assume or allow to exist any
Security Interest upon all or any part of its property, real or personal
(including, without limitation, intangible property), now owned, leased or
hereafter acquired or leased, except the following:
14.6.1.
Security Interests for taxes, assessments or governmental charges not delinquent
or being diligently contested in good faith and by appropriate proceedings
and
for which adequate book reserves in accordance with GAAP are
maintained.
14.6.2. Security
Interests arising out of deposits in connection with workers’ compensation
insurance, unemployment insurance, old age pensions, or other social security
or
retirement benefits legislation.
14.6.3. Deposits
to secure bids, tenders, contracts (other than contracts for the payment of
money), leases, statutory obligations, and appeal bonds, and other obligations
of like nature arising in the ordinary course of business.
59
14.6.4.
Security Interests imposed by any Law, such as mechanics’, workmen’s,
materialmen’s, landlords’, carriers’, or other like Security Interests arising
in the ordinary course of business which secure payment of obligations which
are
not past due or which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
GAAP
are maintained on such Covered Person’s books.
14.6.5.
Subject to the limitations in Section 14.2.6, if any, Security Interests in
favor of the holders of any of the Other Creditor Indebtedness which such
Security Interests secure Inventory and which security interests are subject
to
Intercreditor Agreements unless Administrative Agent, in its sole and absolute
discretion, waives the requirement for an Intercreditor Agreement with respect
to any particular Other Creditor Indebtedness.
14.6.6. Subject
to the limitations in Section 14.2.7, Security Interests in favor of the holders
of any asset leased under a Capital Lease to Borrower.
14.6.7. Subject
to the limitations in Section 14.2.8, Purchase money Security Interests securing
payment of the purchase price of equipment acquired by Borrower after the
Execution Date if such Security Interests attach within 20 days of the
Borrower’s receipt of such equipment.
14.6.8. Security
Interests securing the Loan Obligations in favor of Administrative Agent for
the
benefit of Lenders.
14.6.9. Security
Interests securing the Subordinated Indebtedness if and only if a Subordination
Agreement is in effect.
14.6.10. Without
duplication of any other Security Interests permitted by this Section 14.6,
Security Interests existing on the Execution Date that are disclosed in
section 11.31 of the Disclosure Schedule and are satisfactory to
Administrative Agent.
14.6.11. Security
Interests securing Bid Bonds permitted by Section 14.2.11.
14.7. Acquisitions. Acquire
any Capital Securities in a Person, or acquire all or substantially all of
the
assets of a Person (including without limitation assets comprising all or
substantially all of an unincorporated business unit or division of any Person),
or all or substantially all of the information technology assets or help desk
assets of any Person except if approved by the Required Lenders (any such
approved acquisition, being a “Permitted Acquisition”).
14.8. Leases;
Bailments; Consignments; Warehousing. Store any Inventory
with a value in excess of $100,000 for each location or any of its material
books and records that is at any time (i) in the possession or control of a
warehouseman, bailee, consignee including pursuant to an express or implied
agreement establishing a bailment or consignment, or similar arrangement, (ii)
at any of Borrower’s agents or processors (not including any Person to whom
Inventory is leased or rented in the ordinary course of such Covered Person’s
business), or (iii) at any location or premises that are not owned by Borrower,
unless, in each case, Administrative Agent has received written waivers or
consents, in form and substance satisfactory to Administrative Agent, which
such
written waivers or consents shall include, without limitation, a waiver of
all
present and future Security Interests to which the owner, ▇▇▇▇▇▇, or lessor
or
any mortgagee of such premises may be entitled to assert against the
Collateral. Occupy any national or regional headquarters location,
unless, in each case, Administrative Agent has received written waivers or
60
consents,
in form and substance satisfactory to Administrative Agent, which such written
waivers or consents shall include, without limitation, a waiver of all present
and future Security Interests to which the owner, ▇▇▇▇▇▇, or lessor or any
mortgagee of such premises may be entitled to assert.
14.9. Disposal
of Property. Sell, transfer, exchange, or otherwise dispose
of any of its assets. Notwithstanding the foregoing unless a Default
or Event of Default has occurred and is continuing (in which case any of the
following shall be prohibited if directed by the Administrative Agent), Borrower
may sell, transfer or otherwise dispose of Inventory or obsolete equipment
in
the ordinary course of business consistent with past practice, provided that
all
proceeds of such sales, transfers or other dispositions shall be deposited
into
the Lockboxes.
14.10. Distributions/Redemptions. Directly
or indirectly declare or make, or incur any liability to make, any
Distribution/Redemptions to any Person, provided, however, after May 1, 2008,
MTM Technologies, Inc. may pay dividends on its preferred stock up to $2,650,000
in the aggregate semi-annually and up to $5,300,000 in the aggregate per fiscal
year if and only if (i) at the time of such payment, there is no Existing
Default, and (ii) no Default or Event of Default is reasonably likely to occur
from the making of such payment.
14.11. Change
of Control. Unless consented to in writing by the Required
Lenders, Take any action to authorize or approve, or consent to, a Change in
Control.
14.12. Capital
Structure; Capital Securities. (i) Except as permitted by
clause (iii) of this Section 14.12 hereof, make any change in the capital
structure of any Covered Person; (ii) change any Charter Documents of any
Covered Person which has or is reasonably likely to have a Material Adverse
Effect on any Covered Person or which will or is reasonably likely to cause
a
Default or Event of Default; or (iii) issue or create any Capital Securities,
or
non-equity interest that is convertible into Capital Securities, in any Covered
Person, except, with respect to MTM Technologies, Inc. Capital Securities that
are subordinated in right of payment to all the Loan Obligations in a manner
satisfactory to Administrative Agent and issued on terms and conditions
satisfactory to Administrative Agent.
14.12.2. Allow
or permit any Capital Securities, or non-equity interest that is convertible
into Capital Securities in any Covered Person to be pledge to any Person or
allow any Person to have a Security Interest therein other than Administrative
Agent who shall have at all times a first priority perfected Security Interest
therein and the holders of the Subordinated Indebtedness who shall have at
all
times a second priority perfected Security Interest therein.
14.12.3. Be
a party to any merger or consolidation, except as permitted by Section 14.7
or
Section 14.12.4 below.
14.12.4. Any
Subsidiary of MTM Technologies, Inc. ceases to be a Wholly-Owned Subsidiary
of
MTM Technologies, Inc. unless the assets of such Subsidiary are liquidated
into
another Wholly-Owned Subsidiary of MTM Technologies, Inc. or into MTM
Technologies, Inc., or such Subsidiary is merged into another Wholly-Owned
Subsidiary of MTM Technologies, Inc. or into MTM Technologies, Inc. (and MTM
Technologies, Inc. is the surviving entity).
14.13. Change
of State of Formation; Change of Name. Make any change in
the state of incorporation or formation of organization of any Covered Person,
change its type of legal entity, or change its legal name as it appears on
any
certificates or articles of organization or formation.
61
Make
any
change in the trade names or styles under which a Covered Person will sell
Inventory or create Accounts, or to which instruments in payment of Accounts
may
be made payable, except in accordance with the terms of Section 13.10.9
with at least 30 days prior written notice to Administrative Agent of such
change (unless Administrative Agent agrees in writing to a shorter
period).
14.14. Change
of Business. Engage in any business other than substantially
as conducted by a Borrower on the Effective Date.
14.15. Transactions
With Affiliates. Enter into or be a party to any transaction
or arrangement, including the purchase, sale or exchange of property of any
kind
or the rendering of any service, with any Affiliate, or make any loans or
advances to any Affiliate. If there is no Existing Default, however,
each Covered Person may engage in such transactions with an Affiliate in the
ordinary course of business and pursuant to the reasonable requirements of
its
business and on fair and reasonable terms substantially as favorable to it
as
those which it could obtain in a comparable arm’s-length transaction with a
non-Affiliate. No Borrower shall make any loan or advance to any
shareholder, member or partner of any Borrower, and advances for travel or
similar expenses made in the ordinary course of business, or permit any
shareholder, member or partner of any Borrower to incur any Indebtedness to
any
Borrower (other than travel and similar advances in the ordinary course of
business). Pay any management or similar fees to any Affiliate or
other Person other than another Borrower.
14.16. Conflicting
Agreements. Enter into any agreement, that would, if fully
complied with by it, result in a Default or Event of Default either immediately
or upon the elapsing of time.
14.17. Investment
Banking and Finder’s Fees. Pay or agree to pay, or reimburse
any other party with respect to, any investment banking or similar or related
fee, underwriter’s fee, finder’s fee, or broker’s fee to any Person in
connection with this Agreement.
14.18. Sale
and Leaseback Transactions. Enter into any agreement or
arrangement with any Person providing for any Covered Person to lease or rent
property that Borrower has or will sell or otherwise transfer to such
Person.
14.19. New
Subsidiaries. Organize, create or acquire any Subsidiary
unless Borrower has obtained the prior written consent of Administrative Agent
thereto (which consent shall not be unreasonably withheld) and within five
Business Days (unless Administrative Agent consents, in its sole discretion
to a
longer period of time up to but not exceeding thirty days) following the
organization, creation or acquisition of such Subsidiary, the applicable Covered
Person and such Subsidiary executes and delivers to Administrative Agent for
the
benefit of Lenders the following additional documents: all Charter Documents
of
such new Subsidiary, an unlimited Guaranty of the Loan Obligations by such
Subsidiary or a joinder agreement to this Agreement and the Loan Documents,
a
pledge of the capital stock, partnership interests, or membership interests
of
such Covered Person in such Subsidiary, and other Security Documents requested
by Administrative Agent so as to grant Administrative Agent, for the benefit
of
the Lenders, a perfected, first priority security interest in all real and
personal property of such Subsidiary.
14.20. Fiscal
Year. Change its fiscal year from a fiscal year ending on
March 31 of each calendar year.
14.21. Leases. Enter
into any Capital Leases except as permitted by Section 14.2.
62
14.22. S
Corporation Status. Any Covered Person elects under Section
1362(a) of the Code to be treated as an S corporation.
14.23. Depreciation
Methodology. Change the depreciation schedule or
depreciation methodology for any Inventory, equipment or other
assets.
14.24. Tax
Consolidation. File or consent to the filing of any
consolidated income tax return with any Person other than another
Borrower.
14.25. Transactions
Having a Material Adverse Effect on Covered Person. Enter
into any transaction which has or is reasonably likely to have a Material
Adverse Effect on any Covered Person; or enter into any transaction, or take
or
contemplate taking any other action, or omit or contemplate omitting to take
any
action, which any Responsible Officer knows, or reasonably should know, is
likely to cause a Default or Event of Default hereunder.
14.26. Storage. Store
any Inventory or equipment at any location other than as set forth on
section 11.31.2 of the Disclosure Schedule; maintain its chief executive
office at any location other than as set forth on section 11.32.1 of the
Disclosure Schedule.
14.27. Like-Kind
Exchange. Borrower shall not complete or attempt to complete
any “like-kind exchange” (as such term is defined in the Code or applicable
regulations) with respect to any Collateral on which Administrative Agent has
a
first priority Security Interest.
15. Financial
Covenants.
15.1. Special
Definitions. As used in this Section 15 and elsewhere
herein, the following capitalized terms have the following
meanings:
“Capital
Expenditure” means an expenditure for an asset that must be depreciated or
amortized under GAAP, or for any asset that under GAAP must be treated as a
capital asset. An expenditure for purposes of this definition includes any
deferred or seller financed portion of the purchase price of an asset and
includes the Capital Expenditure Equivalent of a Capital
Lease. Capital Expenditures do not include any expenditure made with
insurance proceeds to the extent used to replace or repair damaged fixed assets
and plant equipment.
“Capital
Expenditure Equivalent” of a Capital Lease is the amount which would have been
the aggregate cost of the property leased if it had been purchased rather than
leased.
“Dilution”
means the rolling 12-month Dollar amount of dilution expressed as a percentage
as determined by the Administrative Agent in its sole discretion as set forth
in
the Administrative Agent’s most recent field exam.
“EBITDA”
means, for any period of calculation, an amount equal to (A) the sum of (i)
Net
Income, (ii) Interest Expense, (iii) income tax expense, (iv) depreciation
expense, (v) amortization expense, (vi) non-cash charges relating to any
share-based compensation awards, to the extent such non-cash charges were
expensed during such period in accordance with SFAS 123R or are required to
be
shown as an expense in any financial statements for periods prior to the
effective date of SFAS 123R, and (vii) actual cash and non-cash nonrecurring
severance and actual cash and non-cash nonrecurring restructuring charges for
such period up to $250,000 in the aggregate in a fiscal quarter and up to
$750,000 in the aggregate during the term of this Agreement, plus (B), the
sum
of (i) all nonrecurring losses under GAAP, and (ii) all extraordinary losses
not
otherwise related to the continuing operations of the Borrower in such period,
minus (C) the sum of (i) all nonrecurring gains under GAAP, and (ii) all
63
extraordinary
gains and income not otherwise related to the continuing operations of the
Borrower in such period.
“Interest
Expense” means for any period of calculation, all interest, whether paid in cash
or accrued as a liability, but without duplication, on Total Indebtedness during
such period.
“Liquidation
Multiple” means (I) Net Recovery divided by (II) the lesser of (A) the amount of
the Aggregate Revolving Loan Commitment as of the last day of the most recently
completed fiscal month and (B) the Borrowing Base as shown in the Borrowing
Base
Certificate provided to Administrative Agent closest to (but not after) the
end
of the most recently completed fiscal month.
“Net
Recovery” means a Dollar amount equal to: (I) (A) 100% of the face
amount of all Accounts of Borrower minus the bad debt reserve, as set forth
in
the Financial Statements for the most recently ended fiscal month, multiplied
by
(B) 100% minus (i) Dilution multiplied by 2 plus (ii) 5% of the amount
determined in clause (I)(B)(i), plus (II) the Floorplan Inventory Value as
calculated by Administrative Agent, as of the last day of the most recently
completed fiscal month, plus (III) 50% multiplied by total aggregate wholesale
invoice price of all of Borrower’s Inventory that is not financed under the
Floorplan Loan Facility and the Interim Floorplan Loan Facility, as shown in
the
Financial Statements for the most recently completed fiscal month, and minus
(IV) $1,000,000.
“Net
Income” means, for any period of calculation, “net income” as determined in
accordance with GAAP.
“Total
Funded Indebtedness” means the sum of the following, without duplication
(i) outstanding principal and interest of the Loans (including any fees
paid to Administrative Agent or any Lender in connection with the execution
and
delivery of this Agreement) excluding the principal outstanding under the
Aggregate Floorplan Loan Facility and, without duplication, the Interim
Floorplan Loan Facility and unfunded Approvals, (ii) the face amount
of any letters of credit issued on the account of any Borrower, (iii) the
aggregate outstanding principal balance of all other Indebtedness for borrowed
money, including, without limitation, the Capital Expenditure Equivalent, and
(iv) the maximum amount payable under any guaranty executed by a Borrower,
but, excluding, the Subordinated Indebtedness if a Subordination
Agreement is in effect.
All
other
capitalized terms used in this Section 15 shall have their meanings and
shall be determined under GAAP. All calculations shall be for the
Borrowers and their respective Subsidiaries on a consolidated
basis. For the purposes of calculating the amount of Total
Indebtedness in this Section 15, each scheduled payment of interest and
principal on any of the Loans made on the first of a month shall be deemed
to
have been made on the immediately preceding day.
15.2. Minimum
Liquidation Multiple. Each Borrower covenants that the
Liquidation Multiple calculated as of the last day of each fiscal month of
Borrower shall be no less than 1.20:1.00.
15.3. Minimum
EBITDA. Each Borrower covenants that as of the last day of
each fiscal quarter, for the fiscal quarter then ended, Borrower’s EBITDA shall
not be less than the amounts set forth in the table below:
▇▇
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇:
|
Minimum
EBITDA
|
|
September
30, 2007
|
$800,000
|
|
December
31, 2007
|
$1,760,000
|
|
March
31, 2008
|
$1,840,000
|
|
June
30, 2008
|
$2,000,000
|
|
September
30, 2008
|
$2,000,000
|
|
December
31, 2008
|
$2,000,000
|
|
March
31, 2009
|
$2,000,000
|
|
June
30, 2009
|
$2,000,000
|
15.4. Maximum
Total Funded Indebtedness to EBITDA. Each Borrower covenants
that (A) the ratio of Total Funded Indebtedness, calculated as of March 31,
2008, to EBITDA, calculated as of March 31, 2008 for the preceding four fiscal
quarters then ended, shall be no more than 4.00:1.00, and (B) the ratio of
Total
Funded Indebtedness, calculated as of the last day of each fiscal quarter ending
after March 31, 2008, to EBITDA, calculated as of the last day of each fiscal
quarter ending after March 31, 2008, for the preceding four fiscal quarters
then
ended, shall be no more than 4.00:1.00.
15.5. Excess
Cash/Marketable Securities plus Availability. Each Borrower
covenants that on the last day of each calendar month that the sum of (A) the
amount of cash or marketable securities permitted by Section 14.1.4 hereof,
plus
(B) the difference between (i) the Borrowing Base on such date, minus (ii)
the
sum of (a) the Swingline Loan, (b) the Floorplan Shortfall, (c) the Letter
of
Credit Exposure on such date (except to the extent that a Revolving Loan Advance
will be used immediately to reimburse Letter of Credit Issuer for unreimbursed
draws on a Letter of Credit), (d) without duplication, the outstanding Aggregate
Revolving Loans, (e) the amount of the Other Creditor Indebtedness (unless
an
Intercreditor Agreement in form and substance satisfactory to Administrative
Agent has been executed between Administrative Agent and the holder of such
Other Creditor Indebtedness), and (f) the amount of Bid Bonds, shall be greater
than or equal to $1,500,000.
16. Default.
16.1. Events
of Default. Any one or more of the following shall
constitute an event of default (an “Event of Default”) under this
Agreement:
16.1.1. Failure
to Pay Principal or Interest. Failure of Borrower to pay (i)
any interest accrued on any of the Loans within three (3) Business Days after
the date when due, or (ii) any principal of the Loans when due; provided,
however, it shall not be an Event of Default with respect to the payment of
any
principal or interest on any Floorplan Loan or Interim Floorplan Loan until
the
occurrence of a Floorplan Payment Default. “Floorplan Payment
Default” means any failure by Borrower to make any payment, under a Transaction
Statement by the last day of the no interest period set forth in a Transaction
Statement. “Floorplan Payment Default” shall not mean or include, and
shall exclude, any deductions, offsets or other disputes made or asserted by
Borrower which are accepted by or under good faith negotiation with
Administrative Agent.
65
16.1.2. Failure
to Pay Certain Other Amounts Owed to Lenders. Failure of
Borrower to pay any of the Loan Obligations (other than principal of the Loans
or interest accrued thereon and other than Administrative Agent’s costs and
expenses Borrower is required to pay pursuant to the terms of Section 13.19
and Section 13.21) within 10 days after the date when due.
16.1.3. Failure
to Pay Examination and Appraisal Costs. Failure of Borrower
to pay any of Administrative Agent’s reasonable costs and expenses required to
be paid by Borrower pursuant to the terms of Section 13.19 and
Section 13.21 within 10 days after the date when due.
16.1.4. Failure
to Pay Amounts Owed to Other Persons. Failure of any Covered
Person to make any payment due on Indebtedness of such Covered Person which
such
Indebtedness is over $250,000 in the aggregate to Persons (other than
Indebtedness owed to Lenders under the Loan Documents and other than
Indebtedness owed to any Covered Person’s trade creditors in connection with the
purchase of such Covered Person’s Inventory from such trade creditors) and which
failure continues unwaived beyond any applicable grace period specified in
the
documents evidencing such Indebtedness.
16.1.5. Representations
or Warranties. Any of the Representations and Warranties is
discovered to have been false in any material respect when made and is not
cured
within ten (10) days of the date such Representation and Warranty was made
(provided such breach can be cured within such period and provided that Borrower
works diligently and in good faith to cure any such breach during such period),
provided, however, with respect to Representations and Warranties regarding
Accounts, any such breach or falsity could reasonably be likely to have a
Material Adverse Effect or result in the Aggregate Revolving Loan plus the
Swingline Loans exceeding the Maximum Available Amount.
16.1.6. Certain
Covenants with Cure Periods. Failure of any Covered Person
to comply with any covenant in Section 13 (other than the covenants set
forth in Section 13.13, Section 13.14, Section 13.17,
Section 13.19, Section 13.20, Section 13.21, Section 13.22,
and Section 13.23) which is not cured within 10 days after the initial
occurrence of such failure, provided noncompliance with such covenant can be
cured within such 10 day period and provided that Borrower works diligently
and in good faith to cure any such noncompliance during such
period.
16.1.7. Certain
Covenants Without Cure Periods. Failure of any Covered
Person to comply with the covenants in Section 13 (unless specified in
Section 16.1.6 above ), Section 14, or Section 15.
16.1.8. Other
Covenants. Failure of any Covered Person to comply with of
any of the terms or provisions of any of the Loan Documents applicable to it
(other than a failure which constitutes an Event of Default under any of
Sections 16.1.1 through 16.1.7).
16.1.9. Acceleration
of Other Indebtedness. Any Obligation (other than a Loan
Obligation) of a Covered Person for the repayment of $250,000 in the aggregate
or more of borrowed money is accelerated, or becomes or is declared to be due
and payable or required to be prepaid (other than by an originally scheduled
prepayment) prior to the original maturity thereof.
16.1.10. Default
Under Other Agreements. The occurrence of any default or
event of default under any agreement to which a Covered Person is a party (other
than the Loan
66
Documents),
which default or event of default continues unwaived beyond any applicable
grace
period provided therein and has or is reasonably likely to have a Material
Adverse Effect on a Covered Person or involves Indebtedness of more than
$250,000 in the aggregate. Administrative Agent or any Covered Person
receives notice of a breach that is not cured within any applicable grace period
from any landlord under a landlord consent/waiver concerning a leased regional
or national headquarters or a leased location at which $250,000 or more of
Collateral is located or any of its material books and records are located
stating that Borrower is in default of its obligations under such
lease. Borrower loses any franchise, permission, license or right to
sell or deal in any Collateral which Administrative Agent or the Lenders finance
which has or could reasonably be likely to have a Material Adverse
Effect.
16.1.11. Other
Creditor Indebtedness.; Subordinated Indebtedness. The
occurrence of (a) any breach, default or event of default with respect to
any of the Other Creditor Indebtedness in excess of $250,000 in the aggregate
which is not cured or waived within any applicable grace period or any
acceleration thereof or right to accelerate, or (b) the termination of any
Intercreditor Agreement by any party thereto, other than Administrative Agent,
prior to the payment in full of all of the Other Creditor Indebtedness covered
thereby. The occurrence of (a) any breach or default with respect to
the Subordinated Indebtedness that is not cured within any applicable grace
period or any acceleration thereof or right to accelerate, or (b) any breach
or
default of the Subordination Agreement by the holder of any of the Subordinated
Indebtedness.
16.1.12. Bankruptcy;
Insolvency; Etc. A Covered Person (i) fails to pay, or
admits in writing its inability to pay, its debts generally as they become
due,
or otherwise becomes insolvent (however evidenced); (ii) makes an
assignment for the benefit of creditors; (iii) files a petition in
bankruptcy, is adjudicated insolvent or bankrupt, petitions or applies to any
tribunal for any receiver or any trustee of such Covered Person or any
substantial part of its property; (iv) commences any proceeding relating to
such Covered Person under any reorganization, arrangement, readjustment of
debt,
dissolution or liquidation Law of any jurisdiction, whether now or hereafter
in
effect; (v) has commenced against it any such proceeding which remains
undismissed for a period of 60 days, or by any act indicates its consent
to, approval of, or acquiescence in any such proceeding or the appointment
of
any receiver of or any trustee for it or of any substantial part of its
property, or allows any such receivership or trusteeship to continue
undischarged for a period of 60 days; or (vi) takes any action to
authorize any of the foregoing.
16.1.13. Judgments;
Attachment; Settlement; Etc. Any one or more judgments or
orders is entered against a Covered Person or any attachment or other levy
is
made against the property of a Covered Person with respect to a claim or claims
involving in the aggregate liabilities (not paid or fully covered by insurance,
less the amount of reasonable deductibles in effect on the Execution Date)
in an
aggregate amount in excess of $250,000, and such judgment becomes final and
non-appealable or if timely appealed is not fully bonded and collection thereof
stayed pending the appeal; or any Covered Person agrees to a settlement
obligating any Covered Person to make a payment with respect to a claim or
claims involving in the aggregate liabilities (not paid or fully covered by
insurance, less the amount of reasonable deductibles in effect on the Execution
Date) in an aggregate amount in excess of $250,000.
