1
EXHIBIT 4(h)
LOAN AND SECURITY AGREEMENT
Dated as of October 29, 1999
Among
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as the Lenders
and
BANK OF AMERICA, NATIONAL ASSOCIATION
as the Agent
and
BANC OF AMERICA SECURITIES LLC
as the Syndication Agent, Lead Arranger and Sole Book Runner
and
FTL RECEIVABLES COMPANY
as the Borrower
2
TABLE OF CONTENTS
ARTICLE I INTERPRETATION OF THIS AGREEMENT 0
Section 1.1 Definitions. As used herein: 0
Section 1.2 Accounting Terms. 23
Section 1.3 Interpretive Provisions. 23
ARTICLE II LOANS 24
Section 2.1 Total Facility. 24
Section 2.2 Revolving Loans. 24
ARTICLE III INTEREST AND FEES 31
Section 3.1 Interest. 31
Section 3.2 Conversion and Continuation Elections. 32
Section 3.3 Maximum Interest Rate. 33
Section 3.4 Closing Fees. 33
Section 3.5 Unused Line Fee. 34
Section 3.6 Administrative Fee. 34
ARTICLE IV PAYMENTS AND PREPAYMENTS 34
Section 4.1 Revolving Loans. 34
Section 4.2 Termination of Facility. 34
Section 4.3 Payments by the Borrower. 35
Section 4.4 Payments as Revolving Loans. 35
Section 4.5 Apportionment, Application and Reversal of Payments. 36
Section 4.6 Indemnity for Returned Payments. 36
Section 4.7 Agent's and Lenders' Books and Records; Monthly Statements. 37
ARTICLE V TAXES, YIELD PROTECTION AND ILLEGALITY 37
Section 5.1 Taxes. 37
Section 5.2 Illegality. 38
Section 5.3 Increased Costs and Reduction of Return. 39
Section 5.4 Funding Losses. 39
Section 5.5 Inability to Determine Rates. 40
Section 5.6 Certificates of Lenders. 40
Section 5.7 Survival. 40
ARTICLE VI COLLATERAL 40
Section 6.1 Grant of Security Interest. 40
Section 6.2 Perfection and Protection of Security Interest. 41
Section 6.3 Location of Collateral. 42
Section 6.4 Title to, Liens on, and Sale and Use of Collateral. 42
Section 6.5 Appraisals. 42
Section 6.6 Access and Examination; Confidentiality. 43
i
3
Section 6.7 Collateral Reporting. 44
Section 6.8 Receivables. 44
Section 6.9 Collection of Receivables; Payments. 45
Section 6.10 Documents, Instruments, and Chattel Paper. 46
Section 6.11 Right to Cure. 46
Section 6.12 Power of Attorney. 46
Section 6.13 The Agent's and Lenders'Rights, Duties and Liabilities. 47
ARTICLE VII BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES 47
Section 7.1 Books and Records. 47
Section 7.2 Financial Information. 47
Section 7.3 Certain Notices 50
ARTICLE VIII GENERAL WARRANTIES AND REPRESENTATIONS 51
Section 8.1 Authorization, Validity, and Enforceability of this Agreement and the Loan Documents. 51
Section 8.2 Validity and Priority of Security Interest. 51
Section 8.3 Organization and Qualification. 51
Section 8.4 Corporate Name; Prior Transactions. 52
Section 8.5 Subsidiaries and Affiliates. 52
Section 8.6 Financial Statements. 52
Section 8.7 Solvency. 52
Section 8.8 Debt. 52
Section 8.9 Distributions. 52
Section 8.10 Title to Property. 52
Section 8.11 Trade Names and Terms of Sale. 52
Section 8.12 Litigation. 53
Section 8.13 Restrictive Agreements. 53
Section 8.14 No Violation of Law. 53
Section 8.15 No Default. 53
Section 8.16 ERISA Compliance. 53
Section 8.17 Taxes. 54
Section 8.18 Regulated Entities. 54
Section 8.19 Use of Proceeds; Margin Regulations. 54
Section 8.20 No Material Adverse Change. 54
Section 8.21 Year 2000 Assessment. 55
Section 8.22 Full Disclosure. 55
Section 8.23 Material Agreements. 55
Section 8.24 Bank Accounts. 55
Section 8.25 Governmental Authorization. 55
Section 8.26 FTL Senior Credit Agreement 55
ARTICLE IX AFFIRMATIVE AND NEGATIVE COVENANTS 55
Section 9.1 Payment of Taxes and Other Indebtedness. 56
Section 9.2 Preservation of Existence and Franchises. 56
Section 9.3 Separate Legal Existence. 56
Section 9.4 Compliance with Law. 56
ii
4
Section 9.5 Maintenance of Property. 56
Section 9.6 Insurance. 56
Section 9.7 Compliance with ERISA. 57
Section 9.8 Merger. 57
Section 9.9 Restricted Payments. 57
Section 9.10 Transactions Affecting Collateral or Obligations. 57
Section 9.11 Guaranties. 57
Section 9.12 Debt. 57
Section 9.13 Investments. 57
Section 9.14 Prepayment. 58
Section 9.15 Transactions with Affiliates. 58
Section 9.16 Investment Banking and Finder's Fees. 58
Section 9.17 Business Conducted. 58
Section 9.18 Liens. 58
Section 9.19 New Subsidiaries. 58
Section 9.20 Fiscal Year. 58
Section 9.21 Further Assurances. 59
Section 9.22 Minimum Eligible Receivables. 59
Section 9.23 Transaction Documents. 59
ARTICLE X CONDITIONS OF LENDING 60
Section 10.1 Conditions Precedent to Making of Loans on the Closing Date. 60
Section 10.2 Conditions Precedent to Each Loan. 62
ARTICLE XI DEFAULT; REMEDIES 63
Section 11.1 Events of Default. 63
Section 11.2 Remedies. 66
ARTICLE XII TERM AND TERMINATION 68
Section 12.1 Term and Termination. 68
ARTICLE XIII AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS 68
Section 13.1 No Waivers; Cumulative Remedies. 68
Section 13.2 Amendments and Waivers. 68
Section 13.3 Assignments; Participations. 69
ARTICLE XIV THE AGENT 71
Section 14.1 Appointment and Authorization. 71
Section 14.2 Delegation of Duties. 72
Section 14.3 Liability of Agent. 72
Section 14.4 Reliance by Agent. 72
Section 14.5 Notice of Default. 73
Section 14.6 Credit Decision. 73
Section 14.7 Indemnification. 74
Section 14.8 Agent in Individual Capacity. 74
Section 14.9 Successor Agent. 74
iii
5
Section 14.10 Withholding Tax. 75
Section 14.11 Collateral Matters. 76
Section 14.12 Restrictions on Actions by Lenders; Sharing of Payments. 77
Section 14.13 Agency for Perfection. 78
Section 14.14 Payments by Agent to Lenders. 78
Section 14.15 Concerning the Collateral and the Related Loan Documents. 78
Section 14.16 Field Audit and Examination Reports; Disclaimer by Lenders. 78
Section 14.17 Relation Among Lenders. 79
ARTICLE XV MISCELLANEOUS 79
Section 15.1 Cumulative Remedies; No Prior Recourse to Collateral. 79
Section 15.2 Severability. 80
Section 15.3 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver. 80
Section 15.4 Survival of Representations and Warranties. 81
Section 15.5 Other Security and Guaranties. 81
Section 15.6 Fees and Expenses. 81
Section 15.7 Notices. 82
Section 15.8 Waiver of Notices. 83
Section 15.9 Binding Effect. 83
Section 15.10 Indemnity of the Agent and the Lenders by the Borrower. 83
Section 15.11 Limitation of Liability. 84
Section 15.12 Final Agreement. 84
Section 15.13 Counterparts. 84
Section 15.14 Captions. 84
Section 15.15 Right of Setoff. 85
iv
6
EXHIBITS AND SCHEDULES
EXHIBITS
EXHIBIT A FORM OF BORROWING BASE CERTIFICATE
EXHIBIT B FINANCIAL STATEMENTS
EXHIBIT C LIST OF CLOSING DOCUMENTS
EXHIBIT D NOTICE OF BORROWING
EXHIBIT E PERFORMANCE PRICING GRID
EXHIBIT F NOTICE OF CONVERSION/CONTINUATION
EXHIBIT G FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
SCHEDULE 1 - NOTICE OF ASSIGNMENT AND ACCEPTANCE
SCHEDULES
Schedule 1.1 Definition Schedules
Schedule 6.3 Location of Collateral
Schedule 7.2 Certificate of Responsible Officer
Schedule 8.3 Organization and Qualification.
Schedule 8.5 Subsidiaries and Affiliates.
Schedule 8.8 Debt
Schedule 8.11 Trade Names and Terms of Sale
Schedule 8.12 Litigation
Schedule 8.16 ERISA Compliance.
Schedule 8.24 Bank Accounts
Schedule 8.23 Material Agreements
Schedule 9.15 Transactions with Affiliates
7
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement") is dated as of
October 29, 1999, among the financial institutions listed on the signature pages
hereof (such financial institutions, together with their respective successors
and assigns, are referred to hereinafter each individually as a "Lender" and
collectively as the "Lenders"), BANK OF AMERICA, NATIONAL ASSOCIATION, a
national banking association ("Bank of America") with an office at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as administrative agent for the Lenders
(in its capacity as agent, the "Agent"), BANC OF AMERICA SECURITIES LLC, a
Delaware limited liability company with an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, as lead arranger, sole book runner and syndication agent
(in its capacity as the foregoing, the "Syndication Agent") and FTL RECEIVABLES
COMPANY, a Delaware corporation, with offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Borrower").
W I T N E S S E T H
WHEREAS, the Borrower has requested the Lenders to make available to
the Borrower a revolving line of credit in an amount not to exceed $275,000,000
which extension of credit the Borrower will use for the purchase of receivables
from designated originators and to refinance an existing receivables purchase
facility; and
WHEREAS, the Lenders have agreed to make available to the Borrower a
revolving credit facility upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Lenders, the Agent, and the
Borrower hereby agree as follows.
ARTICLE I
INTERPRETATION OF THIS AGREEMENT
Section 1.1 Definitions. As used herein:
"Acquiring Person" means any Person who or which, together with all
Affiliates of such Person, shall acquire, directly or indirectly, the right to
vote, or dispose of, or "beneficial ownership" (as defined in Rule 13d-3 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended) of, more than fifty percent (50%) of the shares of the voting stock of
FTL then outstanding, but shall not include any Exempt Person.
"Administrative Fee" has the meaning set forth in the Fee Letter.
"Adverse Claim" means a Lien or similar claim of any Person.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person or which owns, directly or indirectly, five percent (5%) or
more of the outstanding equity interest of such Person. A Person shall be deemed
to control another Person if the controlling Person possesses, directly
8
or indirectly, the power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership of voting
securities, by contract, or otherwise.
"Agent" means Bank of America, National Association, solely in its
capacity as administrative agent for the Lenders, and any successor agent.
"Agent Advances" has the meaning specified in Section 2.2(i) (Agent
Advances).
"Agent's Liens" means the Liens in the Collateral granted to the Agent,
for the ratable benefit of the Lenders and Agent pursuant to this Agreement and
the other Loan Documents.
"Agent-Related Persons" means the Agent and any successor agent,
together with their respective Affiliates, and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Aggregate Revolver Outstandings" means, at any time: the sum of (a)
the unpaid balance of Revolving Loans and (b) the aggregate amount of Pending
Revolving Loans.
"Agreement" means this Loan and Security Agreement.
"Anniversary Date" means each anniversary of the Closing Date.
"Applicable Margin" means
(a) with respect to Base Rate Revolving Loans and all other
Obligations (other than LIBOR Rate Loans), 1-1/2%; and
(b) with respect to LIBOR Revolving Loans, 3%.
"Approved Local Currency" means each of Pounds Sterling, Canadian
Dollars, and, upon meeting all other requirements of this Agreement such other
currencies as shall be agreed among the relevant Local Currency Originator, the
Borrower, and the Agent from time to time, which other currency may include, if
the Agent specifically agrees in a separate writing and subject to all of the
other terms and conditions of this Agreement, Deutsche marks and the European
Monetary Unit or such other European common currency unit equivalent thereof.
"Assigned Local Currency Receivable" means each Receivable of a Local
Currency Originator (a) which Receivable is the subject of a Purchase and
Contribution Agreement that (i) is valid, binding and enforceable according to
its terms, (ii) assigns, as a true sale, to the Borrower absolutely all right,
title and interest in the Receivable and Related Rights free and clear of all
Adverse Claims including, without limitation, Adverse Claims in favor of
creditors (including, without limitation, employees), the Local Currency
Originator (including, without limitation, its successors, assigns, and others
who at any time derive any interest from the Local Currency Originator), every
Governmental Authority and all other Persons whatsoever, and (iii) entitles the
Borrower under all applicable Laws to collect and enforce (with no less than all
rights and remedies afforded under applicable Laws to the Local Currency
Originator) the Receivable and Related Rights directly against the Obligor
without any further limitation whatsoever (including, without limitation, any
action by the Local Currency Originator or any requirement
1
9
for notice, acknowledgment or filing, which action may include original notice
required with respect to the initial assignment thereof) which has not been
accomplished, (b) which is subject to no Liens other than Liens arising under
the Loan Documents, (c) the assignment of which complies with all applicable
Laws and does not constitute a breach of any agreement of the Local Currency
Originator, the Borrower or any of the other Originators, and (d) which
immediately upon assignment is subject to a Lien in favor of the Agent, for the
benefit of the Lenders ratably and the Agent, which Lien is perfected as to the
Receivable and Related Rights solely by the filing of financing statements in
the State of Illinois naming the Borrower only as debtor (and by Agent's taking
possession of any instrument, chattel paper or other property, which possession
has been accomplished) and which Lien constitutes a first priority security
interest and Lien.
"Arrangement Fee" has the meaning set forth in the Fee Letter.
"Assignee" has the meaning specified in Section 13.3(a) (Assignments).
"Assignment and Acceptance" has the meaning specified in Section
13.3(a) (Assignments).
"Attorney Costs" means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel engaged by the Agent,
the reasonably allocated cost of internal legal services of the Agent and all
reasonable expenses and disbursements of internal counsel of the Agent.
"Availability" means, at any time, (a) the Borrowing Base; minus (b)
the sum of (i) the Aggregate Revolver Outstandings, (ii) if the Agent deems it
reasonably necessary, reserves for accrued interest on the Obligations and for
the fees of the Servicer under the Servicing Agreement, (iii) if the Agent or
the Majority Lenders deem it necessary, in the exercise of their sole and
absolute discretion, reserves for concentration, dilution and pre-billing, and
(iv) all other reserves which the Agent deems necessary in the exercise of its
reasonable credit judgment (with prompt notice thereof to the Borrower) to
maintain with respect to the Borrower's account, including, without limitation,
reserves for any amounts which the Agent or any Lender reasonably would be
expected to be obligated to pay in the future for the account of the Borrower.
"Bank Accounts" means the collective reference to the Payment Account
and the Lockbox Accounts.
"Bankruptcy Action" means any of the following:
(a) taking any action that reasonably would be expected to cause
the Borrower to become insolvent;
(b) commencing any case, proceeding or other action on behalf of
the Borrower under any existing or future law of any jurisdiction
relating to bankruptcy, insolvency, reorganization or relief of
debtors;
(c) instituting proceedings to have the Borrower adjudicated as
bankrupt or insolvent;
2
10
(d) consenting to the institution of bankruptcy or insolvency
proceedings against the Borrower;
(e) filing a petition or consent to a petition seeking
reorganization arrangement, adjustment, winding-up, dissolution,
composition, liquidation or other relief on behalf of the Borrower, of
its debts under any federal, state provincial or other Laws relating to
bankruptcy;
(f) seeking or consenting to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator, custodian or any similar
official for the Borrower or a substantial portion of its properties;
(g) making any assignment for the benefit of the Borrower's
creditors; or
(h) taking any action in furtherance of any of the foregoing.
"Base Rate" means, for any day, the rate of interest in effect for such
day as publicly announced from time to time by the Agent in Charlotte, North
Carolina as its "prime rate" (the "prime rate" being a rate set by the Agent
based upon various factors including the Agent's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate). Any change in the prime rate announced by the Agent shall take effect at
the opening of business on the day specified in the public announcement of such
change. Each Interest Rate based upon the Base Rate shall be adjusted
simultaneously with any change in the Base Rate.
"Base Rate Loans" means the Base Rate Revolving Loans.
"Base Rate Revolving Loan" means a Revolving Loan during any period in
which it bears interest based on the Base Rate.
"Borrowing" means a borrowing hereunder consisting of Revolving Loans
made on the same day by the Lenders to the Borrower or by Bank of America in the
case of a Borrowing funded by Non-Ratable Loans or by the Agent in the case of a
Borrowing consisting of an Agent Advance.
"Borrowing Base" means, at any time, the lesser of (a) the Maximum
Revolver Amount or (b) eighty-five percent (85%) of the Net Amount of Eligible
Receivables.
"Borrowing Base Certificate" means a certificate by a Responsible
Officer of the Borrower, substantially in the form of EXHIBIT A (or another form
reasonably acceptable to the Agent) setting forth the Borrowing Base and the
calculation of the Availability, as of the close of business no more than five
(5) Business Days prior to the date of such certificate, all in such detail as
shall be reasonably satisfactory to the Agent. All calculations of the Borrowing
Base and Availability in connection with the preparation of any Borrowing Base
Certificate shall originally be made by the Borrower and certified to the Agent;
provided, that the Agent shall have the right to review and adjust, (with prompt
notice thereof to the Borrower) in the exercise of its reasonable credit
judgment, any such calculation (a) to reflect its reasonable estimate of
3
11
declines in value of any of the Collateral described therein, and (b) to the
extent that such calculation is not in accordance with this Agreement.
"Business Day" means (a) any day that is not a Saturday, Sunday, or a
day on which banks in Chicago, Illinois, are required or permitted to be closed,
and (b) with respect to all notices, determinations, fundings and payments in
connection with the LIBOR Rate or LIBOR Rate Loans, any day that is a Business
Day pursuant to clause (a) above and that is also a day on which trading in
Dollars is carried on by and between banks in the London interbank market.
"Capital Adequacy Regulation" means any guideline, request or directive
of any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
"Capital Lease" means any lease of property by the Borrower which, in
accordance with GAAP, is or should be reflected as a capital lease on the
balance sheet of Borrower.
"Change of Control" means: (a) Union or any of its Affiliates shall
fail to own, collectively, one hundred percent (100%) of the issued and
outstanding shares of capital stock (including all warrants, options, conversion
rights, and other rights to purchase or convert into such stock) of the
Borrower; or (b) any Person shall become an Acquiring Person.
"Closing Date" means the date of this Agreement.
"Closing-Syndication Fee" has the meaning set forth in the Fee Letter.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute, and regulations promulgated thereunder.
"Collateral" has the meaning specified in Section 6.1 (Grant of
Security Interest).
"Collections" means, with respect to any Receivable, all funds which
are received by an Originator, Borrower or Servicer from or on behalf of the
related Obligor in payment of any amounts owed (including, without limitation,
invoice prices, finance charges, interest and all other charges) in respect of
such Receivable, or applied to such amounts owed by such Obligor (including,
without limitation, insurance payments) that an Originator, the Borrower or
Servicer applies in the ordinary course of its business to amounts owed in
respect of such Receivable and net proceeds of sale or other disposition of
repossessed goods or other collateral or property of the Obligor or any other
party directly or indirectly liable for payment of such Receivable.
"Commitment" means, at any time with respect to a Lender, the principal
amount set forth beside such Lender's name under the heading "Commitment" on the
signature pages of this Agreement or on the signature page of the Assignment and
Acceptance pursuant to which such Lender became a Lender hereunder in accordance
with the provisions of Section 13.3 (Assignments; Participations), as such
Commitment may be adjusted from time to time in accordance with the provisions
of Section 13.3 (Assignments; Participations), and "Commitments" means,
collectively, the aggregate amount of the commitments of all of the Lenders.
4
12
"Contract" means with respect to a Receivable, any and all contracts,
understandings, instruments, agreements, invoices or other writings, or
provision of applicable Laws, pursuant to which such Receivable arises or which
evidences such Receivable or under which an Obligor becomes or is obligated to
make payment in respect of such Receivable.