67
16.1.14. Pension
Benefit Plan Termination, Etc. Any Pension Benefit Plan
termination by the PBGC or the appointment by the appropriate United States
District Court of a trustee to administer any Pension Benefit Plan or to
liquidate any Pension Benefit Plan, which has or reasonably could be likely
to
have a Material Adverse Effect; or any event which constitutes grounds either
for the voluntary termination of any Pension Benefit Plan by the PBGC or for
the
appointment by the appropriate United States District Court of a trustee to
administer or liquidate any Pension Benefit Plan shall have occurred and be
continuing for thirty (30) days after Borrower has notice of any such
event, which has or reasonably could be likely to have a Material Adverse
Effect; or any voluntary termination of any Pension Benefit Plan
which is a defined benefit pension plan as defined in Section 3(35) of ERISA
while such defined benefit pension plan has an accumulated funding deficiency
in
an amount exceeding $250,000 in the aggregate unless Administrative Agent has
been notified of such intent to voluntarily terminate such plan and Required
Lenders have given their consent and agreed that such event shall not constitute
an Event of Default; or the plan administrator of any Pension Benefit Plan
applies under Section 412(d) of the Code for a waiver of the minimum funding
standards of Section 412(1) of the Code and Required Lenders determine that
the
substantial business hardship upon which the application for such waiver is
based could subject any Covered Person or ERISA Affiliate of any Covered Person
to a liability in excess of $250,000 in the aggregate.
16.1.15. Liquidation
or Dissolution. A Covered Person files a certificate of
dissolution under applicable state Law or is liquidated or dissolved or suspends
or terminates the operation of its business, or has commenced against it any
action or proceeding for its liquidation or dissolution or the winding up of
its
business, or takes any action in furtherance thereof, except in connection
with
the consolidation of such a Covered Person and its assets with another Covered
Person and its assets.
16.1.16. Seizure
of Assets. All or any material part of the property of all
Covered Persons is nationalized, expropriated, seized or otherwise appropriated,
or custody or control of such property or of all Covered Persons is assumed
by
any Governmental Authority or any court of competent jurisdiction at the
instance of any Governmental Authority, unless the same is being contested
in
good faith by proper proceedings diligently pursued and a stay of enforcement
is
in effect.
16.1.17. Racketeering
Proceeding. There is filed against any Covered Person any
civil or criminal action, suit or proceeding under any federal or state
racketeering statute (including, without limitation, the Racketeer Influenced
and Corrupt Organization Act of 1970), which action, suit or proceeding is
not
dismissed within 120 days and could result in the confiscation or
forfeiture of any of the Collateral.
16.1.18. Loan
Documents; Security Interests. For any reason other than the
failure of Administrative Agent to take any action available to it to maintain
perfection of the Security Interests created in favor of Administrative Agent
for the benefit of Lenders pursuant to the Loan Documents, any Loan Document
ceases to be in full force and effect or any Security Interest with respect
to
any portion of the Collateral intended to be secured thereby ceases to be,
or is
not, valid, perfected and prior to all other Security Interests (other than
the
Permitted Security Interests, and other than sales of Inventory and Equipment
expressly permitted hereunder made in the ordinary course of business, to a
bona
fide purchaser, for fair market value, if all of the proceeds thereof are
delivered to Administrative Agent as set forth herein) or is terminated, revoked
or declared void or
68
invalid,
or Borrower or any Covered Person contests or denies that it has any liability
or obligation under any agreement, term, or condition contained in any Loan
Document to which Borrower or such Covered Person is a party.
16.1.19. Loss
to Collateral. Any abandonment, loss, theft, damage or
destruction of any item or items of Collateral occurs which is not covered
by
insurance as required herein and has or is reasonably likely to have a Material
Adverse Effect.
16.1.20. Guaranty;
Guarantor. Any Guaranty ceases to be in full force and
effect or any action is taken to discontinue or assert the invalidity or
unenforceability of any Guaranty or any Guarantor fails to comply with any
of
the terms or provisions of any Guaranty, or any representation or warranty
of
Guarantor therein is false, or any Guarantor denies that it has any further
liability under any Guaranty or gives notice to Lender to such effect, or any
Guarantor fails to furnish the financial statements required under any Guaranty
or otherwise breaches or is in default of any obligation or covenant contained
in any Guaranty that is not cured within any applicable grace
period.
16.1.21. Change
of Control. Unless consented to in writing by the Required
Lenders, a Change of Control shall occur, or the Borrowers shall take any action
in support of a Change in Control, or any Person or Group states, publicly,
privately, or otherwise, its intention to take any action, or fail to take
any
action, that may reasonably be likely, as determined by the Administrative
Agent, to result in a Change of Control.
16.1.22. Material
Adverse Change. There occurs any action or event or there is
a nonoccurrence of any action or event, which has or reasonably could be likely
to have a Material Adverse Effect.
16.1.23. Negative
Pledge. The occurrence of a breach, default or event of
default by any Borrower of a negative pledge or other agreement which restricts
or otherwise prohibits a Borrower from granting any consensual lien or Security
Interest with respect to its owned or leased real property upon which its
business is conducted.
16.2. Cross-Default. An
Event of Default under this Agreement will automatically and immediately
constitute a default under every other Loan Document without regard to any
requirement therein for the giving of notice or the passing of
time.
16.3. Rights
and Remedies.
16.3.1. Termination
of Commitments. Upon an Event of Default described in
Section 16.1.12 (regardless of whether any time periods specified therein
have expired), all of the Commitments shall be deemed canceled without any
action or notice by the Lenders or Administrative Agent, and Lenders shall
have
no obligation to make any further or subsequent Advances and no further advances
or Approvals shall be made without the consent of the Required
Lenders. Upon the occurrence and during the continuance of any other
Event of Default, the Required Lenders in their sole and absolute discretion
may
cancel the Commitments. Such cancellation may be, in any case,
without presentment, demand or notice of any kind, which Borrower expressly
waives. Borrower hereby waives any requirement for notice of
acceleration.
16.3.2. Acceleration;
Funding. Upon an Event of Default described in
Section 16.1.12 (regardless of whether any time periods specified therein
have expired), all of the outstanding Loan Obligations shall automatically
become immediately due
69
and
payable. From and after the date the Lenders have knowledge of an
Event of Default under Section 16.1.1, no further Advances shall be made or
issued unless the Required Lenders approve in writing any further Advances
or
unless the Required Lenders waive in writing such Event of
Default. Upon the occurrence and during the continuance of any other
Event of Default, and at any time thereafter, (i) the Administrative Agent
may or, at the direction of the Required Lenders shall, cease making Advances,
and (ii) the Required Lenders in their sole and absolute discretion may
declare all of the outstanding Loan Obligations immediately due and
payable. Any such acceleration may be, in either case, without
presentment, demand or notice of any kind, which Borrower expressly
waives.
16.3.3. Right
of Set-off. During an Existing Default, each Lender is
hereby authorized, without notice to Borrower (any such notice being expressly
waived by Borrower), to the fullest extent permitted by law, to set off and
apply against the Loan Obligations any and all deposits (general or special,
time or demand, provisional or final) or any other assets at any time held
by or
at such Lender or under the control of or otherwise pledged to such Lender,
or
any other Indebtedness at any time owing by such Lender (or its Affiliate)
to or
for the credit or the account of Borrower, irrespective of whether or not such
Lender shall have made any demand under this Agreement or the Notes or any
Guaranty and although such Loan Obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which such
Lender may otherwise have. Any such amounts shall be promptly
turned-over to the Administrative Agent in the form received for application
to
the Loan Obligations as set forth in this Agreement. During an
Existing Default, Administrative Agent is hereby authorized, without notice
to
Borrower (any such notice being expressly waived by Borrower), to set off and
apply against the Loan Obligations any and all deposits (general or special,
time or demand, provisional or final) or other assets at any time held by or
at
Administrative Agent, or under the control of or otherwise pledged to
Administrative Agent, or any other Indebtedness at any time owing by
Administrative Agent or any Affiliate thereof to or for the credit or the
account of Borrower, irrespective of whether or not Administrative Agent or
any
Affiliate thereof shall have made any demand under this Agreement or the Loan
Obligations and although such Loan Obligations may be unmatured.
16.3.4. Notice
to Account Debtors. Upon the occurrence and during the
continuance of an Event of Default, Administrative Agent may (if Required
Lenders concur or direct), without prior notice to Borrower, notify any or
all
Account Debtors that the Accounts have been assigned to Administrative Agent
for
the benefit of Lenders and that Administrative Agent has a Security Interest
therein for the benefit of Lenders, and Administrative Agent may direct, or
Borrower, at Administrative Agent’s request, shall direct, any or all Account
Debtors to make all payments upon the Accounts directly to Administrative Agent
for the benefit of Lenders.
16.3.5. Entry
Upon Premises and Access to Information. Upon the occurrence
and during the continuance of an Event of Default, Administrative Agent may
(or
shall at the direction of the Required Lenders) (i) enter upon the premises
leased or owned by Borrower where Collateral is located (or is believed to
be
located) without any obligation to pay rent to Borrower, or any other place
or
places where Collateral is believed to be located, (ii) render Collateral
usable or saleable, (iii) remove Collateral therefrom to the premises of
Administrative Agent or any agent of Administrative Agent for such time as
Administrative Agent may desire in order effectively to collect or liquidate
Collateral;
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(iv) take
possession of, and make copies and abstracts of, Borrower’s original books and
records, obtain access to Borrower’s data processing equipment, computer
hardware and software relating to any of the Collateral and use all of the
foregoing and the information contained therein in any manner Administrative
Agent deems appropriate in connection with the exercise of Administrative
Agent’s rights; and (v) notify postal authorities to change the address for
delivery of Borrower’s mail to an address designated by Administrative Agent and
to receive, open and process all mail addressed to Borrower.
16.3.6. Completion
of Uncompleted Inventory Items. Upon the occurrence and
during the continuance of an Event of Default, Administrative Agent may (or
shall at the direction of the Required Lenders) request that Borrower, and
Borrower shall upon such request, use Borrower’s best efforts to obtain the
consent of its and any other Covered Person’s customers to the completion
(before or after foreclosure by Administrative Agent of its security interest
therein) of the manufacture of all uncompleted Inventory items that Borrower
or
any other Covered Person was manufacturing for such customers pursuant to
contracts or accepted purchase orders, and the commitment by such customers
to
purchase such items upon their completion as provided in the relevant contracts
or accepted purchase orders. Borrower shall, as an uncompensated
agent for Lenders, complete or cause to be completed the manufacture and
shipment of all such items as provided in the relevant contracts or accepted
purchase orders if Administrative Agent so directs.
16.3.7. Borrower’s
Obligations. Upon the occurrence and during the continuance
of an Event of Default, Borrower shall, if Administrative Agent so requests,
assemble all the movable tangible Collateral and make it available to
Administrative Agent at a place or places to be designated by Administrative
Agent in its discretion.
16.3.8. Secured
Party Rights. Upon the occurrence and during the continuance
of an Event of Default:
16.3.8.1. Administrative
Agent may exercise any or all of its rights under the Security Documents as
a
secured party under the UCC and any other applicable Law; and
16.3.8.2. Administrative
Agent may sell or otherwise dispose of any or all of the Collateral at public
or
private sale in a commercially reasonable manner, which sale Administrative
Agent may postpone from time to time by announcement at the time and place
of
sale stated in the notice of sale or by announcement at any adjourned sale
without being required to give a new notice of sale, all as Administrative
Agent
deems advisable, for cash or credit. A Lender may become the
purchaser at any such sale if permissible under applicable Law, and Borrower
agrees that such Lender has no obligation to preserve rights to Collateral
against prior parties or to marshal any Collateral for the benefit of any
Person. Borrower agrees that if Administrative Agent conducts a
private sale of any Collateral by requesting bids from 5 or more dealers,
distributors, or lessors in that type of Collateral, any sale by Administrative
Agent of such Collateral, in bulk or in parcels, to the bidder submitting the
highest cash bid therefor, which occurs within 120 days of the later to
occur of (a) Administrative Agent taking possession and control of such
Collateral, or (b) Administrative Agent being otherwise authorized or
permitted to sell such Collateral, is a commercially reasonable sale of such
71
Collateral
under the UCC. Borrower further agrees that 10 (ten) or more days
prior written notice will be commercially reasonable notice of any public or
private sale. Borrower agrees that the purchase of any Collateral by
a Vendor, as provided in any agreement between Administrative Agent and the
Vendor or CDF and Vender, is a commercially reasonable disposition and private
sale of such Collateral under the UCC, and no request for bids shall be
required. Borrower irrevocably waives any requirement that
Administrative Agent retain possession and not dispose of any Collateral until
after an arbitration hearing, arbitration award, confirmation, trial or final
judgment. If Administrative Agent disposes of any such Collateral
other than as herein contemplated, the commercial reasonableness of such
disposition will be determined in accordance with the laws of the state
governing this Agreement.
16.3.9. Joint
and Several. Each Obligation and liability of Borrower to
Administrative Agent, each Lender, and Letter of Credit Issuer, including the
Loan Obligations, are the joint and several obligations of Borrower, and
Administrative Agent, any Lender, and the Letter of Credit Issuer, may proceed
directly against any Borrower, or all Borrowers, or any Guarantor, or any
Collateral, or all of the foregoing, or any one of the foregoing or any
combination of the foregoing, without first proceeding against Borrower or
any
Collateral, or without joining all Persons liable or potentially liable for
any
portion of the Loan Obligations in one action. Each Borrower shall be
jointly and severally liable as primary obligor and not merely as surety for
repayment of all Loan Obligations arising under the Loan
Documents. Such joint and several liability shall apply to Borrower
regardless of whether any Advance was only requested by or on behalf of or
made
to any other Borrower or the proceeds of any Advance were used only by or on
behalf of any other Borrower or any indemnification Obligation or any other
Obligation arose only as a result of the action of any other
Borrower. If any Borrower makes a payment in respect of the Loan
Obligations hereunder and under the other Loan Documents, it shall have the
rights of contribution described in this Section below against the other
Borrower or Borrowers; provided that such Borrower shall not exercise its right
of contribution until all of the Loan Obligations are fully and indefeasibly
paid in full in cash and satisfied, no Letters of Credit are outstanding and
the
Letter of Credit Exposure is zero and the Commitments are terminated and
Administrative Agent and the Lenders have no further obligation to extend credit
to or for the account of any Borrower; provided, however, that Administrative
Agent is hereby granted, for the benefit of the Lenders, a Security Interest
in
such right of contribution and may enforce such right during an Existing
Default. It is the intent of Borrower, Administrative Agent, the
Lenders, and the Letter of Credit Issuer that Borrower’s maximum obligation to
repay the Loan Obligations hereunder and under the other Loan Documents (the
“Loan Obligation Limit”) shall not exceed the greater of (i) the amount actually
borrowed or received directly or indirectly by such Borrower with respect
thereto and (ii) the amount which is $1.00 less than the amount which, if
recorded by such Borrower as a liability, would render such Borrower not
Solvent. To the extent that any Borrower makes a payment on any of
the Loan Obligations (a “Loan Obligation Payment”), such Borrower (the “Entitled
Borrower”) is entitled to contribution and indemnification from, and
reimbursement by, each other Borrower (a “Contributing Borrower”) in the amount
of the Contribution Obligation of such Contributing Borrower
hereunder. The “Contribution Obligation” of a Contributing Borrower
with respect to the Loan Obligation Payment of an Entitled Borrower is an amount
equal to the greater of (1) the lesser of (x) such Contributing Borrower’s Loan
Obligation Limit at the time the Loan Obligation Payment is made and (y) such
Contributing Borrower’s Allocable Share of the Loan Obligation
72
Payment,
and (2) the amount of all proceeds from the Loan Obligations actually received
by such Contributing Borrower or applied by the recipient thereof directly
or
indirectly for the benefit of such Contributing Borrower, less the sum of any
repayments thereof and any Loan Obligation Payments made by such Contributing
Borrower prior to the time the applicable Loan Obligation Payment is
made. The “Allocable Share” of a Contributing Borrower is a fraction,
the numerator of which is such Contributing Borrower’s Loan Obligation Limit at
the time the applicable Loan Obligation Payment is made and the denominator
of
which is the sum of the Loan Obligation Limits of all of the Contributing
Borrowers (plus a similarly computed amount for any Guarantor which has a
similar obligation to make a contribution) as of such time.
16.3.10. Miscellaneous. Upon
the occurrence of an Event of Default and at any time thereafter, Administrative
Agent and/or Lenders may exercise any other rights and remedies available to
Administrative Agent and/or Lenders under the Loan Documents or otherwise
available to Administrative Agent and/or Lenders at law or in
equity.
16.4. Application
of Funds. Any funds received by Lenders or Administrative
Agent for the benefit of Lenders with respect to any Loan Obligation after
its
Maturity, including proceeds of Collateral, shall be applied as
follows: (i) first, to reimburse Lenders based on their
respective pro-rata shares for any amounts due to Lenders under
Section 18.6; (ii) second, to reimburse to Administrative Agent all
unreimbursed costs and expenses paid or incurred by Administrative Agent that
are payable or reimbursable by Borrower hereunder; (iii) third, to reimburse
to
Lenders based on their respective Pro- Rata Shares for unreimbursed costs and
expenses paid or incurred by Lenders (including costs and expenses incurred
by
Administrative Agent as a Lender that are not reimbursable as provided in the
preceding clause) that are payable or reimbursable by Borrower hereunder;
(iv) fourth, to the payment of accrued and unpaid fees due hereunder and
all other amounts due hereunder and to cash collateralize (at 105% of the face
amount) any letters of credit issued by Administrative Agent or its Affiliates
(other than the Loans and interest accrued thereon); (v) fifth, to the
payment of interest accrued on the Loans to each of Lenders based on their
respective pro-rata shares; and to the payment (pari passu with the foregoing)
of any Interest/Currency Hedge Obligations; (vi) sixth, to the payment of the
Loans of each of Lenders, in such order as each Lender determines in its
absolute discretion; and (vii) seventh, to the payment of the other Loan
Obligations based on each Lender’s respective pro-rata shares. Any
remaining amounts shall be applied to payment of all the Obligations to
Administrative Agent. Any further remaining amounts shall be paid to
Borrower or such other Persons as shall be legally entitled
thereto. Except as expressly provided otherwise herein, Lenders may
apply, and reverse and reapply, payments and proceeds of the Collateral to
the
Loan Obligations in such order and manner as Lenders determine in their absolute
discretion. Borrower hereby irrevocably waives the right to direct
the application of payments and proceeds of the
Collateral. Notwithstanding the foregoing, the Administrative Agent
and the Lenders may, with respect to the Aggregate Floorplan Loan Facility
apply: (i) at any time, payments to reduce finance charges first and then
principal, regardless of Borrower’s instructions; and (ii) principal
payments to the oldest (earliest) invoice for Collateral financed by
Administrative Agent and Lenders under the Aggregate Floorplan Loan Facility
(including the Interim Floorplan Loan Facility), but, in any event, all
principal payments will first be applied to such Collateral financed by
Administrative Agent and Lenders under the Aggregate Floorplan Loan Facility
(including the Interim Floorplan Loan Facility) which is sold, lost, stolen,
damaged, rented, leased, or otherwise disposed of or unaccounted
for.
16.5. Limitation
of Liability; Waiver. Administrative Agent and Lenders shall
not be liable to Borrower as a result of any commercially reasonable possession,
repossession, collection or
73
sale
by
Administrative Agent of Collateral; and Borrower hereby waives all rights of
redemption from any such sale and the benefit of all valuation, appraisal and
exemption Laws. If Administrative Agent seeks to take possession of
any of the Collateral by replevin or other court process, Borrower hereby
irrevocably waives (i) the posting of any bonds, surety and security
relating thereto required by any statute, court rule or otherwise as an incident
to such possession, (ii) any demand for possession of the Collateral prior
to the commencement of any suit or action to recover possession thereof,
(iii) any requirement that Administrative Agent retain possession and not
dispose of any Collateral until after trial or final judgment, and (iv) to
the extent permitted by applicable Law, all rights to notice and hearing prior
to the exercise by Administrative Agent of Administrative Agent’s right to
repossess the Collateral without judicial process or to replevy, attach or
levy
upon the Collateral without notice or hearing. Administrative Agent
shall have no obligation to preserve rights to the Collateral or to marshal
any
Collateral for the benefit of any Person.
16.6. Notice. Any
notice of intended action required to be given by Administrative Agent
(including notice of a public or private sale of Collateral), if given as
provided in Section 20.1 at least 10 days prior to such proposed action,
shall be effective and constitute reasonable and fair notice to
Borrower.
17. Administrative
Agent and Lenders.
17.1. Appointment,
Powers, and Immunities. CDF is hereby appointed
Administrative Agent hereunder and under each of the other Loan
Documents. Each Lender hereby irrevocably appoints and authorizes the
Administrative Agent to act as its agent under this Agreement and the other
Loan
Documents with such powers and discretion as are specifically delegated to
the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental
thereto. The Administrative Agent (which term as used in this
sentence and in Section 18.5 and the first sentence of Section 18.6
hereof shall include its Affiliates and its own and its Affiliates’ officers,
directors, employees, representatives, and agents): (a) shall
not have any duties or responsibilities except those expressly set forth in
this
Agreement and shall not be a trustee or fiduciary for any Lender; (b) shall
not be responsible to the Lenders for any recital, statement, representation,
or
warranty (whether written or oral) made in or in connection with any Loan
Document or any certificate or other document referred to or provided for in,
or
received by any of them under, any Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of any Loan Document,
or any other document referred to or provided for therein or for any failure
by
any Covered Person or any other Person to perform any of its obligations
thereunder; (c) shall not be responsible for or have any duty to ascertain,
inquire into, or verify the performance or observance of any covenants or
agreements by any Covered Person or the satisfaction of any condition or to
inspect the property (including the books and records) of any Covered Person
or
any of its Subsidiaries; (d) shall not be required to initiate or conduct
any litigation or collection proceedings under any Loan Document (other than
normal collection procedures from the Lockboxes); and (e) shall not be
responsible for any action taken or omitted to be taken by it under or in
connection with any Loan Document, except for its own gross negligence or
willful misconduct. The Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable
care.
17.2. Reliance
by Administrative Agent. The Administrative Agent shall be
entitled to rely upon any certification, notice, instrument, writing, or other
communication (including, without limitation, any thereof by telephone or
telecopy) believed by it to be genuine and correct and to
74
have
been
signed, sent or made by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel (including counsel for any Covered
Person), independent accountants, and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the
payee of any Note as the holder thereof for all purposes hereof unless and
until
the Administrative Agent receives and accepts an Assignment and Acceptance
executed in accordance with this Agreement. As to any matters not
expressly provided for by this Agreement, the Administrative 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 shall be binding on all of the Lenders; provided,
however, that the Administrative Agent shall not be required to take
any
action that exposes the Administrative Agent to personal liability or that
is
contrary to any Loan Document or applicable Law or unless it shall first be
indemnified to its satisfaction by the Lenders against any and all liability
and
expense which may be incurred by it by reason of taking any such
action.
17.3. Employment
of Administrative Agents and Counsel. Administrative Agent
may execute any of its duties hereunder by or through employees, agents, and
attorneys-in-fact and shall not be liable to any Lender, except with respect
to
money or securities received by it or such agents or attorneys-in-fact, for
the
default or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. Administrative Agent shall be entitled to
advice of counsel concerning all matters pertaining to the agency hereby created
and its duties hereunder and shall not be liable to any Lender for acting or
failing to act as advised by such counsel, except where doing so violates an
express obligation of Administrative Agent under the Loan
Documents.
17.4. Defaults. The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Administrative Agent
has
received written notice from a Lender or the Borrower specifying such Default
or
Event of Default and stating that such notice is a “Notice of
Default”. In the event that the Administrative Agent receives such a
written notice of the occurrence of a Default or Event of Default, the
Administrative Agent shall promptly give notice thereof to the
Lenders. The Administrative Agent shall (subject to Section 17.2
hereof) take such action with respect to such Default or Event of Default as
shall be directed by the Required Lenders, providedthat, unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action,
or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the
Lenders.
17.5. Rights
as Lender. With respect to its Commitments and the Loans
made by it, CDF (and any successor acting as Administrative Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting
as
the Administrative Agent, and the term “Lender” or “Lenders” shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity as a Lender. CDF (and any successor acting as Administrative
Agent) and its Affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to, make investments in, provide services
to,
and generally engage in any kind of lending, trust, or other business with
any
Covered Person or any of its Subsidiaries or Affiliates or any Guarantor as
if
it were not acting as Administrative Agent, and CDF (and any successor acting
as
Administrative Agent) and its Affiliates may accept fees and other consideration
from any Covered Person or any of its Subsidiaries or Affiliates or any
Guarantor for services in connection with this Agreement or otherwise without
having to account for the same to Lenders.