"Credit and Collection Policy" means those credit and collection
policies and practices relating to Contracts and Receivables of the Originators
described in the Servicing Agreements, as modified from time to time pursuant to
the Servicing Agreements.
"Debt" means all liabilities, obligations and indebtedness of the
Borrower to any Person, of any kind or nature, now or hereafter owing, arising,
due or payable, howsoever evidenced, created, incurred, acquired or owing,
whether primary, secondary, direct, contingent, fixed or otherwise, and
including, without in any way limiting the generality of the foregoing: (a) the
Borrower's liabilities and obligations to trade creditors; (b) all Obligations;
(c) all obligations and liabilities of any Person secured by any Lien on the
Borrower's property, even though the Borrower shall not have assumed or become
liable for the payment thereof; provided, however, that all such obligations and
liabilities which are limited in recourse to such property shall be included in
Debt only to the extent of the book value of such property as would be shown on
a balance sheet of the Borrower prepared in accordance with GAAP; (d) all
obligations or liabilities created or arising under any Capital Lease or
conditional sale or other title retention agreement with respect to property
used or acquired by the Borrower, even if the rights and remedies of the lessor,
seller or lender thereunder are limited to repossession of such property;
provided, however, that all such obligations and liabilities which are limited
in recourse to such property shall be included in Debt only to the extent of the
book value of such property as would be shown on a balance sheet of the Borrower
prepared in accordance with GAAP; (e) all accrued pension fund and other
employee benefit plan obligations and liabilities; and (f) deferred taxes.
"Debt For Borrowed Money" means, as to any Person, Debt for borrowed
money or as evidenced by notes, bonds, debentures or similar evidences of any
such Debt of such Person, the deferred and unpaid purchase price of any property
or business (other than trade accounts payable incurred in the ordinary course
of business and constituting current liabilities) and all obligations under
Capital Leases.
"Default" means any event or circumstances that, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Defaulted Receivable" means a Receivable: (a) as to which any payment,
or part thereof, remains unpaid for more than sixty (60) days from the original
due date for such payment, (b) with regard to the Obligor of which a matured or
unmatured Event of Bankruptcy has occurred or (c) which has been written off as
uncollectible by Servicer or which, consistent with the Credit and Collection
Policy, should be written off as uncollectible by Servicer.
"Defaulting Lender" has the meaning specified in Section 2.2(g)(ii)
(Making of Revolving Loans).
5
13
"Default Rate" means a fluctuating per annum interest rate at all times
equal to the sum of (a) the otherwise applicable Interest Rate plus (b) two
percent (2%). Each Default Rate shall be adjusted simultaneously with any change
in the applicable Interest Rate.
"Designated Obligor" means, at any time, all Obligors of the
Originators except any such Obligor as to which the Agent, in its reasonable
business judgment based upon the Agent's reasonable estimation of the credit
quality of such Obligor, has given notice to Borrower shall not be considered a
Designated Obligor, such notice to become effective three (3) Business Days
following the giving of such notice.
"Distribution" means, in respect of any corporation: (a) the payment or
making of any dividend or other distribution of property in respect of capital
stock (or any options or warrants for such stock) of such corporation, other
than distributions in capital stock (or any options or warrants for such stock)
of the same class; or (b) the redemption or other acquisition by such
corporation of any capital stock (or any options or warrants for such stock) of
such corporation.
"Dollar" and "$" means dollars in the lawful currency of the United
States.
"Eligible Receivable" means an account included among the Receivables
owned by the Borrower (which Receivables may include Assigned Local Currency
Receivables) that the Agent in the exercise of its reasonable commercial
discretion determines to be an Eligible Receivable; provided, however, that
notwithstanding any other provision of this definition (including, without
limitation, the general guidance provided by clause (r) below) or this Agreement
to the contrary, the decision as whether any Obligor is creditworthy and the
extent to which (if at all) an account of such Obligor may be included among
Eligible Receivables shall be made by the Agent and, when the Agent is so
directed, the Majority Lenders in the exercise of the Agent's and the Majority
Lenders' sole and absolute discretion. Without limiting the discretion of the
Agent to establish other criteria of eligibility, at any time of determination
thereof, an Eligible Receivable shall be limited to the unpaid portion (valued
in Dollars) of each account included among Receivables owned by the Borrower
(net of any returns, discounts, claims, credits, charges, accrued rebates or
other allowances, offsets, deductions, counterclaims, disputes or other defenses
and reduced by the aggregate amount of all reserves (including, without
limitation, reserves to cover value added taxes or sales taxes), limits and
deductions provided for by the Agent in the reasonable exercise (except where
this Agreement provides for sole and absolute exercise) of its discretion)
receivable by the Borrower in United States Dollars, or in the case of Assigned
Local Currency Receivables, receivable by the Borrower in Dollars or in the
Approved Local Currency of the applicable Local Currency Originator. Also
without limiting the discretion of the Agent to establish other criteria of
eligibility, Eligible Receivables shall, unless the Agent in its reasonable
commercial discretion (except where this Agreement provides for sole and
absolute exercise) determines to the contrary, include an account that is
included among the Receivables, and:
(a) which represents a bona fide obligation resulting from a
sale of goods and services in the ordinary course of business of an
Originator, such business to be the apparel and textile business and
businesses reasonably related thereto;
6
14
(b) which, (i) is an "account" as defined in the Uniform
Commercial Code as in effect in such jurisdiction, and (ii) if the
account is an Assigned Local Currency Receivable, Borrower has
furnished to the Agent such opinions of counsel and other evidence as
has reasonably been requested, establishing to the reasonable
satisfaction of the Agent that the Agent's security interest and other
rights with respect thereto are not significantly less protected and
favorable than such rights under the Uniform Commercial Code;
(c) the Obligor of which is a Designated Obligor;
(d) that is not of an Obligor with regard to which a matured or
unmatured Event of Bankruptcy has occurred;
(e) as to which no more than 50% of the unpaid balance of all
the Receivables owed by such Obligor are, at any time, Defaulted
Receivables; provided, however, this clause (e) shall not apply if the
aggregate Unpaid Balance of all Receivables owed by such Obligor does
not exceed $100,000;
(f) except as provided in (e) above, is not a Defaulted
Receivable;
(g) with regard to which the representations, warranties,
covenants, and agreements contained in Section 6.8 (Receivables) are
true and correct;
(h) the assignment of which (including, without limitation, the
sale of which to Borrower) does not contravene or conflict with any
law, rule or regulation or any contractual or other restriction,
limitation or encumbrance, and the sale or assignment of which does not
require the consent of the Obligor thereof;
(i) which is denominated and payable only in Dollars or, only in
the case of the Receivables of a Local Currency Originator, in an
Approved Local Currency;
(j) which arises under a Contract that has been duly authorized
and that, together with such Receivable, is in full force and effect
and constitutes the legal, valid and binding obligation of the Obligor
of such Receivable enforceable against such Obligor in accordance with
its terms and is not subject to a reduction, cancellation, rebate or
refund or any dispute, offset, counterclaim or defense whatsoever
(except the discharge in bankruptcy of such Obligor prior to the
occurrence thereof);
(k) which, together with the Contract related thereto, conforms
in all material respects with any laws, rules or regulations applicable
thereto (including, without limitation, laws, rules and regulations
relating to usury, truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy) and with respect to which no party to the Contract related
thereto is in violation of any such law, rule or regulation in any
7
15
material respect if such violation would impair the collectability of
such Receivable;
(l) which satisfies all applicable requirements of the Credit
and Collection Policy;
(m) which arises under a Contract (i) the performance of which
has been completed by the related Originator and by all other parties
thereto and accepted by the Obligor, to the extent of the amount of the
related Receivable, (ii) which has been invoiced by Servicer or the
related Originator and (iii) which requires such Receivable to be paid
in full within thirty (30) days or less of the original billing date
therefor; provided, however, that with respect to this clause (iii), a
Receivable, the Contract with respect to which requires such Receivable
to be paid in full within not less than thirty one (31) days nor more
than one hundred eighty (180) days shall also be an Eligible
Receivable, if, when the unpaid balance of such Receivable is added to
the aggregate unpaid balance of all other Eligible Receivables payable
in full within not less than thirty one (31) days nor more than one
hundred eighty (180) days, the aggregate unpaid balance of all such
Eligible Receivables does not exceed fifteen percent (15%) of the
aggregate unpaid principal balance of all Eligible Receivables;
(n) as to which the Agent's first priority interest has been
perfected under the applicable UCC;
(o) the Obligor of which is not a government or a governmental
subdivision or agency, unless all rights of the Borrower with respect
to such account have been assigned to the Agent for the ratable benefit
of the Lenders and the Agent on terms acceptable to the Agent pursuant
to the Assignment of Claims Act of 1940, as amended;
(p) which does not represent a progress billing (as hereinafter
defined) or as to which the Originator or the Servicer has extended the
time for payment without the consent of the Agent; for the purposes
hereof "progress billing" means any invoice for goods sold or leased or
services rendered under a Contract pursuant to which the Obligor's
obligation to pay such invoice is conditioned upon the Originator's
completion of any further performance under the Contract;
(q) not more than fifty percent (50%) of the aggregate Dollar
amount of outstanding Receivables owed at such time by the Obligor
thereon is classified as ineligible under the other criteria set forth
herein or otherwise established by the Agent;
(r) the account is not owing by an Obligor whose Receivables
owing to the Borrower in the aggregate exceed in the aggregate the
credit limit determined by Agent in its sole discretion, but only to
the extent such Accounts exceed such limit;
8
16
(s) neither the Originator or the Borrower is indebted to the
Obligor in any way, and the Receivable is not subject to any right of
setoff or recoupment by the Obligor, unless the Obligor has entered
into an agreement reasonably acceptable to the Agent to waive setoff
rights; or if the Obligor thereon has disputed liability or made any
claim with respect to any other Receivable due from such Obligor; but
in each such case only to the extent of such indebtedness, setoff,
recoupment, dispute, or claim;
(t) the Receivable is not one which represents a sale on a
▇▇▇▇-and-hold, guaranteed sale, sale and return, sale on approval,
consignment, or other repurchase or return basis;
(u) the Receivable is not one which is evidenced by a promissory
note or other instrument or by chattel paper;
(v) the Agent believes, in the exercise of its reasonable
judgment, that there is no impairment of the prospect of collection of
such Receivable or likelihood that the Receivable may not be paid by
reason of the Obligor's financial inability to pay; or
(w) if the Obligor is located in any state requiring the filing
of a Notice of Business Activities Report or similar report in order to
permit the Borrower or Servicer to seek judicial enforcement in such
State of payment of such Receivable, the Borrower or the Servicer has
qualified to do business in such state or has filed a Notice of
Business Activities Report or equivalent report for the then current
year.
If any Receivable at any time ceases to be an Eligible Receivable
pursuant to the foregoing criteria or any failure to meet any other eligibility
criteria established by the Agent in the exercise of its reasonable discretion
((except where this Agreement provides for sole and absolute exercise)) then
such Receivable shall promptly be excluded from the calculation of Eligible
Receivable.
"Enforcement Costs" means all reasonable expenses, charges, costs and
fees whatsoever (including, without limitation, Attorney Costs) of any nature
whatsoever paid or incurred by or on behalf of the Agent and/or any of the
Lenders in connection with (a) any or all of the Obligations, this Agreement
and/or any of the other Loan Documents, (b) the creation, perfection,
collection, maintenance, preservation, defense, protection, realization upon,
disposition, sale or enforcement of all or any part of the Collateral, this
Agreement or any of the other Loan Documents, including, without limitation,
those costs and expenses more specifically enumerated in Section 15.6 (Fees and
Expenses), and (c) the monitoring, administration, processing and/or servicing
of any or all of the Obligations, the Loan Documents, and/or the Collateral.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
9
17
"ERISA Affiliate" means an entity, whether or not incorporated, that is
under common control with the Borrower or FTL or any of FTL's Subsidiaries
within the meaning of Section 4001(1)(14) of ERISA, or is a member of a group
that includes the Borrower, FTL or any of FTL's Subsidiaries and that is treated
as a single employer under Section 414(b), (c), (m) or (o) of the Code.
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations which is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multi-employer Plan or notification that a Multi-employer Plan
is in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multi-employer Plan; (e) the occurrence of an event or condition which
reasonably would be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multi-employer Plan; or (f) the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.
"Event of Bankruptcy" shall be deemed to have occurred with respect to
a Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up,
or composition or readjustment of debts of such Person, the appointment
of a trustee, receiver, custodian, liquidator, assignee, sequestrator
or the like for such Person or all or any substantial part of its
assets, or any similar action with respect to such Person under any law
relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, and such case or proceeding shall
continue undismissed, or unstayed and in effect, for a period of sixty
(60) consecutive days; or an order for relief in respect of such Person
shall be entered in an involuntary case under the federal bankruptcy
laws or other similar laws now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency, reorganization,
debt arrangement, dissolution or other similar law now or hereafter in
effect, or shall consent to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian, sequestrator (or
other similar official) for, such Person or for any substantial part of
its property, or shall make any general assignment for the benefit of
creditors, or shall fail to, or admit in writing its inability to, pay
its debts generally as they become due, or, if a corporation or similar
entity, its board of directors shall vote to implement any of the
foregoing.
10
18
"Event of Default" has the meaning specified in Section 11.1 (Events of
Default).
"Exempt Person" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, a resident of the State of
Illinois, and any Person that ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ controls. For the purposes of this
definition, "Controls" shall mean the ownership, directly or indirectly, of more
than fifty percent (50%) of the voting rights associated with a Person's
outstanding securities.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on
that day by each of three leading brokers of Federal funds transactions in New
York City selected by the Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"Fee Letter" means that certain fee letter referred to in the
commitment letter dated October 1, 1999 and accepted October 8, 1999, between
the Agent, the Syndication Agent and the Borrower relating to the Loans.
"Financial Statements" means, according to the context in which it is
used, the financial statements referred to in Section 7.2 (Financial
Information) or any other financial statements required to be given to the Agent
pursuant to this Agreement.
"Financing Documents" means the Loan Documents.
"Fiscal Year" means the Borrower's fiscal year for financial accounting
purposes. The current Fiscal Year of the Borrower will end on January 1, 2000.
"FTL" means Fruit of the Loom, Inc., a Delaware corporation.
"FTL Cayman" means Fruit of the Loom, Ltd., a Cayman Islands company.
"FTL Note" has the meaning set forth in Section 3.2 of the respective
Purchase and Contribution Agreements.
"FTL Senior Credit Agreement" means the Credit Agreement by and among
FTL and certain Subsidiaries of FTL and Bank of America, N. A. (formerly
NationsBank, N. A.), as Agent, Bankers Trust Company, as Syndication Agent, The
Chase Manhattan Bank and The Bank of Nova Scotia, as Co-Documentation Agents and
the Bank of New York as L/C Agent, dated as of September 19, 1997, as amended by
First Amendment to Credit Agreement March 26, 1998, Second Amendment to Credit
Agreement July 2, ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ to Credit
11
19
Agreement December 31, ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ to Credit Agreement March 10,
1999, Fifth Amendment to Credit Agreement July 22, 1999, and Sixth Amendment to
Credit Agreement dated October 13, 1999, and as amended from time to time after
the Closing Date.
"Funding Date" means any date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the Closing Date.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guaranty" means, with respect to any Person, all obligations of such
Person which in any manner directly or indirectly guarantee or assure, or in
effect guarantee or assure, the payment or performance of any indebtedness,
dividend or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including, without limitation, any
such obligations incurred through an agreement, contingent or otherwise: (a) to
purchase the guaranteed obligations or any property constituting security
therefor; (b) to advance or supply funds for the purchase or payment of the
guaranteed obligations or to maintain a working capital or other balance sheet
condition; or (c) to lease property or to purchase any debt or equity securities
or other property or services.
"Independent Director" means a director of a corporation who is not at
the time of initial appointment, has not been at any time during the preceding
five (5) years, and will not be at any time prior to payment of the Obligations
in full: (a) a stockholder, director, officer, employee, partner or member of
the Borrower or any Affiliate thereof; (b) a customer, supplier or other person
(including without limitation, an attorney, accountant or other professional)
who derives any portion of its purchases or revenues from its activities with
the Borrower or any Affiliate thereof, other than reasonable compensation for
the performance of its obligations as Independent Director; (c) a person or
other entity controlling or under common control with any such stockholder,
partner, member, customer, supplier or other person; or (d) a member of the
immediate family of any such stockholder, director, officer, employee, partner,
member, customer, supplier or other person. As used herein, the term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of management, policies or activities of a person or entity,
whether through ownership of voting securities, by contract or otherwise.
12
20
"Intercompany Accounts" means all assets and liabilities, however
arising, which are due to the Borrower from, which are due from the Borrower to,
or which otherwise arise from any transaction by the Borrower with, any
Affiliate.
"Interest Period" means, as to any LIBOR Rate Loan, the period
commencing on the Funding Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as a LIBOR Rate Loan, and
ending on the date one, two, three or six months thereafter as selected by the
Borrower in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(a) if any Interest Period would otherwise end on a day that is
not a Business Day, that Interest Period shall be extended to the
following Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Rate Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of the calendar month at the end of such Interest Period; and
(c) no Interest Period shall extend beyond the Stated
Termination Date.
"Interest Rate" means each or any of the interest rates, including the
Default Rate, set forth in Section 3.1 (Interest).
"Investment Property" means: (a) a security, whether certificated or
uncertificated; (b) a security entitlement; (c) a securities account; (d) a
commodity contract; or (e) a commodity account.
"IRS" means the Internal Revenue Service and any Governmental Authority
succeeding to any of its principal functions under the Code.
"Laws" means all ordinances, statutes, rules, regulations, orders,
injunctions, rulings, binding arbitration, directives, writs, or decrees, or
other action, procedure or process having the effect of any of the foregoing, of
any Governmental Authority.
"Lender" and "Lenders" have the meanings specified in the introductory
paragraph hereof and shall include the Agent to the extent of any Agent Advance
outstanding and the Bank to the extent of any Non-Ratable Loan outstanding;
provided that no such Agent Advance or Non-Ratable Loan shall be taken into
account in determining any Lender's Pro Rata Share.
"LIBOR Interest Payment Date" means, with respect to a LIBOR Rate Loan,
the last day of each Interest Period applicable to such Loan and, for any
Interest Period in excess of three months, on the day that is three months after
the beginning of the Interest Period.
13
21
"LIBOR Rate" means, for any Interest Period, with respect to LIBOR Rate
Loans comprising part of the same Borrowing, the rate of interest per annum
(rounded upward to the next 1/1000th of 1.0%) determined by the Agent as
follows:
LIBOR Rate = LIBOR
-----
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any
Interest Period the maximum reserve percentage (expressed as a decimal,
rounded upward to the next 1/100th of 1%) in effect on such day
(whether or not applicable to any Lender) under regulations issued from
time to time by the Federal Reserve Board for determining the maximum
reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency funding
(currently referred to as "Eurocurrency liabilities"); and
"LIBOR" means the rate of interest per annum (rounded upward
to the next 1/16th of 1%) at which dollar deposits in the approximate
amount of the Loan to be made or continued as, or converted into, a
LIBOR Rate Loan and having a maturity comparable to such Interest
Period would be offered by the Agent's applicable lending office to
major banks in the London eurodollar market at approximately 11:00 a.m.
(London time) two (2) Business Days prior to the commencement of such
Interest Period.
"LIBOR Rate Loans" means the LIBOR Revolving Loans.
"LIBOR Revolving Loan" means a Revolving Loan during any period in
which it bears interest based on the LIBOR Rate.
"Lien" means: (a) any interest in or right or remedy with respect to
property securing an obligation owed to, or a claim by, a Person whether such
interest is based on or arises under common law, civil law, statute, the
operation of other Laws, contract, other agreement, or otherwise and including
without limitation, a security interest, charge, claim, or lien arising from an
encumbrance, lien arising from a judgment, injunction, pledge, hypothecation,
assignment, deposit arrangement, agreement, security agreement, conditional
sale, title retention, or trust receipt or a lease, consignment or bailment for
security purposes, deed to secure debt, provision in any instrument or other
document for confession of judgment, cognovit or other similar right or remedy,
all of the above whether perfected or unperfected, avoidable or unavoidable,
including, without limitation, the filing of or agreement to give any financing
statement under the Uniform Commercial Code or any other notice of any of the
foregoing under applicable Laws, even if a Lien does not otherwise result
therefrom; and (b) to the extent not included under clause (a), any reservation,
exception, encroachment, easement, right-of-way, covenant, condition,
restriction, lease or other title exception or encumbrance affecting property.