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17.6. Indemnification. The
Lenders agree to reimburse and indemnify the Administrative Agent (to the extent
not reimbursed under the terms of Section 18.6, but without limiting the
obligations of the Borrower under such Section) in accordance with their
respective pro-rata shares, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including
reasonable attorneys’ fees), or disbursements of any kind and nature whatsoever
that may be imposed on, incurred by or asserted against the Administrative
Agent
(including by any Lender) in any way relating to or arising out of any Loan
Document or the transactions contemplated thereby or any action taken or omitted
by the Administrative Agent under any Loan Document; provided that no
Lender shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct of the Person to be
indemnified. Without limitation of the foregoing, each Lender agrees
to reimburse the Administrative Agent promptly upon demand for its pro-rata
share of any costs or expenses payable by the Borrower to Administrative Agent
under this Agreement or the other Loan Documents, to the extent that the
Administrative Agent is not promptly reimbursed for such costs and expenses
by
the Borrower. If Lenders reimburse Administrative Agent and
Administrative Agent subsequently receives reimbursement from Borrower,
Administrative Agent shall promptly remit to the Lenders (without interest)
their pro-rata share of such reimbursement received from Borrower. If
Administrative Agent is for any reason compelled to surrender any payment or
any
proceeds of the Collateral because such payment or the application of such
proceeds is for any reason invalidated, declared fraudulent, set aside, or
determined to be void or voidable as a preference, an impermissible set-off,
or
a diversion of trust funds, then this Agreement and the Loan Obligations to
which such payment or proceeds was applied or intended to be applied shall
be
revived as if such application was never made, and to the extent Administrative
Agent has been compelled to surrender any such payment or proceeds which have
been distributed by Administrative Agent to a Lender and Borrower has not repaid
such amounts immediately upon demand by Administrative Agent, such Lender shall
be liable to pay, and shall promptly on demand pay, to Administrative Agent
the
amount of any such payments or proceeds so received by Lender and surrendered
by
Administrative Agent, and shall indemnify Administrative Agent for and hold
Administrative Agent harmless from any loss with respect to payments or proceeds
received by such Lender and surrendered by Administrative Agent. The
agreements contained in this Section shall survive payment in full of the Loans
and all other amounts payable under this Agreement and the termination of the
Commitments.
17.7. Notification
of Lenders. Each Lender agrees to use commercially
reasonable efforts (but no Lender shall have liability to any other Lender
or
Administrative Agent for failure to use such commercially reasonable efforts,
unless such failure is due to a Lender’s willful misconduct in not using such
commercially reasonable efforts), upon becoming actually aware of anything
which
has or is reasonably likely to have a Material Adverse Effect on any Covered
Person, including any Guarantor, to promptly notify Administrative Agent
thereof. Administrative Agent shall promptly deliver to each Lender
copies of every written notice, demand, report (including any financial report),
or other writing which Administrative Agent gives to or receives from Borrower
or any Lender, or of which Administrative Agent, in its capacity as a Lender
otherwise becomes actually aware, and which itself (a) constitutes, or
which contains information about, something that has or is reasonably likely
to
have a Material Adverse Effect on any Covered Person, including any Guarantor,
or (b) is otherwise delivered to Administrative Agent by Borrower pursuant
to the Loan Documents and is deemed material information by Administrative
Agent
in its sole discretion. Any Lender may specifically request certain
information regarding any Covered Person which it reasonably believes is in
the
possession of Administrative Agent. Administrative Agent and its
directors, officers, agents, and employees shall have no liability to any Lender
for failure to deliver any such item to such Lender unless the failure
constitutes gross negligence or willful misconduct.
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17.8. Non-Reliance
on Agent and Other Lenders. Each Lender agrees that it has,
independently and without reliance on the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Covered Persons and their
Subsidiaries and the Guarantors and its own decision to enter into this
Agreement and that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own
analysis and decisions in taking or not taking action under the Loan
Documents. Except for notices, reports, and other documents and
information expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any
duty
or responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition, or business of any Covered Person
or any of its Subsidiaries or Affiliates or any of the Guarantors that may
come
into the possession of the Administrative Agent or any of its
Affiliates.
17.9. Resignation. The
Administrative Agent may resign at any time by giving notice thereof to the
Lenders and the Borrower. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Administrative
Agent. Effective with such resignation, the resigning Administrative
Agent shall assign (at Borrower’s sole cost and expense) all Security Interests
and liens in the Collateral, security documents and UCC filings, and do all
other things reasonably necessary so as to assign and transfer the Security
Interests in the Collateral (including, all documents effectuating or evidencing
such Security Interests) to any successor Administrative Agent. The
successor Administrative Agent appointed by the Required Lenders shall be a
Lender. If no successor Administrative Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent’s giving of
notice of resignation, then the retiring Administrative Agent may, on behalf
of
the Lenders, appoint a successor Administrative Agent which shall be a
commercial bank or other financial institution organized under the laws of
the
United States of America or any state thereof having combined capital and
surplus of at least $300,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor, such successor
shall thereupon succeed to and become vested with all the rights, powers,
discretion, privileges, and duties of the retiring Administrative Agent, and
the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent’s
resignation hereunder as Administrative Agent, the provisions of this Section
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Administrative
Agent.
17.10. Collections
and Distributions to Lenders by Administrative Agent. Except
as otherwise provided in this Agreement, including the other provisions of
this
Agreement pertaining to interest on the Floorplan Loans and the Interim
Floorplan Loans and the provisions of Section 4.5 pertaining to the
suspension or reduction of payments of principal and interest to the Lenders
under certain circumstances, all payments of interest, fees, principal and
other
amounts received by Administrative Agent for the account of Lenders shall be
distributed by Administrative Agent to Lenders in accordance with their pro-rata
shares of the outstanding Loan Obligations at the time of such distribution
by
wire transfer of same day funds to Lenders as provided in this Agreement (or
entirely to Administrative Agent in the case of payments of interest, fees
or
principal with respect to the Swingline Loan) on the Settlement Date following
the date when received, unless received after 12:00 noon (Local Time) on
the Business Day preceding a Settlement Date, in which case they shall be so
distributed by 12:00 noon (Local Time) on the next Settlement
Date. All amounts received by any Lender on account of the Loan
Obligations, including amounts received by way of setoff, shall be paid over
promptly to Administrative Agent for distribution to Lenders as provided above
in this Section. Such
77
distributions
shall be made according to instructions that each Lender may give to
Administrative Agent from time to time.
17.11. Provision
Regarding Payments. Lenders agree that the Lenders shall be
obligated to make any required purchase and or sale from another Lender on
a
Settlement Date or required reimbursement to Administrative Agent following
the
termination of the Lenders obligations to make Advances under Sections 16.3.1
and 16.3.2 of this Agreement. The parties acknowledge and agree that
the provisions of this Section 17.11 are solely for the benefit of
Administrative Agent and the Lenders and not for Borrower or any other
Person.
18. General.
18.1. Lenders’
Right to Cure. Administrative Agent or any Lender may (but
shall not be obligated to), from time to time, in its absolute discretion,
for
Borrower’s account and at Borrower’s expense, pay (or, with the consent of
Required Lenders, make a Revolving Loan Advance, or Floorplan Loan Advance
to
pay) any amount or do any act required of Borrower hereunder or requested by
Administrative Agent or Required Lenders to preserve, protect, maintain or
enforce the Loan Obligations, the Collateral or Administrative Agent’s Security
Interests therein for the benefit of Lenders, and which Borrower fails to pay
or
do, including payment of any judgment against Borrower, insurance premium,
Taxes, warehouse charge, finishing or processing charge, landlord’s claim, and
any other Security Interest upon or with respect to the
Collateral. All payments that Lenders make pursuant to this Section
and all reasonable out-of-pocket costs and expenses that Lenders pay or incur
in
connection with any action taken by them hereunder shall be a part of the Loan
Obligations, the repayment of which shall be secured by the
Collateral. Any payment made or other action taken by Lenders
pursuant to this Section shall be without prejudice to any right to assert
an
Event of Default hereunder and to pursue Lender’s other rights and remedies with
respect thereto.
18.2. Rights
Not Exclusive. Every right granted to Administrative Agent
and Lenders hereunder or under any other Loan Document or allowed to it at
law
or in equity shall be deemed cumulative and may be exercised from time to
time.
18.3. Survival
of Agreements. All covenants and agreements made herein and
in the other Loan Documents shall survive the execution and delivery of this
Agreement, the Notes and other Loan Documents and the making of every
Advance. All agreements, obligations and liabilities of Borrower
under this Agreement concerning the payment of money to Administrative Agent
and
Lenders, including Borrower’s obligations under Sections 18.5 and 18.6, but
excluding the obligation to repay the Loans and interest accrued thereon, shall
survive the repayment in full of the Loans and interest accrued thereon, whether
or not indefeasible, the return of the Notes to Borrower and the termination
of
the Commitments.
18.4. Assignments.
18.4.1.
Permitted Assignments. At any time after the
Execution Date, any Lender may assign to one or more Eligible Assignees all
or a
portion of its rights and obligations under this Agreement (including all or
a
portion of the Notes payable to it, its Commitments and its Loans), provided
that the terms of assignment satisfy the following requirements:
18.4.1.1. If
there is no Existing Default, Borrower shall have approved the
assignment.
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18.4.1.2. Administrative
Agent shall have accepted the assignment, which acceptance shall not be
unreasonably withheld; provided, however, that if the Commitments have been
terminated and the Loan Obligations accelerated by the Required Lenders, then
Administrative Agent’s consent shall not be required.
18.4.1.3. Each
such assignment shall be of a constant, and not a varying, percentage of all
of
the assigning Lender’s rights and obligations under this Agreement.
18.4.1.4. For
each assignment involving the issuance and transfer of Notes, the assigning
Lender shall execute an Assignment and Acceptance in the form attached hereto
as
Exhibit 18.4.1 together with any Note subject to such assignment and a
processing fee of $4,000.
18.4.1.5. The
minimum Commitment which shall be assigned (which shall include the applicable
portion of the assigning Lender’s Revolving Loan Commitment, and Floorplan Loan
Facility, and the Letter of Credit Facility (and in the case of Administrative
Agent, the Swingline Commitment and the Interim Floorplan Loan Facility)) is
$5,000,000 or such lesser amount which constitutes such Lender’s entire
Commitment; provided, however, that no such minimum shall apply between a Lender
and its Affiliates, or between one Lender and another Lender or to an assignment
of all of a Lender’s rights and obligations under this Agreement.
18.4.1.6. The
assignee shall have an office located in the United States and is otherwise
an
Eligible Assignee.
Upon
execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder
and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this
Agreement. Upon the consummation of any assignment pursuant to this
Section, the assignor, the Administrative Agent and the Borrower shall make
appropriate arrangements so that, if required, new Notes are issued to the
assignor and the assignee. If the assignee is not incorporated under the laws
of
the United States of America or a state thereof, it shall deliver to the
Borrower and the Administrative Agent certification as to the exemption from
deduction or withholding of Taxes in accordance with
Section 4.11.
18.4.2. Register;
Consequences and Effect of Assignments.
18.4.2.1. From
and after the effective date specified in any Assignment and Acceptance, the
assignee shall be deemed and treated as a party to this Agreement and, to the
extent that rights and obligations hereunder and under the Notes held by the
assignor have been assigned or negotiated to the assignee pursuant to such
Assignment and Acceptance, to have the rights and obligations of a Lender
hereunder as fully as if such assignee had been named as a Lender in this
Agreement and of a holder of such Notes, and the assignor shall, to the extent
that rights and obligations hereunder or under such Notes have been assigned
or
negotiated by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its future obligations under this
Agreement.
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18.4.2.2. By
executing and delivering an Assignment and Acceptance, the assignor thereunder
and the assignee confirm to and agree with each other and the other parties
hereto substantially as follows: (i) the assignment made under
such Assignment and Acceptance is made without recourse; (ii) such assignor
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of any Covered Person or Guarantor or the performance
or observance by any Covered Person or Guarantor of any of its Loan Obligations;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the Financial Statements and such other Loan Documents
and other documents and information as it has deemed appropriate to make its
own
credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon
Administrative Agent, such assignor, or any other Lender, and based on such
documents and information as it deems appropriate at the time, continue to
make
its own credit decisions in taking or not taking action under this Agreement;
(v) such assignee appoints and authorizes Administrative 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 Administrative Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
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
are
required to be performed by it as a Lender and a holder of a Note.
18.4.2.3. The
Administrative Agent shall maintain at its address referred to herein a copy
of
each Assignment and Acceptance delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders and the Commitment
of, and principal amount of Loans owing to, each Lender from time to time (the
“Register”). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the
Administrative 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
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice. Upon its receipt of an Assignment and
Acceptance executed by the parties thereto, together with any Note subject
to
such assignment and payment of the processing fee, the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit 18.4.1 hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the parties thereto
and to Borrower.
18.4.3.
Administrative Agent to Retain Copies of Assignments and
Acceptances. Administrative Agent shall maintain a copy of
each Assignment and Acceptance delivered to and accepted by it.
18.4.4. Notice
to Borrower of Assignment. Upon its receipt of an Assignment
and Acceptance executed by an assigning Lender, if Administrative Agent accepts
the assignment contemplated thereby, Administrative Agent shall give prompt
notice thereof to Borrower. If Borrower consents to the assignment
contemplated thereby (Borrower agrees such consent shall not be unreasonably
withheld or delayed), Borrower shall
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execute
and deliver replacement Notes to the assignor and assignee as requested by
Administrative Agent and necessary to give effect to the assignment; provided,
however, no consent of Borrower to any assignment shall be required during
an
Existing Default. If Borrower fails or refuses to execute and deliver
such replacement Notes, Administrative Agent may, as agent and attorney-in-fact
for Borrower, execute and deliver such replacement Notes on behalf of
Borrower. Borrower hereby appoints Administrative Agent as its agent
and attorney-in-fact for such purpose and acknowledges that such power is
coupled with an interest and therefore irrevocable until the Loan Obligations
have been indefeasibly paid in full in cash, the Commitments have terminated,
no
Letters of Credit are outstanding and the Letter of Credit Exposure is
irreversibly zero and the Administrative Agent and the Lenders have no other
commitment to extend credit or make advances to or for the account of
Borrower. Administrative Agent shall not have any liability to
Borrower or anyone else, including any Lender, as a consequence of exercising
the power granted to Administrative Agent in the foregoing sentence in any
instance, except in cases of Administrative Agent’s gross negligence or willful
misconduct.
18.4.5. Assignment
to Federal Reserve Bank. Notwithstanding any other provision
set forth in this Agreement, any Lender may at any time assign and pledge all
or
any portion of its Loans and its Notes to any Federal Reserve Bank as collateral
security pursuant. No such assignment shall release the assigning
Lender from its obligations hereunder.
18.4.6. Information. Any
Lender or Administrative Agent may furnish any information concerning the
Borrower or any of its Subsidiaries in the possession of such Lender or
Administrative Agent, as the case may be, from time to time to assignees,
affiliates or participants (including prospective assignees and
participants) Administrative Agent or such Lender will use reasonable
efforts to provide notice to Borrower prior to disclosing any such information,
but shall have no liability for failure to provide such notice unless failure
was willful.
18.4.7. Sale
of Participations. No Lender may sell participations in its
Loans to any other Person; provided, however, any Lender may sell such
participations as it may be required to do under any applicable Law or as
otherwise instructed to do so by any Governmental Authority.
18.5. Payment
of Expenses. Borrower agrees to pay or reimburse to
Administrative Agent all of Administrative Agent’s reasonable out-of-pocket
costs incurred in connection with Administrative Agent’s due diligence review
before execution of the Loan Documents; the negotiation and preparation of
proposals, a commitment letter and the Loan Documents; the syndication of the
Loans; the administration of this Agreement, the Loan Documents and the Loans;
the perfection of Administrative Agent’s Security Interests in the Collateral;
the interpretation of any of the Loan Documents; the enforcement of
Administrative Agent’s rights and remedies under the Loan Documents after a
Default or Event of Default; any amendment of or supplementation to any of
the
Loan Documents; and any waiver, consent or forbearance with respect to any
Default or Event of Default. Administrative Agent’s reasonable
out-of-pocket costs may include but are not limited to the following, to the
extent they are actually paid or incurred by Administrative Agent: title
insurance fees and premiums; the cost of searches for Security Interests
existing against Covered Persons or Guarantors; recording and filing fees and
taxes; appraisal fees; environmental consultant fees; litigation costs; and
reasonable attorneys’ and paralegals’ expenses and reasonable
fees. Attorneys’ and paralegals’ expenses may include
81
but
are
not limited to filing charges; telephone, data transmission, facsimile and
other
communication costs; courier and other delivery charges; and photocopying
charges. Litigation costs may include but are not limited to filing
fees, deposition costs, expert witness fees, expenses of service of process,
and
other such costs paid or incurred in any administrative, arbitration, or court
proceedings involving a Lender and any Covered Person, including proceedings
under the Bankruptcy Code. All costs which Borrower is obligated to
pay or reimburse Administrative Agent are Loan Obligations payable to
Administrative Agent and are payable on demand by Administrative
Agent.
18.6. General
Indemnity.
18.6.1. Borrower
agrees to indemnify and hold harmless Administrative Agent, each Lender, the
Letter of Credit Issuer, and each of their affiliates and their respective
officers, directors, employees, attorneys, representatives, agents, and advisors
(each, an “Indemnified Party”) from and against any and all claims,
damages, losses, liabilities, costs, and expenses (including, without
limitation, reasonable attorneys’ fees) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection
with any investigation, litigation, or proceeding or preparation of defense
in
connection therewith) the Loan Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans (including,
without limitation, any payments made by Administrative Agent to any Person
(other than Borrower) who is a party to any blocked account and/or lockbox
agreement, including, without limitation, any indemnity payments by
Administrative Agent thereunder), or the manufacture, storage, transportation,
release or disposal of any Hazardous Material on, from, over or affecting any
of
the Collateral or any of the assets, properties, or operations of any Covered
Person or any predecessor in interest, directly or indirectly, except to the
extent such claim, damage, loss, liability, cost, or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence or willful
misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section applies, such indemnity shall
be effective whether or not such investigation, litigation or proceeding is
brought by the Borrower, its directors, shareholders or creditors or an
Indemnified Party or any other Person or any Indemnified Party is otherwise
a
party thereto and whether or not the transactions contemplated hereby are
consummated. The Borrower agrees not to assert and agrees that it
will not direct any other Covered Person to assert, any claim against any
Indemnified Party, on any theory of liability, for special, indirect,
consequential, exemplary or punitive damages arising out of or otherwise
relating to the Loan Documents, any of the transactions contemplated herein
or
the actual or proposed use of the proceeds of the Loans. Borrower
also agrees to pay, indemnify and hold harmless the Indemnified Parties for,
from and against, and shall promptly reimburse the Indemnified Parties for,
any
and all claims, damages, liabilities, losses, costs and expenses (including
reasonable attorneys’ fees and expenses and amounts paid in settlement)
incurred, paid or sustained by the Indemnified Parties, or enforcement by
Administrative Agent of any of its rights with respect thereto, except to the
extent such claim, damage, loss, liability, cost, or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence or willful
misconduct. Each Borrower covenants and agrees to assume liability
for and to protect, indemnify and hold harmless the Administrative Agent, each
of the Lenders, and the Letter of Credit Issuer from any and all liabilities,
obligations, damages, penalties, claims, causes of action, costs, charges and
expenses (including without limitation,
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attorneys’
fees), which may be incurred by, imposed or asserted against the Administrative
Agent, any Lender, or the Letter of Credit Issuer, howsoever arising or incurred
because of. out of or in connection with the disbursements of Revolving Loans,
Swingline Loans, Interim Floorplan Loans, or Floorplan Loans in accordance
with
Section 2.10; provided, however, the liability of the Borrowers pursuant to
this indemnity shall not extend to any liability, obligation, damage, penalty,
claim, cause of action, cost, charge or expense caused by or arising out of
the
gross negligence or willful misconduct of the Administrative Agent, the Lenders
or the Letter of Credit Issuer. Borrower: (i) is
obligated to pay any Loan Obligation even if any Collateral is defective or
fails to conform to any warranties extended by any third party; (ii) shall
not assert against Administrative Agent, any Lender, the Letter of Credit Issuer
or any other Indemnified Party any claim or defense Borrower has against any
third party; and (iii) indemnify and hold Administrative Agent, any Lender,
the Letter of Credit Issuer and any other Indemnified Party harmless against
all
claims and defenses asserted by any buyer of the Collateral relating to the
condition of, or any representations regarding, any of the
Collateral. Borrower irrevocably waives all rights of offset and
counterclaims Borrower may have against Administrative Agent, any Lender, or
the
Letter of Credit Issuer, except counterclaims arising in cases of Administrative
Agent’s, Lender’s or the Letter of Credit Issuer’s gross negligence or willful
misconduct.
18.6.2.
The obligations of Borrower under this Section 18.6 shall survive the
termination of the Commitments, the indefeasible full payment in cash and
satisfaction of all of the Loan Obligations, and the release of the
Collateral. All amounts, obligations and liabilities referred to in
Section 18.6.1 shall be deemed to be a part of the Loan Obligations and
shall be paid to Administrative Agent on demand.
18.6.3.
To the extent that any of the indemnities required from Borrower under this
Section are unenforceable because they violate any Law or public policy,
Borrower shall pay the maximum amount which it is permitted to pay under
applicable Law.
18.6.4.
The foregoing indemnification shall not apply to the extent such
liabilities and costs are determined to have resulted or been caused, in whole
or in part, by the gross negligence or willful misconduct on the part of such
Indemnified Party. THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER
OR NOT SUCH LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY EXTENT CAUSED, IN
WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND EXCEPT AS
PROVIDED BY THE IMMEDIATELY PRECEDING SENTENCE.
18.6.5.
In exchange for, among other things, Administrative Agent’s agreement to make
any payments to any Person (other than Borrower or a Covered Person) who is
a
party to any blocked account, lockbox agreement, bailee letter, landlord waiver
or other similar agreement entered into in connection herewith (including any
indemnity payments by Administrative Agent thereunder, collectively, “Third
Person Reimbursement Agreements”), Borrower hereby indemnifies, releases,
discharges and acquits forever Administrative Agent and each Lender and any
of
their respective officers, directors, servants, agents, employees and attorneys,
past, present and future, from any and all claims, demands and causes of action,
of whatever nature, whether in contract or tort, accrued or to accrue,
contingent or vested, known or unknown, running in favor of Borrower or any
Covered Person arising out of or relating to such Third Person Reimbursement
Agreements, except those arising from Administrative Agent’s or any Lender’s
gross negligence or willful misconduct.
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18.7. Letters
of Credit. Borrower assumes all risks of the acts or
omissions of any beneficiary of any of the Letters of Credit. Neither
Letter of Credit Issuer, Administrative Agent, any Lender nor any of their
respective directors, officers, employees, agents, or representatives shall
be
liable or responsible for: (a) the use which may be made of any of the Letters
of Credit or for any acts or omissions of beneficiary in connection therewith;
(b) the validity, sufficiency or genuineness of documents, or of any
endorsement(s) thereon, even if such documents should in fact prove to be in
any
or all respects invalid, insufficient, fraudulent or forged, unless such
invalidity, insufficiency, fraudulence, or forgery is due to the gross
negligence or willful misconduct of the Letter of Credit Issuer; (c) payment
by
the Letter of Credit Issuer against presentation of documents which, on their
face, appear to comply with the terms of any Letter of Credit, even though
such
documents may fail to bear any reference or adequate reference to any such
Letter of Credit, unless such failure is due to the gross negligence or willful
misconduct of the Letter of Credit Issuer; or (d) any other circumstances
whatsoever in making or failing to make payment under any Letter of Credit
in
connection with which Letter of Credit Issuer would, pursuant to the Uniform
Customs and Practices for Documentary Credits, International Chamber of Commerce
Publication No. 600 (as amended or replaced from time to time) with respect
to documentary letters of credit or the International Standby Practices (ISP98),
International Chamber of Commerce Publication No. 590 (as amended or
replaced from time to time), be absolved from liability. In furtherance and
not
in limitation of the foregoing, Letter of Credit Issuer may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the
contrary.
18.8. Changes
in Accounting Principles. If any Covered Person, at the end
of its fiscal year and with the concurrence of its independent certified public
accountants, changes the method of valuing the Inventory of such Covered Person,
or if any other changes in accounting principles from those used in the
preparation of any of the Financial Statements are required by or result from
the promulgation of principles, rules, regulations, guidelines, pronouncements
or opinions by the Financial Accounting Standards Board or the American
Institute of Certified Public Accountants (or successors thereto or bodies
with
similar functions), and any of such changes result in a change in the method
of
calculation of, or affect the results of such calculation of, any of the
financial covenants, standards or terms found herein, then the parties hereto
agree to enter into and diligently pursue negotiations in order to amend such
financial covenants, standards or terms so as to equitably reflect such changes,
with the desired result that the criteria for evaluating the financial condition
and results of operations of such Covered Person shall be the same after such
changes as if such changes had not been made; provided, however, that until
such
amendments are made, all financial covenants herein and all the provisions
hereof which contemplate financial calculation hereunder shall remain in full
force and effect.
18.9. Loan
Records. The date and amount of all Advances to Borrower and
payments of amounts due from Borrower under the Loan Documents will be recorded
in the records that Administrative Agent normally maintains for such types
of
transactions. The failure to record, or any error in recording, any
of the foregoing shall not, however, affect the obligation of Borrower to repay
the Loans and other amounts payable under the Loan
Documents. Borrower shall have the burden of proving that such
records are not correct. Borrower agrees that Administrative Agent’s
and any Lender’s books and records showing the Loan Obligations and the
transactions pursuant to this Agreement shall be admissible in any action or
proceeding arising therefrom, and shall constitute prima facie proof thereof,
irrespective of whether any Loan Obligation is also evidenced by a promissory
note or other instrument. Any statement sent by Administrative Agent
or a Lender to a Covered Person shall be deemed correct, accurate and binding
on
Borrower and an account stated (except for reversals and reapplications of
payments as provided in Section 6.7 and corrections of errors discovered by
Administrative Agent or a Lender), unless Borrower
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notifies
Administrative Agent in writing to the contrary within 60 days after such
statement is rendered (regardless of whether a shorter period is provided for
in
any Transaction Statement). In the event a timely written notice of
objections is given by Borrower, only the items to which exception is expressly
made will be considered to be disputed by Borrower.