"Loan Account" means the loan account of the Borrower, which account
shall be maintained by the Agent.
14
22
"Loan Documents" means this Agreement and any other agreements,
instruments, and documents heretofore, now or hereafter evidencing, securing,
guaranteeing or otherwise relating to the Obligations, the Collateral, or any
other aspect of the transactions contemplated by this Agreement.
"Loans" means, collectively, all loans and advances provided for in
ARTICLE II (Loans).
"Local Currency Originator" means each Affiliate of the Borrower
identified on Schedule 1.1A attached to and made a part of this Agreement and
"Local Currency Originators" means the collective reference to all Local
Currency Originators.
"Lockbox Accounts " means those certain bank accounts with the numbers,
and maintained at those certain locations, set forth on Schedule 1.1B to this
Agreement; and any bank account that is hereafter created in accordance with,
and to perform the function contemplated for lockbox accounts under the
Servicing Agreements.
"Majority Lenders" means at anytime Lenders whose Pro Rata shares
aggregate more than 60% of the Commitments or, if no Commitments shall then be
in effect, Lenders who hold more than 60% of the aggregate principal amount of
the Loans then outstanding.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means, with respect to any event or
circumstance, a material adverse effect on: (a) the assets, operations, business
or financial condition of the Borrower or FTL and its Subsidiaries, taken as a
whole; or (b) the ability of the Servicer, the Borrower or an Originator to
perform its obligations under the Loan Documents, the Purchase and Contribution
Agreements or any other Transaction Document or the performance of any such
obligations and to avoid any Event of Default; or (c) the validity or
enforceability of, or collectability of amounts payable under, the Loan
Documents, the Purchase and Contribution Agreements or any other Transaction
Document; or (d) the status, existence, perfection or priority of the Agent's
Liens in the Receivables, including Agent's unencumbered first priority security
interest therein; or (e) the validity, enforceability or collectability of any
material portion of the Receivables or Contracts.
"Maximum Revolver Amount" means $275,000,000.
"Merger" means the Borrower shall: (a) be a party to any merger or
consolidation, or directly or indirectly purchase or otherwise acquire, whether
in one or a series of transactions, all or substantially all of the assets or
any stock of any class of, or any partnership or joint venture interest in, any
other Person, or sell, transfer, assign, convey or lease any of its property and
assets (including, without limitation, any Receivable or any interest therein)
other than pursuant to this Agreement; (ii) make, incur or suffer to exist an
investment in, equity contribution to, loan, credit or advance to, or payment
obligation in respect of the deferred purchase price of property from, any other
Person, except for Permitted Investments; or (iii) create any direct or indirect
Subsidiary or otherwise acquire direct or indirect ownership of any equity
interests in any other Person.
15
23
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multi-employer Plan" means a "multi-employer plan" as defined in
Section 4001(a)(3) of ERISA that is or was at any time during the current year
or the immediately preceding six (6) years contributed to by the Borrower or any
ERISA Affiliate.
"Net Amount of Eligible Receivables" means, at any time, the gross
amount of Eligible Receivables less sales, excise or similar taxes, and less
returns, discounts, claims, credits and allowances of any nature at any time
issued, owing, granted, outstanding, available or claimed.
"Non-Ratable Loan" and "Non-Ratable Loans" have the meanings specified
in Section 2.2(h).
"Notice of Borrowing" has the meaning specified in Section 2.2(b)
(Procedure for Borrowing).
"Notice of Conversion/Continuation" has the meaning specified in
Section 3.2(b) (Notice).
"Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Borrower to
the Agent and/or any Lender, arising under or pursuant to this Agreement or any
of the other Loan Documents, including, without limitation, all fees arising
under the Fee Letter, whether or not evidenced by any note, or other instrument
or document, whether arising from an extension of credit, opening of a interest
rate exchange, swap, cap, future, protection, floor, collar or similar
agreements, currency hedge agreements, other currency agreements, letter of
credit, acceptance, loan, guaranty, indemnification or otherwise, whether direct
or indirect (including, without limitation, those acquired by assignment from
others, and any participation by the Agent and/or any Lender in the Borrower's
debts owing to others), absolute or contingent, due or to become due, primary or
secondary, as principal or guarantor, and including, without limitation, all
principal, interest, charges, expenses, fees, Attorney Costs, filing fees, other
Enforcement Costs and any other sums chargeable to the Borrower hereunder or
under any of the other Loan Documents.
"Obligor" means with respect to any Receivable, the Person obligated to
make payments pursuant to the Contract relating to such Receivable. "Obligors"
means the collective reference to each and every Obligor.
"Originator" means Union Underwear Company, Inc., Pro Player, Inc., a
New York corporation, Salem Sportswear, Inc., a New Hampshire corporation,
together with their respective successors that are Affiliates of FTL and to
which the Agent has given its prior written consent, and such other Affiliates
of FTL acceptable to the Agent and organized and conducting business in the
United States, Canada, the United Kingdom or such other country acceptable to
the Agent and with which the Borrower has entered into Purchase and Contribution
Agreements from time to time after the date hereof. "Originators" means the
collective reference to each and every Originator.
"Originator Assignment Certificate" means each assignment, in form and
substance as required by the Agent from time to time, evidencing the Borrower's
ownership of the
16
24
Receivables generated by an Originator, as the same may be amended,
supplemented, amended and restated, or otherwise modified from time to time in
accordance with the Purchase and Contribution Agreements and this Agreement.
"Other Taxes" means any present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies which arise from
any payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any other Loan Documents.
"Participant" means any Person who shall have been granted the right by
any Lender to participate in the financing provided by such Lender under this
Agreement, and who shall have entered into a participation agreement in form and
substance satisfactory to such Lender.
"Payment Account" means each blocked bank account established pursuant
to Section 6.9 (Collection of Receivables; Payments), to which the funds of the
Borrower (including, without limitation, proceeds of Receivables and other
Collateral) are deposited or credited, and which is maintained in the name of
the Agent or the Borrower, as the Agent may determine, on terms acceptable to
the Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.
"Pending Revolving Loans" means, at any time, the aggregate principal
amount of all Revolving Loans requested in any Notice(s) of Borrowing received
by the Agent that have not yet been advanced.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which the Borrower sponsors, maintains, or
to which it makes, is making, or is obligated to make contributions, or in the
case of a Multiple-employer Plan has made contributions at any time during the
immediately preceding five (5) plan years.
"Permitted Investments" means any one or more of the following types of
investments: (a) marketable obligations of the United States having a maturity
of not more than 30 days from the date of acquisition; (b) marketable
obligations directly and fully guaranteed by the United States having a maturity
of not more than 30 days from the date of acquisition; (c) bankers, acceptances
and certificates of deposit and other interest-bearing obligations denominated
in Dollars and issued by any bank with capital, surplus and undivided profits
aggregating at least $100,000,000, the short-term securities of which are rated
at least as highly as those of Bank of America by Moody's and S&P, in each case
having a maturity of not more than 30 days from the date of acquisition; (d)
repurchase obligations with a term of not more than ten days for underlying
securities of the types described in clauses (a), (b) and (c) above entered into
with any bank of the type described in clause (c) above; and (e) commercial
paper having a maturity of not more than 30 days given a rating of "A2" or
better by S&P or "P2" or better by Moody's.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
Governmental Authority, or any other entity.
17
25
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which the Borrower sponsors or maintains or to which the Borrower makes,
is making, or is obligated to make contributions and includes any Pension Plan.
"Post-Default Rate" means the Default Rate.
"Pro Rata Share" means, with respect to a Lender, a fraction (expressed
as a percentage), the numerator of which is the amount of such Lender's
Commitment and the denominator of which is the sum of the amounts of all of the
Lenders' Commitments, or if no Commitments are outstanding, a fraction
(expressed as a percentage), the numerator of which is the amount of Obligations
owed to such Lender and the denominator of which is the aggregate amount of the
Obligations owed to the Lenders, in each case giving effect to a Lender's
participation in Non-Ratable Loans and Agent Advances.
"Purchase" has the meaning set forth in the respective Purchase and
Contribution Agreements.
"Purchase and Contribution Agreement (US)" means that certain Purchase
and Contribution Agreement, dated as of October 29, 1999, among the Borrower,
the Originators and Servicer, as the same may be amended, supplemented, amended
and restated or otherwise modified from time to time in accordance with the
terms thereof and this Agreement.
"Purchase and Contribution Agreements" means the collective reference
to the Purchase and Contribution Agreement (US) and those certain Purchase and
Contribution Agreements more particularly described on Schedule 1.1 C
(Definition Schedules) attached hereto and made a part hereof, among the
Borrower, one or more of the Originators and the Servicer, as the same may be
amended, supplemented, amended and restated or otherwise modified from time to
time in accordance with the terms thereof and such other purchase agreements as
may be entered into from time to time after the date hereof among the Borrower,
one or more of the Originators and the Servicer and that contain payment terms
and are otherwise in form and substance satisfactory to the Agent.
"Receivable" means any right to payment from an Obligor that is not an
Affiliate of an Originator or the Borrower, whether constituting an account,
chattel paper, instrument or a general intangible, arising from the sale by an
Originator of goods and services and includes the right to payment of any
interest or finance charges and other obligations of such Obligor with respect
thereto. "Receivables" means the collective reference to each and every
Receivable.
"Related Assets" means, with respect to any Receivable: (a) all of
Borrower's (or, in the case of the Purchase and Contribution Agreements, the
applicable Originator's) interest in goods, including returned goods, if any,
relating to the sale which gave rise to such Receivable; (b) all other security
interests or liens and property subject thereto (including any rights arising
out of any financing statements related thereto) from time to time purporting to
secure payment of such Receivable, whether pursuant to the Contract related to
such Receivable or otherwise; and (c) all guarantees and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of such Receivable whether pursuant to the Contract related to such
Receivable or otherwise.
18
26
"Related Rights" means the following rights: (a) all rights to, but not
the obligations under, all Related Assets; (b) all monies due or to become due
with respect to the Receivables or the rights described in clause (a) of this
definition; (c) all books and records with respect to any of the forgoing; and
(d) all proceeds thereof (as defined in the applicable Uniform Commercial Code
or any successor statute) provided in the Purchase and Contribution Agreement
(US)) including, without limitation, all funds which are either received in
payment of amounts owed (including, without limitation, finance charges,
interest and all other charges) in respect of Receivables, or are applied to
such amounts by the Obligors (including, without limitation, insurance payments
if any, that each Originator or the Servicer (other than the applicable
Originator) applies in the ordinary course of its business to amounts owed in
respect to any Receivable).
"Related Security " means with respect to any Receivable: (a) all of
Borrower's interest in the Related Rights with respect thereto, but not the
obligations thereunder; and (b) all of Borrower's rights and remedies with
respect to such Receivable pursuant to the Purchase and Contribution Agreements.
"Reportable Event" means, any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, other than any such event for
which the thirty (30) day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"Required Lenders" means at any time Lenders whose Pro Rata Shares
aggregate 51% of the Commitments or, if no Commitments shall then be in effect,
Lenders who hold 51% of the aggregate principal amount of the Loans then
outstanding.
"Requirement of Law" means, as to any Person, any Laws, in each case
applicable to or binding upon the Person or any of its property or to which the
Person or any of its property is subject.
"Responsible Officer" means the chief executive officer or the
president or any vice president of the Borrower, or any other officer having
substantially the same authority and responsibility; or, with respect to
compliance with financial covenants and the preparation of the Borrowing Base
Certificate, the chief financial officer or the treasurer or assistant treasurer
of the Borrower, or any other officer having substantially the same authority
and responsibility.
"Revolving Loans" has the meaning specified in Section 2.2 (Revolving
Loans) and includes, without limitation, each Agent Advance and Non-Ratable
Loan.
"Servicer" means individually or collectively Union Underwear Company,
Inc., a New York corporation, any entity designated from time to time as
servicer for any of the Receivables under any of the Purchase and Contribution
Agreements, sub-servicers reasonably acceptable to the Agent, substitutes for
any of the foregoing reasonably acceptable to the Agent, or, during the
existence of an Event of Default, a servicer chosen by the Agent.
"Servicing Agreements" means the collective reference to that certain
servicing agreement dated the same date as this Agreement by and among the
Borrower, Union, and the Agent relating to the servicing of the Receivables
purchased under the Purchase and Contribution Agreement (US) and each other
servicing agreement and sub-servicing agreement
19
27
relating to the Receivables, all of the foregoing as amended, modified,
restated, substituted, extended and renewed from time to time.
"Settlement" and "Settlement Date" have the meanings specified in
Section 2.2(j)(i) (Settlement).
"Solvent" means when used with respect to any Person that at the time
of determination:
(a) the assets of such Person, at a fair valuation, are in
excess of the total amount of its debts (including, without limitation,
contingent liabilities); and
(b) the present fair saleable value of its assets is greater
than its probable liability on its existing debts as such debts become
absolute and matured; and
(c) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments)
as they mature; and
(d) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
For purposes of determining whether a Person is Solvent, the amount of
any contingent liability shall be computed as the amount that, in light of all
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
"S&P" means Standard & Poor's Ratings Services.
"Special Purpose Entity" means an entity that by and through its
organizational documents provides the following:
(a) Limited Purpose. The entity's purpose is limited solely to
purchase Receivables and Related Rights from Affiliates, entering into
the Loan Documents and the transactions contemplated thereby and
engaging in incidental activities in connection therewith.
(b) Certain Actions Requiring Unanimous Vote. The unanimous vote
of the entity's board of directors (including that of the Independent
Director), partners or members, as applicable, must be required in
order to:
(i) take any Bankruptcy Action;
(ii) dissolve, liquidate, consolidate, merge or sellz all or
substantially all of its assets;
(iii) amend or recommend the amendment of its organizational
documents; and
20
28
(iv) engage in transactions with Affiliates.
(c) Separateness Provisions. The entity must be required to:
(i) not commingle assets with those of any other entity and
must hold its assets in its own name;
(ii) conduct its own business in its own name;
(iii) maintain separate bank accounts, books, records and
financial statements;
(iv) maintain its books, records, resolutions and agreements
as official records;
(v) pay its own liabilities out of its own funds;
(vi) maintain adequate capital in light of contemplated
business operations;
(vii) observe all corporate, partnership, company or other
organizational formalities;
(viii) maintain an arm's-length relationship with
Affiliates;
(ix) pay the salaries of its own employees and maintain a
sufficient number of employees in light of contemplated business operations;
(x) not guarantee or become obligated for the debts of any
other entity or hold out its credit as being available to satisfy the
obligations of others;
(xi) not acquire obligations or securities of Affiliates;
(xii) not make loans to any other person or entity;
(xiii) allocate fairly and reasonably any overhead for
shared office space;
(xiv) use separate stationery, invoices and checks;
(xv) not pledge its assets for the benefit of any other
entity;
(xvi) hold itself out as a separate entity, and not fail to
correct any known misunderstanding regarding its separate identity; and
(xvii) not identify itself or any of its Affiliates as a
division or part of the other.
21
29
(d) Subordination of Indemnification Obligations. The entity's
obligation, if any, to indemnify its directors and officers, partners,
or members or managers, as applicable, must be fully subordinated to
the loan and the loan documents and must not constitute a claim against
it in the event that cash flow in excess of amounts necessary to pay
holders of the loan is insufficient to pay such obligations.
(e) Independent Director. The corporation's board of directors
must include an Independent Director.
(f) Consideration of the Interests of Creditors. The
corporation's directors must be required to consider the interests of
creditors in connection with all corporate actions.
"Stated Termination Date" means October 31, 2002.
"Subsidiary" of a Person means any corporation, association,
partnership, joint venture or other business entity of which more than fifty
percent (50%) of the voting stock or other equity interests (in the case of
Persons other than corporations), is owned or controlled directly or indirectly
by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires, references
herein to a "Subsidiary" refer to a Subsidiary of the Borrower.
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, such taxes (including
income taxes or franchise taxes) as are imposed on or measured by each Lender's
net income by the jurisdiction (or any political subdivision thereof) under the
laws of which such Lender or the Agent, as the case may be, is organized or
maintains a lending office.
"Termination Date " means the earliest to occur of (a) the Stated
Termination Date, (b) the date the Total Facility is terminated either by the
Borrower pursuant to Section 4.2 (Termination of Facility) or by the Majority
Lenders pursuant to Section 11.2 (Remedies), and (c) the date this Agreement is
otherwise terminated for any reason whatsoever.
"Termination Event" means (a) with respect to any Single Employer Plan,
the occurrence of a Reportable Event or the substantial cessation of operations
(within the meaning of Section 4062(e) of ERISA); (b) the withdrawal of the
Borrower, FTL or any of FTL's Subsidiaries or any ERISA Affiliate from a
Multi-employer Plan during a plan year in which it was a substantial employer
(as such term is defined in Section 4001(a)(2) of ERISA) or the termination of a
Multi-employer Plan; (c) the distribution of notice of intent to terminate or
the actual termination of a Plan pursuant to Section 4041(a)(2) or 4041A of
ERISA; (d) the institution of proceedings to terminate or the actual termination
of a Plan by the PBGC under Section 4042 of ERISA; (e) any event or condition
which reasonably would be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan; or (f) the complete or partial withdrawal of the Borrower, FTL or any of
FTL's Subsidiaries or any ERISA Affiliate from a Multi-employer Plan.
22
30
"Total Facility" has the meaning specified in Section 2.1 (Total
Facility).
"Transaction Documents" means the this Agreement, the Loan Documents,
the Fee Letter, the Originator Assignment Certificates, the Purchase and
Contribution Agreements and each other agreement contemplated therein, the FTL
Notes, the Servicing Agreements and each other agreement contemplated therein,
and all other instruments, certificates, agreements, reports or documents
delivered under or in connection with the Purchase and Contribution Agreement,
as any of the foregoing may be amended, supplemented, amended and restated, or
otherwise modified from time to time in accordance with the Purchase and
Contribution Agreement.
"UCC" means the Uniform Commercial Code (or any successor statute) of
the State of Illinois or of any other state the laws of which are required by
Section 9-103 thereof to be applied in connection with the issue of perfection
of security interests.
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
"Union" means Union Underwear Company, Inc., a New York corporation.
"Unused Line Fee" has the meaning specified in Section 3.5 (Unused Line
Fee).
Section 1.2 Accounting Terms.
Any accounting term used in this Agreement shall have, unless otherwise
specifically provided herein, the meaning customarily given in accordance with
GAAP, and all financial computations hereunder shall be computed, unless
otherwise specifically provided herein, in accordance with GAAP as consistently
applied.
Section 1.3 Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar words
refer to this Agreement as a whole and not to any particular provision
of this Agreement; and Subsection, Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including," the words "to" and "until" each mean "to but excluding" and
the word "through" means "to and including."
23
31
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
(f) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Borrower
and the other parties, and are the products of all parties. Accordingly, they
shall not be construed against the Lenders or the Agent merely because of the
Agent's or Lenders' involvement in their preparation.
(h) This Agreement may sometimes be referred to in the other Loan
Documents or elsewhere as the "Loan Agreement" or the "Financing Agreement."
ARTICLE II
LOANS
Section 2.1 Total Facility.
Subject to all of the terms and conditions of this Agreement, the
Lenders severally agree to make available a total credit facility of up to
$275,000,000 (the "Total Facility") for the Borrower's use from time to time
during the term of this Agreement. The Total Facility shall be comprised of a
revolving line of credit consisting of revolving loans up to the Maximum
Revolver Amount, as described in Section 2.2 (Revolving Loans).
Section 2.2 Revolving Loans.
(a) Amounts. Subject to the satisfaction of the conditions
precedent set forth in ARTICLE X (Conditions of Lending), each Lender severally
agrees, upon the Borrower's request from time to time on any Business Day during
the period from the Closing Date to the Termination Date, to make revolving
loans (the "Revolving Loans") to the Borrower, in amounts not to exceed (except
for Bank of America with respect to Non-Ratable Loans and except for the Agent
with respect to Agent Advances) such Lender's Pro Rata Share of the Borrower's
Availability. The Lenders, however, in their discretion, may elect to make
Revolving Loans in excess of the Availability on one or more occasions, but if
they do so, neither the Agent nor the Lenders shall be deemed thereby to have
changed the limits of the Maximum Revolver Amount or the Availability or to be
obligated to exceed such limits on any other occasion. If the
24
32
Aggregate Revolver Outstandings exceeds the Availability (with the Availability
for this purpose calculated as if the Aggregate Revolver Outstandings were
zero), the Lenders may refuse to make or otherwise restrict the making of
Revolving Loans as the Lenders determine until such excess has been eliminated,
subject to the Agent's authority, in its sole discretion, to make Agent Advances
pursuant to the terms of Section 2.2(i) (Agent Advances). Notwithstanding the
foregoing, the Lenders shall have no obligation to make any advances hereunder
that would cause the Aggregate Revolver Outstandings to exceed $240,000,000 so
long as the FTL Senior Credit Agreement prohibits Aggregate Revolver
Outstandings in excess of $240,000,000; provided, however, that this provision
is for the benefit of the Agent and the Lenders alone and not for any other
Person including, without limitation, the Borrower or the agent or the lenders
under the FTL Senior Credit Agreement.
(b) Procedure for Borrowing.
(i) Each Borrowing shall be made upon the Borrower's irrevocable
written notice delivered to the Agent in the form of a notice of borrowing
("Notice of Borrowing"), substantially in the form of EXHIBIT D attached hereto
and made a part hereof, together with a Borrowing Base Certificate reflecting
sufficient Availability, (which must be received by the Agent prior to 12:00
noon (Chicago, Illinois time) (A) three (3) Business Days prior to the requested
Funding Date, in the case of LIBOR Rate Loans and (B) no later than 12:00 noon
on the requested Funding Date, in the case of Base Rate Loans, specifying:
(1) the amount of the Borrowing;
(2) the requested Funding Date, which shall be a Business Day;
(3) whether the Revolving Loans requested are to be Base Rate
Revolving Loans or LIBOR Revolving Loans; and
(4) the duration of the Interest Period if the requested
Revolving Loans are to be LIBOR Revolving Loans. If the
Notice of Borrowing fails to specify the duration of the
Interest Period for any Borrowing comprised of LIBOR Rate
Loans, such Interest Period shall be one month;
provided, however, that with respect to the Borrowing to be made on the Closing
Date, such Borrowings will consist of Base Rate Revolving Loans only.
(ii) With respect to any request for Base Rate Revolving Loans,
in lieu of delivering the above-described Notice of Borrowing the Borrower may
give the Agent telephonic notice of such request by the required time, with such
telephonic notice to be confirmed in writing including facsimile writing within
24 hours of the giving of such notice but the Agent shall be entitled to rely on
the telephonic notice in making such Revolving Loans.
(c) Reliance upon Authority. On or prior to the Closing Date and
thereafter prior to any change with respect to any of the information contained
in the following clauses (i) and (ii), the Borrower shall deliver to the Agent a
writing setting forth (i) the account of the Borrower to which the Agent is
authorized to transfer the proceeds of the Revolving Loans
25
33
requested pursuant to this Section 2.2(c), and (ii) the names of the persons
authorized to request Revolving Loans on behalf of the Borrower, and shall
provide the Agent with a specimen signature of each such person. The Agent shall
be entitled to rely conclusively on such person's authority to request Revolving
Loans on behalf of the Borrower, the proceeds of which are to be transferred to
any of the accounts specified by the Borrower pursuant to the immediately
preceding sentence, until the Agent receives written notice to the contrary. The
Agent shall have no duty to verify the identity of any individual representing
him or herself as one of the officers authorized by the Borrower to make such
requests on its behalf.
(d) No Liability. The Agent shall not incur any liability to the
Borrower as a result of acting upon any notice referred to in Section 2.2(b)
(Procedure for Borrowing) and Section 2.2(c) (Reliance Upon Authority), which
notice the Agent believes in good faith to have been given by an officer duly
authorized by the Borrower to request Revolving Loans on its behalf or for
otherwise acting in good faith under this Section 2.2(d), and the crediting of
Revolving Loans to the Borrower's deposit account, or transmittal to such Person
as the Borrower shall direct, shall conclusively establish the obligation of the
Borrower to repay such Revolving Loans as provided herein.
(e) Notice Irrevocable. Any Notice of Borrowing (or telephonic
notice in lieu thereof) made pursuant to Section 2.2(b) (Procedure for
Borrowing) shall be irrevocable and the Borrower shall be bound to borrow the
funds requested therein in accordance therewith.
(f) Agent's Election. Promptly after receipt of a Notice of
Borrowing (or telephonic notice in lieu thereof) pursuant to Section 2.2(b)
(Procedure for Borrowing), the Agent shall elect, in its discretion, (i) to have
the terms of Section 2.2(g) apply to such requested Borrowing, or (ii) to
request Bank of America to make a Non-Ratable Loan pursuant to the terms of
Section 2.2(h) (Non-Ratable Loans) in the amount of the requested Borrowing;
provided, however, that if Bank of America declines in its sole discretion to
make a Non-Ratable Loan pursuant to Section 2.2(h), the Agent shall elect to
have the terms of Section 2.2(g) apply to such requested Borrowing.
(g) Making of Revolving Loans.
(i) In the event that the Agent shall elect to have the
terms of this Section 2.2(g) apply to a requested Borrowing as described in
Section 2.2(f), then promptly after receipt of a Notice of Borrowing or
telephonic notice pursuant to Section 2.2(b), the Agent shall notify the Lenders
by telecopy, telephone or other similar form of transmission, of the requested
Borrowing. Each Lender shall make the amount of such Lender's Pro Rata Share of
the requested Borrowing available to the Agent in same day funds, to such
account of the Agent as the Agent may designate, not later than 12:00 noon
(Chicago, Illinois time) on the Funding Date applicable thereto. After the
Agent's receipt of the proceeds of such Revolving Loans, upon satisfaction of
the applicable conditions precedent set forth in ARTICLE X, the Agent shall make
the proceeds of such Revolving Loans available to the Borrower on the applicable
Funding Date by transferring same day funds equal to the proceeds of such
Revolving Loans received by the Agent to the account of the Borrower, designated
in writing by the Borrower and
26
34
reasonably acceptable to the Agent; provided, however, that the amount
of Revolving Loans so made on any date shall in no event exceed the
Availability on such date.
(ii) Unless the Agent receives notice from a Lender on
or prior to the Closing Date or, with respect to any Borrowing after
the Closing Date, at least one Business Day prior to the date of such
Borrowing, that such Lender will not make available as and when
required hereunder to the Agent for the account of the Borrower the
amount of that Lender's Pro Rata Share of the Borrowing, the Agent may
assume that each Lender has made such amount available to the Agent in
immediately available funds on the Funding Date and the Agent may (but
shall not be so required), in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and
to the extent any Lender shall not have made its full amount available
to the Agent in immediately available funds and the Agent in such
circumstances has made available to the Borrower such amount, that
Lender shall on the Business Day following such Funding Date make such
amount available to the Agent, together with interest at the Federal
Funds Rate for each day during such period. A notice by the Agent
submitted to any Lender with respect to amounts owing under this
subsection shall be conclusive, absent manifest error. If such amount
is so made available, such payment to the Agent shall constitute such
Lender's Revolving Loan for all purposes of this Agreement. If such
amount is not made available to the Agent on the Business Day following
the Funding Date, the Agent will notify the Borrower of such failure to
fund and, upon demand by the Agent, the Borrower shall pay such amount
to the Agent for the Agent's account, together with interest thereon
for each day elapsed since the date of such Borrowing, at a rate per
annum equal to the Interest Rate applicable at the time to the
Revolving Loans comprising such Borrowing. The failure of any Lender to
make any Revolving Loan on any Funding Date (any such Lender, prior to
the cure of such failure, being hereinafter referred to as a
"Defaulting Lender") shall not relieve any other Lender of any
obligation hereunder to make a Revolving Loan on such Funding Date, but
no Lender shall be responsible for the failure of any other Lender to
make the Revolving Loan to be made by such other Lender on any Funding
Date.
(iii) The Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by Borrower to the Agent for the
Defaulting Lender's benefit; nor shall a Defaulting Lender be entitled
to the sharing of any payments hereunder. Amounts payable to a
Defaulting Lender shall instead be paid to or retained by the Agent.
The Agent may hold and, in its discretion, re-lend to Borrower the
amount of all such payments received or retained by it for the account
of such Defaulting Lender. Any amounts so re-lent to the Borrower shall
bear interest at the rate applicable to Base Rate Revolving Loans and
for all other purposes of this Agreement shall be treated as if they
were Revolving Loans, provided, however, that for purposes of voting or
consenting to matters with respect to the Loan Documents and
determining Pro Rata Shares, such Defaulting Lender shall be deemed not
to be a "Lender". Until a Defaulting Lender cures its failure to fund
its Pro Rata Share of any Borrowing (A) such Defaulting Lender
27
35
shall not be entitled to any portion of the Unused Line Fee and (B) the
Unused Line Fee shall accrue in favor of the Lenders which have funded
their respective Pro Rata Shares of such requested Borrowing and shall
be allocated among such performing Lenders ratably based upon their
relative Commitments. This section shall remain effective with respect
to such Lender until such time as the Defaulting Lender shall no longer
be in default of any of its obligations under this Agreement. The terms
of this Section shall not be construed to increase or otherwise affect
the Commitment of any Lender, or relieve or excuse the performance by
the Borrower of its duties and obligations hereunder.
(h) Non-Ratable Loans. (i) In the event the Agent shall
elect, with the consent of Bank of America, to have the terms of this Section
2.2(h) apply to a requested Borrowing as described in Section 2.2(f), Bank of
America shall make a Revolving Loan in the amount of such Borrowing (any such
Revolving Loan made solely by Bank of America pursuant to this Section 2.2(h)
being referred to as a "Non-Ratable Loan" and such Revolving Loans being
referred to collectively as "Non-Ratable Loans") available to the Borrower on
the Funding Date applicable thereto by transferring same day funds to an account
of the Borrower, designated in writing by the Borrower and reasonably acceptable
to the Agent. Each Non-Ratable Loan is a Revolving Loan hereunder and shall be
subject to all the terms and conditions applicable to other Revolving Loans
except that all payments thereon shall be payable to Bank of America solely for
its own account (and for the account of the holder of any participation interest
with respect to such Revolving Loan). The Agent shall not request Bank of
America to make any Non-Ratable Loan if (A) the Agent shall have received
written notice from any Lender that one or more of the applicable conditions
precedent set forth in ARTICLE X will not be satisfied on the requested Funding
Date for the applicable Borrowing, or (B) the requested Borrowing would exceed
the Availability on such Funding Date. Bank of America shall not otherwise be
required to determine whether the applicable conditions precedent set forth in
ARTICLE X have been satisfied or the requested Borrowing would exceed the
Availability on the Funding Date applicable thereto prior to making, in its sole
discretion, any Non-Ratable Loan.
(ii) The Non-Ratable Loans shall be secured by the
Agent's Liens in and to the Collateral, shall constitute Revolving Loans and
Obligations hereunder, and shall bear interest at the rate applicable to the
Revolving Loans from time to time.
(i) Agent Advances.
(i) Subject to the limitations set forth in the provisos
contained in this Section 2.2(i), the Agent is hereby authorized by the Borrower
and the Lenders, from time to time in the Agent's sole discretion, (A) after the
occurrence and during the continuation of a Default or an Event of Default, or
(B) at any time that any of the other applicable conditions precedent set forth
in ARTICLE X have not been satisfied, to make Base Rate Revolving Loans to the
Borrower on behalf of the Lenders which the Agent, in its reasonable business
judgment, deems necessary or desirable (1) to preserve or protect the
Collateral, or any portion thereof, (2) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other Obligations, or (3) to
pay any other amount chargeable to the Borrower pursuant to the terms of this
Agreement, including, without limitation, costs, fees and expenses as described
in Section 15.6 (Fees and Expenses) (any of the advances described in this
Section 2.2(i) being hereinafter
28
36
referred to as "Agent Advances"); provided, that the Required Lenders may at any
time revoke the Agent's authorization contained in this Section 2.2(i) to make
Agent Advances, any such revocation to be in writing and to become effective
prospectively upon the Agent's receipt thereof; provided further, that the Agent
shall not intentionally make Agent Advances which would cause the Aggregate
Revolver Outstandings to exceed the Availability by more than $2,750,000.
(ii) The Agent Advances shall be repayable on demand and
secured by the Agent's Liens in and to the Collateral, shall constitute
Revolving Loans and Obligations hereunder, and shall bear interest at the rate
applicable to the Revolving Loans from time to time. The Agent shall notify each
Lender in writing of each such Agent Advance.
(j) Settlement.
It is agreed that each Lender's funded portion of the Revolving Loans
is intended by the Lenders to be equal at all times to such Lender's Pro Rata
Share of the outstanding Revolving Loans. Notwithstanding such agreement, the
Agent, Bank of America, and the other Lenders agree (which agreement shall not
be for the benefit of or enforceable by the Borrower) that in order to
facilitate the administration of this Agreement and the other Loan Documents,
settlement among them as to the Revolving Loans, the Non-Ratable Loans and the
Agent Advances shall take place on a periodic basis in accordance with the
following provisions:
(i) The Agent shall request settlement ("Settlement") with the
Lenders on at least a weekly basis, or on a more frequent basis if so determined
by the Agent, (A) on behalf of Bank of America, with respect to each outstanding
Non-Ratable Loan, (B) for itself, with respect to each Agent Advance, and (C)
with respect to collections received, in each case, by notifying the Lenders of
such requested Settlement by telecopy, telephone or other similar form of
transmission, of such requested Settlement, no later than 12:00 noon (Chicago,
Illinois time) on the date of such requested Settlement (the "Settlement Date").
Each Lender (other than Bank of America, in the case of Non-Ratable Loans and
the Agent in the case of Agent Advances) shall make the amount of such Lender's
Pro Rata Share of the outstanding principal amount of the Non-Ratable Loans and
Agent Advances with respect to which Settlement is requested available to the
Agent, to such account of the Agent as the Agent may designate, not later than
2:00 p.m. (Chicago, Illinois time) on the Settlement Date applicable thereto,
which may occur before or after the occurrence or during the continuation of a
Default or an Event of Default and whether or not the applicable conditions
precedent set forth in ARTICLE X have then been satisfied. Such amounts made
available to the Agent shall be applied against the amounts of the applicable
Non-Ratable Loan or Agent Advance and, together with the portion of such
Non-Ratable Loan or Agent Advance representing Bank of America's Pro Rata Share
thereof, shall constitute Revolving Loans of such Lenders. If any such amount is
not made available to the Agent by any Lender on the Settlement Date applicable
thereto, the Agent shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Federal Funds Rate for the first
three (3) days from and after the Settlement Date and thereafter at the Interest
Rate then applicable to the Revolving Loans.
(ii) Notwithstanding the foregoing, not more than one (1)
Business Day after demand is made by the Agent (whether before or after the
occurrence of a Default or
29
37
an Event of Default and regardless of whether the Agent has requested a
Settlement with respect to a Non-Ratable Loan or Agent Advance), each other
Lender shall irrevocably and unconditionally purchase and receive from Bank of
America or the Agent, as applicable, without recourse or warranty, an undivided
interest and participation in such Non-Ratable Loan or Agent Advance equal to
such Lender's Pro Rata Share of such Non-Ratable Loan or Agent Advance. If
Settlement has not previously occurred with respect to such Non-Ratable Loans or
Agent Advances, upon demand by Bank of America or Agent, as applicable, each
other Lender shall pay to Bank of America or Agent, as applicable, as the
purchase price of such participation an amount equal to one-hundred percent
(100%) of such Lender's Pro Rata Share of such Non-Ratable Loans or Agent
Advances. If such amount is not in fact made available to the Agent by any
Lender, the Agent shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Federal Funds Rate for the first
three (3) days from and after such demand and thereafter at the Interest Rate
then applicable to the Revolving Loans.
(iii) From and after the date, if any, on which any Lender
purchases an undivided interest and participation in any Non-Ratable Loan or
Agent Advance pursuant to subsection (ii) above, the Agent shall promptly
distribute to such Lender at such address as such Lender may request in writing,
such Lender's Pro Rata Share of all payments of principal and interest and all
proceeds of Collateral received by the Agent in respect of such Non-Ratable Loan
or Agent Advance.
(iv) Between Settlement Dates, the Agent, to the extent no
Agent Advances or Non-Ratable Loans are outstanding, may pay over to Bank of
America any payments received by the Agent, which in accordance with the terms
of this Agreement would be applied to the reduction of the Revolving Loans, for
application to Bank of America's Revolving Loans. If, as of any Settlement Date,
collections received since the then immediately preceding Settlement Date have
been applied to Bank of America's Revolving Loans (other than to Non-Ratable
Loans or Agent Advances in which such Lender has not yet funded its purchase of
a participation pursuant to clause Section 2.2(j)(ii) above), as provided for in
the previous sentence, Bank of America shall pay to the Agent for the accounts
of the Lenders, to be applied to the outstanding Revolving Loans of such
Lenders, an amount such that each Lender shall, upon receipt of such amount,
have, as of such Settlement Date, its Pro Rata Share of the Revolving Loans.
During the period between Settlement Dates, Bank of America with respect to
Non-Ratable Loans, the Agent with respect to Agent Advances, and each Lender
with respect to the Revolving Loans other than Non-Ratable Loans and Agent
Advances, shall be entitled to interest at the applicable rate or rates payable
under this Agreement on the actual average daily amount of funds employed by
Bank of America, the Agent and the other Lenders.
(k) Notation. The Agent shall record on its books the principal amount
of the Revolving Loans owing to each Lender (including, without limitation, the
Non-Ratable Loans made by Bank of America) and the Agent Advances owing to the
Agent, from time to time. In addition, each Lender is authorized, at such
Lender's option, to note the date and amount of each payment or prepayment of
principal of such Lender's Revolving Loans in its books and records, including
computer records, such books and records constituting rebuttably presumptive
evidence, absent manifest error, of the accuracy of the information contained
therein.
30
38
(l) Lenders' Failure to Perform. All Loans (other than Agent
Advances and Non-Ratable Loans) shall be made by the Lenders simultaneously and
in accordance with their Pro Rata Shares. It is understood that (i) no Lender
shall be responsible for any failure by any other Lender to perform its
obligation to make any Loans hereunder, nor shall any Commitment of any Lender
be increased or decreased as a result of any failure by any other Lender to
perform its obligation to make any Loans hereunder, (ii) no failure by any
Lender to perform its obligation to make any Loans hereunder shall excuse any
other Lender from its obligation to make any Loans hereunder, and (iii) the
obligations of each Lender hereunder shall be several, not joint and several.
ARTICLE III
INTEREST AND FEES
Section 3.1 Interest.
(a) Interest Rates. All outstanding Obligations shall bear
interest on the unpaid principal amount thereof (including, to the extent
permitted by law, on interest thereon not paid when due) from the date made
until paid in full in cash at a rate determined by reference to the Base Rate or
the LIBOR Rate and Section 3.1(a)(i), Section 3.1(a)(ii) or Section 3.1(a)(iii),
as applicable, but not to exceed the Maximum Rate described in Section 3.3
(Maximum Interest Rate). Subject to the provisions of Section 3.2 (Conversion
and Continuation Elections), any of the Loans may be converted into, or
continued as, Base Rate Loans or LIBOR Rate Loans in the manner provided in
Section 3.2 (Conversion and Continuation Elections). If at any time Loans are
outstanding with respect to which notice has not been delivered to the Agent in
accordance with the terms of this Agreement specifying the basis for determining
the interest rate applicable thereto, then those Loans shall be Base Rate Loans
and shall bear interest at a rate determined by reference to the Base Rate until
notice to the contrary has been given to the Agent in accordance with this
Agreement and such notice has become effective. Except as otherwise provided
herein, the outstanding Obligations shall bear interest as follows:
(i) For all Base Rate Revolving Loans and other Obligations
(other than LIBOR Rate Loans) at a fluctuating per annum rate equal to
the Base Rate plus the Applicable Margin;
(ii) For all LIBOR Revolving Loans at a per annum rate equal
to the LIBOR Rate plus the Applicable Margin.