18.10. Other
Security and Guaranties. Administrative Agent or any Lender
may, without notice or demand and without affecting Borrower’s obligations
hereunder, from time to time, for the benefit of the other Lenders and
Administrative Agent (based upon each Lender’s pro-rata share): (a) take
from any Person and hold collateral (other than the Collateral) for the payment
of all or any part of the Loan Obligations and exchange, enforce and release
such collateral or any part thereof; and (b) accept and hold any
endorsement or Guaranty of payment of all or any part of the Loan Obligations
and release or substitute any such endorser or Guarantor, or any Person who
has
given any Security Interest in any other collateral as security for the payment
of all or any part of the Loan Obligations, or any other Person in any way
obligated to pay all or any part of the Loan Obligations.
18.11. Loan
Obligations Payable in Dollars. All Loan Obligations shall
be payable only in Dollars. If, however, to obtain a judgment in any
court it is necessary to convert a Loan Obligation payable in Dollars into
another currency, the rate of exchange used shall be that at which
Administrative Agent, using its customary procedures, could purchase Dollars
with such other currency in New York, New York on the Business Day immediately
preceding the day on which such judgment is rendered. If any sum in
another currency is paid to a Lender or received by a Lender and applied to
a
Loan Obligation payable in Dollars, such Loan Obligation shall be deemed paid
and discharged only to the extent of the amount of Dollars that Administrative
Agent, using its customary procedures, is able to purchase in New York, New
York
with such sum on the Business Day immediately following receipt
thereof. Borrower agrees to indemnify each Lender against any loss in
Dollars that it may incur on such Loan Obligation as a result of such payment
or
receipt and application to such Loan Obligation.
18.12. Reimbursement
Obligations of Borrower. Each Borrower hereby
unconditionally agrees to immediately pay to Administrative Agent or any
Affiliate thereof who issues a letter of credit on Borrower’s behalf or for
Borrower’s account all amounts required to pay all drafts drawn under any such
letters of credit issued for the account of Borrower and all reasonable expenses
incurred by Administrative Agent or any Affiliate thereof who issues any such
letter of credit in connection with such letters of credit and in any event
and
without demand to remit (which may be through obtaining Advances) sufficient
funds to pay all debts and liabilities arising under any letter of credit issued
for the account of Borrower. Borrower assumes all risks of the acts
or omissions of any beneficiary of any letters of credit issued for the benefit
of Borrower or for Borrower’s account. Neither Administrative Agent,
its Affiliates or any Lender, nor any of their respective directors, officers,
employees, agents, or representatives shall be liable or responsible for:
(a) the use which may be made of any of the letters of credit issued for
the benefit of Borrower or for Borrower’s account or for any acts or omissions
of beneficiary in connection therewith; (b) the validity, sufficiency or
genuineness of documents, or of any endorsement(s) thereon, even if such
documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged, unless such invalidity, insufficiency,
fraudulence, or forgery is due to the gross negligence or willful misconduct
of
the Letter of Credit Issuer; (c) payment by Administrative Agent to any of
its Affiliates in connection with, or payment by any Affiliate of Administrative
Agent against, presentation of documents which, on their face, appear to comply
with the terms of any such letter of credit, even though such documents may
fail
to bear any reference or adequate reference to any such letter of credit, unless
such failure is due to the gross negligence or willful misconduct of the Letter
of Credit Issuer; or (d) any other
85
circumstances
whatsoever in making or failing to make payment under any letter of credit
in
connection with which Administrative Agent would, pursuant to the Uniform
Customs and Practices for Documentary Credits, International Chamber of Commerce
Publication No. 600 (as amended or replaced from time to time) with respect
to documentary letters of credit or the International Standby Practices (ISP98),
International Chamber of Commerce Publication No. 590 (as amended or
replaced from time to time) with respect to standby letters of credit, or the
UCC, be absolved from liability. In furtherance and not in limitation of the
foregoing, Administrative Agent or any Affiliate thereof may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the
contrary. The rights of Administrative Agent and its Affiliates under
this Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which Administrative Agent and its
Affiliates may otherwise have.
18.13. Disclosure.
18.13.1. Administrative
Agent and each Lender agrees that it will not disclose to third Persons any
information that it obtains about Borrower or its operations or finances that
is
proprietary in nature or otherwise designated by Borrower in writing as
confidential or that Borrower has advised Lenders in writing constitutes
non-public information.
18.13.2. Administrative
Agent may obtain from any vendor any credit, financial or other information
regarding Borrower that such vendor may from time to time possess.
18.13.3. Notwithstanding
the terms of Section 18.13.1, Administrative Agent and any Lender may, disclose
information regarding Borrower, or its operations or finances, to their
Affiliates, to each other, to each other’s Affiliates, to any actual or
prospective assignee, participant, trustee or purchaser (including any purchaser
of any interest in a trust or other special purpose entity), and to all of
the
officers, attorneys, auditors, accountants, bank examiners, agents and
representatives of the foregoing, in connection with the administration or
the
securitization, participation, or other disposition of all or any portion of
the
Loans or Loan Documents, or the interpretation or enforcement of the Loan
Documents, or the lending and collection activity contemplated therein, or
to
the extent required by Law or a Governmental Authority, or to the extent
required for the assignment, securitization, participation, or other disposition
of all or any portion of the Loans or Loan Documents. Administrative
Agent or such Lender shall use their reasonable efforts to cause such Persons
to
which information is to be disclosed as part of a syndication of the Loans
to
execute non-disclosure agreements with respect to such information, but shall
have no liability for failure to do so, unless such failure is intentionally
willful. Notwithstanding the terms of Section 18.13.1, Administrative
Agent or any Lender may also disclose without restriction any such information
in any documents that it files in any legal proceeding to pursue, enforce or
preserve its rights under the Loan Documents. Notwithstanding the
terms of Section 18.13.1, Administrative Agent may also disclose customary
credit, financial, or other information on Borrower in Administrative Agent’s
possession to Vendors and potential Vendors, credit rating agencies, suppliers
of Borrower, any Persons liable for the Loan Obligations, or any Person involved
in the Floorplan Loan Facility or Interim Floorplan Loan Facility, and
Administrative Agent or such Lender shall use their reasonable efforts to advise
such Persons that such information is to be treated as confidential, but shall
have no liability for failure to do so, unless such failure is intentionally
willful. Administrative Agent’s and Lenders’ non-disclosure
obligation shall not apply to any information that (i) is disclosed to
Administrative Agent or any Lender by a third Person not affiliated with or
86
employed
by Borrower who does not, to Administrative Agent’s or such Lender’s knowledge,
have a commensurate duty of non-disclosure, or (ii) is or becomes publicly
known
other than as a result of disclosure by Administrative Agent or a
Lender.
18.14. Tax
Treatment Waiver. Notwithstanding any provision of this
Agreement to the contrary, any party hereto (and each employee, representative,
or other agent of each such party) may disclose to any and all Persons, without
limitation of any kind, the “tax treatment,” “tax structure,” and “tax
strategies” of the transactions contemplated hereby and the other Loan Documents
and all materials of any kind (including opinions or other tax analyses) that
are provided to such party relating to any such tax treatment, tax structure,
or
tax strategy. This authorization is effective immediately upon the
Effective Date. The terms “tax treatment,” “tax structure,” and “tax
strategies” shall be ascribed the meaning set forth in Treas. Reg. §1.6011-4,
and this paragraph shall be construed so as to cause the subject transaction
not
to have been offered or entered into under conditions of confidentiality as
described in Treas. Reg. §1.6011-4(b)(3).
18.15. Termination.
18.15.1. Termination
Fee. Borrower may terminate no less than all of the
Commitments at any time prior to the second Anniversary Date, upon (a) no less
than three (3) Business Days prior written notice to Administrative Agent,
(b) payment to Administrative Agent of all Loan Obligations in full in
cash; and (c) the one-time payment of an amount as follows to the
Administrative Agent for the pro-rata benefit of the Lenders (such payment
being
the “Termination Fee”):
|
Date
of
Termination
|
Percent
of Aggregate
Commitments
|
|
On
or prior to the first
|
1.00%
|
|
Anniversary
Date
|
|
|
After
the first Anniversary Date
|
.50%
multiplied by a fraction (A) the numerator of which is the number
of months from and including month in which payment of all the Loan
Obligations in full in cash occurs to and including month in which
the
Revolving Loan Maturity Date is to occur, and (B) the denominator
of which
is 12
|
The
foregoing percentages are percentages of the Total Aggregate Facility Limit
as
of the Effective Date or, if the Total Aggregate Facility Limit would ever
be
increased, such increased amount. In addition, the Termination Fee
will also be owing and shall be paid by Borrower if the Commitments are
terminated on account of an Event of Default. Notwithstanding the
foregoing, if the Required Lenders terminate the Aggregate Floorplan Loan
Facility, and if the Borrower elects to terminate the Aggregate Revolving Loan
Facility within 60 days following notice of termination of the Aggregate
Floorplan Loan Facility and repays the Loan Obligations and provides cash
collateral all in accordance with Section 3.5.2 (including the time
limitations contained therein), then Borrower shall not be obligated to pay
the
Termination Fee.
87
18.15.2. Liquidated
Damages. Each party hereto agrees that any Termination Fee
represents liquidated damages and is not a penalty.
18.15.3. Irrevocable;
Termination of Entire Agreement. Any notice of termination
delivered by Borrower to Administrative Agent (which shall be in writing) shall
be irrevocable. It is understood that Borrower may elect to terminate
this Agreement in its entirety only, as provided herein, and no Section,
Commitment or other portion may be terminated singly.
18.15.4. Effect
on Obligations. No termination will relieve Borrower from
any Loan Obligations or other obligations to the Lenders or Administrative
Agent
under this Agreement and the other Loan Documents
19. Binding
Arbitration.
19.1. Arbitrable
Claims. Except as otherwise specified below, all actions,
disputes, claims and controversies under common law, statutory law or in equity
of any type or nature whatsoever, whether arising before or after the date
of
this Agreement and the Loan Documents, and whether directly or indirectly
relating to: (a) this Agreement or any amendments, modifications, restatements,
waivers, and addenda hereto, or the breach, invalidity or termination hereof;
(b) any previous or subsequent agreement between or among Administrative Agent,
Lenders, Borrower and any other Covered Person; (c) any act committed by
Administrative Agent, Lenders or by any parent company, subsidiary or affiliated
company of Administrative Agent or the Lenders (the “Lender Companies”), or by
any employee, agent, officer or director of a Lender Company whether or not
arising within the scope and course of employment or other contractual
representation of the Lender Companies provided that such act arises under
a
relationship, transaction or dealing between Administrative Agent, any Lender,
Borrower and any other Covered Person; or (d) any other relationship,
transaction or dealing between or among, Administrative Agent, Lenders, Borrower
and any Covered Person (collectively, for clauses (a) through and including
(d),
the “Disputes”), will be subject to and resolved by binding
arbitration. Notwithstanding the foregoing, the parties agree that
either party may pursue claims against the other that do not exceed Fifteen
Thousand Dollars ($15,000) in the aggregate in a court of competent
jurisdiction. Service of arbitration claims shall be acceptable if
made by U.S. mail or overnight delivery to the address for the party described
herein.
19.2. Administrative
Body. All arbitration hereunder will be conducted in
accordance with the Commercial Arbitration Rules of either: (a) The American
Arbitration Association (“AAA”); or (b) United States Arbitration &
Mediation (“USA&M”). The party first filing an arbitration claim
shall designate which arbitration forum and rules are to be applied for all
Disputes between the parties. The arbitration rules are found at
▇▇▇.▇▇▇.▇▇▇ for AAA, and at ▇▇▇.▇▇▇▇-▇▇▇▇▇▇▇.▇▇▇. for USA&M. AAA
claims may be filed in any AAA office. Claims filed with USA&M
shall be filed in their Midwest office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. All arbitrator(s) selected will be
attorneys with at least five (5) years secured transactions
experience. A panel of three arbitrators shall hear all claims
exceeding One Million Dollars ($1,000,000), exclusive of interest, costs and
attorneys’ fees. The arbitrator(s) will decide if any inconsistency
exists between the rules of the applicable arbitral forum and the arbitration
provisions contained herein. If such inconsistency exists, the
arbitration provisions contained herein will control and supersede such
rules. The arbitrator shall follow the terms of this Agreement and
the applicable law, including the attorney-client privilege and the attorney
work product doctrine.
88
19.3. Hearings. Each
party hereby consents to a documentary hearing for all arbitration claims,
by
submitting the Dispute to the arbitrator(s) by written briefs and affidavits,
along with relevant documents. However, arbitration claims will be
submitted by way of an oral hearing if any party requests an oral hearing within
thirty (30) days after service of the claim, and that party remits the
appropriate amount for AAA’s or USA&M’s (as applicable) fees and arbitrator
compensation within ten (10) days of the designated arbitration association’s
statement for payment of all fees and arbitrator compensation relating to the
oral hearing. Each party agrees that failure to timely pay all fees
and arbitrator compensation billed to the party requesting the oral hearing
will
be deemed such party’s consent to submitting the Dispute to the arbitrator on
documents and such party’s waiver of its request for an oral
hearing. The site of all oral arbitration hearings will be in the
Division of the Federal Judicial District in which the designated arbitration
association maintains a regional office that is closest to
Borrower.
19.4. Discovery. Discovery
permitted in any arbitration proceeding commenced hereunder is limited as
follows. No later than forty (40) days after the filing and service
of a claim for arbitration, the parties in contested cases will exchange
detailed statements setting forth the facts supporting the claim(s) and all
defenses to be raised during the arbitration, and a list of all exhibits and
witnesses. No later than twenty-one (21) days prior to the oral
arbitration hearing, the parties will exchange a final list of all exhibits
and
all witnesses, including any designation of any expert witness(es) together
with
a summary of their testimony; a copy of all documents and a detailed description
of any property to be introduced at the hearing. Under no
circumstances will the use of interrogatories, requests for admission, requests
for the production of documents or the taking of depositions be
permitted. However, if of the designation of any expert witness(es),
the following will occur: (i) all information and documents relied upon by
the
expert witness(es) will be delivered to the opposing party; (ii) the opposing
party will be permitted to depose the expert witness(es); (iii) the opposing
party will be permitted to designate rebuttal expert witness(es); and (iv)
the
arbitration hearing will be continued to the earliest possible date that enables
the foregoing limited discovery to be accomplished.
19.5. Exemplary
or Punitive Damages. The Arbitrator(s) will not have the
authority to award exemplary or punitive damages.
19.6. Confidentiality
of Awards. All arbitration proceedings, including testimony
or evidence at hearings, will be kept confidential, although any award or order
rendered by the arbitrator(s) pursuant to the terms of this Agreement may be
confirmed as a judgment or order in any state or federal court of competent
jurisdiction within the federal judicial district which includes the residence
of the party against whom such award or order was entered. This
Agreement concerns transactions involving commerce among the several
states. The Federal Arbitration Act, Title 9 U.S.C. Sections 1 et
seq., as amended (“FAA”) will govern all arbitration(s) and confirmation
proceedings hereunder.
19.7. Prejudgment
and Provisional Remedies. Nothing herein will be construed
to prevent Administrative Agent’s, any Lender’s, Borrower’s or any
Covered Person’s use of bankruptcy, receivership, injunction, repossession,
replevin, claim and delivery, sequestration, seizure, attachment, foreclosure,
or any other prejudgment or provisional action or remedy relating to any
Collateral for any current or future debt owed by either party to the
other. Any such action or remedy will not waive Administrative
Agent’s, any Lender’s, Borrower’s or any Covered Person’s right to compel
arbitration of any Dispute.
19.8. Attorneys’
Fees. If Administrative Agent, any Lender, Borrower or any
Covered Person brings any other action for judicial relief with respect to
any
Dispute (other than those set forth in
89
Sections
19.1 or 19.7), the party bringing such action will be liable for and immediately
pay all of the other party’s costs and expenses (including attorneys’ fees)
incurred to stay or dismiss such action and remove or refer such Dispute to
arbitration. If Administrative Agent, any Lender, Borrower or any
Covered Person brings or appeals an action to vacate or modify an arbitration
award and such party does not prevail, such party will pay all costs and
expenses, including attorneys’ fees, incurred by the other party in defending
such action. Additionally, if Borrower or any Covered Person sues
Administrative Agent or any Lender or institutes any arbitration claim or
counterclaim against Administrative Agent or any Lender in which Administrative
Agent or any Lender is the prevailing party, Borrower or any such Covered Person
will pay all costs and expenses (including attorneys’ fees) incurred by
Administrative Agent or any Lender in the course of defending such action or
proceeding.
19.9. Limitations. Any
arbitration proceeding must be instituted: (i) with respect to any
Dispute for the collection of any debt owed by either party to the other, before
the second anniversary of the date the last payment by or on behalf of the
payor
was received and applied in respect of such debt by the payee; and (ii) with
respect to any other Dispute, before the second anniversary of the date the
incident giving rise thereto occurred, whether or not any damage was sustained
or capable of ascertainment or either party knew of such
incident. Failure to institute an arbitration proceeding within such
period will constitute an absolute bar and waiver to the institution of any
proceeding, whether arbitration or a court proceeding, with respect to such
Dispute. Notwithstanding the foregoing, this limitations provision
will be suspended temporarily, as of the date any of the following events occur,
and will not resume until the date following the date either party is no longer
subject to, (a) bankruptcy; (b) receivership; (c) any proceeding regarding
an
assignment for the benefit of creditors; or (d) any legal proceeding, civil
or
criminal, which prohibits either party from foreclosing any interest it might
have in the collateral of the other party.
19.10. Survival
After Termination. The agreement to arbitrate will survive
the termination of this Agreement.
19.11. Invalidity/Unenforceability
of Binding Arbitration; Jury Trial Waiver; Service of Process;
Forum. IF THIS AGREEMENT IS FOUND TO BE NOT SUBJECT TO ARBITRATION,
THEN:
19.11.1. Jury
Trial Waiver. ANY LEGAL PROCEEDING WITH RESPECT TO ANY DISPUTE
(1) ARISING UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, or (2) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM IN RESPECT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER OR NOT SOUNDING IN CONTRACT OR TORT OR
OTHERWISE, WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE WITHOUT
A JURY. EACH BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER WAIVE ANY
RIGHT TO A JURY TRIAL IN ANY SUCH PROCEEDING. Each Borrower,
Administrative Agent, and each Lender further agrees and consents that any
such
claim, demand, action or cause of action shall be decided by court trial without
a jury and that either may file an original counterpart or a copy of this
Agreement with any court as written evidence of the consent of the parties
hereto to the waiver of their right to trial by jury.
90
19.11.2. Choice
of Forum. Subject only to the exception in the next
sentence, Borrower, Administrative Agent, and each Lender hereby agrees to
the
exclusive jurisdiction of the federal court of the Southern District of New
York
and the state courts of New York located in New York City (Borough of
Manhattan), New York and waives any objection based on venue or
forumnonconveniens with respect to any action instituted
therein, and agrees that any dispute concerning the relationship between
Administrative Agent, Lenders, and Borrower or the conduct of any of them in
connection with this Agreement or otherwise shall be heard only in the courts
described above. Notwithstanding the foregoing:
(1) Administrative Agent or any Lender shall have the right to bring any
action or proceeding against any Borrower or its property in any courts of
any
other jurisdiction Administrative Agent or any Lender deem necessary or
appropriate in order to realize on the Collateral, real estate or other security
for the Loan Obligations, and (2) each party hereto acknowledges that any
appeals from the courts described in the immediately preceding sentence may
have
to be heard by a court located outside those jurisdictions.
19.11.3. Service
of Process. Each Borrower hereby waives personal service of
any and all process upon it and consents that all such service of process may
be
made by registered mail (return receipt requested) directed to Borrower at
its
address set forth on the signature pages hereof, and service so made shall
be
deemed to be completed five (5) days after the same shall have been so
deposited in the U.S. mails, registered mail, return receipt requested; or
at
Administrative Agent’s or any Lender’s option, by service upon
CT Corporation which Borrower irrevocably appoints as such Borrower’s agent
for the purpose of accepting service of process. Administrative Agent
or such Lender shall promptly forward by registered mail any process so served
upon said agent to Borrower at its address on the signature pages
hereof. Nothing in this Section shall affect the right of
Administrative Agent or any Lender to serve legal process in any other manner
permitted by Law.
20.
Miscellaneous.
20.1. Notices. All
notices, consents, requests and demands to or upon the respective parties hereto
shall be in writing, and shall be deemed to have been given or made when
delivered in person to those Persons listed on the signature pages hereof or
four (4) days after the date when deposited in the United States mail, postage
prepaid, or, in the case of the overnight courier services, when delivered
to
the overnight courier service, or in the case of telecopy or e-mail (if
expressly permitted herein) notice, when sent, verification received, in each
case addressed as set forth on the signature pages hereof, or to such other
address as either party may designate by notice to the other in accordance
with
the terms of this Section. No notice given to or demand made on
Borrower by Administrative Agent or any Lender in any instance shall entitle
Borrower to notice or demand in any other instance.
20.2. Amendments
and Modifications; Waivers and Consents; All Lenders.
20.2.1. Unless
otherwise provided herein, no amendment to or modification of any provision
of
this Agreement, or of any of the other Loan Documents shall be effective unless
it is in writing and signed by authorized officers of Borrower and Required
Lenders. Unless otherwise provided herein, no waiver of, or consent
to any departure by Borrower from, the requirements of any provision of this
Agreement or any of the other Loan Documents shall be effective unless it is
in
writing and signed by authorized officers or representatives of Required
Lenders.
91
20.2.2. The
foregoing notwithstanding, no such amendment, modification or consent shall,
unless signed by authorized officers of Borrower and authorized officers or
representatives of all Lenders: (i) reduce or forgive the repayment of principal
of any Advance (except, with respect to the Aggregate Floorplan Loan or Interim
Floorplan Loan, to the extent arising from any deductions, offsets or other
disputes made or asserted by Borrower which are accepted by Administrative
Agent
in the ordinary course of business of Administrative Agent) or the reimbursement
of any draw on a Letter of Credit, (ii) extend the Revolving Loan Maturity
Date,
(iii) change the definition of Required Lenders herein, (iv) change the
provisions of this Section 20.2, (v) except as contemplated in this
Agreement (including, clause (i) above), release any Guarantor or any Covered
Person from its obligations under the Loan Documents, (vi) increase the
percentages in the definition of “Borrowing Base,” (vii) change any provisions
of this Agreement requiring ratable distributions to Lenders, (viii) reduce
the
LIBOR Increment as set forth in Section 4.7, or (ix) exchange, waive, or release
the Security Interests in any of the Collateral (except as expressly permitted
by Section 14.9); provided, however, that to the extent not permitted by Section
14.9, Administrative Agent may, in its absolute discretion and without the
consent of any Lender or any Covered Person or Guarantor, may permit Borrower
or
such other applicable Person to exchange, waive or release the Security
Interests in any of the Collateral so long as the fair market value of the
Collateral which is exchanged or for which the Security Interest is waived
or
released does not exceed Two Million Five Hundred Thousand Dollars ($2,500,000)
in the aggregate per calendar year. In addition, the Dollar amount of
the Revolving Loan Commitment of any Lender may not be increased without the
consent of such Lender, the Borrower and Administrative Agent. In
addition, no change to the provisions of Section 17 that are detrimental any
Lender may be made without the consent of such Lender, the Borrower and
Administrative Agent.
20.2.3. Notwithstanding
the terms of Section 20.2.2 and Sections 11.1, 11.11, 13.10.9, 14.12 and 14.13
of this Agreement, and any similar provisions of any of the Security Documents,
without the necessity of obtaining the consent of the Required Lenders, upon
the
request of any Borrower, the Administrative Agent may, in its sole discretion,
consent to the conversion of any Borrower from a corporation into a limited
liability company, limited partnership or similar entity; provided, however,
no
such conversion shall occur without the prior written consent of the
Administrative Agent and the fulfillment of any conditions on such consent
to
the satisfaction of Administrative Agent. The Administrative Agent
may condition such consent on the execution of such documents and agreements,
and the making of such public filings, as Administrative Agent deems reasonable
in its sole discretion so as to ensure Administrative Agent’s first priority
Security Interest in the assets of the entity undergoing such
conversion. Each Borrower authorizes the filing by Administrative
Agent of any financing statements under the Uniform Commercial Code against
any
and all of its assets regarding any such conversion.