(iii) Twelve (12) months after the Closing Date, the
Applicable Margins for Base Rate Revolving Loans and LIBOR Revolving
Loans shall be subject to adjustment determined in accordance with the
performance pricing grid attached hereto as EXHIBIT E and made a part
hereof.
Each change in the Base Rate shall be reflected in the interest rate
described in clause (i) above as of the effective date of such change. All
interest charges shall be computed on the basis of a year of 360 days and actual
days elapsed (which results in more interest being paid than if computed on the
basis of a 365-day year). Interest accrued on all Base Rate Revolving Loans
31
39
will be payable in arrears on the first day of each month. Interest accrued on
all LIBOR Rate Loans hereafter will be payable in arrears on each LIBOR Interest
Payment Date.
(b) Default Rate. If any Default or Event of Default occurs and is
continuing and the Agent in its discretion may so elect, or the Majority Lenders
in their discretion so elect, then, while any such Default or Event of Default
is outstanding, all of the Obligations shall bear interest at the Default Rate
applicable thereto.
Section 3.2 Conversion and Continuation Elections.
(a) Borrower's Election. The Borrower may, upon irrevocable
written notice to the Agent in accordance with Section 3.2(b)(Notice):
(i) elect, as of any Business Day, in the case of Base Rate
Loans to convert any such Loans (or any part thereof in an amount not less
than $5,000,000 or that is in an integral multiple of $500,000 in excess
thereof) into LIBOR Rate Loans; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any LIBOR Rate Loans having Interest Periods expiring
on such day (or any part thereof in an amount not less than $5,000,000, or
that is in an integral multiple of $500,000 in excess thereof);
provided, that if at any time the aggregate amount of LIBOR Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such LIBOR Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Borrower to continue such Loans as, and convert such Loans into, LIBOR
Rate Loans, as the case may be, shall terminate.
(b) Notice. The Borrower shall deliver a notice of
conversion/continuation ("Notice of Conversion/Continuation"), substantially in
the form of EXHIBIT F attached hereto and made a part hereof, to be received by
the Agent not later than 12:00 noon (Chicago, Illinois time) at least three (3)
Business Days in advance of the Conversion/Continuation Date, if the Loans are
to be converted into or continued as LIBOR Rate Loans and specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be converted or renewed;
(iii) the type of Loans resulting from the proposed conversion
or continuation; and
(iv) the duration of the requested Interest Period, provided,
however, the Borrower may not select an Interest Period with respect to any
portion of the Loans which extends beyond an installment payment date for
the Loans unless, after giving effect to such election, the portion of the
Loans not subject to Interest Periods ending after such installment payment
date is equal to or greater than the principal due on such installment
payment date.
32
40
(c) Failure to Elect. If upon the expiration of any Interest
Period applicable to LIBOR Rate Loans, the Borrower has failed to select timely
a new Interest Period to be applicable to LIBOR Rate Loans or if any Default or
Event of Default then exists, the Borrower shall be deemed to have elected to
convert such LIBOR Rate Loans into Base Rate Loans effective as of the
expiration date of such Interest Period.
(d) Notice to Lenders. The Agent will promptly notify each
Lender of its receipt of a Notice of Conversion/Continuation. All conversions
and continuations shall be made ratably according to the respective outstanding
principal amounts of the Loans with respect to which the notice from the Agent
was given to each Lender.
(e) Default. During the existence of a Default or Event of
Default, the Borrower may not elect to have a Loan converted into or continued
as a LIBOR Rate Loan.
(f) Limitation. After giving effect to any conversion or
continuation of Loans, there may not be more than eight (8) different
Interest Periods in effect.
Section 3.3 Maximum Interest Rate.
In no event shall any interest rate provided for hereunder exceed the
maximum rate legally chargeable by any Lender under applicable law for loans of
the type provided for hereunder (the "Maximum Rate"). If, in any month, any
interest rate, absent such limitation, would have exceeded the Maximum Rate,
then the interest rate for that month shall be the Maximum Rate, and, if in
future months, that interest rate would otherwise be less than the Maximum Rate,
then that interest rate shall remain at the Maximum Rate until such time as the
amount of interest paid hereunder equals the amount of interest which would have
been paid if the same had not been limited by the Maximum Rate. In the event
that, upon payment in full of the Obligations, the total amount of interest paid
or accrued under the terms of this Agreement is less than the total amount of
interest which would, but for this Section 3.3, have been paid or accrued if the
interest rates otherwise set forth in this Agreement had at all times been in
effect, then the Borrower shall, to the extent permitted by applicable law, pay
the Agent, for the account of the Lenders, an amount equal to the excess of (a)
the lesser of (i) the amount of interest which would have been charged if the
Maximum Rate had, at all times, been in effect or (ii) the amount of interest
which would have accrued had the interest rates otherwise set forth in this
Agreement, at all times, been in effect over (b) the amount of interest actually
paid or accrued under this Agreement. In the event that a court determines that
the Agent and/or any Lender has received interest and other charges hereunder in
excess of the Maximum Rate, such excess shall be deemed received on account of,
and shall automatically be applied to reduce, the Obligations other than
interest, in the inverse order of maturity, and if there are no Obligations
outstanding, the Agent and/or such Lender shall refund to the Borrower such
excess.
Section 3.4 Closing Fees.
The Borrower agrees to pay the Arrangement Fee and the
Closing-Syndication Fee to the Agent for its own account on the Closing Date in
accordance with the Fee Letter, which fees shall be due and fully earned and
non-refundable by the Agent on the Closing Date. The Agent, the Lenders and the
Borrower agree that the Arrangement Fee and the Closing-Syndication Fee shall be
financed by the Lenders as a Revolving Loan.
33
41
Section 3.5 Unused Line Fee.
Subject to adjustment determined in accordance with the performance
pricing grid attached hereto as EXHIBIT E twelve (12) months after the Closing
Date, until the Obligations have been paid in full and the Agreement terminated,
the Borrower agrees to pay, on the first day of each month and on the
Termination Date, to the Agent, for the ratable account of the Lenders, an
unused line fee equal to one-half of one percent (1/2%) per annum on the average
daily amount by which the Maximum Revolver Amount exceeded the sum of the
average daily outstanding amount of Revolving Loans, during the immediately
preceding month or shorter period if calculated on the Termination Date. The
unused line fee shall be computed on the basis of a 360-day year for the actual
number of days elapsed. All payments received by the Agent on account of
Receivables or as proceeds of other Collateral shall be deemed to be credited to
the Borrower's Loan Account immediately upon receipt of good funds for purposes
of calculating the "unused line fee" pursuant to this Section 3.5.
Section 3.6 Administrative Fee.
The Borrower agrees to pay the Agent, for the account of the Agent an
administrative fee (the "Administrative Fee") in accordance with the Fee Letter,
which Administrative Fee shall be due and fully earned by the Agent on the
Closing Date and on each Anniversary Date thereafter as provided in the Fee
Letter and shall be non-refundable when paid. The Agent, the Lenders and the
Borrower agree that the Administrative Fee shall be financed by the Lenders as a
Revolving Loan.
ARTICLE IV
PAYMENTS AND PREPAYMENTS
Section 4.1 Revolving Loans.
The Borrower shall repay the outstanding principal balance of the
Revolving Loans, plus all accrued but unpaid interest thereon, on the
Termination Date. The Borrower may prepay Revolving Loans at any time, and
reborrow subject to the terms of this Agreement; provided, however, that with
respect to any LIBOR Revolving Loans prepaid by the Borrower prior to the
expiration date of the Interest Period applicable thereto, the Borrower promises
to pay to the Agent for account of the Lenders the amounts described in Section
5.4 (Funding Losses). In addition, and without limiting the generality of the
foregoing, upon demand the Borrower promises to pay to the Agent, for account of
the Lenders, the amount, without duplication, by which the Aggregate Revolver
Outstandings exceeds the Availability (with Availability for this purpose
calculated as if the Aggregate Revolver Outstandings were zero).
Section 4.2 Termination of Facility.
The Borrower may terminate this Agreement upon at least thirty (30)
Business Days' notice to the Agent and the Lenders, upon (a) the payment in full
of all outstanding Revolving Loans, together with accrued interest thereon, (b)
the prepayment in full of the Loans, together with accrued interest thereon, (c)
the payment of the early termination fee set forth in the next sentence, (d) the
payment in full in cash of all other Obligations together with accrued interest
thereon, and (e) with respect to any LIBOR Rate Loans prepaid in connection with
such termination prior to the expiration date of the Interest Period applicable
thereto, the payment of
34
42
the amounts described in Section 5.4 (Funding Losses). If this Agreement is
terminated at any time prior to the second Anniversary Date, whether pursuant to
this Section or pursuant to Section 11.2 (Remedies), the Borrower shall pay to
the Agent, for its own account the early termination fee described in the Fee
Letter.
Section 4.3 Payments by the Borrower.
(a) No Setoff. All payments to be made by the Borrower shall
be made without setoff, recoupment or counterclaim. Except as otherwise
expressly provided herein, all payments by the Borrower shall be made to the
Agent for the account of the Lenders at the Agent's address set forth in Section
15.7 (Notices), and shall be made in Dollars and in immediately available funds,
no later than 12:00 noon (Chicago, Illinois time) on the date specified herein.
Any payment received by the Agent later than 12:00 noon (Chicago, Illinois time)
shall be deemed to have been received on the following Business Day and any
applicable interest or fee shall continue to accrue.
(b) Date of Payment. Subject to the provisions set forth in
the definition of "Interest Period" herein, whenever any payment is due on a day
other than a Business Day, such payment shall be made on the following Business
Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be.
(c) Failure of Borrower to Make Timely Payment. Unless the
Agent receives notice from the Borrower prior to the date on which any payment
is due to the Lenders that the Borrower will not make such payment in full as
and when required, the Agent may assume that the Borrower has made such payment
in full to the Agent on such date in immediately available funds and the Agent
may (but shall not be so required), in reliance upon such assumption, distribute
to each Lender on such due date an amount equal to the amount then due such
Lender. If and to the extent the Borrower has not made such payment in full to
the Agent, each Lender shall repay to the Agent on demand such amount
distributed to such Lender, together with interest thereon at the Federal Funds
Rate for each day from the date such amount is distributed to such Lender until
the date repaid.
Section 4.4 Payments as Revolving Loans.
All payments of principal, interest, reimbursement obligations in
connection with fees, premiums and other sums payable hereunder, including all
reimbursement for expenses pursuant to Section 15.6 (Fees and Expenses), may, at
the option of the Agent, in its sole discretion, subject only to the terms of
this Section 4.4, be paid from the proceeds of Revolving Loans made hereunder,
whether made following a request by the Borrower pursuant to Section 2.2
(Revolving Loans) or a deemed request as provided in this Section 4.4. The
Borrower hereby irrevocably authorizes the Agent to charge the Loan Account for
the purpose of paying principal, interest, reimbursement obligations in
connection with fees, premiums and other sums payable hereunder, including
reimbursing expenses pursuant to Section 15.6 (Fees and Expenses), and agrees
that all such amounts charged shall constitute Revolving Loans (including
Non-Ratable Loans and Agent Advances) and that all such Revolving Loans so made
shall be deemed to have been requested by Borrower pursuant to Section 2.2
(Revolving Loans).
35
43
Section 4.5 Apportionment, Application and Reversal of Payments.
Aggregate principal and interest payments shall be apportioned ratably
among the Lenders (according to the unpaid principal balance of the Loans to
which such payments relate held by each Lender) and payments of the fees shall,
as applicable, be apportioned ratably among the Lenders. All payments shall be
remitted to the Agent and all such payments not relating to principal or
interest of specific Loans, or not constituting payment of specific fees, and
all proceeds of Receivables or other Collateral received by the Agent, shall be
applied, ratably, subject to the provisions of this Agreement, first, to pay any
fees, indemnities or expense reimbursements then due to the Agent from the
Borrower; second, to pay any fees or expense reimbursements then due to the
Lenders from the Borrower; third, to pay interest due in respect of all
Revolving Loans, including Non-Ratable Loans and Agent Advances; fourth, to pay
or prepay principal of the Non-Ratable Loans and the Agent Advances; fifth, to
pay or prepay principal of the Revolving Loans (other than Non-Ratable Loans and
Agent Advances); sixth, to the payment of any other Obligation due to the Agent
or any Lender by the Borrower. Notwithstanding anything to the contrary
contained in this Agreement, unless so directed by the Borrower, or unless an
Event of Default is outstanding, neither the Agent nor any Lender shall apply
any payments which it receives to any LIBOR Revolving Loan, except (a) on the
expiration date of the Interest Period applicable to any such LIBOR Rate Loan,
or (b) in the event, and only to the extent, that there are no outstanding Base
Rate Revolving Loans. The Agent shall promptly distribute to each Lender,
pursuant to the applicable wire transfer instructions received from each Lender
in writing, such funds as it may be entitled to receive, subject to a Settlement
delay as provided for in Section 2.2(j) (Settlement). The Agent and the Lenders
shall have the continuing and exclusive right to apply and reverse and reapply
any and all such proceeds and payments to any portion of the Obligations.
Section 4.6 Indemnity for Returned Payments.
If, after receipt of any payment of, or proceeds applied to the
payment of, all or any part of the Obligations, the Agent or any Lender is for
any reason compelled to surrender such payment or proceeds to any Person,
because such payment or application of proceeds is invalidated, declared
fraudulent, set aside, determined to be void or voidable as a preference,
impermissible setoff, or a diversion of trust funds, or for any other reason,
then the Obligations or part thereof intended to be satisfied shall be revived
and continue and this Agreement shall continue in full force as if such payment
or proceeds had not been received by the Agent or such Lender, and the Borrower
shall be liable to pay to the Agent, and hereby does indemnify the Agent and the
Lenders and hold the Agent and the Lenders harmless for, the amount of such
payment or proceeds surrendered. The provisions of this Section 4.6 shall be and
remain effective notwithstanding any contrary action which may have been taken
by the Agent or any Lender in reliance upon such payment or application of
proceeds, and any such contrary action so taken shall be without prejudice to
the Agent's and the Lenders' rights under this Agreement and shall be deemed to
have been conditioned upon such payment or application of proceeds having become
final and irrevocable. The provisions of this Section 4.6 shall survive the
termination of this Agreement.
36
44
Section 4.7 Agent's and Lenders' Books and Records; Monthly
Statements.
The Borrower agrees that the Agent's and each Lender's books and
records showing the Obligations and the transactions pursuant to this Agreement
and the other Loan Documents shall be admissible in any action or proceeding
arising therefrom, and shall constitute rebuttably presumptive proof thereof,
irrespective of whether any Obligation is also evidenced by a promissory note or
other instrument. The Agent will provide to the Borrower a monthly statement of
Loans, payments, and other transactions pursuant to this Agreement. Such
statement shall be deemed correct, accurate, and binding on the Borrower and an
account stated (except for reversals and reapplications of payments made as
provided in Section 4.5 (Apportionment; Application and Reversal of Payments)
and corrections of errors discovered by the Agent), unless the Borrower notifies
the Agent in writing to the contrary within thirty (30) days after such
statement is rendered. In the event a timely written notice of objections is
given by the Borrower, only the items to which exception is expressly made will
be considered to be disputed by the Borrower.
ARTICLE V
TAXES, YIELD PROTECTION AND ILLEGALITY
Section 5.1 Taxes.
(a) No Withholding in Payments to Lenders. Any and all
payments by the Borrower to each Lender or the Agent under this Agreement and
any other Loan Document shall be made free and clear of, and without deduction
or withholding for any Taxes. In addition, the Borrower shall pay all Other
Taxes, unless any such penalty, interest or addition to tax is the result of any
failure of the applicable Lender to file appropriate documentation in a timely
manner.
(b) Indemnification of Agent and Lenders. The Borrower agrees
to indemnify and hold harmless each Lender and the Agent for the full amount of
Taxes or Other Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section) paid by the Lender or the
Agent and any liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted, unless any such penalty,
interest or addition to tax is the result of any failure of the applicable
Lender to file appropriate documentation in a timely manner.
(c) Payment under this indemnification shall be made within
thirty (30) days after the date the Lender or the Agent makes written demand
therefor.
(d) Requirements of Law. If the Borrower shall be required by
law to deduct or withhold any Taxes or Other Taxes from or in respect of any sum
payable hereunder to any Lender or the Agent, then:
(i) the sum payable shall be increased as necessary so
that after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable
under this Section) such
37
45
Lender or the Agent, as the case may be, receives an amount equal to
the sum it would have received had no such deductions or withholdings
been made;
(ii) the Borrower shall make such deductions and
withholdings;
(iii) the Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) the Borrower shall also pay to each Lender or the
Agent for the account of such Lender, at the time interest is paid,
all additional amounts which the respective Lender specifies as
necessary to preserve the after-tax yield the Lender would have
received if such Taxes or Other Taxes had not been imposed.
(e) Evidence of Payment. Within thirty (30) days after the
date of any payment by the Borrower of Taxes or Other Taxes, the Borrower shall
furnish the Agent the original or a certified copy of a receipt evidencing
payment thereof, or other evidence of payment satisfactory to the Agent.
(f) Change in Lending Office. If the Borrower is required to
pay additional amounts to any Lender or the Agent pursuant to Section 5.1(d)
(Requirements of Law) or Section 5.3(b) (Reduction of Return) or if any Lender
is unable to continue to make LIBOR Loans, as described in Section 5.3(a)
(Increased Costs) then such Lender shall use reasonable efforts (consistent with
legal and regulatory restrictions) to change the jurisdiction of its lending
office so as to eliminate any such additional payment by the Borrower or
prohibition, as applicable which may thereafter accrue, if such change in the
judgment of such Lender is not otherwise disadvantageous to such Lender.
Section 5.2 Illegality.
(a) Suspension of LIBOR Rate Loans. If any Lender determines
that the introduction of any Requirement of Law, or any change in any
Requirement of Law, or in the interpretation or administration of any
Requirement of Law, has made it unlawful, or that any central bank or other
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable lending office to make LIBOR Rate Loans, then, on notice thereof by
the Lender to the Borrower through the Agent, any obligation of that Lender to
make LIBOR Rate Loans shall be suspended until the Lender notifies the Agent and
the Borrower that the circumstances giving rise to such determination no longer
exist.
(b) Repayment of LIBOR Rate Loans. If a Lender determines that
it is unlawful to maintain any LIBOR Rate Loan, the Borrower shall, upon its
receipt of notice of such fact and demand from such Lender (with a copy to the
Agent), prepay in full such LIBOR Rate Loans of that Lender then outstanding,
together with interest accrued thereon and amounts required under Section 5.4
(Funding Losses), either on the last day of the Interest Period thereof, if the
Lender may lawfully continue to maintain such LIBOR Rate Loans to such day, or
immediately, if the Lender may not lawfully continue to maintain such LIBOR Rate
Loan. If the Borrower is required to so prepay any LIBOR Rate Loan, then
concurrently with such
38
46
prepayment, the Borrower shall borrow from the affected Lender, in the amount of
such repayment, a Base Rate Loan.
Section 5.3 Increased Costs and Reduction of Return.
(a) Increased Costs. If any Lender determines that, due to
either (i) the introduction of or any change in the interpretation of any law or
regulation or (ii) the compliance by that Lender with any guideline or request
from any central bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost to such Lender of
agreeing to make or making, funding or maintaining any LIBOR Rate Loans, then
the Borrower shall be liable for, and shall from time to time, upon demand (with
a copy of such demand to be sent to the Agent), pay to the Agent for the account
of such Lender, additional amounts as are sufficient to compensate such Lender
for such increased costs.