20.2.4. Any
such amendment, modification, waiver or consent shall be effective only in
the
specific instance and for the purpose for which given. No notice to
or demand on Borrower in any instance shall entitle Borrower to any other or
further notice or demand in another similar or different instance. No
failure by Administrative Agent or any Lender to exercise, and no delay by
Administrative Agent or any Lender in exercising, any right,
92
remedy,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise by Administrative Agent or any Lender of any right,
remedy, power or privilege hereunder preclude any other exercise thereof, or
the
exercise of any other right, remedy, power or privilege existing under any
Law
or otherwise.
20.3. Course
of Dealing. Acceptance of or acquiescence in a course of
performance or course of dealing rendered or taken under or with respect to
this
Agreement or the other Loan Documents will not be relevant in any respect to
determine the meaning of this Agreement or the other Loan Documents, or the
obligations or liabilities of the parties hereto under this Agreement or the
other Loan Documents, even though the accepting or acquiescing party had
knowledge of the nature of the performance and opportunity for
objection.
20.4. Rights
Cumulative. Each of the rights and remedies of
Administrative Agent and Lenders under this Agreement shall be in addition
to
all of its other rights and remedies under applicable Law, and nothing in this
Agreement shall be construed as limiting any such rights or
remedies.
20.5. Successors
and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and all future holders of the Notes and
their respective successors and assigns, except that Borrower may not assign,
delegate or transfer any of its rights or obligations under this Agreement
without the prior written consent of Administrative Agent and Required
Lenders. With respect to Borrower’s successors and assigns, such
successors and assigns shall include any receiver, trustee or
debtor-in-possession of or for Borrower.
20.6. Severability. Any
provision of this Agreement which is prohibited, unenforceable or not authorized
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition, unenforceability or lack of authorization without
invalidating the remaining provisions hereof or affecting the validity,
enforceability or legality of such provision in any other jurisdiction unless
the ineffectiveness of such provision would result in such a material change
as
to cause completion of the transactions contemplated hereby to be
unreasonable.
20.7. Counterparts. This
Agreement may be executed by the parties hereto on any number of separate
counterparts, and all such counterparts taken together shall constitute one
and
the same instrument. It shall not be necessary in making proof of
this Agreement to produce or account for more than one counterpart signed by
the
party to be charged.
20.8. Governing
Law; No Third Party Rights. This Agreement, the Notes and
the other Loan Documents and the rights and obligations of the parties hereunder
and thereunder shall be governed by and construed and interpreted in accordance
with the internal Laws of the State of Illinois applicable to contracts made
and
to be performed wholly within such state, without regard to choice or conflicts
of law principles; except that the provisions of the Loan Documents pertaining
to the creation or perfection of Security Interests or the enforcement of rights
of Administrative Agent and Lenders in Collateral located in a State other
that
the State of Illinois shall be governed by the Laws of such State to the extent
such law is applicable thereto. This Agreement is solely for the benefit
of the parties hereto and their respective successors and assigns, and no other
Person shall have any right, benefit, priority or interest under, or because
of
the existence of, this Agreement.
20.9. Counterpart
Facsimile Execution. For purposes of this Agreement, a
document (or signature page thereto) signed and transmitted by facsimile machine
or telecopier or via e-mail as a PDF attachment is to be treated as an original
document. The signature of any Person thereon, for purposes hereof,
is to be considered as an original signature, and the document transmitted
is to
be considered to have the same binding effect as an original signature on an
original document. At the request of any party hereto, any facsimile,
telecopy or PDF document is to be re-executed
93
in
original form by the Persons who executed the facsimile, telecopy or PDF
document. No party hereto may raise the use of a facsimile machine,
telecopier, e-mail or the fact that any signature was transmitted through the
use of a facsimile machine, telecopier or e-mail as a defense to the enforcement
of this Agreement or any amendment or other document executed in compliance
with
this Section.
20.10. No
Other Agreements. There are no other agreements between
Administrative Agent, Lenders, and Borrower, oral or written, concerning the
subject matter of the Loan Documents, and all prior agreements concerning the
same subject matter, including any proposal or commitment letter, are merged
into the Loan Documents and thereby extinguished.
20.11. Negotiated
Transaction. Borrower, Administrative Agent and each Lender
represent each to the others that in the negotiation and drafting of this
Agreement and the other Loan Documents they have been represented by and have
relied upon the advice of counsel of their choice. Borrower and
Administrative Agent affirm that their counsel have both had substantial roles
in the drafting and negotiation of this Agreement and each Lender affirms that
its counsel has participated in the drafting and negotiation of this Agreement;
therefore, this Agreement will be deemed drafted by all of Borrower,
Administrative Agent and Lenders, and the rule of construction to the effect
that any ambiguities are to be resolved against the drafter will not be employed
in the interpretation of this Agreement.
20.12. Waiver
of Punitive and Exemplary Damages. Each party to this
Agreement hereby waives any right to bring any action or claim against any
other
party to this Agreement for exemplary or punitive damages arising out of or
otherwise relating to the this Agreement, Loan Documents, any of the
transactions contemplated herein, or the actual or proposed use of the proceeds
of the Loans.
20.13. Incorporation
By Reference. All of the terms of the other Loan Documents
are incorporated in and made a part of this Agreement by this
reference.
20.14. Statutory
Notice-Insurance.
UNLESS
YOU PROVIDE EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR AGREEMENT WITH
US, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTERESTS IN YOUR
COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT YOUR
INTERESTS. THE COVERAGE THAT WE PURCHASE MAY NOT PAY ANY CLAIM THAT
YOU MAKE OR ANY CLAIM THAT IS MADE AGAINST YOU IN CONNECTION WITH THE
COLLATERAL. YOU MAY LATER CANCEL ANY INSURANCE PURCHASED BY US, BUT
ONLY AFTER PROVIDING EVIDENCE THAT YOU HAVE OBTAINED INSURANCE AS REQUIRED
BY
OUR AGREEMENT. IF WE PURCHASE INSURANCE FOR THE COLLATERAL, YOU WILL
BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING THE INSURANCE PREMIUM,
INTEREST AND ANY OTHER CHARGES WE MAY IMPOSE IN CONNECTION WITH THE PLACEMENT
OF
THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF
THE
INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO YOUR TOTAL
OUTSTANDING BALANCE OR OBLIGATION. THE COSTS OF THE INSURANCE MAY BE
MORE THAN THE COST OF INSURANCE YOU MAY BE ABLE TO OBTAIN ON YOUR
OWN.
94
20.15. Statutory
Notice--Oral Commitments.
ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED
THAT
IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU (BORROWER(S))
AND
US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE
AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE
IN
WRITING TO MODIFY IT.
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of page intentionally left blank;
signature
pages follow}
95
THIS
CONTRACT CONTAINS A BINDING ARBITRATION CLAUSE WHICH MAY BE ENFORCED BY THE
PARTIES.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by
appropriate duly authorized officers as of the Effective Date.
GE
COMMERCIAL DISTRIBUTION FINANCE CORPORATION,
as
Administrative Agent and a Lender
|
By:
|
/s/ |
|
Name:
|
|
|
Title:
|
Notice Address:
GE
Commercial Distribution Finance Corporation
▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇, Documentation Manager
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
FAX
#
(▇▇▇) ▇▇▇-▇▇▇▇
TEL
#
(▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy to
GE
Commercial Distribution Finance Corporation
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Operations Counsel
FAX
#
(▇▇▇) ▇▇▇-▇▇▇▇
TEL
#
(▇▇▇) ▇▇▇-▇▇▇▇
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Signature
Page 1 of 3
MTM
TECHNOLOGIES, INC., as a Borrower
|
By:
|
/s/ |
|
Name:
|
▇.▇.
▇▇▇▇▇▇▇▇, III
|
|
Title:
|
Senior
Vice President
|
|
and
Chief Financial Officer
|
MTM
TECHNOLOGIES (US), INC., as a Borrower
|
By:
|
/s/ |
|
Name:
|
▇.▇.
▇▇▇▇▇▇▇▇, III
|
|
Title:
|
Senior
Vice President
|
|
and
Chief Financial Officer
|
MTM
TECHNOLOGIES (MASSACHUSETTS), LLC, as a Borrower
|
By:
|
/s/ |
|
Name:
|
▇.▇.
▇▇▇▇▇▇▇▇, III
|
|
Title:
|
Senior
Vice President
|
|
and
Chief Financial Officer
|
INFO
SYSTEMS, INC., as a Borrower
|
By:
|
/s/ |
|
Name:
|
▇.▇.
▇▇▇▇▇▇▇▇, III
|
|
Title:
|
Senior
Vice President
|
|
and
Chief Financial Officer
|
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Signature
Page 2 of 3
Notice
Address for all Borrowers:
with
a
copy to
MTM
Technologies, Inc.
▇▇▇▇
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn: Chief
Financial Officer
FAX: (▇▇▇)
▇▇▇-▇▇▇▇
TEL: (▇▇▇)
▇▇▇-▇▇▇▇
and
Thelen,
Reid, ▇▇▇▇▇, Raysman & ▇▇▇▇▇▇▇, LLP
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, ▇▇., Esq.
FAX: (▇▇▇)
▇▇▇-▇▇▇▇
TEL: (▇▇▇)
▇▇▇-▇▇▇▇
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Signature
Page 3 of 3
EXHIBIT 2.1
GLOSSARY
AND INDEX OF DEFINED TERMS
AAA
-- is
defined in Section 19.2.
Account
-- as to any Person, the right of such Person to payment for goods sold or
leased or for services rendered by such Person.
Account
Debtor -- the obligor on any Account.
Acquisition
means any transaction or series of related transactions for the purpose of
or
resulting, directly or indirectly, in (a) the acquisition of all or
substantially all of the assets of a Person, or of all or substantially all
of
any business or division of a Person, (b) the acquisition of in excess of 50%
of
the Capital Securities of any Person, or otherwise causing any Person to become
a Subsidiary, or (c) a merger or consolidation or any other combination with
another Person (other than a Person that is already a Subsidiary).
Adjusted
LIBOR Rate -- is defined in Section 4.6.
Administrative
Agent or the Administrative Agent -- CDF in its capacity as Administrative
Agent
under this Agreement, and its successors and assigns in such
capacity.
Advance
-- a Revolving Loan Advance, a Swingline Advance, an Interim Floorplan Loan
Advance or Floorplan Loan Advance.
Advance
Date -- the date on which an Advance is requested by Borrower to be made, or
is
otherwise contemplated or intended to be made, as provided herein.
Affiliate
-- with respect to any Person, (a) any other Person who is a partner,
director, officer or stockholder of such Person; and (b) any other Person
which, directly or indirectly, is in control of, is controlled by or is under
common control with such Person, and any partner, director, officer or
stockholder of such other Person described. For purposes of this
Agreement, control of a Person by another Person shall be deemed to exist if
such other Person has the power, directly or indirectly, either to (i) vote
twenty percent (20%) or more of the securities having the power to vote in
an
election of directors of such Person, or (ii) direct the management of such
Person, whether by contract or otherwise and whether alone or in combination
with others.
Agent/Lender
Companies -- is defined in Section 19.1.
Aggregate
Commitment -- either the Aggregate Revolving Loan Commitment, the Aggregate
Floorplan Loan Facility or the Letter of Credit Facility.
Aggregate
Loan -- any of the Aggregate Revolving Loan, the Swingline Loan, the Interim
Floorplan Loan, or the Aggregate Floorplan Loan Facility as the case may
be.
Aggregate
Floorplan Loan -- the from time to time outstanding principal balance of all
Floorplan Loan Advances.
Aggregate
Floorplan Loan Facility -- the aggregate discretionary line of Lenders as stated
in Section 3.2.1 to fund Floorplan Loan Advances, as it may be changed as
provided herein.
1
Aggregate
Revolving Loan -- the from time to time outstanding principal balance of all
Revolving Loan Advances.
Aggregate
Revolving Loan Commitment -- the aggregate commitments of Lenders as stated
in
Section 3.1.1 to fund Revolving Loan Advances, as it may be changed as
provided herein.
Anniversary
Date -- each annual anniversary of the Effective Date.
Applicable
Lending Office -- means, for Administrative Agent and each Lender and for each
Loan, the “Applicable Lending Office” of Administrative Agent or such Lender (or
of an affiliate of such Lender) designated for such Loan on the signature pages
hereof or such other office of such Lender (or an affiliate of Administrative
Agent or such Lender) as Administrative Agent or such Lender may from time
to
time specify to the Administrative Agent (in the case of another Lender) and
the
Borrower by written notice in accordance with the terms hereof as the office
by
which its Loans are to be made and maintained.
Approval
-- means Administrative Agent’s approval to finance particular Inventory for
Borrower which is evidenced by Administrative Agent issuing a financing approval
number to the vendor of such Inventory. “Approval” also means
(i) any open-to-buy authorization given by Administrative Agent to a
vendor, pursuant to which Administrative Agent may authorize such vendor to
assume Administrative Agent’s approval to finance Inventory until Administrative
Agent affirmatively withdraws such authorization, and (ii) any Approval for
which Administrative Agent has not made an Interim Floorplan Loan Advance or
the
Lenders have not made a Floorplan Loan Advance as a result of Administrative
Agent not receiving the invoice from the vendor for the Inventory which is
subject to the Approval.
Asbestos
Material -- either asbestos or asbestos-containing materials.
Assigned
Collateral -- any tangible or intangible property of Borrower or any other
Person, now owned or hereafter acquired, other than the Personal Property
Collateral, in which Administrative Agent holds or will hold a Security Interest
under a Collateral Assignment to secure payment or performance of any of the
Loan Obligations, and all proceeds thereof.
Assignment
and Acceptance -- means an Assignment and Acceptance in the form attached hereto
as Exhibit 18.4.1
Average
Daily Balance -- is defined in Section 4.3.3.
Bid
Bonds
-- means bonds or similar instruments issued from time to time by third party
bonding companies for the benefit of a Borrower to secure a Borrower’s bid or
proposal, or to secure a contract of a Borrower, to supply goods and/or services
to a potential customer of Borrower or a customer of Borrower.
Blocked
Accounts -- is defined in Section 6.1.2.1.
Borrowing
Base -- is defined in Section 3.1.4.
Borrowing
Base Certificate -- the certificate required to be delivered to Administrative
Agent and each Lender from time to time as provided in
Section 13.14.1.
Borrowing
Agent -- is defined in Section 2.10.
Borrowing
Officer -- each officer of the Borrowing Agent who is authorized to submit
a
request for an Advance or the issuance of a Letter of Credit or take such other
action as described in Section 2.10 on
2
behalf
of
each Borrower or any Borrower as designated by the Borrowing Agent in a writing
delivered to Administrative Agent.
Business
Day -- any day on which the Federal Reserve Bank of Chicago is open for the
transaction of business.
Capital
Expenditure -- is defined in Section 15.1.
Capital
Expenditure Equivalent -- is defined in Section 15.1.
Capital
Lease -- any lease that has been or should be capitalized under
GAAP.
Capital
Securities means, with respect to any Person, all shares, interests,
participations or other equivalents (however designated, whether voting or
non-voting) of such Person’s capital, whether now outstanding or issued or
acquired after the Effective Date, including common shares, preferred shares,
membership interests in a limited liability company, limited or general
partnership interests in a partnership, interests in a trust, interests in
other
unincorporated organizations or any other equivalent of such ownership
interest.
Cash
Collateral -- is defined in Section 3.4.3.
Cash
Collateral Account -- the account(s) with such financial institution as selected
or designated by Administrative Agent from time to time that is designated
by
Administrative Agent as the Cash Collateral Account.
Change
of
Control -- means the occurrence of any of the following events: (a)
other than one of the Major Shareholders, any Person or group of Persons (within
the meaning of Section 13 or 14 of the Securities Exchange Act of 1934) shall
acquire beneficial ownership (within the meaning of Rule 13d-3 promulgated
under
such Act) of more than 20% of the outstanding Capital Securities (on a fully
diluted basis and taking into account any securities or contract rights
exercisable, exchangeable or convertible into equity securities) of MTM
Technologies, Inc. having voting rights in the election of directors under
normal circumstances; (b) the Major Shareholders, as a group, shall fail to
have
beneficial ownership (within the meaning of Rule 13d-3 promulgated under such
Act) of at least 65% of the outstanding Capital Securities (on a fully diluted
basis and taking into account any securities or contract rights exercisable,
exchangeable or convertible into equity securities) of MTM Technologies, Inc.
having voting rights in the election of directors under normal circumstances,
provided, however, if no Event of Default shall have occurred and be continuing
at the time of delivery of the March 31, 2008 audited financials or with respect
to the covenants in Section 15 with respect to such computation date, then
this
clause (b) shall no longer be effective; (c) except for the merger of any
Wholly-Owned Subsidiary with or into any other Wholly-Owned Subsidiary (if
a
Wholly-Owned Subsidiary is the surviving entity), any Subsidiary of the Company
ceases to be a Wholly-Owned Subsidiary of MTM Technologies, Inc. unless the
assets of such Subsidiary are liquidated into a Wholly-Owned Subsidiary of
MTM
Technologies, Inc. or such Subsidiary is merged into a Wholly-Owned Subsidiary
of MTM Technologies, Inc.; or (d) the sale of all or substantially all of the
assets of the Borrower
Charter
Documents -- the articles or certificate of incorporation and bylaws of a
corporation; the certificate of limited partnership and partnership agreement
of
a limited partnership; the partnership agreement of a general partnership;
the
articles of organization and operating agreement of a limited liability company;
or the indenture of a trust.
Claims
Act -- the Assignment of Claims Act of 1940.
3
COBRA
--
the Consolidated Omnibus Budget Reconciliation Act.
Code
--
the Internal Revenue Code of 1986 and all regulations thereunder of the
IRS.
Collateral
-- all assets and property of Borrower, including without limitation, all of
the
Personal Property Collateral, the Assigned Collateral, and any other property
or
asset in which Administrative Agent or a Lender has a Security Interest to
secure payment or performance of the Loan Obligations and all proceeds
thereof.
Collateral
Assignment -- any of the collateral assignments or control agreements required
or contemplated under Section 8.5 to be executed and delivered to
Administrative Agent for the benefit of the Lenders or otherwise delivered
to
Administrative Agent for the benefit of the Lenders from time to
time.
Commitment
-- the Revolving Loan Commitment of a Lender, the Swingline Commitment of
Administrative Agent, the Interim Floorplan Loan Facility of Administrative
Agent or the Floorplan Loan Facility of a Lender. The inclusion of
the “Interim Floorplan Loan Facility” and the “Floorplan
Loan Facility” in this defined term “Commitment” does not alter the
non-committed nature of the Interim Floorplan Loan Facility of Administrative
Agent or the Floorplan Loan Facility of a Lender, and the Interim Floorplan
Loan
Facility and Floorplan Loan Facility each are, and remain, non-committed
facilities.
Commonly
Controlled Entity -- a Person which is under common control with another Person
within the meaning of Section 414(b) or (c) of the Code.
Compliance Certificate
-- a certificate substantially in the form of Exhibit 13.13 attached
hereto.
Contract
-- any contract, capital lease, operating lease, note, bond, indenture, deed,
mortgage, deed of trust, security agreement, pledge, hypothecation agreement,
assignment, or other agreement or undertaking, or any security.
Covered
Person -- is defined in Section 2.4.
Credit
Facilities Agreement -- This Agreement.
Daily
Charge -- is defined in Section 4.3.3.
Daily
Rate -- is defined in Section 4.3.3.
Default
-- any of the events listed in Section 16.1 of this Agreement, without
giving effect to any requirement for the giving of notice, for the lapse of
time, or both, or for the happening of any other condition, event or
act.
Default
Rate -- the rate of interest payable on each Loan after its Maturity and in
certain other circumstances as provided in Section 4.10.
Defaulting
Lender -- is defined in Section 7.5.1.
Disclosure
Schedule -- the disclosure schedule of Borrower attached hereto as
Exhibit 11.
Disputes
-- is defined in Section 19.1.
4
Distribution/Redemptions
-- means and includes (i) any cash dividend or payment, (ii) any direct or
indirect acquisition or redemption of any outstanding Capital Securities, (iii)
any retirement or prepayment of debt securities before their regularly scheduled
maturity dates, other than as expressly permitted by this Agreement, (iv) any
loan or advance to a shareholder, partner, or member and advances for travel
or
similar expenses made in the ordinary course of business, and (v) any
compensation payment to a shareholder or partner in excess of (a) normal
compensation plus (b) bonus compensation based on the actual performance of
Borrower or the actual performance of any such shareholder or partner for
services actually rendered.
DOL
--
the United States Department of Labor.
Dollars
and the sign $ -- lawful money of the United States.
EBITDA
--
is defined in Section 15.1.
Effective
Date -- the date when this Agreement is effective as provided in
Section 1.
Eligible
Accounts -- is defined in Section 3.1.5.
Eligible
Assignee -- means (i) a Lender (including any successor by merger);
(ii) an Affiliate of a Lender; and (iii) subject to
Section 18.4.1.1, any other Person approved by the Administrative Agent;
provided, however, that neither the Borrower, Guarantor nor an
Affiliate of the Borrower or Guarantor shall qualify as an “Eligible
Assignee.”
Employment
Law -- ERISA, the Occupational Safety and Health Act, the Fair Labor Standards
Act, or any other Law pertaining to the terms or conditions of labor or safety
in the workplace or discrimination or sexual harassment in the
workplace.
Encumbrance
-- as to any item of real or personal property, any easement, right-of-way,
license, condition, or restrictive covenant, or zoning or similar restriction,
that is not a Security Interest but is enforceable by any Person other than
the
record owner of such property.
Environmental
Law -- the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Clean Water Act,
the
Clean Air Act, or any other Law pertaining to environmental quality or
remediation of Hazardous Material.
EPA
--
the United States Environmental Protection Agency.
ERISA
--
the Employee Retirement Income Security Act of 1974.
ERISA
Affiliate -- as to any Borrower, any trade or business (irrespective of whether
incorporated) which is a member of a group of which such Person is a member
and
thereafter treated as a single employer under §414(b), (c), (m) or (o) of the
Code or applicable Treasury Regulations.
Event
of
Default -- any of the events listed in Section 16.1 of this Agreement as to
which any requirement for the giving of notice, for the lapse of time, or both,
or for the happening of any further condition, event or act has been
satisfied.
Execution
Date -- the date when this Agreement has been executed.
Existing
Default -- an Event of Default which has occurred and is continuing and which
has not been waived in writing by the Required Lenders.
5
FAA
-- is
defined in Section 19.6.
Federal
Funds Rate -- for any day, the rate per annum (rounded upwards, if necessary,
to
the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers on such day, as published by the Federal Reserve Bank
of New York on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for such
day shall be such rate on such transactions on the next preceding Business
Day
as so published on the next succeeding Business Day, and (b) if no such
rate is so published on such next succeeding Business Day, the Federal Funds
Rate for such day shall be the average rate charged to the Administrative Agent
(in its individual capacity) on such day on such transactions as determined
by
the Administrative Agent.
Financial
Statements -- the most recent of the Initial Financial Statements and the
financial statements of Borrower required to be furnished to Administrative
Agent under this Agreement.
Floorplan
Inventory Value -- means one hundred percent (100%) of the total aggregate
wholesale invoice price of all of Borrower’s Inventory financed under the
Floorplan Loan Facility and the Interim Floorplan Loan Facility in which
Administrative Agent has a first priority, perfected Security Interest (subject
to no other Security Interest) that is unsold and not leased by Borrower and
is
in Borrower’s possession and control as of the date of determination, less the
amount of any such Inventory reported by the Borrower (if the Borrower is
required by the Administrative Agent or the Required Lenders to report) as
demonstration items or Inventory that is obsolete or otherwise unmerchantable
or
if in the possession or control of Borrower for 180 days or more from the date
of the invoice for such Inventory. If any Inventory financed under
the Aggregate Floorplan Loan Facility or the Interim Floorplan Loan Facility
with a value in excess of $0.00 for each location is located on any premises
that are not owned by Borrower (not including any lessee or other person to
whom
Inventory is leased or rented in the ordinary course of such Covered Person’s
business, or other locations where Borrower is not obligated to pay rent for
up
to 30 consecutive days) and Borrower has not obtained or caused to be obtained
written waivers or consents, in form and substance satisfactory to
Administrative Agent, then such Inventory shall be deemed to have a “Floorplan
Inventory Value” of zero Dollars ($0.00).
Floorplan
Loan -- any Lender’s pro-rata share of the Aggregate Floorplan
Loan.
Floorplan
Loan Advance -- an Advance by Administrative Agent that is to be funded by
Lenders under the Aggregate Floorplan Loan Facility.
Floorplan
Loan Facility -- the discretionary line of credit of each Lender as stated
in
Section 3.2.1 to fund Floorplan Loan Advances.
Floorplan
Loan Maturity Date -- is defined in Section 6.1.2.3.
Floorplan
Payment Default -- is defined in Section 16.1.1.
Floorplan
Shortfall -- means the amount, if any, by which (a) the sum of the
Aggregate Floorplan Loans and Interim Floorplan Loans (less the amount of the
Aggregate Floorplan Loans and Interim Floorplan Loans attributable to Inventory
purchased by Borrower during the In Transit Period (defined below) as evidenced
by the invoice date) outstanding on any date of determination, exceeds
(b) the Floorplan Inventory Value as determined by Administrative Agent as
of such date of determination. “In Transit Period” shall mean a
period determined by Administrative Agent which reasonably estimates the time
period it takes Inventory ordered by Borrower and shipped by a Vendor to arrive
at Borrower’s location. Until notice is given by Administrative Agent
to Borrower of a change in the In Transit Period,
6
the
In-Transit Period shall be the two (2) day period immediately preceding the
date of the most recent Schedule of Inventory.