(b) Reduction of Return. If any Lender shall have determined
that (i) the introduction of any Capital Adequacy Regulation, (ii) any change in
any Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or (iv) compliance by the Lender or any corporation or other entity
controlling the Lender with any Capital Adequacy Regulation, affects or would
affect the amount of capital required or expected to be maintained by the Lender
or any corporation or other entity controlling the Lender and (taking into
consideration such Lender's or such corporation's or other entity's policies
with respect to capital adequacy and such Lender's desired return on capital)
determines that the amount of such capital is increased as a consequence of its
Commitments, loans, credits or obligations under this Agreement, then, upon
demand of such Lender to the Borrower through the Agent, the Borrower shall pay
to the Lender, from time to time as specified by the Lender, additional amounts
sufficient to compensate the Lender for such increase.
Section 5.4 Funding Losses.
The Borrower shall reimburse each Lender and hold each Lender harmless
from any loss or expense that the Lender may sustain or incur as a consequence
of:
(a) the failure of the Borrower to make on a timely basis any
payment of principal of any LIBOR Rate Loan;
(b) the failure of the Borrower to borrow, continue or convert
a Loan after the Borrower has given (or is deemed to have given) a
Notice of Borrowing or a Notice of Conversion/ Continuation;
(c) the prepayment or other payment (including after
acceleration thereof) of a LIBOR Rate Loan on a day that is not the
last day of the relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans or from fees payable to
terminate the deposits from which such funds were obtained.
39
47
Section 5.5 Inability to Determine Rates.
If the Agent determines that for any reason adequate and reasonable
means do not exist for determining the LIBOR Rate for any requested Interest
Period with respect to a proposed LIBOR Rate Loan, or that the LIBOR Rate for
any requested Interest Period with respect to a proposed LIBOR Rate Loan does
not adequately and fairly reflect the cost to the Lenders of funding such Loan,
the Agent will promptly so notify the Borrower and each Lender. Thereafter, the
obligation of the Lenders to make or maintain LIBOR Rate Loans hereunder shall
be suspended until the Agent revokes such notice in writing. Upon receipt of
such notice, the Borrower may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If the Borrower does not revoke
such Notice, the Lenders shall make, convert or continue the Loans, as proposed
by the Borrower, in the amount specified in the applicable notice submitted by
the Borrower, but such Loans shall be made, converted or continued as Base Rate
Loans instead of LIBOR Rate Loans.
Section 5.6 Certificates of Lenders.
Any Lender claiming reimbursement or compensation under this ARTICLE V
(Taxes, Yield Protection and Illegality) shall deliver to the Borrower (with a
copy to the Agent) a certificate setting forth in reasonable detail the amount
payable to the Lender hereunder and such certificate shall be conclusive and
binding on the Borrower in the absence of manifest error.
Section 5.7 Survival.
The agreements and obligations of the Borrower in this ARTICLE V
(Taxes, Yield Protection and Illegality) shall survive the payment of all other
Obligations.
ARTICLE VI
COLLATERAL
Section 6.1 Grant of Security Interest.
(a) UCC Collateral. As security for all present and future
Obligations, the Borrower hereby grants to the Agent, for the ratable benefit of
the Agent and the Lenders, a continuing security interest in, lien on,
assignment of and right of set-off against, all of the following property of the
Borrower, whether now owned or existing or hereafter acquired or arising,
regardless of where located:
(i) all Receivables, all Related Security and all Collections
related thereto;
(ii) all of the Borrower's rights, remedies, powers and
privileges under, or in respect of, the Purchase and Contribution
Agreements;
(iii) all of the Borrower's rights, remedies, powers and
privileges under, or in respect of, the Servicing Agreements;
(iv) the Payment Account;
40
48
(v) all money, securities and other property of any kind of
the Borrower in the possession or under the control of the Agent or
any Lender, any assignee of or participant in the Obligations, or a
bailee of any such party or such party's Affiliates;
(vi) all of the Borrower's deposit accounts, credits, and
balances with and other claims against the Agent or any Lender or any
of their Affiliates or any other financial institution with which the
Borrower maintains deposits;
(vii) all books, records and other property related to or
referring to any of the foregoing, including, without limitation,
books, records, account ledgers, data processing records, computer
software and other property and general intangibles at any time
evidencing or relating to any of the foregoing; and
(viii) all other assets (including, without limitation,
returned goods and general intangibles) of the Borrower of any type or
nature, whether now owned or hereafter acquired, except to the extent
that the grant of a security interest therein would result in a
violation of the Borrower's existing Debt agreements and
(ix) all proceeds of any or all of the foregoing.
All of the foregoing and all other property of the Borrower in which the Agent
or any Lender may at any time be granted a Lien, is herein collectively referred
to as the "Collateral."
(b) Cross-Collateralization. All of the Obligations shall be
secured by all of the Collateral.
Section 6.2 Perfection and Protection of Security Interest.
(a) Borrower's Obligations. The Borrower shall, at its
expense, perform all steps requested by the Agent at any time to perfect,
maintain, protect, and enforce the Agent's Liens, including, without limitation:
(i) executing and filing financing or continuation statements, and amendments
thereof, in form and substance satisfactory to the Agent; (ii) delivering to the
Agent the originals of all instruments, documents, and chattel paper, and all
other Collateral of which the Agent determines it should have physical
possession in order to perfect and protect the Agent's security interest
therein, duly pledged, endorsed or assigned to the Agent without restriction;
(iii) placing notations on the Borrower's books of account to disclose the
Agent's security interest; (iv) delivering to the Agent all letters of credit on
which the Borrower is named beneficiary; and (v) taking such other steps as are
deemed necessary or desirable by the Agent to maintain and protect the Agent's
Liens. To the extent permitted by applicable law or filing procedure, the Agent
may file by electronic means with or without the Borrower's signature, one or
more financing statements disclosing the Agent's Liens; provided, however, that
unless an Event of Default is continuing or unless the Lenders have a reasonable
belief that any Agent's Lien securing the Obligations is impaired or may be
impaired by delay, no such filing shall be made unless the Agent has requested
the Borrower to make such filing and the Borrower has failed to comply with such
request within ten (10) Business Days after
41
49
such request has been delivered to the Borrower. The Borrower agrees that a
carbon, photographic, photostatic, or other reproduction of this Agreement or of
a financing statement is sufficient as a financing statement.
(b) Additional Documentation. From time to time, the Borrower
shall, upon the Agent's request, execute and deliver confirmatory written
instruments pledging to the Agent, for the ratable benefit of the Agent and the
Lenders, the Collateral with respect to the Borrower, but the Borrower's failure
to do so shall not affect or limit any security interest or any other rights of
the Agent or any Lender in and to the Collateral with respect to the Borrower.
So long as this Agreement is in effect and until all Obligations have been fully
satisfied, the Agent's Liens shall continue in full force and effect in all
Collateral (whether or not deemed eligible for the purpose of calculating the
Availability or as the basis for any advance, loan, extension of credit, or
other financial accommodation).
Section 6.3 Location of Collateral.
The Borrower represents and warrants to the Agent and the Lenders that
Schedule 6.3 is a correct and complete list of the Borrower's chief executive
office, the location of its books and records, the locations of the Collateral,
and the locations of all of its other places of business. The Borrower covenants
and agrees that it will not (i) maintain any Collateral at any location other
than those locations listed for the Borrower on Schedule 6.3, (ii) otherwise
change or add to any of such locations, or (iii) change the location of its
chief executive office from the location identified in Schedule 6.3, unless it
gives the Agent at least thirty (30) days' prior written notice thereof and
executes any and all financing statements and other documents that the Agent
requests in connection therewith.
Section 6.4 Title to, Liens on, and Sale and Use of Collateral.
The Borrower represents and warrants to the Agent and the Lenders and
agrees with the Agent and the Lenders that: (a) all of the Collateral is and
will continue to be owned by the Borrower free and clear of all Liens
whatsoever, except for the Agent's Liens; (b) the Agent's Liens in the
Collateral will not be subject to any prior Lien; (c) the Borrower will maintain
the Collateral with all reasonable care and will use such Collateral for lawful
purposes only; and (d) the Borrower will not, without the Agent's prior written
approval, sell, or dispose of or permit the sale or disposition of any of the
Collateral. The inclusion of proceeds in the Collateral shall not be deemed to
constitute the Agent's or any Lender's consent to any sale or other disposition
of the Collateral except as expressly permitted herein.
Section 6.5 Appraisals.
Whenever a Default or Event of Default exists, and at such other times
not more frequently than once a year as the Agent requests, the Borrower shall,
at its expense and upon the Agent's request, provide the Agent with appraisals
or updates thereof of any or all of the Collateral from an appraiser, and
prepared on a basis, reasonably satisfactory to the Agent, such appraisals and
updates to include, without limitation, information required by applicable law
and regulation and by the internal policies of the Lenders.
42
50
Section 6.6 Access and Examination; Confidentiality.
(a) Access and Examination of Borrower's Records. The Agent,
accompanied by any Lender which so elects, may at all reasonable times during
regular business hours following not less than five (5) Business Days prior
written notice (and at any time with or without notice when a Default or Event
of Default exists and is continuing) have access to, examine, audit, make
extracts from or copies of and inspect any or all of the Borrower's records,
files, and books of account and the Collateral, whether or not in the possession
of the Borrower or a Servicer, and discuss the Borrower's affairs with the
Borrower's officers and management. The Borrower will deliver to the Agent any
instrument necessary for the Agent to obtain records from any service bureau
maintaining records for the Borrower. The Agent may, and at the direction of the
Majority Lenders shall, at any time when a Default or Event of Default exists,
and at the Borrower's expense, make copies of all of the Borrower's books and
records, or require the Borrower to deliver such copies to the Agent. The Agent
may, without expense to the Agent, use such of the Borrower's respective
personnel, supplies, and premises as may be reasonably necessary for maintaining
or enforcing the Agent's Liens. The Agent shall have the right, at any time, in
the Agent's name or in the name of a nominee of the Agent, to verify the
validity, amount or any other matter relating to the Receivables or other
Collateral, by mail, telephone, or otherwise; provided, however, that absent an
Event of Default, the Agent shall effect such verification by a means which does
not identify the Agent by name.
(b) Access and Examination of Servicer's Records. The Agent,
accompanied by any Lender which so elects, may at all reasonable times during
regular business hours following not less than five (5) Business Days prior
written notice (and at any time with or without notice when a Default or Event
of Default exists and is continuing) have access to, examine, audit, make
extracts from or copies of and inspect any or all of the Servicer's records,
files, and books of account, and discuss the Servicer's affairs with the
Servicer's officers and management. The Servicer will deliver to the Agent any
instrument necessary for the Agent to obtain records from any service bureau
maintaining records for the Servicer. The Agent may, and at the direction of the
Majority Lenders shall, at any time when a Default or Event of Default exists,
and at the Borrower's expense, make copies of all of the Servicer's books and
records, or require the Servicer, as the case may be, to deliver such copies to
the Agent. The Agent may, without expense to the Agent, use such of the
Servicer's respective personnel, supplies, and premises as may be reasonably
necessary for maintaining or enforcing the Agent's Liens.
(c) Confidentiality. The Borrower agrees that, subject to the
Borrower's prior consent for uses other than in a traditional tombstone, which
consent shall not be unreasonably withheld or delayed, the Agent and each Lender
may use the Borrower's name in advertising and promotional material and in
conjunction therewith disclose the general terms of this Agreement. The Agent
and each Lender agree to take normal and reasonable precautions and exercise due
care to maintain the confidentiality of all information identified as
"confidential" or "secret" by the Borrower and provided to the Agent or such
Lender by or on behalf of the Borrower, under this Agreement or any other Loan
Document, and neither the Agent, nor such Lender nor any of their respective
Affiliates shall use any such information other than in connection with or in
enforcement of this Agreement and the other Loan Documents, except to the extent
that such information (i) was or becomes generally available to the public other
than as a result of disclosure by the Agent or such Lender, or (ii) was or
becomes available on a non-confidential
43
51
basis from a source other than the Borrower, provided that such source is not
bound by a confidentiality agreement with the Borrower known to the Agent or
such Lender; provided, however, that the Agent and any Lender may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Agent or such Lender is subject or in
connection with an examination of the Agent or such Lender by any such
Governmental Authority; (B) pursuant to subpoena or other court process; (C)
when required to do so in accordance with the provisions of any applicable
requirement of law; (D) to the extent reasonably required in connection with any
litigation or proceeding (including, but not limited to, any bankruptcy
proceeding) to which the Agent, any Lender or their respective Affiliates may be
party; (E) to the extent reasonably required in connection with the exercise of
any remedy hereunder or under any other Loan Document; (F) to the Agent's or
such Lender's independent auditors, accountants, attorneys and other
professional advisors; (G) to any prospective Participant or assignee under any
Assignment and Acceptance, actual or potential, provided that such prospective
Participant or assignee agrees to keep such information confidential to the same
extent required of the Agent and the Lenders hereunder; (H) as expressly
permitted under the terms of any other document or agreement regarding
confidentiality to which the Borrower is party or is deemed party with the Agent
or such Lender, and (I) to its Affiliates.
Section 6.7 Collateral Reporting.
The Borrower shall provide the Agent with the following documents at
the following times in form satisfactory to the Agent: (a) on a weekly basis, or
more frequently if requested by the Agent, a schedule of the Receivables
purchased since the last such schedule (along with applicable purchase and
assignment documents) and a Borrowing Base Certificate; (b) on a monthly basis,
or more frequently if requested by Agent, an aging of the Receivables, together
with a reconciliation to the previous month's aging of the Receivables and to
the Borrower's general ledger; (c) on a monthly basis, or more frequently if
requested by Agent, an aging of the Originators' accounts payable to the
Originators' top twenty-five (25) Obligors; (d) upon request, copies of invoices
in connection with the Receivables, customer statements, credit memos,
remittance advices and reports, deposit slips, shipping and delivery documents
in connection with the Receivables; (e) such other reports as to the Collateral
of the Borrower as the Agent shall reasonably request from time to time; and (f)
with the delivery of each of the foregoing, a certificate of the Borrower
executed by an officer thereof certifying as to the accuracy and completeness of
the foregoing. If any of the Borrower's records or reports of the Collateral are
prepared by an accounting service or other agent, the Borrower hereby authorizes
such service or agent to deliver such records, reports, and related documents to
the Agent, for distribution to the Lenders.
Section 6.8 Receivables.
(a) Representations and Warranties. The Borrower hereby
represents and warrants to the Agent and the Lenders, with respect to the
Receivables, that: (i) each existing Receivable represents, and each future
Receivable will represent, a bona fide sale or lease and delivery of goods by
one of the Originators, or rendition of services by one of the Originators, in
the ordinary course of the applicable Originator's business; (ii) each existing
Receivable is, and each future Receivable will be, for a liquidated amount
payable by the Obligor thereon on the terms set forth in the invoice therefor or
in the schedule thereof delivered to the Agent, without any offset, deduction,
defense, or counterclaim except those known to the Borrower and
44
52
disclosed to the Agent and the Lenders pursuant to this Agreement; (iii) no
payment will be received with respect to any Receivable, and no credit,
discount, or extension, or agreement therefor will be granted on any Receivable,
except as reported to the Agent and the Lenders in accordance with this
Agreement; (iv) each copy of an invoice delivered to the Agent by the Borrower
will be a genuine copy of the original invoice sent to the Obligor named
therein; and (v) all goods described in any invoice representing a sale of goods
will have been delivered to the Obligor and all services of the Borrower
described in each invoice will have been performed.
(b) No Re-dating. The Borrower shall not re-date any invoice
or sale or extend or modify any Receivable. If the Borrower becomes aware of any
matter adversely affecting the collectability of any Receivable or Obligor
involving an amount greater than $1,000,000, including information regarding the
Obligor's creditworthiness, the Borrower will promptly so advise the Agent.
(c) No Notes or Instruments. The Borrower shall not accept any
note or other instrument (except a check or other instrument for the immediate
payment of money) with respect to any Receivable without the Agent's written
consent, which consent shall not unreasonably be withheld or delayed. If the
Agent consents to the acceptance of any such instrument, it shall be considered
as evidence of the Receivable and not payment thereof and the Borrower will
promptly deliver such instrument to the Agent, endorsed by the Borrower to the
Agent in a manner satisfactory in form and substance to the Agent. Regardless of
the form of presentment, demand, notice of protest with respect thereto, the
Borrower shall remain liable thereon until such instrument is paid in full.
(d) Notice of Claims. The Borrower shall notify the Agent
promptly of all disputes and claims in excess of $1,000,000 with any Obligor,
and agrees to settle, contest, or adjust such dispute or claim at no expense to
the Agent or any Lender. No discount, credit or allowance shall be granted to
any such Obligor without the Agent's prior written consent, which consent shall
not unreasonably be withheld or delayed except for discounts, credits and
allowances made or given in the ordinary course of the Borrower's business when
no Event of Default exists hereunder. At the time each Borrowing Base
Certificate is provided and at such other times as the Agent may require during
the continuance of an Event of Default, the Borrower shall send the Agent a copy
of each credit memorandum in excess of $1,000,000 as soon as issued. The Agent
may, and at the direction of the Majority Lenders shall, at all times when an
Event of Default exists hereunder, settle or adjust disputes and claims directly
with Obligors for amounts and upon terms which the Agent or the Majority
Lenders, as applicable, shall consider advisable and, in all cases, the Agent
will credit the Borrower's Loan Account with only the net amounts received by
the Agent in payment of any Receivables.
Section 6.9 Collection of Receivables; Payments.
(a) Borrower's Collection. Collection of all Receivables and
other Collateral shall be received and deposited into a Payment Account subject
to the terms and conditions of the Servicing Agreement. The Borrower and the
Servicer shall establish a lock-box service for collections of Receivables at a
bank reasonably acceptable to the Agent and pursuant to documentation reasonably
satisfactory to the Agent and the terms and conditions of the Servicing
Agreement. All Obligors shall be instructed to make all payments directly to the
address established for such service. The Purchase Agreements and the Servicing
Agreement shall
45
53
provide that if, notwithstanding such instructions, the Originator or the
Borrower receives any proceeds of Receivables, it shall receive such payments as
the Agent's trustee, and shall immediately deliver such payments to the Agent in
their original form duly endorsed in blank or deposit them into a Payment
Account, as the Agent may direct. All collections received in any such lock-box
or Payment Account or directly by the Borrower, any Originator or the Agent, and
all funds in any Payment Account or other account to which such collections are
deposited shall be subject to the Agent's sole control.
(b) Borrower's Loan Account. All payments, including
immediately available funds received by the Agent at a bank designated by it,
received by the Agent on account of Receivables or as proceeds of other
Collateral will be the Agent's sole property for its benefit and the benefit of
the Lenders and will be credited when received by the Agent in good funds to the
Borrower's Loan Account (conditional upon final collection).
Section 6.10 Documents, Instruments, and Chattel Paper.
The Borrower represents and warrants to the Agent and the Lenders that
(a) all documents, instruments, and chattel paper describing, evidencing, or
constituting Collateral, and all signatures and endorsements thereon, are and
will be complete, valid, and genuine, and (b) all goods evidenced by such
documents, instruments, and chattel paper are and will be owned free and clear
of all Liens other than Agent's Liens.
Section 6.11 Right to Cure.
The Agent may, in its discretion, and shall, at the direction of the
Majority Lenders, pay any amount or do any act required of the Borrower
hereunder or under any other Loan Document in order to preserve, protect,
maintain or enforce the Obligations, the Collateral or the Agent's Liens
therein, and which the Borrower fails to pay or do, including, without
limitation, payment of any judgment against the Borrower, any insurance premium,
any warehouse charge, any finishing or processing charge, any landlord's claim,
and any other Lien upon or with respect to the Collateral, unless no Event of
Default exists and payment of any such amount is being contested by the Borrower
and if reserves in accordance with GAAP have been set aside on the books of
Borrower. All payments that the Agent makes under this Section 6.11 and all
out-of-pocket costs and expenses that the Agent pays or incurs in connection
with any action taken by it hereunder shall be charged to the Borrower's Loan
Account as a Revolving Loan. Any payment made or other action taken by the Agent
under this Section 6.11 shall be without prejudice to any right to assert an
Event of Default hereunder and to proceed thereafter as herein provided.
Section 6.12 Power of Attorney.