FRB
--
the Board of Governors of the Federal Reserve System and any successor thereto
or to the functions thereof.
Fronting
Fee -- is defined in Section 5.4.
GAAP
--
those generally accepted accounting principles set forth in Statements of the
Financial Accounting Standards Board and in Opinions of the Accounting
Principles Board of the American Institute of Certified Public Accountants
or
which have other substantial authoritative support in the United States and
are
applicable in the circumstances, as applied on a consistent basis.
Governmental
Authority -- the federal government of the United States; the government of
any
foreign country that is recognized by the United States or is a member of the
United Nations; any state of the United States; any local government or
municipality within the territory or under the jurisdiction of any of the
foregoing; any department, agency, division, or instrumentality of any of the
foregoing; and any court, arbitrator, or board of arbitrators whose orders
or
judgments are enforceable by or within the territory of any of the
foregoing.
Group
--
as used in Regulation 13-D issued by the Securities and Exchange
Commission.
Guarantor
-- each Person who from time to time executes and delivers to Administrative
Agent for the benefit of Lenders a Guaranty of part or all of the Loan
Obligations.
Guaranty
-- each guaranty of part or all of the Loan Obligations executed and delivered
to Administrative Agent for the benefit of Lenders by any
Guarantor.
Hazardous
Material -- any hazardous, radioactive, toxic, solid or special waste, material,
substance or constituent thereof, or any other such substance (as defined under
any applicable Law or regulation), including Asbestos Material.
Impositions
-- is defined in Section 4.11.2.
Indebtedness
-- as to any Person at any particular date, any contractual obligation
enforceable against such Person (i) to repay borrowed money; (ii) to
pay the deferred purchase price of property or services; (iii) to make
payments or reimbursements with respect to bank acceptances or to a factor;
(iv) to make payments or reimbursements with respect to letters of credit
whether or not there have been drawings thereunder; (v) with respect to
which there is any Security Interest in any property of such Person;
(vi) to make any payment or contribution to a Multi-Employer Plan;
(vii) that is evidenced by a note, bond, debenture or similar instrument;
(viii) under any conditional sale agreement or title retention agreement;
(ix) all Liabilities (as defined by GAAP) under any Capital Lease or
(x) to pay interest or fees with respect to any of the
foregoing. Indebtedness also includes any other Obligation that
either (i) is non-contingent and liquidated in amount or (ii) should
under GAAP be included in liabilities and not just as a footnote on a balance
sheet.
Indirect
Obligation -- as to any Person, (a) any guaranty by such Person of any
Obligation of another Person; (b) any Security Interest in any property of
such Person that secures any Obligation of another Person; (c) any
enforceable contractual requirement that such Person (i) purchase an
Obligation of another Person or any property that is security for such
Obligation, (ii) advance or contribute funds to another Person for the
payment of an Obligation of such other Person or to maintain the working
capital, net worth or solvency of such other Person as required in any documents
evidencing an Obligation of
7
such
other Person, (iii) purchase property, securities or services from another
Person for the purpose of assuring the beneficiary of any Obligation of such
other Person that such other Person has the ability to timely pay or discharge
such Obligation, (iv) grant a Security Interest in any property of such
Person to secure any Obligation of another Person, (v) otherwise assure or
hold harmless the beneficiary of any Obligation of another Person against loss
in respect thereof; (d) any Obligation arising from the endorsement by such
Person of an instrument (e) any Obligation of such Person as a surety; and
(f) any other contractual requirement enforceable against such Person that
has the same substantive effect as any of the foregoing. The term
Indirect Obligation does not, however, include the endorsement by a Person
of
instruments for deposit or collection in the ordinary course of business or
the
liability of a general partner of a partnership for Obligations of such
partnership. The amount of any Indirect Obligation of a Person shall
be deemed to be the stated or determinable amount of the Obligation in respect
of which such Indirect Obligation is made or, if not stated or determinable,
the
maximum reasonably anticipated liability in respect thereof as determined by
such Person in good faith.
Initial
Financial Statements -- the financial statements (not including the projections)
of Borrower referred to in Section 10.1.2.
Insurance
Proceeds -- insurance and/or condemnation proceeds payable as a consequence
of
damage to or destruction of any of the Collateral.
Intellectual
Property -- as to any Person, any domestic or foreign patents or patent
applications of such Person, any inventions made or owned by such Person upon
which either domestic or foreign patent applications have not yet been filed,
any domestic or foreign trade names or trademarks of such Person, any domestic
or foreign trademark registrations or applications filed by such Person, any
domestic or foreign service marks of such Person, any domestic or foreign
service ▇▇▇▇ registrations and applications by such Person, any domestic or
foreign copyrights of such Person, and any domestic or foreign copyright
registrations or applications by such Person.
Intellectual
Property Assignment -- each assignment of Intellectual Property that Borrower
or
any other Person executes and delivers to Administrative Agent for the benefit
of Lenders, either on or after the Execution Date.
Intercreditor
Agreement -- individually and collectively, any Intercreditor Agreement by
and
between the Administrative Agent on behalf of the Lenders, and each holder
of
the Other Creditor Indebtedness, each in form and substance satisfactory to
Administrative Agent.
Interest
Expense -- is defined in Section 15.1.
Interest/Currency
Hedge Obligation -- any obligations of Borrower to Administrative Agent, any
Lender or any of their respective Affiliates or Subsidiaries under an agreement
or agreements between Borrower and Administrative Agent, any
Lender or any of their respective Affiliates or Subsidiaries under
which the exposure of Borrower to fluctuations in interest rates or currencies
is effectively limited, including, without limitation, whether in the form
of
one or more interest rate cap, collar, corridor agreements, interest rate swaps,
currency swaps, or the like, or options therefor.
Interim
Floorplan Loan Advance -- an Advance by Administrative Agent under the Interim
Floorplan Loan Facility.
Interim
Floorplan Loan -- Administrative Agent’s aggregate Interim Floorplan Loan
Advances.
Interim
Floorplan Loan Facility -- the discretionary line of credit of Administrative
Agent as stated in Section 3.2.2 to fund Interim Floorplan Loan
Advances.
8
Inventory
-- goods owned, leased or held by a Person for sale, lease, sublease or resale
or furnished or to be furnished under contracts for services, and raw materials,
goods/work in process, materials, component parts and supplies used or consumed,
or held for use or consumption in such Person’s business.
Investment
-- (a) a loan or advance of money or property to a Person, (b) Capital
Securities in a Person, (c) a debt instrument issued by a Person, whether
or not convertible to stock or other equity interest in such Person, or
(d) any other interest in or rights with respect to a Person which include,
in whole or in part, a right to share, with or without conditions or
restrictions, some or all of the revenues or net income of such
Person.
IRS
--
the Internal Revenue Service.
Law
--
any statute, rule, regulation, order, judgment, award or decree of any
Governmental Authority.
Lender
--
any one of the Persons who are signatories to this Agreement and obligated
as
lenders or any Person who takes an assignment from any of such signatories
of
all or a portion of its rights and obligations as a lender under this Agreement
pursuant to Section 18.4.1 and an Assignment and Acceptance as provided
therein.
Lenders’
Exposure -- the sum of the Aggregate Revolving Loan Commitment, the Swingline
Loan, the Letter of Credit Exposure, the Interim Floorplan Loan, the Aggregate
Floorplan Loan Facility and the amount of all unfunded Approvals.
Letter
of
Credit -- any standby or commercial (documentary) letter of credit issued by
Letter of Credit Issuer pursuant to the Letter of Credit Facility.
Letter
of
Credit Facility -- the discretionary agreement of the Letter of Credit Issuer
to
issue Letters of Credit as provided in Section 3.4.
Letter
of
Credit Exposure -- the undrawn amount of all outstanding letters of credit
issued under the Letter of Credit Facility plus all amounts drawn on such
letters of credit and not yet reimbursed by Borrower.
Letter
Of
Credit Fee -- the fee payable to Administrative Agent and Lenders as required
in
Section 5.3.
Letter
of
Credit Issuer – Administrative Agent or any Person who Administrative Agent
arranges to issue Letters of Credit pursuant to Section 3.4.
LIBOR
Advance -- an Advance that will become a LIBOR Loan.
LIBOR
Increment -- is defined in Section 4.7.
LIBOR
Loan -- any portion of a Loan on which interest accrues at the Adjusted LIBOR
Rate.
LIBOR
Rate -- is defined in Section 4.6.
Loan
-- a
Revolving Loan, the Swingline Loan, the Interim Floorplan Loan or a Floorplan
Loan.
Loan
Documents -- this Agreement, the Notes, the Guaranties, the Security Documents,
any reimbursement agreement between Borrower and Letter of Credit Issuer, any
fee letter between the Borrowers and CDF, and all other agreements,
certificates, documents, instruments and other writings executed in connection
herewith or therewith from time to time.
9
Loan
Obligations -- all of Borrower’s Indebtedness owing to Letter of Credit Issuer,
Administrative Agent (including, without limitation, the Obligations to
Administrative Agent) or Lenders under this Agreement and the other Loan
Documents, and all other agreements, certificates, documents, instruments and
other writings executed in connection therewith, whether as principal, interest,
fees (including, without limitation, the Termination Fee), or otherwise,
including without limitation, the amount of all unfunded Approvals, any amounts
set forth in Section 4.12, all obligations of Administrative Agent or the
Lenders under any Third Person Reimbursement Agreements, any reimbursement
agreement between Borrower and the Letter of Credit Issuer (or its Affiliates
in
connection with the issuance of any type of Letter of Credit), and all
reimbursement obligations of Borrower to Letter of Credit Issuer, Administrative
Agent or Lenders with respect to the Letter of Credit Exposure and any fees
related thereto (including, without limitation, the Letter of Credit Fee),
and
all other Obligations and liabilities of Borrower to Administrative Agent or
Lenders under this Agreement and the other Loan Documents and all
Interest/Currency Hedge Obligations (in each case including all extensions,
renewals, modifications, rearrangements, restructures, replacements and
refinancings of the foregoing, whether or not the same involve modifications
to
interest rates or other payment terms), whether now existing or hereafter
created, absolute or contingent, direct or indirect, joint or several, secured
or unsecured, due or not due, contractual or tortious, liquidated or
unliquidated, arising by operation of law or otherwise, including but not
limited to the obligation of Borrower to repay future advances by Administrative
Agent or Lenders hereunder, whether or not made pursuant to commitment and
whether or not presently contemplated by Borrower, Administrative Agent or
Lenders in the Loan Documents.
Local
Time -- means the local time in Atlanta, Georgia.
Lockboxes
-- the lockboxes maintained as required in Section 6.1.2.1.
Major
Shareholders -- means Pequot Private Equity Fund III, L.P., Pequot Offshore
Private Equity Partners III, L.P., Constellation Venture Capital II, L.P.,
and
Constellation Venture Capital Offshore II, L.P.
Material
Adverse Effect -- as to the Borrower, any Guarantor or any other Covered Person,
taken as a whole, and with respect to any event or occurrence of whatever nature
(including any adverse determination in any litigation, arbitration,
investigation or proceeding), a material adverse effect on the business,
operations, revenues, financial condition, property, or business prospects
of
Borrower and each other Covered Person taken as a whole, or the ability of
Borrower, any Guarantor or such Covered Person to timely pay or perform
Borrower’s, any Guarantor’s and each other Covered Person’s Obligations
generally taken as a whole, or in the case of Borrower, and each Covered Person
specifically, the ability of Borrower to pay or perform any of Borrower’s
Obligations to Administrative Agent or to any Lender, or in the case of a
Guarantor, the ability of such Guarantor to pay or perform any of its
Obligations guarantied under the terms of its Guaranty.
Material
Agreement -- as to Borrower, any Guarantor or any other Covered Person, any
Contract to which Borrower, any Guarantor or any Covered Person is a party
or by
which any such Borrower, any Guarantor or any other Covered Person is bound
which, if violated or breached, has or is reasonably likely to have a Material
Adverse Effect, including, without limitation, all Other Creditor Indebtedness
Documents, all Subordinated Indebtedness Documents, all documents referenced
in
any Intercreditor Agreement, including, without limitation, the Other Creditor
Indebtedness Documents.
10
Material
Law -- any separately enforceable provision of a Law whose violation by a
Borrower, any Guarantor, or any other Covered Person has or is reasonably likely
to have a Material Adverse Effect on such Person or any Covered Person or any
Guarantor, taken as a whole.
Material
License -- (i) as to any Covered Person, any license, permit or consent
from a Governmental Authority or other Person and any registration and filing
with a Governmental Authority or other Person which if not obtained, held or
made by such Covered Person has or is reasonably likely to have a Material
Adverse Effect, and (ii) as to any Person who is a party to this Agreement
or any of the other Loan Documents, any license, permit or consent from a
Governmental Authority or other Person and any registration or filing with
a
Governmental Authority or other Person that is necessary for the execution
or
performance by such party, or the validity or enforceability against such party,
of this Agreement or such other Loan Document.
Material
Obligation -- as to Borrower, any Guarantor or any Covered Person, an Obligation
of such Person which if not fully and timely paid or performed has or is
reasonably likely to have a Material Adverse Effect.
Material
Proceeding -- any litigation, investigation or other proceeding by or before
any
Governmental Authority (i) which involves any of the Loan Documents or any
of the transactions contemplated thereby, or involves a Covered Person or a
Guarantor as a party or any property of Covered Person or a Guarantor, and
has
or is reasonably likely to have a Material Adverse Effect if adversely
determined, (ii) in which there has been issued an injunction, writ,
temporary restraining order or any other order of any nature which purports
to
restrain or enjoin the making of any Advance, the consummation of any other
transaction contemplated by the Loan Documents, or the enforceability of any
provision of any of the Loan Documents, (iii) which involves the actual or
alleged breach or violation by a Covered Person of, or default by a Covered
Person under, any Material Agreement, or (iv) which involves the actual or
alleged violation by a Covered Person or any Guarantor of any Material
Law.
Maturity
-- as to any Indebtedness, the time when it becomes payable in full, whether
at
a regularly scheduled time, because of acceleration or otherwise.
Maximum
Available Amount -- is defined in Section 3.1.2.
Multi-employer
Plan -- a Pension Benefit Plan which is a multi-employer plan as defined in
Section 4001(a)(3) of ERISA.
Mortgagee
Consent Agreement -- means each agreement described in Section 8.2 in form
and substance satisfactory Administrative Agent and the Required
Lenders.
Net
Income -- is defined in Section 15.1.
Note
--
any Revolving Note, or the Swingline Note.
Obligation
-- as to any Person, any Indebtedness of such Person, any guaranty by such
Person of any Indebtedness of another Person, and any contractual requirement
enforceable against such Person that does not constitute Indebtedness of such
Person or a guaranty by such Person but which would involve the expenditure
of
money by such Person if complied with or enforced.
Obligations
to Administrative Agent -- exclusive of all the Loan Obligations, all of
Borrower’s Indebtedness owing to Administrative Agent (whether as principal,
interest, fees or otherwise), all obligations of Borrower under agreements
between Borrower and Administrative Agent under which the exposure of Borrower
to fluctuations in interest rates is effectively limited, whether in the form
of
interest
11
rate
cap
agreements, interest rate swaps, or the like, or options therefor, all Indirect
Obligations of Borrower owing to Administrative Agent, all reimbursement
obligations of Borrower to Administrative Agent with respect to letters of
credit, and all other obligations and liabilities of Borrower to Administrative
Agent (including all extensions, renewals, modifications, rearrangements,
restructures, replacements and refinancings of the foregoing, whether or not
the
same involve modifications to interest rates or other payment terms), whether
now existing or hereafter created, absolute or contingent, direct or indirect,
joint or several, secured or unsecured, due or not due, contractual or tortious,
liquidated or unliquidated, arising by operation of law or otherwise, or
acquired by Administrative Agent outright, conditionally or as collateral
security from another, including the obligation of Borrower to repay future
advances by Administrative Agent, whether or not made pursuant to commitment
and
whether or not presently contemplated by Borrower and Administrative
Agent.
Operating
Lease -- any lease that is not a Capital Lease.
Other
Creditor Indebtedness -- individually and collectively, except for the
Indebtedness owing to the Administrative Agent and the Lenders, the Indebtedness
of Borrower which is secured by Inventory and proceeds thereof (excluding
Accounts) of a Covered Person.
Other
Creditor Indebtedness Documents -- each document, instrument and agreement
evidencing all or any portion of the Other Creditor Indebtedness.
PBGC
--
the Pension Benefit Guaranty Corporation.
Pension
Benefit Plan -- any pension plan within the meaning of Section 3(2) of ERISA,
including a Multiemployer Plan that is covered by Title IV of ERISA or Section
412 of the Code.
Permitted
Acquisition -- is defined in Section 14.7
Permitted
Encumbrance -- any easement, license or similar encumbrance on any Covered
Person’s real property, excluding any mortgage, assignment of rents or lease,
deed of trust, or financing statement.
Permitted
Indebtedness -- Indebtedness that Borrower is permitted under Section 14.2
to incur, assume, or allow to exist.
Permitted
Indirect Obligations -- Indirect Obligations that Borrower is permitted under
Section 14.5 to create, incur, assume, or allow to exist.
Permitted
Investments -- Investments that Borrower is permitted under Section 14.1 to
make in other Persons.
Permitted
Security Interests -- Security Interests that Borrower is permitted under
Section 14.6 to create, incur, assume, or allow to exist.
Person
--
any individual, partnership, corporation, trust, unincorporated association,
joint venture, limited liability company, Governmental Authority, or other
organization in any form that has the legal capacity to ▇▇▇ or be
sued. If the context so implies or requires, the term Person includes
Borrower.
Personal
Property Collateral -- all of the Accounts, Chattel Paper, Commercial Tort
Claims, Deposit Accounts, Documents, Equipment, Fixtures, General Intangibles,
Health Care Insurance Receivables, Farm Products, Goods, Instruments,
Intellectual Property, Inventory, Investment Property, leases, Letter-of-Credit
Rights, money, Supporting Obligations, and other personal property of Borrower,
any other Covered Person and every Subsidiary of Borrower or any other Covered
Person, all books and
12
records
pertaining to any of the foregoing, all proceeds, insurance proceeds, and
products of any of the foregoing, and all collateral security and guaranties
given by any Person with respect to any of the foregoing, whether now owned
or
hereafter acquired and wherever located, of Borrower, any other Covered Person,
or any other Person, in which Administrative Agent at any time holds or purports
to hold a Security Interest for the benefit of Lenders to secure payment and
performance of any of the Loan Obligations.
Preferred
Capital Stock -- means any preferred capital stock or any convertible preferred
capital stock, which is subordinated to the Loan Obligations on terms
satisfactory to the Administrative Agent and issued on terms satisfactory to
Administrative Agent.
Prime
Rate -- shall mean the higher of (a) the Federal Funds Rate (as such rate
may fluctuate from time to time as provided for herein) for such day plus .50%,
and (b) a fluctuating interest rate per annum equal to the highest of the
prime, base or reference rates of interest announced publicly from time to
time
(whether or not charged in each instance) by ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, N.A. (or
any
successor thereof or any other financial institution selected by Administrative
Agent in its sole discretion ) as such bank’s prime, base, or reference rate,
which rate may not be the lowest rate of interest charged by such institution,
Administrative Agent, or any Lender to its respective customers or a favored
rate and may not correspond with future increases or decreases in interest
rates
charged by other lenders or market interest rates in general.
Pro
Forma
Financial Statements -- the projections of Borrower referred to in
Section 10.1.2.
Regulation T,
Regulation U, and Regulation X -- respectively,
Regulation T issued by the FRB, Regulation U issued by the FRB, and
Regulation X issued by the FRB.
Register
-- is defined in Section 18.4.2.3.
Reportable
Event -- a reportable event as defined in Title IV of ERISA or the
regulations thereunder excluding events with respect to which notice has been
waived by the PBGC in writing.
Representations
and Warranties -- The representations and warranties made by Borrower with
respect to itself and other Covered Persons in Section 11, and the
representations and warranties made in any certificate, report, opinion or
other
document delivered by Borrower pursuant to the Loan Documents, as such
representations and warranties are modified from time to time as provided in
Section 12.
Required
Lenders -- defined in Section 2.5.
Responsible
Officer -- as to any Person that is not an individual, partnership or trust,
the
Chairman of the Board of Directors, the President, the chief executive officer,
the chief operating officer, the chief financial officer, the Treasurer, any
Assistant to the Treasurer, or any Vice President in charge of a principal
business unit; as to any partnership, any individual who is a general partner
thereof or any individual who has general management or administrative authority
over all or any principal unit of the partnership’s business; and as to any
trust, any individual who is a trustee.
Revolving
Loan -- any Lender’s pro-rata share of the Aggregate Revolving
Loan.
Revolving
Loan Advance -- an Advance by Administrative Agent that is to be funded by
Lenders under the Aggregate Revolving Loan Commitment.
13
Revolving
Loan Commitment -- the commitment of each Lender as stated in
Section 3.1.1. to fund Revolving Loan Advances.
Revolving
Loan Maturity Date -- the date when Borrower must repay the amount of Aggregate
Revolving Loan and the Swingline Loan then outstanding as provided in
Section 6.1.2.3.
Revolving
Note -- any note delivered to a Lender as required by Section 3.1.3 to
evidence Borrower’s obligation to repay such Lender’s Revolving
Loan.
Schedule
of Accounts -- a listing of each Account, including the aging of each Account
of
Borrower, in such reasonable detail as Administrative Agent may
require.
Schedule
of Accounts Payable -- a listing of each account payable, including the aging
of
each account payable of Borrower, in such reasonable detail as Administrative
Agent may require.
Schedule
of Inventory -- a listing of each item of existing Inventory, new Inventory
purchases and items of Inventory sold or assigned within the past ninety
(90) days from the date of the last such schedule, containing the
following: location, manufacturer, age, quantity, initial date of purchase
or
lease by Borrower, actual cost, total accrued depreciation, and net book value
of then-existing Inventory in such reasonable detail as Administrative Agent
may
require.
Security
Agreement -- any security agreement required or contemplated under
Section 8.3 to be executed and delivered to Administrative Agent for the
benefit of Lenders or otherwise delivered to Administrative Agent for the
benefit of the Lenders from time to time.
Security
Documents -- all of the documents required or contemplated to be executed and
delivered to Administrative Agent for the benefit of Lenders under
Section 8, all other documents granting a Security Interest in any asset of
Borrower or any other Person to secure the payment or performance of any of
the
Loan Obligations from time to time, including any such documents listed on
Exhibit 10.1.1, all Collateral Assignments, and any similar documents at
any time executed and delivered to Administrative Agent for the benefit of
Lenders from time to time, by Borrower or any other Person to secure payment
or
performance of any of the Loan Obligations.
Security
Interest -- as to any item of tangible or intangible property, any interest
therein or right with respect thereto or assignment thereof that secures an
Obligation or Indirect Obligation, whether such interest or right is created
under a Contract, or by operation of law or statute (such as but not limited
to
a statutory lien for work or materials), or as a result of a judgment, or which
arises under any form of preferential or title retention agreement or
arrangement (including a conditional sale agreement or a lease) that has
substantially the same economic effect as any of the foregoing.
Settlement
Date -- is defined in Section 6.1.2.1.
Solvent
-- as to any Person, such Person not being “insolvent” within the meaning of
Section 101(32) of the Bankruptcy Code, Section 2 of the Uniform Fraudulent
Transfer Act (the “UFTA”) or Section 3 of the Illinois Uniform Fraudulent
Transfer Act set forth in Section 160/3 of the Illinois Compiled Statutes (1996)
(the “Illinois UFTA”), (ii) such Person not having unreasonably small capital,
within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the
UFTA,
or Section 5 of the Illinois UFTA, and (iii) such Person not being unable to
pay
such Person’s debts as they become due within the meaning of Section 548 of the
Bankruptcy Code, Section 4 of the UFTA, or Section 5 of the Illinois UFTA,
or
any other applicable Law.
State
–
any state of the United States.
14
Stock
Pledge Agreement -- any stock pledge agreement required or contemplated under
Section 8.3 to be executed and delivered to Administrative Agent for the benefit
of Lenders.
Subordinated
Indebtedness -- means the Indebtedness subordinated to the Loan Obligations
incurred on terms and conditions satisfactory to Administrative
Agent.
Subordinated
Indebtedness Documents -- each document, instrument and agreement evidencing
all
or any portion of the Subordinated Indebtedness.
Subordinated
Lenders -- means each Person to whom the Subordinated Indebtedness is
owed.
Subordination
Agreement -- the Subordination Agreement by and between Administrative Agent,
on
behalf of the Lenders, and the Subordinated Lenders, in form and substance
satisfactory to Administrative Agent.
Subsidiary
-- as to any Person, another Person with respect to which more than 20% of
the
outstanding Capital Securities of each class having ordinary voting power (other
than Capital Securities having such power only by reason of the happening of
a
contingency) is at the time owned by such Person or by one or more Subsidiaries
of such Person.