The Borrower hereby appoints the Agent and the Agent's designee as the
Borrower's attorney, with power upon the occurrence and during the continuation
of an Event of Default: (a) to endorse the Borrower's name on any checks, notes,
acceptances, money orders, or other forms of payment or security that come into
the Agent's or any Lender's possession; (b) to sign the Borrower's name on any
invoice, ▇▇▇▇ of lading, warehouse receipt or other document of title relating
to any Collateral, on drafts against customers, on assignments of Receivables,
on notices of assignment, financing statements and other public records and to
file any such financing statements by electronic means with or without a
signature as authorized or required by applicable law or filing procedure; (c)
to notify the post office authorities to change the address
46
54
for delivery of the Borrower's mail to an address designated by the Agent and to
receive, open and dispose of all mail addressed to the Borrower; (d) to send
requests for verification of Receivables to customers or Obligors; and (e) to do
all things necessary to carry out this Agreement. The Borrower ratifies and
approves all acts of such attorney. None of the Lenders or the Agent nor their
attorneys will be liable for any acts or omissions or for any error of judgment
or mistake of fact or law, except to the extent any such acts constitute gross
negligence or willful or wanton misconduct. This power, being coupled with an
interest, is irrevocable until this Agreement has been terminated and the
Obligations have been fully satisfied.
Section 6.13 The Agent's and Lenders' Rights, Duties and Liabilities.
The Borrower assumes all responsibility and liability arising from or
relating to the use, sale or other disposition of the Collateral. The
Obligations shall not be affected by any failure of the Agent or any Lender to
take any steps to perfect the Agent's Liens or to collect or realize upon the
Collateral, nor shall loss of or damage to the Collateral release the Borrower
from any of the Obligations. Following the occurrence and continuation of an
Event of Default, the Agent may (but shall not be required to), and at the
direction of the Majority Lenders shall, without notice to or consent from the
Borrower, ▇▇▇ upon or otherwise collect, extend the time for payment of, modify
or amend the terms of, compromise or settle for cash, credit, or otherwise upon
any terms, grant other indulgences, extensions, renewals, compositions, or
releases, and take or omit to take any other action with respect to the
Collateral, any security therefor, any agreement relating thereto, any insurance
applicable thereto, or any Person liable directly or indirectly in connection
with any of the foregoing, without discharging or otherwise affecting the
liability of the Borrower for the Obligations or under this Agreement or any
other agreement now or hereafter existing between the Agent and/or any Lender
and the Borrower.
ARTICLE VII
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
Section 7.1 Books and Records.
The Borrower shall keep complete and accurate books and records of its
transactions in accordance with good accounting practices on the basis of GAAP.
The Borrower shall maintain at all times books and records pertaining to the
Collateral in such detail, form and scope as the Agent or any Lender shall
reasonably require, including, but not limited to, records of (a) all payments
received and all credits and extensions granted with respect to the Receivables;
and (b) all other dealings affecting the Collateral.
Section 7.2 Financial Information.
The Borrower will furnish, or cause to be furnished, to the Agent, in
sufficient copies for distribution by the Agent to each Lender, the following:
(a) Annual Financial Statements of Borrower. As soon as
available, and in any event within one hundred and fifty (150) days after the
close of each fiscal year of the Borrower, a balance sheet of the Borrower, as
of the end of such fiscal year, setting forth in comparative form figures for
the preceding fiscal year, all such financial information described above to be
in reasonable form and detail and audited by independent certified public
47
55
accountants of recognized national standing reasonably acceptable to the Agent
and whose opinion shall be to the effect that such financial statements have
been prepared in accordance with GAAP (except for changes with which such
accountants concur) and shall not be limited as to the scope of the audit or
qualified in any manner.
(b) Annual Financial Statements of FTL and FTL Cayman. As soon
as available, and in any event within one hundred and twenty (120) days after
the close of each fiscal year of FTL, a consolidated balance sheet and income
statement of FTL Cayman, FTL and its Subsidiaries, as of the end of such fiscal
year, together with related consolidated statements of operations and of cash
flows for such fiscal year, setting forth in comparative form consolidated
figures for the preceding fiscal year, all such consolidated financial
information described above to be in reasonable form and detail and audited by
independent certified public accountants of recognized national standing
reasonably acceptable to the Agent and whose opinion shall be to the effect that
such financial statements have been prepared in accordance with GAAP (except for
changes with which such accountants concur) and shall not be limited as to the
scope of the audit or qualified in any manner. All consolidated financial
statements of FTL and/or FTL Cayman which include the ownership or financial
results of the Borrower will contain notes stating that the Borrower is a
separate corporate entity with creditors who have received ownership and
security interests in the Borrower's assets.
(c) Monthly Financial Statements of FTL and FTL Cayman. As
soon as available, and in any event within thirty (30) days after the end of
each month or within such earlier period provided in FTL Senior Credit
Agreement, a consolidated balance sheet and income statement of FTL Cayman, FTL
and its Subsidiaries, as of the end of such month, together with related
consolidated statements of operations and of cash flows for such month in each
case setting forth in comparative form consolidated figures for the
corresponding period of the preceding fiscal year (except for the consolidated
balance sheet, which will be compared to the consolidated balance sheet as of
the end of the immediately preceding fiscal year), all such financial
information described above to be in reasonable form and detail and reasonably
acceptable to the Agent, and accompanied by a certificate of a Responsible
Officer of FTL to the effect that such monthly financial statements fairly
present in all material respects the financial condition of FTL Cayman, FTL and
its Subsidiaries and have been prepared in accordance with GAAP, subject to
changes resulting from audit and normal year-end audit adjustments.
(d) Annual Projections and Other Financial Information of FTL.
As soon as available but in no event later than thirty (30) days after the
beginning of each fiscal year, annual projections of FTL Cayman's and FTL's
anticipated financial performance in the current year. In addition FTL shall
furnish to the Agent and the Lenders promptly, such additional information,
reports or statements regarding FTL Cayman, FTL and its Subsidiaries, including,
but not limited to the Originators, as the Agent and/or any of the Lenders may
from time to time reasonably request.
(e) Officer's Certificate. At the time of delivery of the
financial statements provided for in Section 7.2(a) (Annual Financial Statements
of Borrower) and in Section 7.2(c) (Monthly Financial Statements of FTL and FTL
Cayman), a certificate of a Responsible Officer of the Borrower substantially in
the form of Schedule 7.2, (i) demonstrating compliance with any terms of this
Agreement as requested by the Agent and (ii) stating that no Default or Event of
48
56
Default exists, or if any Default or Event of Default does exist, specifying the
nature and extent thereof and what action the Borrower proposes to take with
respect thereto.
(f) Certificate of Accountant. Within the period for delivery
of the annual financial statements provided in Section 7.2(a) (Annual Financial
Statements of Borrower) and Section 7.2(b) (Annual Financial Statements of FTL),
a certificate of the accountants conducting the annual audit stating that they
have reviewed this Agreement or FTL Senior Credit Agreement, as applicable, and
stating further whether, in the course of their audit, they have (based on the
financial statements prepared in accordance with then existing GAAP) become
aware of any Default or Event of Default and, if any such Default or Event of
Default exists, specifying the nature and extent thereof.
(g) Reports. Promptly upon or at least within fifteen (15)
Business Days after transmission or receipt thereof, copies of any filings and
registrations with, and reports to or from, the Securities and Exchange
Commission, or any successor agency, and copies of all financial statements,
proxy statements, notices and reports that FTL or any of its Subsidiaries shall
send to its shareholders generally or to a holder of public Debt of FTL or any
of its Subsidiaries in its capacity as such a holder.
(h) Notices. Upon the Borrower obtaining knowledge thereof,
the Borrower will give written notice to the Agent immediately of (i) the
occurrence of an event or condition consisting of a Default or Event of Default,
specifying the nature and existence thereof and what action the Borrower
proposes to take with respect thereto, and (ii) the occurrence of any of the
following with respect to the Borrower, FTL or any of FTL's Subsidiaries (A) the
pendency or commencement of any litigation, arbitral or governmental proceeding
against the Borrower, FTL or any of FTL's Subsidiaries which if adversely
determined would have or would be reasonably expected to have a Material Adverse
Effect, or (B) the institution of any proceedings against the Borrower, FTL or
any of FTL's Subsidiaries with respect to, or the receipt of notice by such
Person of potential liability or responsibility for, violation, or alleged
violation, of any Laws, the violation of which would have or would be reasonably
expected to have a Material Adverse Effect.
(i) ERISA. Upon any of the Borrower, FTL or any ERISA
Affiliate obtaining knowledge thereof, the Borrower will give written notice to
the Agent and each of the Lenders promptly (and in any event within five (5)
Business Days) of: (i) any event or condition, including, but not limited to,
any Reportable Event, that constitutes, or would be reasonably expected to lead
to, a Termination Event; (ii) with respect to any Multi-employer Plan, the
receipt of notice as prescribed in ERISA or otherwise of any withdrawal
liability assessed against the Borrower, FTL or any of FTL's Subsidiaries or
ERISA Affiliates, or of a determination that any Multi-employer Plan is in
reorganization or insolvent (both within the meaning of Title IV of ERISA);
(iii) the failure to make full payment on or before the due date (including
extensions) thereof of all amounts which the Borrower, FTL or any of FTL's
Subsidiaries or ERISA Affiliates is required to contribute to each Plan pursuant
to its terms and as required to meet the minimum funding standard set forth in
ERISA and the Code with respect thereto; or (iv) any change in the funding
status of any Plan that would be reasonably expected to have a Material Adverse
Effect; together with a description of any such event or condition or a copy of
any such notice and a statement by a Responsible Officer of the Borrower briefly
setting forth the details
49
57
regarding such event, condition, or notice, and the action, if any, which has
been or is being taken or is proposed to be taken by the Borrower or FTL with
respect thereto. Promptly upon request, the Borrower shall furnish the Agent and
each of the Lenders with such additional information concerning any Plan as may
be reasonably requested, including, but not limited to, copies of each annual
report/return (Form 5500 series), as well as all schedules and attachments
thereto required to be filed with the Department of Labor and/or the Internal
Revenue Service pursuant to ERISA and the Code, respectively, for each "plan
year" (within the meaning of Section 3(39) of ERISA).
(j) Fiscal Year 2000 Business Plan and Certain Other
Information. (i) Immediately upon completion thereof by FTL and its financial
consultants, and in any event no later than November 15, 1999, the comprehensive
business plan for FTL Cayman and its subsidiaries for the fiscal year beginning
in January, 2000, in form and substance reasonably acceptable to the Lenders,
(ii) with respect to the month ending December 31, 1999, a forecast for FTL
Cayman and its subsidiaries of the financial information required to be
furnished under Section 7.2(c) for such month, (iii) by 5:00 p.m. each Wednesday
of each week for FTL Cayman and its subsidiaries (A) an actual cash flow
statement for the prior week and (B) cash flow projections for the next
succeeding thirteen (13) weeks, and (iv) immediately upon receipt thereof, but
in any event no later than November 15, 1999, the comprehensive audit of the
consolidated inventory of the "Credit Parties" (as that term is defined in the
FTL Senior Credit Agreement) and their Subsidiaries prepared by FTL as of August
28, 1999. The Borrower confirms its obligation to furnish information required
under Section 7.2(c) no later than the time such information is made available
to under the FTL Senior Credit Agreement.
(k) Other Information. With reasonable promptness upon any
such request, such other information regarding the business, properties or
financial condition of the Borrower, FTL, FTL's Subsidiaries and FTL Cayman as
the Agent may reasonably request.
Section 7.3 Certain Notices
The Borrower shall notify the Agent and the Lenders, in writing of the
following matters at the following times:
(a) Default or Event of Default. Immediately after becoming
aware of any Default or Event of Default.
(b) FTL Senior Credit Agreement. Without implying any
limitation on the provisions of subsection (b) above, immediately after becoming
aware (by receipt of notice or otherwise) of any "Default" or "Event of Default"
(as those terms are defined in the FTL Senior Credit Agreement).
(c) Other Events. Immediately after becoming aware of any of
the following if the same would reasonably be expected to have a Material
Adverse Effect: (a) a change in the property, business, operations, or condition
(financial or otherwise) of the Borrower, FTL and its Subsidiaries, taken as a
whole, any Originator or the Servicer; (b) any pending or threatened action,
suit, proceeding, or counterclaim by any Person, or any pending or threatened
investigation by a Governmental Authority and (c) any violation of any law,
statute, regulation, or ordinance of a Governmental Authority.
50
58
ARTICLE VIII
GENERAL WARRANTIES AND REPRESENTATIONS
The Borrower warrants and represents to the Agent and the Lenders that
except as hereafter disclosed to and accepted by the Agent and the Majority
Lenders in writing:
Section 8.1 Authorization, Validity, and Enforceability of this
Agreement and the Loan Documents.
The Borrower has the corporate power and authority to execute, deliver
and perform this Agreement and the other Loan Documents, to incur the
Obligations, and to grant to the Agent Liens upon and security interests in the
Collateral. The Borrower has taken all necessary corporate action (including
without limitation, obtaining approval of its stockholders if necessary) to
authorize its execution, delivery, and performance of this Agreement and the
other Loan Documents to which it is a party. This Agreement and the other Loan
Documents have been duly executed and delivered by the Borrower, and constitute
the legal, valid and binding obligations of the Borrower, enforceable against it
in accordance with their respective terms without defense, setoff or
counterclaim except as such enforceability may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and except as
such enforceability may be limited by principals of equity generally, whether a
suit is brought at law or in equity. The Borrower's execution, delivery, and
performance of this Agreement and the other Loan Documents do not and will not
conflict with, or constitute a violation or breach of, or constitute a default
under, or result in the creation or imposition of any Lien upon the property of
the Borrower by reason of the terms of (a) any contract, mortgage, Lien, lease,
agreement, indenture, or instrument to which the Borrower is a party or which is
binding upon it, (b) any Requirement of Law applicable to the Borrower, or (c)
the certificate or articles of incorporation or by-laws of the Borrower.
Section 8.2 Validity and Priority of Security Interest.
The provisions of this Agreement and the other Loan Documents create
legal and valid Liens on all the Collateral in favor of the Agent, for the
ratable benefit of the Agent and the Lenders, and such Liens constitute
perfected and continuing Liens on all the Collateral, having priority over all
other Liens on the Collateral, securing all the Obligations, and enforceable
against the Borrower and all third parties except as such enforceability may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and except as such enforceability may be limited by principals of
equity generally, whether a suit is brought at law or in equity.
Section 8.3 Organization and Qualification.
The Borrower (a) is duly incorporated and organized and validly
existing in good standing under the laws of the state of its incorporation, (b)
is qualified to do business as a foreign corporation and is in good standing in
the jurisdictions set forth on Schedule 8.3 which are the only jurisdictions in
which qualification is necessary in order for it to conduct its business; (c)
has all requisite power and authority to conduct its business and to own its
property and (d) is a duly formed and validly existing Special Purpose Entity.
51
59
Section 8.4 Corporate Name; Prior Transactions.
The Borrower has not been known by or used any other corporate or
fictitious name, or been a party to any Merger, 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.
Section 8.5 Subsidiaries and Affiliates.
The Borrower has no Subsidiaries. Schedule 8.5 is a correct and
complete list of the name and relationship to the Borrower of each and all of
the Borrower's Affiliates.
Section 8.6 Financial Statements.
The Borrower has delivered to the Agent and the Lenders the audited
balance sheet for the Borrower as of December 31, 1998, for the Fiscal Year then
ended, accompanied by the report thereon of the Borrower's independent certified
public accountants, Ernst & Young LLP. The Borrower has also delivered to the
Agent the unaudited, internal financial statements dated August 31, 1999 of the
Borrower, FTL and FTL's Subsidiaries. Such financial statements are attached
hereto as EXHIBIT B. All such financial statements have been prepared in
accordance with GAAP and present accurately and fairly in all material respects
the financial position of the Borrower, FTL and FTL's Subsidiaries as at the
dates thereof and their results of operations for the periods then ended.
Section 8.7 Solvency.
The Borrower is Solvent prior to and after giving effect to the making
of the Revolving Loans to be made on the Closing Date, and shall remain Solvent
during the term of this Agreement.
Section 8.8 Debt.
After giving effect to the making of the Revolving Loans to be made on
the Closing Date, the Borrower has no Debt, except (a) the Obligations, and (b)
Debt described on Schedule 8.8.
Section 8.9 Distributions.
Since January 2, 1999, no Distribution has been declared, paid, or made
upon or in respect of any capital stock or other securities of the Borrower.
Section 8.10 Title to Property.
The Borrower has good, indefeasible, and merchantable title to all of
its property (including, without limitation, the assets reflected on the
Financial Statements delivered to the Agent and the Lenders and attached hereto
as EXHIBIT B, except as disposed of in the ordinary course of business since the
date thereof), free of all Liens except the Agent's Liens.
Section 8.11 Trade Names and Terms of Sale.
All trade names or styles under which the Borrower conducts its
business or to which instruments in payment of Receivables may be made payable,
are listed on Schedule 8.11.
52
60
Section 8.12 Litigation.
Except as set forth on Schedule 8.12, there is no pending or (to the
best of the Borrower's knowledge) threatened, action, suit, proceeding, or
counterclaim by any Person, or investigation by any Governmental Authority, or
any basis for any of the foregoing, against or involving the Borrower, FTL
and/or any Originator which would reasonably be expected to cause a Material
Adverse Effect.
Section 8.13 Restrictive Agreements.
The Borrower is not a party to any contract or agreement, or subject to
any charter or other corporate restriction, which affects its ability to
execute, deliver, and perform the Loan Documents and repay the Obligations or
which materially and adversely affects or, insofar as the Borrower can
reasonably foresee, would reasonably be expected to materially and adversely
affect, the property, business, operations, or condition (financial or
otherwise) of the Borrower, or would in any respect cause a Material Adverse
Effect.
Section 8.14 No Violation of Law.
The Borrower is not in violation of any law, statute, regulation,
ordinance, judgment, order, decree or other Laws applicable to it which
violation would reasonably be expected to have a Material Adverse Effect.
Section 8.15 No Default.
The Borrower is not in default with respect to any note, indenture,
loan agreement, mortgage, lease, deed, or other agreement to which the Borrower
is a party or by which it is bound, which default would reasonably be expected
to have a Material Adverse Effect.
Section 8.16 ERISA Compliance.
Except as specifically disclosed in Schedule 8.16:
(a) Compliance. Each Plan is in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law. Each Plan which is intended to qualify under Section
401(a) of the Code has received a favorable determination letter from the IRS
and to the best knowledge of the Borrower, nothing has occurred that would cause
the loss of such qualification. The Borrower and each ERISA Affiliate has made
all required contributions to any Plan subject to Section 412 of the Code, and
no application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) No Pending Claims. There are no pending or, to the
best knowledge of Borrower, threatened claims, actions or lawsuits, or action by
any Governmental Authority, with respect to any Plan which has resulted or would
reasonably be expected to result in a Material Adverse Effect. There has been no
prohibited transaction or violation of the fiduciary responsibility rules with
respect to any Plan which has resulted or would reasonably be expected to result
in a Material Adverse Effect.
53
61
(c) No ERISA Event or Liabilities. (i) No ERISA Event has
occurred or is reasonably expected to occur; (ii) no Pension Plan has any
Unfunded Pension Liability; (iii) neither the Borrower nor any ERISA Affiliate
has incurred, or reasonably expects to incur, any liability under Title IV of
ERISA with respect to any Pension Plan (other than premiums due and not
delinquent under Section 4007 of ERISA); (iv) neither the Borrower nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability (and no
event has occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Section 4201 or 4243 of ERISA with respect
to a Multi-employer Plan; and (v) neither the Borrower nor any ERISA Affiliate
has engaged in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA.
Section 8.17 Taxes.
The Borrower has filed all federal and other tax returns and reports
required to be filed, and has paid all federal and other taxes, assessments,
fees and other governmental charges levied or imposed upon it or its properties,
income or assets otherwise due and payable except (i) any such returns which are
subject to valid extensions or (ii) with respect to any such taxes assessments,
fees or other governmental charges, the payment of which is being contested by
the Borrower in good faith and for which adequate reserves have been set aside
on the books of Borrower in accordance with GAAP.
Section 8.18 Regulated Entities.
Neither the Borrower nor any Person controlling the Borrower, is an
"Investment Company" within the meaning of the Investment Company Act of 1940.