Swingline
Advance -- an advance by Administrative Agent to Borrower under the Swingline
Commitment.
Swingline
Commitment -- the commitment of Administrative Agent as stated in
Section 3.3.1 to make Swingline Advances.
Swingline
Loan -- the from time to time outstanding principal balance of all Swingline
Advances.
Tax
-- as
to any Person, any tax, duty, impost, deduction, charges, withholdings,
assessment, fee, or other charge levied by a Governmental Authority (and all
liabilities associated therewith) on the income or property of such Person,
including any interest or penalties thereon, and which is payable by such
Person.
Termination
Fee -- is defined in Section 18.15.
Third
Person Reimbursement Agreements- is defined in
Section 18.6.5.
this
Agreement -- this document (including every document that is stated herein
to be
an appendix, exhibit or schedule hereto, whether or not physically attached
to
this document).
Total
Aggregate Facility Limit -- is defined in Section 3.6.
Total
Available Assets -- is defined in Section 15.1.
Total
Funded Indebtedness -- is defined in Section 15.1.
Total
Indebtedness -- with respect to any Person, the aggregate Indebtedness of such
Person.
Total
Senior Indebtedness -- is defined in Section 15.1.
Transaction
Statement -- is defined in Section 4.3.2.
UCC
--
the Uniform Commercial Code as in effect from time to time in the State of
Illinois or such other similar statute as in effect from time to time in
Illinois or any other appropriate jurisdiction.
15
United
States -- when used in a geographical sense, all the states of the United States
of America and the District of Columbia; and when used in a legal jurisdictional
sense, the government of the country that is the United States of
America.
Unused
Revolving Fee -- is defined in Section 5.2.
Vendor
--
is defined in Section 3.2.4.
Vendor
Agreement -- is defined in Section 3.2.8.
Welfare
Benefit Plan -- any plan described by Section 3(1) of ERISA.
Wholly-Owned
Subsidiary means, as to any Person, a Subsidiary all of the Capital Securities
of which (except directors’ qualifying shares for foreign Subsidiaries) are at
the time directly or indirectly owned by such Person and/or another Wholly-Owned
Subsidiary of such Person.
16
EXHIBIT
3
LENDERS’
COMMITMENTS AND PRO-RATA SHARES
Subject
to the Total Aggregate Facility Limit
|
LENDER
|
TOTALS
|
REVOLVING
LOAN COMMIT-MENT
|
FLOORPLAN
LOAN FACILITY
|
PRO-RATA
SHARES
|
|
GE
Commercial Distribution Finance Corporation
|
$34,000,000.00
|
$20,000,000.00
|
$14,000,000.00
|
100.000000%
|
|
AGGREGATES
|
$34,000,000.00
|
$20,000,000.00
|
$14,000,000.00
|
100.000000%
|
EXHIBIT 7.10
FORM
OF REQUEST FOR REVOLVING LOAN ADVANCE
GE
Commercial Distribution Finance Corporation, as Administrative
Agent
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn.:
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇, Documentation Manager
|
|
Re:
|
Credit
Facilities Agreement effective August 21, 2007, among MTM Technologies,
Inc., MTM Technologies (US), Inc., MTM Technologies (Massachusetts),
LLC,
and Info Systems, Inc. (collectively and separately referred to as,
“Borrower”), and GE Commercial Distribution Finance Corporation, for
itself as a Lender and as Administrative Agent, and the other Lenders
party thereto, as it may be amended, modified, restated or replaced
from
time to time (the “Credit
Agreement”)
|
Ladies
and Gentlemen:
The
undersigned is a Borrowing Officer of MTM Technologies, Inc. and, as such is
authorized to make and deliver this Advance Request on behalf of Borrower
pursuant to Section 2.10 and Section 7.10 of the Credit
Agreement. All capitalized words used herein that are defined in the
Credit Agreement have the meanings defined in the Credit Agreement.
Borrower
hereby requests that Administrative Agent make a Revolving Loan Advance of
$_______ to Borrower under the terms of the Credit Agreement on
_______________. Of the requested Revolving Loan Advance, all is to
be a LIBOR Advance.
The
undersigned hereby certifies that:
|
|
(i)
|
There
is no Existing Default.
|
|
|
(ii)
|
The
Representations and Warranties including those of each Guarantor
in its
Guaranty are true and will be true as of the time of the requested
Revolving Loan Advance with such exceptions as have been disclosed
to
Lenders in writing by Borrower or any Guarantor and which are satisfactory
to the Required Lenders.
|
|
|
(iii)
|
The
amount of the requested Revolving Loan Advance will not, when added
to the
current amount of the Aggregate Revolving Loan, exceed the Maximum
Available Amount, nor will the Lenders’ Exposure exceed the Total
Aggregate Facility Limit.
|
|
|
(iv)
|
All
conditions precedent under Sections 10.1 and 10.2 of the Credit
Agreement have been satisfied.
|
Executed
this ____ day of _______________, _____.
|
MTM
Technologies, Inc. on behalf of itself and the other
Borrowers
|
||
|
By
its
|
||
|
Typed
Name:
|
||
2
EXHIBIT
13.13
FORM
OF COMPLIANCE CERTIFICATE
TO: GE
Commercial Distribution Finance Corporation, as Administrative
Agent
This
Compliance Certificate is furnished pursuant to that certain Credit Facilities
Agreement effective August 21, 2007 (as the same may be amended, modified,
restated or replaced from time to time, the “Credit Agreement”), among MTM
Technologies, Inc., MTM Technologies (US), Inc., MTM Technologies
(Massachusetts), LLC, and Info Systems, Inc. (collectively and separately
referred to as, “Borrower”), GE Commercial Distribution Finance Corporation
(“CDF”), as Administrative Agent, and CDF and the Lenders as defined in the
Credit Agreement. Unless otherwise defined herein, capitalized terms
used in this Compliance Certificate have the meanings defined in the Credit
Agreement.
THE
UNDERSIGNED HEREBY CERTIFIES THAT:
|
|
1.
|
I
am the _______________ of MTM Technologies,
Inc.
|
|
|
2.
|
I
have reviewed the terms of the Credit Agreement and the Loan Documents
and
I have made, or have caused to be made under my supervision, a review
of
the transactions and conditions of each Borrower and each other Covered
Person during the accounting period covered by the attached Financial
Statements.
|
|
|
3.
|
The
examinations described in paragraph 2 did not disclose, and I have
no
knowledge of, the existence of any condition or event which constitutes
a
Default or Event of Default as of the date of this Compliance Certificate;
and to my knowledge all of the Representations and Warranties (including
those of each Guarantor in its Guaranty) are true (with such exceptions
as
have been disclosed to Lenders in writing by Borrower or any Guarantor
and
which are satisfactory to the Required
Lenders).
|
|
|
4.
|
[Use
for annual financial statements: Schedule I attached hereto contains
the
Financial Statements for Borrower for the fiscal year ended ____________,
which are complete and correct in all material respects and have
been
prepared in accordance with GAAP applied consistently throughout
the
period and with prior periods (except as disclosed
therein).]
|
|
|
[Use
for quarterly financial statements: Schedule I attached hereto contains
the Financial Statements for Borrower for the fiscal quarter ended
_______
which are complete and correct in all material respects (subject
to normal
year-end audit adjustments) and have been prepared in accordance
with GAAP
applied consistently throughout the period and with prior periods
(except
as disclosed therein).]
|
|
|
5.
|
Each
Borrower and every other Covered Person is in compliance with all
of the
covenants in the Credit Agreement, including the financial covenants
in
Section 15, and Schedule II attached hereto contains calculations
based on Borrower’s consolidated financial statements and other financial
records that show Borrower’s compliance with such financial
covenants. The calculations and the data upon which they are
based are believed by me to be complete and
correct.
|
This
Compliance Certificate, together with the Schedules hereto, is executed and
delivered this ______day of __________. The undersigned is a
duly authorized Borrowing Officer of each Borrower.
MTM
Technologies, Inc.
on
behalf
of itself and the other Borrowers
|
Print
Name:
|
|
|
Title:
|
|
Schedules
I and II are Attached
2
SCHEDULE I
TO COMPLIANCE CERTIFICATE
See
current Financial Statements attached.
SCHEDULE
II TO COMPLIANCE CERTIFICATE
Note:
the text of Section 15 of the Loan Agreement controls
over any difference between this certificate and Section
15 of the Loan Agreement. Reference should
be made to the Loan Agreement for more specific instructions regarding the
calculation periods and how the components of the financial covenants should
be
calculated.
All
calculations done in accordance with GAAP on a consolidated basis, in accordance
with the provisions of the Credit Facilities Agreement and are based on the
period ended __________________.
|
I.
|
Minimum
Liquidation Recovery calculated
monthly
|
|||
|
A.
|
Net
Recovery
|
|||
|
(i)
(A) 100% of the face amount of all Accounts of Borrower minus
the bad debt
reserve as set forth in the Financial Statements for the most
recently
ended fiscal month multiplied by (B) 100% minus (C) Dilution
multiplied by 2 plus (D) 5% of the amount in clause
(i)(C)
|
$_________
|
|||
|
(ii)
the Inventory Floorplan Value as calculated by Administrative
Agent as of
the last day of the most recently completed fiscal month
|
$_________
|
|||
|
(iii)
50% multiplied by total aggregate wholesale invoice price of
all of
Borrower’s Inventory that is not financed under the Floorplan Loan
Facility and the Interim Floorplan Loan Facility
|
$_________
|
|||
|
(iv)
an amount equal to--
|
$1,000,000
|
|||
|
(v)
Net Recovery: Item (i) plus Item (ii) plus Item (iii)
minus Item (iv)
|
$_________
|
|||
|
B.
|
the
lesser of (i) the amount of the Aggregate Revolving Loan Commitment
as of
the last day of the most recently completed fiscal month and
(ii) the
Borrowing Base as shown in the Borrowing Base Certificate provided
to
Administrative Agent closest to (but not after) the end of
the most
recently completed fiscal month
|
$_________
|
||
|
C.
|
Item
A(v) divided Item (B)
|
_________
|
||
|
D.
|
Minimum
Ratio Permitted by Section 15.2
|
1.20
to 1.00
|
||
|
II
|
Minimum EBITDA calculated quarterly | |||
|
A.
|
EBITDA
(for each fiscal quarter)
(see
definition of EBITDA in Section 15.1)
|
$_________
|
||
|
(i)
|
Net
Income
|
$_________
|
||
|
(ii)
|
Interest
Expense
|
$_________
|
||
|
(iii)
|
income
tax expense
|
$_________
|
||
|
(iv)
|
depreciation
expense
|
$_________
|
||
|
(v)
|
amortization
expense
|
$_________
|
||
|
(vi)
|
nonrecurring
losses under GAAP in such period
|
$_________
|
||
|
(vii)
|
all
extraordinary losses not otherwise related to the continuing
operations of
the Borrower in such period
|
$_________
|
||
|
(viii)
|
actual
cash and non-cash nonrecurring severance and actual cash and
non-cash
nonrecurring restructuring charges for such period up to $250,000
in the
aggregate in a fiscal quarter and up to $750,000 in the aggregate
during
the term of this Agreement
|
$_________
|
||
|
(ix)
|
Non-cash
charges relating to any share-based compensation awards, to
the extent
such non-cash charges were expensed during such period in accordance
with
SFAS 123R or are required to be shown as an expense in any
financial
statements for periods prior to the effective date of SFAS
123R
|
$_________
|
||
|
(x)
|
extraordinary
gains under GAAP in such period
|
$_________
|
||
|
(xi)
|
all
extraordinary gains not otherwise related to the continuing
operations of
the Borrower in such period
|
$_________
|
||
|
(xii)
|
Sum
of items (i) through (ix) less items (x) and (xi) is
EBITDA
|
$_________
|
||
|
B.
|
Minimum
EBITDA Required by Section 15.3
|
|||
|
C.
|
EBITDA
for preceding 4 fiscal quarters
|
|||
|
III.
|
Excess
Cash/Marketable Securities plus Availability Section
15.5 certified monthly
|
|||
|
A.
|
the
amount of cash or marketable securities permitted by Section
14.1.4
hereof
|
$_________
|
||
|
B.
|
the
Borrowing Base on such date
|
$_________
|
||
|
C.
|
the
Swingline Loan,
|
|||
|
D.
|
the
Floorplan Shortfall,
|
|||
|
E.
|
the
Letter of Credit Exposure (except to the extent that a Revolving
Loan
Advance will be used immediately to reimburse Letter of Credit
Issuer for
unreimbursed draws on a Letter of Credit)
|
$_________
|
||
|
F.
|
without
duplication, the outstanding Aggregate Revolving Loans
|
$_________
|
||
|
G.
|
the
amount of the Other Creditor Indebtedness (unless an Intercreditor
Agreement in form and substance satisfactory to Administrative
Agent has
been executed between Administrative Agent and the holder of
such Other
Creditor Indebtedness)
|
$_________
|
||
|
H.
|
the
amount of Bid Bonds
|
$_________
|
||
|
I.
|
the
sum of Items C, D, E, F, G and H
|
$_________
|
||
|
J.
|
Item
B minus Item I
|
$_________
|
||
|
K.
|
the
sum of Item A and Item J
|
$_________
|
||
|
L.
|
Minimum
Required by Section 15.5
|
$1,500,000
|
||
|
IV.
|
Maximum
Total Funded Indebtedness to EBITDA calculated fiscal year
end only
|
|||
|
A.
|
Total
Funded Indebtedness (see definition in Section 15.1)
|
$_________
|
||
|
B.
|
Total
Funded Indebtedness (see definition in Section 15.1)
|
$_________
|
||
|
C.
|
Ratio
of VA to VB
|
$_________
|
||
|
D.
|
Maximum
ratio permitted by Section 15.4
|
4.00
to 1.00
|
||
EXHIBIT
18.4.1
FORM
OF
ASSIGNMENT AND ACCEPTANCE
DATED
_________________, _____
Reference
is made to the Credit Facilities Agreement dated as of August 21, 2007 (as
amended, modified, restated and/or replaced from time to time, the “Credit
Agreement”) among MTM Technologies, Inc., MTM Technologies (US), Inc., MTM
Technologies (Massachusetts), LLC, and Info Systems, Inc. (collectively and
separately referred to as, “Borrower”) and GE Commercial Distribution Finance
Corporation (“CDF”), as Administrative Agent, and CDF and the Lenders as defined
in the Credit Agreement. Terms defined in the Credit Agreement are
used herein with the same meaning.
The
“Assignor” and the “Assignee” referred to on Schedule 1 agree as
follows:
1. The
Assignor hereby sells and assigns to the Assignee, without recourse and without
representation or warranty except as expressly set forth herein, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and
to
the Assignor’s rights and obligations under the Credit Agreement and the other
Loan Documents as of the date hereof equal to the percentage interest specified
on Schedule 1 of all outstanding rights and obligations under the Credit
Agreement and the other Loan Documents. After giving effect to such
sale and assignment, the Assignee’s Commitment and the amount of the Loans owing
to the Assignee will be as set forth on Schedule 1. Such
purchase and assumption shall include that portion of Assignor’s obligations to
fund unfunded Approvals equal to the percentage of the Floorplan Loans being
assigned by Assignor to Assignee.
2. The
Assignor (i) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest
is
free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Covered Person
or
any Guarantor, or the performance or observance by any Covered Person or any
Guarantor of any of its obligations under the Loan Documents or any other
instrument or document furnished pursuant thereto; and (iv) attaches the
Notes held by the Assignor and requests that the Administrative Agent exchange
such Notes for new Notes payable to the order of the Assignee in an amount
equal
to the Commitment assumed by the Assignee pursuant hereto and to the Assignor
in
an amount equal to the Commitment retained by the Assignor, if any, as specified
on Schedule 1.
3. The
Assignee (i) confirms that it has received a copy of the Credit Agreement,
together with copies of the financial statements referred to in
Section 13.13 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Assignor or any other Lender
and based on such documents and information as it shall deem appropriate at
the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) confirms that it is an Eligible Assignee;
(iv) appoints and authorizes the Administrative Agent to take such action
as agent on its behalf and to exercise such powers and discretion under the
Credit Agreement as are delegated to the Administrative Agent by the terms
thereof, together with such powers and discretion as are reasonably incidental
thereto; (v) agrees that it will perform in accordance with their terms all
of the obligations that by the terms of the Credit
Agreement
are required to be performed by it as a Lender; and (vi) attaches any U.S.
Internal Revenue Service or other forms required under the Credit
Agreement.
4. Following
the execution of this Assignment and Acceptance, it will be delivered to the
Administrative Agent for acceptance and recording by the Administrative
Agent. The effective date for this Assignment and Acceptance (the
“Effective Date”) shall be the date of acceptance hereof by the
Administrative Agent, unless otherwise specified on
Schedule 1.
5. Upon
such acceptance and recording by the Administrative Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and
be
released from its obligations under the Credit Agreement.
6. Upon
such acceptance and recording by the Administrative Agent, from and after the
Effective Date, the Administrative Agent shall make all payments under the
Credit Agreement and the Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The Assignor
and Assignee shall make all appropriate adjustments in payments under the Credit
Agreement and the Notes for periods prior to the Effective Date directly between
themselves.
7. Assignor
represents and warrants that is has paid an assignment and a processing fee
of
$3,500 to Administrative Agent.
8. This
Assignment and Acceptance shall be governed by, and construed in accordance
with, the laws of the State of Illinois.
9. This
Assignment and Acceptance may be executed in any number of counterparts and
by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall
constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier
shall be effective as delivery of a manually executed counterpart of this
Assignment and Acceptance.
IN
WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to
this Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.
2
SCHEDULE 1
to
ASSIGNMENT
AND ACCEPTANCE
|
Assignor’s
Pro Rata Share after giving effect hereto:
|
______%
|
|
Assignee’s
Pro Rata Share after giving effect hereto:
|
______%
|
|
Assignor’s
Commitment after giving effect hereto:
|
$______
|
|
Assignee’s
Commitment after giving effect hereto :
|
$______
|
|
Aggregate
outstanding principal amount of Loans assigned:
|
$______
|
|
Principal
amount of Revolving Note payable to Assignee:
|
$______
|
|
Principal
amount of Floorplan Loans payable to Assignee:
|
$______
|
|
Amount
of unfunded Approvals payable by Assignee:
|
$______
|
|
Principal
amount of Revolving Note payable to Assignor:
|
$______
|
|
Principal
amount of Floorplan Loans payable to Assignor:
|
$______
|
|
Amount
of unfunded Approvals payable by Assignor:
|
$______
|
|
Effective
Date (if other than date of acceptance by Administrative
Agent):
|
*___________,
____
|
|
[NAME
OF ASSIGNOR], as Assignor
|
|||
|
By:
|
|||
|
Title:
|
|||
|
Dated:
|
__________,
20___
|
||
|
[NAME
OF ASSIGNEE], as Assignee
|
|||
|
By:
|
|||
|
Title:
|
|||
|
Domestic
Lending Office:
LIBOR
Lending Office:
|
|||
*This
date should be no earlier than five Business Days after the delivery of this
Assignment and Acceptance to the Administrative Agent.
Accepted
and Approved
this
_____ day of ____________, ____
GE
COMMERCIAL DISTRIBUTION FINANCE CORPORATION,
as
Administrative Agent
|
By:
|
||
|
Title:
|
||
ONLY
IF THERE IS NO EXISTING DEFAULT, THEN ALSO THE FOLLOWING
SIGNATURE
MTM
TECHNOLOGIES, INC.
on
behalf
of itself and the other Borrowers
|
By:
|
||
|
Title:
|
||
TABLE
OF CONTENTS
|
Page
|
||||||
|
1.
|
Effective
Date.
|
1
|
||||
|
2.
|
Definitions;
Rules of Construction; Borrowing Agent; Patriot Act.
|
1
|
||||
|
2.1.
|
Listed
Definitions.
|
1
|
||||
|
2.2.
|
Other
Definitions.
|
1
|
||||
|
2.3.
|
References
to Borrower.
|
1
|
||||
|
2.4.
|
References
to Covered Person.
|
1
|
||||
|
2.5.
|
References
to Required Lenders.
|
1
|
||||
|
2.6.
|
Accounting
Terms.
|
1
|
||||
|
2.7.
|
Meaning
of Satisfactory.
|
1
|
||||
|
2.8.
|
Computation
of Time Periods.
|
2
|
||||
|
2.9.
|
Syndication
Agent.
|
2
|
||||
|
2.10.
|
Certificates
of Borrower and Borrowing Officer, Advance Requests; Borrowing
Agent.
|
2
|
||||
|
2.11.
|
General.
|
2
|
||||
|
2.12.
|
Patriot
Act Notification.
|
3
|
||||
|
2.13.
|
Other
Deposits and Extensions of Credit.
|
3
|
||||
|
3.
|
Lenders’
Commitments and Facilities.
|
3
|
||||
|
3.1.
|
Revolving
Loan Commitments.
|
3
|
||||
|
3.1.1.
|
Aggregate
Amount.
|
3
|
||||
|
3.1.2.
|
Limitation
on Revolving Loan Advances.
|
4
|
||||
|
3.1.3.
|
Revolving
Notes.
|
4
|
||||
|
3.1.4.
|
Borrowing
Base.
|
5
|
||||
|
3.1.5.
|
Eligible
Accounts.
|
5
|
||||
|
3.2.
|
Floorplan
Loan Facility.
|
7
|
||||
|
3.2.1.
|
Floorplan
Loan Facility Generally.
|
7
|
||||
|
3.2.2.
|
Interim
Floorplan Loan Advances.
|
7
|
||||
|
3.2.3.
|
Limitations
on Interim Floorplan Loan Advances.
|
|||||
|
3.2.4.
|
Operation
of Floorplan Loan Facility and Interim Floorplan Loan
Facility.
|
8
|
||||
|
3.2.5.
|
Floorplan
Loan Approvals.
|
8
|
||||
|
3.2.6.
|
Inventory
not Available for Floorplan Loans and Interim Floorplan
Loans.
|
8
|
||||
|
3.2.7.
|
Termination
of Floorplan Loan Facility and Interim Floorplan Loan
Facility.
|
9
|
||||
|
3.2.8.
|
Repurchase
Agreements.
|
10
|
||||
|
3.3.
|
Swingline
Commitment.
|
10
|
||||
|
3.3.1.
|
Swingline
Advances.
|
10
|
||||
|
3.3.2.
|
Limitations
on Swingline Advances.
|
10
|
||||
|
3.3.3.
|
Swingline
Note.
|
11
|
||||
|
3.4.
|
Letter
of Credit Facility.
|
11
|
||||
|
3.5.
|
Termination.
|
12
|
||||
|
3.6.
|
Total
Aggregate Facility Limit.
|
13
|
||||
|
4.
|
Interest;
Yield Protection.
|
13
|
||||
|
4.1.
|
Interest
on the Swingline Loan.
|
13
|
||||
|
4.2.
|
Interest
on Draws on Letters of Credit.
|
13
|
||||
|
4.3.
|
Interest
on the Floorplan Loan and Interim Floorplan Loan --Administrative
Agent
and CDF as a Lender Only.
|
13
|
||||
i
|
4.4.
|
Interest
on Aggregate Loans--Other than Floorplan Loans.
|
15
|
||||
|
4.5.
|
Interest
on Floorplan Loans; Administrative Agent Deficiency
Amount.
|
15
|
||||
|
4.6.
|
Adjusted
LIBOR Rate.
|
16
|
||||
|
4.7.
|
LIBOR
Increments.
|
16
|
||||
|
4.8.
|
Time
of Accrual.
|
16
|
||||
|
4.9.
|
Computation.
|
16
|
||||
|
4.10.
|
Rate
After Maturity and Rate After An Event of Default.
|
16
|
||||
|
4.11.
|
Taxes.
|
17
|
||||
|
4.12.
|
Compensation
for Increased Costs and Reduced Returns; Capital Adequacy.
|
18
|
||||
|
4.13.
|
Usury.
|
19
|
||||
|
5.
|
Fees.
|
19
|
||||
|
5.1.
|
Annual
Facility Fee.
|
19
|
||||
|
5.2.
|
Unused
Revolving Fee.
|
19
|
||||
|
5.3.
|
Letter
of Credit Fees.
|
19
|
||||
|
5.4.
|
Letter
of Credit Fronting Fee.
|
20
|
||||
|
5.5.
|
Other
Letter of Credit Fees.
|
20
|
||||
|
5.6.
|
Calculation
of Fees.
|
20
|
||||
|
6.
|
Payments.
|
20
|
||||
|
6.1.
|
Scheduled
Payments on Loans; Applications to Loans.
|
20
|
||||
|
6.1.1.
|
Interest.
|
20
|
||||
|
6.1.1.1.
|
20
|
|||||
|
6.1.2.
|
Principal.
|
21
|
||||
|
6.1.2.3.
|
Maturity.
|
22
|
||||
|
6.2.
|
Special
Requirement for Payments on Floorplan Loans and Interim Floorplan
Loans.
|
23
|
||||
|
6.3.
|
Prepayments.
|
23
|
||||
|
6.3.1.
|
Voluntary
Prepayments.
|
23
|
||||
|
6.3.2.
|
Mandatory
Prepayments.
|
24
|
||||
|
6.3.3.
|
Other
Mandatory Prepayments.
|
24
|
||||
|
6.3.3.1.
Proceeds
from Sales of Assets.
|
|
24
|
||||
|
6.3.3.2.
Proceeds
from Sale of Securities or Indebtedness.
|
24
|
|||||
|
6.3.3.3.
Insurance
Proceeds.
|
|
25
|
||||
|
6.4.
|
Reimbursement
Obligations of Borrower.
|
25
|
||||
|
6.5.
|
Manner
of Payments and Timing of Application of Payments.
|
25
|
||||
|
6.5.1.
|
Payment
Requirement.
|
25
|
||||
|
6.5.2.
|
Application
of Payments and Proceeds.
|
25
|
||||
|
6.5.3.
|
Interest
Calculation.
|
26
|
||||
|
6.6.
|
Returned
Instruments.
|
26
|
||||
|
6.7.
|
Compelled
Return of Payments or Proceeds.
|
26
|
||||
|
6.8.
|
Due
Dates Not on Business Days.
|
27
|
||||
|
7.
|
Procedure
for Obtaining Advances.
|
27
|
||||
|
7.1.
|
Initial
Advances.
|
27
|
||||
|
7.2.
|
Subsequent
Revolving Loan Advances.
|
27
|
||||
|
7.3.
|
Subsequent
Floorplan Loan Advances.
|
27
|
||||
|
7.3.1.
|
Repayment
of the Swingline Loan and the Interim Floorplan Loan.
|
27
|
||||
|
7.3.2.
|
Administrative
Agent’s Right to Make Other Certain Advances.
|
28
|
||||
|
7.3.2.1.
|
Payment
of Loan Obligations.
|
28
|
||||
|
7.3.2.2.
|
Payments
to Other Creditors.
|
28
|
||||
|
7.4.
|
Fundings.
|
29
|
||||
|
7.4.1.
|
Advances.
|
29
|
||||
|
7.4.2.
|
Draws
on Letters of Credit.
|
29
|
||||
ii
|
7.4.3.
|
All
Fundings Ratable.
|
29
|
||||
|
7.5.
|
Administrative
Agent’s Availability Assumption.
|
29
|
||||
|
7.6.
|
Letters
of Credit.
|
31
|
||||
|
7.7.
|
Disbursement.
|
31
|
||||
|
7.8.
|
Restrictions
on Advances.
|
31
|
||||
|
7.9.
|
Each
Advance Request and Request for Letter of Credit a
Certification.
|
31
|
||||
|
7.10.
|
Requirements
for Every Advance Request.
|
31
|
||||
|
7.11.
|
Requirements
for Every Letter of Credit Request.
|
32
|
||||
|
7.12.
|
Exoneration
of Administrative Agent and Lenders.
|
32
|
||||
|
8.
|
Security.
|
32
|
||||
|
8.1.
|
Landlord
Consents.
|
32
|
||||
|
8.2.
|
Mortgagee
Consent Agreements.
|
32
|
||||
|
8.3.
|
Security
Agreements.
|
33
|
||||
|
8.4.
|
Stock
Pledge Agreements.
|
33
|
||||
|
8.5.
|
Collateral
Assignments.
|
33
|
||||
|
8.5.1.
|
Intellectual
Property Assignments.
|
33
|
||||
|
8.5.2.
|
Control
Agreements.
|
33
|
||||
|
9.
|
Power
of Attorney.
|
33
|
||||
|
10.
|
Conditions
of Lending.
|
34
|
||||
|
10.1.
|
Conditions
to Initial Advance.
|
34
|
||||
|
10.1.1.
|
Listed
Documents and Other Items.
|
34
|
||||
|
10.1.2.
|
Financial
Condition.
|
34
|
||||
|
10.1.3.
|
Intercreditor
Agreements.
|
34
|
||||
|
10.1.4.
|
Subordination
Agreements.
|
35
|
||||
|
10.1.5.
|
Default.
|
35
|
||||
|
10.1.6.
|
Perfection
of Security Interests.
|
35
|
||||
|
10.1.7.
|
Representations
and Warranties.
|
35
|
||||
|
10.1.8.
|
Material
Adverse Change.
|
35
|
||||
|
10.1.9.
|
Pending
Material Proceedings.
|
35
|
||||
|
10.1.10.
|
Payment
of Fees.
|
35
|
||||
|
10.1.11.
|
Other
Items.
|
35
|
||||
|
10.2.
|
Conditions
to Subsequent Advances.
|
35
|
||||
|
10.2.1.
|
General
Conditions.
|
35
|
||||
|
10.2.2.
|
Representations
and Warranties.
|
35
|
||||
|
10.2.3.
|
Approvals.
|
35
|
||||
|
10.2.4.
|
Default.
|
36
|
||||
|
10.3.
|
Conditions
to Issuance of Letters of Credit.
|
36
|
||||
|
10.3.1.
|
Letter
of Credit Application/Reimbursement Agreement.
|
36
|
||||
|
10.3.2.
|
No
Prohibitions.
|
36
|
||||
|
10.3.3.
|
Representations
and Warranties.
|
36
|
||||
|
10.3.4.
|
No
Material Proceedings.
|
36
|
||||
|
10.3.5.
|
No
Default.
|
36
|
||||
|
10.3.6.
|
Other
Conditions.
|
36
|
||||
|
11.
|
Representations
and Warranties.
|
36
|
||||
|
11.1.
|
Organization
and Existence.
|
37
|
||||
|
11.2.
|
Authorization.
|
37
|
||||
|
11.3.
|
Due
Execution.
|
37
|
||||
|
11.4.
|
Enforceability
of Obligations.
|
37
|
||||
|
11.5.
|
Burdensome
Obligations.
|
37
|
||||
|
11.6.
|
Legal
Restraints.
|
37
|
||||
|
11.7.
|
Labor
Contracts and Disputes.
|
37
|
||||
iii
|
11.8.
|
No
Material Proceedings.
|
38
|
||||
|
11.9.
|
Material
Licenses.
|
38
|
||||
|
11.10.
|
Compliance
with Material Laws.
|
38
|
||||
|
11.10.1.
|
General
Compliance with Environmental Laws.
|
38
|
||||
|
11.10.2.
|
Proceedings.
|
38
|
||||
|
11.10.3.
|
Investigations
Regarding Hazardous Materials.
|
38
|
||||
|
11.10.4.
|
Notices
and Reports Regarding Hazardous Materials.
|
38
|
||||
|
11.10.5.
|
Hazardous
Materials on Real Property.
|
38
|
||||
|
11.10.6.
|
Environmental
Property Transfer Acts.
|
38
|
||||
|
11.11.
|
Other
Names.
|
39
|
||||
|
11.12.
|
Prior
Transactions.
|
39
|
||||
|
11.13.
|
Capitalization.
|
39
|
||||
|
11.14.
|
Solvency.
|
39
|
||||
|
11.15.
|
Projections.
|
39
|
||||
|
11.16.
|
Financial
Statements.
|
39
|
||||
|
11.17.
|
No
Change in Condition.
|
39
|
||||
|
11.18.
|
No
Defaults.
|
39
|
||||
|
11.19.
|
Investments.
|
39
|
||||
|
11.20.
|
Indebtedness.
|
39
|
||||
|
11.21.
|
Indirect
Obligations.
|
40
|
||||
|
11.22.
|
Encumbrances.
|
40
|
||||
|
11.23.
|
Capital
Leases.
|
40
|
||||
|
11.24.
|
Other
Creditor Indebtedness; Intercreditor Documents; Subordinated
Indebtedness.
|
40
|
||||
|
11.25.
|
Tax
Liabilities; Governmental Charges.
|
40
|
||||
|
11.26.
|
Pension
Benefit Plans.
|
40
|
||||
|
11.27.
|
Welfare
Benefit Plans.
|
40
|
||||
|
11.28.
|
Retiree
Benefits.
|
40
|
||||
|
11.29.
|
Distributions/Redemptions.
|
41
|
||||
|
11.30.
|
Real
Property.
|
41
|
||||
|
11.31.
|
State
of Collateral and other Property.
|
41
|
||||
|
11.31.1.
|
Accounts.
|
41
|
||||
|
11.31.2.
|
Inventory.
|
42
|
||||
|
11.31.3.
|
Equipment.
|
42
|
||||
|
11.31.4.
|
Intellectual
Property.
|
42
|
||||
|
11.31.5.
|
Documents,
Instruments and Chattel Paper.
|
42
|
||||
|
11.32.
|
Chief
Place of Business; Locations of Collateral.
|
43
|
||||
|
11.33.
|
Warranties
and Representations-Inventory.
|
43
|
||||
|
11.34.
|
No
Negative Pledges.
|
43
|
||||
|
11.35.
|
Security
Documents.
|
43
|
||||
|
11.35.1.
|
Security
Agreements.
|
43
|
||||
|
11.35.2.
|
Collateral
Assignments.
|
44
|
||||
|
11.35.2.1.
|
Control
Agreements.
|
44
|
||||
|
11.35.2.2.
|
Intellectual
Property Assignments.
|
44
|
||||
|
11.35.2.3.
|
Stock
Pledge Agreement.
|
44
|
||||
|
11.36.
|
S
Corporation.
|
44
|
||||
|
11.37.
|
Subsidiaries
and Affiliates.
|
44
|
||||
|
11.38.
|
Bank
Accounts and Lockboxes.
|
44
|
||||
|
11.39.
|
Margin
Stock.
|
44
|
||||
|
11.40.
|
Securities
Matters.
|
45
|
||||
|
11.41.
|
Investment
Company Act, Etc.
|
45
|
||||
iv
|
11.42.
|
No
Material Misstatements or Omissions.
|
45
|
||||
|
11.43.
|
Filings.
|
45
|
||||
|
11.44.
|
Broker’s
Fees.
|
45
|
||||
|
11.45.
|
Eligibility
of Collateral.
|
45
|
||||
|
11.46.
|
Loans
to Shareholders.
|
45
|
||||
|
11.47.
|
No
Improper Payment or Influence.
|
45
|
||||
|
11.48.
|
Foreign
Enemies and Regulations.
|
46
|
||||
|
12.
|
Modification
and Survival of Representations.
|
46
|
||||
|
13.
|
Affirmative
Covenants.
|
46
|
||||
|
13.1.
|
Use
of Proceeds.
|
46
|
||||
|
13.2.
|
Corporate
Existence.
|
47
|
||||
|
13.3.
|
Maintenance
of Property and Leases.
|
47
|
||||
|
13.4.
|
Inventory.
|
47
|
||||
|
13.5.
|
Insurance.
|
47
|
||||
|
13.6.
|
Payment
of Taxes and Other Obligations.
|
48
|
||||
|
13.7.
|
Compliance
With Laws.
|
48
|
||||
|
13.7.1.
|
Environmental
Laws.
|
48
|
||||
|
13.7.2.
|
Pension
Benefit Plans.
|
48
|
||||
|
13.8.
|
Discovery
and Clean-Up of Hazardous Material.
|
48
|
||||
|
13.8.1.
|
In
General.
|
48
|
||||
|
13.9.
|
Termination
of Pension Benefit Plan.
|
49
|
||||
|
13.10.
|
Notice
to Administrative Agent and Lenders of Material Events.
|
49
|
||||
|
13.11.
|
Maintenance
of Security Interests of Security Documents.
|
51
|
||||
|
13.11.1.
|
Preservation
and Perfection of Security Interests.
|
51
|
||||
|
13.11.2.
|
Collateral
Held by Warehouseman, Bailee, etc.
|
52
|
||||
|
13.11.3.
|
Compliance
With Terms of Security Documents.
|
52
|
||||
|
13.12.
|
Accounting
System.
|
52
|
||||
|
13.12.1.
|
Account
Records.
|
52
|
||||
|
13.12.2.
|
Inventory
Records.
|
53
|
||||
|
13.12.3.
|
Tracing
of Proceeds.
|
53
|
||||
|
13.13.
|
Financial
Statements.
|
53
|
||||
|
13.13.1.
|
Annual
Financial Statements.
|
53
|
||||
|
13.13.2.
|
Monthly
Financial Statements.
|
53
|
||||
|
13.14.
|
Other
Financial Information.
|
54
|
||||
|
13.14.1.
|
Borrowing
Base Certificate.
|
54
|
||||
|
13.14.2.
|
Sales
Report.
|
54
|
||||
|
13.14.3.
|
Cash
Journal Report.
|
54
|
||||
|
13.14.4.
|
Schedule
of Inventory.
|
54
|
||||
|
13.14.5.
|
Schedule
of Accounts, Schedule of Accounts Payable.
|
54
|
||||
|
13.14.6.
|
Report
of Indebtedness.
|
54
|
||||
|
13.14.7.
|
Report
of Deferred Revenue.
|
54
|
||||
|
13.14.8.
|
Other
Reports or Information Concerning Accounts or Inventory.
|
54
|
||||
|
13.14.9.
|
Stockholder
and SEC Reports.
|
55
|
||||
|
13.14.10.
|
Pension
Benefit Plan Reports.
|
55
|
||||
|
13.14.11.
|
Tax
Returns.
|
55
|
||||
|
13.14.12.
|
Locations
of Inventory Report.
|
55
|
||||
|
13.15.
|
Review
of Accounts.
|
55
|
||||
|
13.16.
|
Inventory.
|
55
|
||||
|
13.17.
|
Annual
Projections; Operating Plan.
|
55
|
||||
|
13.18.
|
Other
Information.
|
55
|
||||
|
13.19.
|
Examinations
and Site Visits by Administrative Agent.
|
55
|
||||
v
|
13.20.
|
Verification
of Accounts and Notices to Account Debtors.
|
56
|
||||
|
13.21.
|
Appraisals
of Collateral.
|
56
|
||||
|
13.22.
|
Access
to Officers and Auditors.
|
56
|
||||
|
13.23.
|
Movement
of Inventory.
|
56
|
||||
|
13.24.
|
Titled
Assets.
|
56
|
||||
|
13.25.
|
Claims
Act.
|
57
|
||||
|
13.26.
|
Further
Assurances.
|
57
|
||||
|
14.
|
Negative
Covenants.
|
57
|
||||
|
14.1.
|
Investments.
|
57
|
||||
|
14.2.
|
Indebtedness.
|
58
|
||||
|
14.3.
|
Payments
on Other Creditor Indebtedness; Subordinated Indebtedness.
|
59
|
||||
|
14.4.
|
Prepayments.
|
59
|
||||
|
14.5.
|
Indirect
Obligations.
|
59
|
||||
|
14.6.
|
Security
Interests.
|
59
|
||||
|
14.7.
|
Acquisitions.
|
60
|
||||
|
14.8.
|
Leases;
Bailments; Consignments; Warehousing.
|
60
|
||||
|
14.9.
|
Disposal
of Property.
|
61
|
||||
|
14.10.
|
Distributions/Redemptions.
|
61
|
||||
|
14.11.
|
Change
of Control.
|
61
|
||||
|
14.12.
|
Capital
Structure; Capital Securities.
|
61
|
||||
|
14.13.
|
Change
of State of Formation; Change of Name.
|
61
|
||||
|
14.14.
|
Change
of Business.
|
62
|
||||
|
14.15.
|
Transactions
With Affiliates.
|
62
|
||||
|
14.16.
|
Conflicting
Agreements.
|
62
|
||||
|
14.17.
|
Investment
Banking and Finder’s Fees.
|
62
|
||||
|
14.18.
|
Sale
and Leaseback Transactions.
|
62
|
||||
|
14.19.
|
New
Subsidiaries.
|
62
|
||||
|
14.20.
|
Fiscal
Year.
|
62
|
||||
|
14.21.
|
Leases.
|
62
|
||||
|
14.22.
|
S
Corporation Status.
|
63
|
||||
|
14.23.
|
Depreciation
Methodology.
|
63
|
||||
|
14.24.
|
Tax
Consolidation.
|
63
|
||||
|
14.25.
|
Transactions
Having a Material Adverse Effect on Covered Person.
|
63
|
||||
|
14.26.
|
Storage.
|
63
|
||||
|
14.27.
|
Like-Kind
Exchange.
|
63
|
||||
|
15.
|
Financial
Covenants.
|
63
|
||||
|
15.1.
|
Special
Definitions.
|
63
|
||||
|
15.2.
|
Minimum
Liquidation Multiple.
|
64
|
||||
|
15.3.
|
Minimum
EBITDA.
|
64
|
||||
|
15.4.
|
Maximum
Total Funded Indebtedness to EBITDA.
|
65
|
||||
|
15.5.
|
Excess
Cash/Marketable Securities plus Availability.
|
65
|
||||
|
16.
|
Default.
|
65
|
||||
|
16.1.
|
Events
of Default.
|
65
|
||||
|
16.1.1.
|
Failure
to Pay Principal or Interest.
|
65
|
||||
|
16.1.2.
|
Failure
to Pay Certain Other Amounts Owed to Lenders.
|
66
|
||||
|
16.1.3.
|
Failure
to Pay Examination and Appraisal Costs.
|
66
|
||||
|
16.1.4.
|
Failure
to Pay Amounts Owed to Other Persons.
|
66
|
||||
|
16.1.5.
|
Representations
or Warranties.
|
66
|
||||
|
16.1.6.
|
Certain
Covenants with Cure Periods.
|
66
|
||||
|
16.1.7.
|
Certain
Covenants Without Cure Periods.
|
66
|
||||
|
16.1.8.
|
Other
Covenants.
|
66
|
||||
vi
|
16.1.9.
|
Acceleration
of Other Indebtedness.
|
66
|
||||
|
16.1.10.
|
Default
Under Other Agreements.
|
66
|
||||
|
16.1.11.
|
Other
Creditor Indebtedness.; Subordinated Indebtedness.
|
67
|
||||
|
16.1.12.
|
Bankruptcy;
Insolvency; Etc.
|
67
|
||||
|
16.1.13.
|
Judgments;
Attachment; Settlement; Etc.
|
67
|
||||
|
16.1.14.
|
Pension
Benefit Plan Termination, Etc.
|
68
|
||||
|
16.1.15.
|
Liquidation
or Dissolution.
|
68
|
||||
|
16.1.16.
|
Seizure
of Assets.
|
68
|
||||
|
16.1.17.
|
Racketeering
Proceeding.
|
68
|
||||
|
16.1.18.
|
Loan
Documents; Security Interests.
|
68
|
||||
|
16.1.19.
|
Loss
to Collateral.
|
69
|
||||
|
16.1.20.
|
Guaranty;
Guarantor.
|
69
|
||||
|
16.1.21.
|
Change
of Control.
|
69
|
||||
|
16.1.22.
|
Material
Adverse Change.
|
69
|
||||
|
16.1.23.
|
Negative
Pledge.
|
69
|
||||
|
16.2.
|
Cross-Default.
|
69
|
||||
|
16.3.
|
Rights
and Remedies.
|
69
|
||||
|
16.3.1.
|
Termination
of Commitments.
|
69
|
||||
|
16.3.2.
|
Acceleration;
Funding.
|
69
|
||||
|
16.3.3.
|
Right
of Set-off.
|
70
|
||||
|
16.3.4.
|
Notice
to Account Debtors.
|
70
|
||||
|
16.3.5.
|
Entry
Upon Premises and Access to Information.
|
70
|
||||
|
16.3.6.
|
Completion
of Uncompleted Inventory Items.
|
71
|
||||
|
16.3.7.
|
Borrower’s
Obligations.
|
71
|
||||
|
16.3.8.
|
Secured
Party Rights.
|
71
|
||||
|
16.3.9.
|
Joint
and Several.
|
72
|
||||
|
16.3.10.
|
Miscellaneous.
|
73
|
||||
|
16.4.
|
Application
of Funds.
|
73
|
||||
|
16.5.
|
Limitation
of Liability; Waiver.
|
73
|
||||
|
16.6.
|
Notice.
|
74
|
||||
|
17.
|
Administrative
Agent and Lenders.
|
74
|
||||
|
17.1.
|
Appointment,
Powers, and Immunities.
|
74
|
||||
|
17.2.
|
Reliance
by Administrative Agent.
|
74
|
||||
|
17.3.
|
Employment
of Administrative Agents and Counsel.
|
75
|
||||
|
17.4.
|
Defaults.
|
75
|
||||
|
17.5.
|
Rights
as Lender.
|
75
|
||||
|
17.6.
|
Indemnification.
|
76
|
||||
|
17.7.
|
Notification
of Lenders.
|
76
|
||||
|
17.8.
|
Non-Reliance
on Agent and Other Lenders.
|
77
|
||||
|
17.9.
|
Resignation.
|
77
|
||||
|
17.10.
|
Collections
and Distributions to Lenders by Administrative Agent.
|
77
|
||||
|
17.11.
|
Provision
Regarding Payments.
|
78
|
||||
|
18.
|
General.
|
78
|
||||
|
18.1.
|
Lenders’
Right to Cure.
|
78
|
||||
|
18.2.
|
Rights
Not Exclusive.
|
78
|
||||
|
18.3.
|
Survival
of Agreements.
|
78
|
||||
|
18.4.
|
Assignments.
|
78
|
||||
|
18.4.1.
|
Permitted
Assignments.
|
78
|
||||
|
18.4.2.
|
Register;
Consequences and Effect of Assignments.
|
79
|
||||
|
18.4.3.
|
Administrative
Agent to Retain Copies of Assignments and Acceptances.
|
80
|
||||
vii
|
18.4.4.
|
Notice
to Borrower of Assignment.
|
80
|
||||
|
18.4.5.
|
Assignment
to Federal Reserve Bank.
|
81
|
||||
|
18.4.6.
|
Information.
|
81
|
||||
|
18.4.7.
|
Sale
of Participations.
|
81
|
||||
|
18.5.
|
Payment
of Expenses.
|
81
|
||||
|
18.6.
|
General
Indemnity.
|
82
|
||||
|
18.7.
|
Letters
of Credit.
|
84
|
||||
|
18.8.
|
Changes
in Accounting Principles.
|
84
|
||||
|
18.9.
|
Loan
Records.
|
84
|
||||
|
18.10.
|
Other
Security and Guaranties.
|
85
|
||||
|
18.11.
|
Loan
Obligations Payable in Dollars.
|
85
|
||||
|
18.12.
|
Reimbursement
Obligations of Borrower.
|
85
|
||||
|
18.13.
|
Disclosure.
|
86
|
||||
|
18.14.
|
Tax
Treatment Waiver.
|
87
|
||||
|
18.15.
|
Termination.
|
87
|
||||
|
18.15.1.
|
Termination
Fee.
|
87
|
||||
|
18.15.2.
|
Liquidated
Damages.
|
88
|
||||
|
18.15.3.
|
Irrevocable;
Termination of Entire Agreement.
|
88
|
||||
|
18.15.4.
|
Effect
on Obligations.
|
88
|
||||
|
19.
|
Binding
Arbitration.
|
88
|
||||
|
19.1.
|
Arbitrable
Claims.
|
88
|
||||
|
19.2.
|
Administrative
Body.
|
88
|
||||
|
19.3.
|
Hearings.
|
89
|
||||
|
19.4.
|
Discovery.
|
89
|
||||
|
19.5.
|
Exemplary
or Punitive Damages.
|
89
|
||||
|
19.6.
|
Confidentiality
of Awards.
|
89
|
||||
|
19.7.
|
Prejudgment
and Provisional Remedies.
|
89
|
||||
|
19.8.
|
Attorneys’
Fees.
|
89
|
||||
|
19.9.
|
Limitations.
|
90
|
||||
|
19.10.
|
Survival
After Termination.
|
90
|
||||
|
19.11.
|
Invalidity/Unenforceability
of Binding Arbitration; Jury Trial Waiver; Service of Process;
Forum.
|
90
|
||||
|
19.11.1.
|
Jury
Trial Waiver.
|
90
|
||||
|
19.11.2.
|
Choice
of Forum.
|
91
|
||||
|
19.11.3.
|
Service
of Process.
|
91
|
||||
|
20.
|
Miscellaneous.
|
91
|
||||
|
20.1.
|
Notices.
|
91
|
||||
|
20.2.
|
Amendments
and Modifications; Waivers and Consents; All Lenders.
|
91
|
||||
|
20.3.
|
Course
of Dealing.
|
93
|
||||
|
20.4.
|
Rights
Cumulative.
|
93
|
||||
|
20.5.
|
Successors
and Assigns.
|
93
|
||||
|
20.6.
|
Severability.
|
93
|
||||
|
20.7.
|
Counterparts.
|
93
|
||||
|
20.8.
|
Governing
Law; No Third Party Rights.
|
93
|
||||
|
20.9.
|
Counterpart
Facsimile Execution.
|
93
|
||||
|
20.10.
|
No
Other Agreements.
|
94
|
||||
|
20.11.
|
Negotiated
Transaction.
|
94
|
||||
|
20.12.
|
Waiver
of Punitive and Exemplary Damages.
|
94
|
||||
|
20.13.
|
Incorporation
By Reference.
|
94
|
||||
|
20.14.
|
Statutory
Notice-Insurance.
|
94
|
||||
|
20.15.
|
Statutory
Notice--Oral Commitments.
|
95
|
||||
viii