The Borrower is not subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, any
state public utilities code or law, or any other federal or state statute or
regulation limiting its ability to incur indebtedness.
Section 8.19 Use of Proceeds; Margin Regulations.
The proceeds of the Loans are to be used solely to purchase
Receivables; provided, however, initially, the proceeds will be advanced to
terminate, replace and refund the existing facility that is being provided to
the Borrower by ▇▇▇▇▇▇ Capital Corporation, and Societe Generale, to purchase
receivables from some of the Originators. The Borrower is not engaged in the
business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock.
Section 8.20 No Material Adverse Change.
No material adverse change has occurred in the business, operations, or
conditions (financial or otherwise) of the Borrower, FTL and FTL's Subsidiaries
taken as a whole since the date of the Financial Statements delivered to the
Agent and attached hereto as EXHIBIT B. No material adverse change has occurred
in the Borrower's or FTL's ability to operate in accordance with the financial
projections furnished to the Agent or to comply with the covenants and
agreements hereof.
54
62
Section 8.21 Year 2000 Assessment.
On the basis of a comprehensive review and assessment undertaken by
Borrower of Borrower's computer applications and inquiry made of Borrower's
material suppliers, vendors and customers Borrower reasonably believes that the
"Year 2000 problem" (that is, the risk that computer applications used by any
person may be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999) will not
result in a material adverse change in the operations, business, properties, or
condition (financial or otherwise) of the Borrower.
Section 8.22 Full Disclosure.
None of the representations or warranties made by the Borrower in the
Loan Documents as of the date such representations and warranties are made or
deemed made, and none of the statements contained in any exhibit, report,
statement or certificate furnished by or on behalf of the Borrower in connection
with the Loan Documents (including the offering and disclosure materials
delivered by or on behalf of the Borrower to the Lenders prior to the Closing
Date), contains any untrue statement of a material fact or omits any material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they are made, not misleading
as of the time when made or delivered.
Section 8.23 Material Agreements.
Schedule 8.23 hereto sets forth all material agreements and contracts
to which the Borrower is a party or is bound as of the date hereof.
Section 8.24 Bank Accounts.
Schedule 8.24 contains a complete and accurate list of all bank
accounts maintained by the Borrower with any bank or other financial
institution.
Section 8.25 Governmental Authorization.
No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority or other Person is
necessary or required in connection with the execution, delivery or performance
by, or enforcement against, the Borrower of this Agreement or any other Loan
Document.
Section 8.26 FTL Senior Credit Agreement
The Sixth Amendment to the FTL Senior Credit Agreement is in full force
and effect and there exists no "Default" or "Event of Default" (as those terms
are defined in the FTL Senior Credit Agreement).
ARTICLE IX
AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower covenants to the Agent and each Lender that, so long as
any of the Obligations remain outstanding or this Agreement is in effect:
55
63
Section 9.1 Payment of Taxes and Other Indebtedness.
The Borrower will pay, settle or discharge (a) all taxes, assessments
and governmental charges or levies imposed upon it, or upon its income or
profits, or upon any of its properties, before they shall become delinquent, (b)
all lawful claims (including claims for labor, materials and supplies) which, if
unpaid, would be reasonably expected to give rise to a Lien upon any of its
properties, and (c) all of its other Debt as it shall become due; provided,
however, that the Borrower shall not be required to pay any such tax,
assessment, charge, levy, claim or Debt that is being contested in good faith by
appropriate proceedings and as to which adequate reserves therefor have been
established in accordance with GAAP, unless the failure to make any such payment
(i) would give rise to an immediate right to foreclose or collect on a Lien
securing such amounts or (ii) would have or would be reasonably expected to have
a Material Adverse Effect.
Section 9.2 Preservation of Existence and Franchises.
The Borrower will do all things necessary to preserve and keep in full
force and effect its existence, rights, franchises and authority.
Section 9.3 Separate Legal Existence.
The Borrower shall maintain its separate legal entity as a Special
Purpose Entity and make it apparent to third Persons that the Borrower is an
entity with assets and liabilities distinct from those of each of the
Originators, the Servicer and any Affiliate thereof, and is not a division of
any Originator, the Servicer or any other Person. Without limiting the
generality of the foregoing, the Borrower shall take such actions as shall be
required in order that the Borrower's purpose is limited solely to purchasing
the Receivables, granting security interests in the Receivables, entering into
the Financing Documents and the transactions contemplated thereby and engaging
in incidental activities in connection therewith.
Section 9.4 Compliance with Law.
The Borrower will comply with all material laws, rules, regulations and
orders, and all applicable material Laws imposed by all Governmental
Authorities, applicable to it and its property, except to the extent that any
non-compliance would not have or be reasonably expected to have a Material
Adverse Effect.
Section 9.5 Maintenance of Property.
The Borrower will maintain and preserve its properties and equipment in
good repair, working order and condition, normal wear and tear excepted, except
to the extent any of such property no longer is necessary to the operation of
the business of the Borrower, and will make, or cause to be made, in such
properties and equipment from time to time all repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto as may be needed or
proper, to the extent and in the manner customary for companies in similar
businesses.
Section 9.6 Insurance.
The Borrower will at all times maintain in full force and effect
insurance (including worker's compensation insurance, liability insurance,
casualty insurance and business interruption insurance) in such amounts,
covering such risks and liabilities and with such deductibles or self-insurance
retentions as are in accordance with normal industry practice.
56
64
Section 9.7 Compliance with ERISA.
The Borrower shall, and shall cause each of its ERISA Affiliates to:
(a) maintain each Plan in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law; (b)
cause each Plan which is qualified under Section 401(a) of the Code to maintain
such qualification; (c) make all required contributions to any Plan subject to
Section 412 of the Code; (d) not engage in a prohibited transaction or violation
of the fiduciary responsibility rules with respect to any Plan; and (e) not
engage in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA.
Section 9.8 Merger.
The Borrower will not enter into any transaction of Merger or
liquidate, wind up or dissolve itself.
Section 9.9 Restricted Payments.
The Borrower will not, directly or indirectly, do the following
(collectively, "Restricted Payments"): (a) declare or pay any dividends or make
any other Distribution upon any shares of its capital stock of any class or (b)
purchase, redeem or otherwise acquire or retire or make any provisions for
redemption, acquisition or retirement of any shares of its capital stock of any
class or any warrants or options to purchase any such shares.
Section 9.10 Transactions Affecting Collateral or Obligations.
The Borrower shall not enter into any transaction that would be
reasonably expected to have a Material Adverse Effect.
Section 9.11 Guaranties.
The Borrower shall not make, issue, or become liable on any Guaranty.
Section 9.12 Debt.
The Borrower shall not incur or maintain any Debt, other than: (a) the
Obligations; (b) trade payables and contractual obligations to suppliers and
customers incurred in the ordinary course of business; (c) the FTL Note; and (d)
other Debt existing on the Closing Date and reflected in the Financial
Statements attached hereto as EXHIBIT B.
Section 9.13 Investments.
Except as otherwise provided in this Agreement, the Borrower will not
(a) make, assume, acquire or continue to hold any investment in any real or
personal property, other than Receivables and Related Rights of an Originator
and other than Permitted Investments, whether by stock purchase, capital
contribution, acquisition of indebtedness of such Person or otherwise
(including, without limitation, investments in any joint venture or
partnership), (b) guaranty or otherwise become contingently liable for the Debt
or obligations of any Person, or (c) make any loans or advances, or otherwise
extend credit to any Person.
57
65
Section 9.14 Prepayment.
The Borrower shall not voluntarily prepay any Debt, except the
Obligations in accordance with the terms of this Agreement.
Section 9.15 Transactions with Affiliates.
The Borrower will not enter into any transaction or series of
transactions, whether or not in the ordinary course of business, with any
officer, director, shareholder or Affiliate other than transactions (a) listed
on Schedule 9.15, and any renewals, replacements, refinancings or extension
thereof, (b) on terms and conditions substantially as favorable as would be
obtainable in a comparable arm's-length transaction with a Person other than an
officer, director, shareholder or Affiliate or, if such transaction is not one
which by its nature could be obtained from such Person, is on fair and
reasonable terms, (c) in the ordinary course of business or, if not in the
ordinary course of business, that are set forth in writing and the board of
directors of FTL, has determined in good faith that such business or transaction
or series of transactions meets the applicable criteria set forth in clause (b)
preceding, and (d) under the Transaction Documents, provided that during the
continuance of an Event of Default, the Borrower shall make no payment under the
FTL Note and, if so directed by the Agent or the Majority Lenders, no other
payment to an Affiliate including, without limitation, those under the Servicing
Agreements.
Section 9.16 Investment Banking and Finder's Fees.
Except as provided in the Fee Letter, the Borrower shall not 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. The Borrower shall defend
and indemnify the Agent and the Lenders against and hold them harmless from all
claims of any Person that the Borrower is obligated to pay for any such fees,
and all costs and expenses (including without limitation, attorneys' fees)
incurred by the Agent and/or any Lender in connection therewith.
Section 9.17 Business Conducted.
The Borrower shall not alter the character of its business from that
described in the definition of "Special Purpose Entity."
Section 9.18 Liens.
The Borrower shall not create, incur, assume, or permit to exist any
Lien with respect to any of its property or assets of any kind (whether real or
personal, tangible or intangible), whether now owned or after acquired, except
for the Agent's Liens.
Section 9.19 New Subsidiaries.
The Borrower shall not, directly or indirectly, organize, create,
acquire or permit to exist any Subsidiary.
Section 9.20 Fiscal Year.
The Borrower shall not change its Fiscal Year.
58
66
Section 9.21 Further Assurances.
The Borrower shall execute and deliver, or cause to be executed and
delivered, to the Agent and/or the Lenders such documents and agreements, and
shall take or cause to be taken such actions, as the Agent or any Lender may,
from time to time, reasonably request to carry out the terms and conditions of
this Agreement and the other Loan Documents.
Section 9.22 Minimum Eligible Receivables.
At all times the Eligible Receivables shall equal or exceed
$120,000,000; provided, however, that in the event an Originator sells certain
non-core assets that have been identified to the Agent prior to the date of this
Agreement, the Majority Lenders shall, after consultation with the Borrower,
establish a lower, appropriate level of Eligible Receivables.
Section 9.23 Transaction Documents.
The Borrower shall fully perform all of its obligations under each of
the Transaction Documents, and shall enforce all of its rights and remedies
thereunder, in each case, as it deems appropriate in its business judgment;
provided, however, that the Borrower shall not take any action or fail to take
any action with respect to its Transaction Documents which would cause the
termination of any of the Purchase and Contribution Agreements or the Servicing
Agreements. Without limiting the generality of the foregoing, the Borrower shall
take all action necessary or appropriate to permit, and shall not take any
action which would have would reasonably be expected to have a materially
adverse effect upon, the full enforcement of all indemnification rights under
its Transaction Documents. The Borrower shall not, without the Agent's and the
Majority Lenders' prior written consent, modify, amend, supplement, compromise,
satisfy, release, or discharge any of its Transaction Documents, any obligation
or security thereunder collateral securing the same, any Person liable directly
or indirectly with respect thereto, or any agreement relating to any of its
Transaction Documents or the collateral therefor. The Borrower shall notify the
Agent and the Lenders in writing, promptly after the Borrower becomes aware
thereof, of any event or fact which reasonably would be expected to give rise to
a claim by it for indemnification under any of its Transaction Documents, and
shall diligently pursue such right and report to the Agent on all further
developments with respect thereto. The Borrower shall remit directly to the
Agent for application to the Obligations in such order as the Majority Lenders
shall determine, all amounts received by the Borrower as indemnification or
otherwise pursuant to its Transaction Documents. If the Borrower shall fail
after the Agent's demand to pursue diligently any right under its Transaction
Documents, or if an Event of Default then exists, the Agent may, and at the
direction of the Majority Lenders shall, directly enforce such right in its own
or the Borrower's name and may enter into such settlements or other agreements
with respect thereto as the Agent or the Majority Lenders, as applicable, shall
determine. In any suit, proceeding or action brought by the Agent for the
benefit of the Lenders under any Assigned Contract for any sum owing thereunder
or to enforce any provision thereof, the Borrower shall indemnify and hold the
Agent and Lenders harmless from and against all expense, loss or damage suffered
by reason of any defense, setoff, counterclaims, recoupment, or reduction of
liability whatsoever of the obligor thereunder arising out of a breach by the
Borrower of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing from the Borrower to or in favor of
such obligor or its successors. All such obligations of the Borrower shall be
and remain enforceable only against the Borrower and
59
67
shall not be enforceable against the Agent or the Lenders. Notwithstanding any
provision hereof to the contrary, the Borrower shall at all times remain liable
to observe and perform all of its duties and obligations under its Transaction
Documents, and the Agent's or any Lender's exercise of any of their respective
rights with respect to the Collateral shall not release the Borrower from any of
such duties and obligations. Neither the Agent nor any Lender shall be obligated
to perform or fulfill any of the Borrower's duties or obligations under its
Transaction Documents or to make any payment thereunder, or to make any inquiry
as to the nature or sufficiency of any payment or property received by it
thereunder or the sufficiency of performance by any party thereunder, or to
present or file any claim, or to take any action to collect or enforce any
performance, any payment of any amounts, or any delivery of any property.
ARTICLE X
CONDITIONS OF LENDING
Section 10.1 Conditions Precedent to Making of Loans on the
Closing Date.
The obligation of the Lenders to make the initial Revolving Loans on
the Closing Date is subject to the following conditions precedent having been
satisfied in a manner satisfactory to the Agent and each Lender:
(a) Execution. This Agreement and the other Loan
Documents, including, but not limited to, the Loan Documents included on the
List of Closing Documents attached hereto as EXHIBIT C and made a part hereof,
have been executed by each party thereto and the Borrower shall have performed
and complied with all covenants, agreements and conditions contained herein and
the other Loan Documents which are required to be performed or complied with by
the Borrower before or on such Closing Date.
(b) Representations and Warranties. All representations
and warranties made hereunder and in the other Loan Documents shall be true and
correct as of the Closing Date as if made on such date, except that any such
representations and warranties which are deemed to be made as of a certain date
shall be true and correct as of such date.
(c) No Default. No Default or Event of Default shall
exist on the Closing Date, or would exist after giving effect to the Loans to be
made on such date.
(d) Consents, Licenses, Approvals, Etc. The Agent shall
have received copies of all consents, licenses and approvals, required in
connection with the execution, delivery, performance, validity and
enforceability of the Financing Documents and the Purchase and Contribution
Agreements, and such consents, licenses and approvals shall be in full force and
effect.
(e) Opinions. The Agent and the Lenders shall have
received such opinions of counsel for the Borrower as the Agent or any Lender
shall request, each such opinion to be in a form, scope, and substance
satisfactory to the Agent, the Lenders, and their respective counsel. The
opinions required hereunder shall include, but not be limited to, opinions from
Borrower's counsel that all Purchase and Contribution Agreements constitute a
true sale of the Receivables and Related Rights described therein and opinions
from Borrower's counsel that the Borrower is
60
68
a Special Purpose Entity. With respect to each Local Currency Originator, Agent
and the Lenders shall have received such opinions of counsel for the Borrower as
the Agent or any Lender shall request, each such opinion to be in a form, scope,
and substance satisfactory to the Agent, the Lenders, and their respective
counsel, and to cover the validity and binding transfer of the Receivables as
Assigned Local Currency Receivables, and other related matters addressed to the
Agent and the Lenders in form satisfactory to the Agent. The opinion of FTL's
in-house counsel regarding the absence of conflicting agreements shall be
supplemented on or before November 30, 1999 by a favorable opinion of ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇ regarding the absence of conflicting agreements, which opinion
shall be in form and substance satisfactory to the Agent and its counsel.
(f) Financing Statements and Termination Statements. The
Agent shall have received:
(i) acknowledgment copies of proper financing
statements, duly filed on or before the Closing Date under the UCC of
all jurisdictions that the Agent may deem necessary or desirable in
order to perfect the Agent's Lien; and
(ii) duly executed UCC-3 Termination Statements
and such other instruments, in form and substance satisfactory to the
Agent, as shall be necessary to terminate and satisfy all Liens on the
Property of the Borrower except the Agent's Liens.
(g) Payment of All Fees and Expenses. The Borrower shall
have paid all reasonable fees and expenses of the Agent and the Attorney Costs
incurred in connection with any of the Loan Documents and the transactions
contemplated thereby to the extent invoiced.
(h) Insurance. The Agent shall have received evidence, in
form, scope, and substance, reasonably satisfactory to the Agent, of all
insurance coverage as required by this Agreement.
(i) Due Diligence. The Agent and the Lenders shall have
had an opportunity, if they so choose, to examine the books of account and other
records and files of the Borrower and to make copies thereof, and to conduct a
pre-closing audit which shall include, without limitation, verification of
Receivables, and Availability, and the results of such examination and audit
shall have been reasonably satisfactory to the Agent and the Lenders in all
respects.
(j) Due Authorization. All proceedings taken in
connection with the execution of this Agreement, all other Loan Documents and
all documents and papers relating thereto shall be reasonably satisfactory in
form, scope, and substance to the Agent and the Lenders. Purchase and
Contribution Agreements. The Borrower shall have delivered to the Agent a copy
of each of the fully executed Purchase and Contribution Agreements in effect as
of the Closing Date, together with solvency certificates executed by the
applicable Originators, which Purchase and Contribution Agreements shall be in
all respects satisfactory to the Agent.
61
69
(l) Servicing Agreements. The Agent shall have received
evidence satisfactory to it that the obligations of the Servicer run to the
benefit of the Agent and the Agent can enforce the obligations of the Servicer
directly.
(m) FTL Senior Credit Agreement Acknowledgment. The Agent
shall have received evidence satisfactory to it that the agent and the lenders
under FTL Senior Credit Agreement have acknowledged and agreed that the Purchase
and Contribution Agreements and the security for the Obligations do not violate
FTL Senior Credit Agreement and that the assets purchased under the Purchase and
Contribution Agreement and the security for the Obligations are free and clear
of all liens and other interests of such lenders and agents.
(n) Borrower's Capitalization, Solvency, etc. The Agent
shall be satisfied that the Borrower is adequately capitalized, that the fair
saleable value of the Borrower's assets exceeds its liabilities on the Closing
Date and that the Borrower has sufficient working capital to pay its debts as
they become due.
(o) Year 2000 Risks. The Borrower shall have satisfied
the Agent that (a) each of the Borrower, FTL, the Servicer and the Originators
has taken and is taking all necessary and appropriate steps to ascertain the
extent of, quantify and successfully address the business and financial risks
facing such entity as a result of what is commonly referred to as the "Year 2000
problem" (i.e., the inability of certain computer applications to recognize
correctly and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999), including risks resulting from
the failure of key customers and suppliers to address successfully the Year 2000
problem, and (b) the material computer applications of the Borrower, FTL, the
Servicer and the Originators will on a timely basis adequately address the Year
2000 problem in all material respects.
(p) No Material Adverse Change in Markets. No material
adverse change or material disruption of conditions has occurred and is
continuing in the financial, banking or capital markets which the Agent and the
Syndication Agent, in their reasonable discretion, deem material in connection
with the syndication of the Commitments.
The acceptance by the Borrower of any Loans made on the Closing Date
shall be deemed to be a representation and warranty made by the Borrower to the
effect that all of the conditions precedent to the making of such Loans have
been satisfied, with the same effect as delivery to the Agent and the Lenders of
a certificate signed by a Responsible Officer of the Borrower, dated the Closing
Date, to such effect. Execution and delivery to the Agent by a Lender of a
counterpart of this Agreement shall be deemed confirmation by such Lender that
(i) all conditions precedent in this Section 10.1 have been fulfilled to the
satisfaction of such Lender and (ii) the decision of such Lender to execute and
deliver to the Agent an executed counterpart of this Agreement was made by such
Lender independently and without reliance on the Agent or any other Lender as to
the satisfaction of any condition precedent set forth in this Section 10.1.
Section 10.2 Conditions Precedent to Each Loan.
The obligation of the Lenders to make each advance under the Revolving
Loans on the Closing Date and thereafter shall be subject to the further
conditions precedent that on and as of the date of any such extension of credit:
62
70
(a) Representations and Warranties. The following
statements shall be true, and the acceptance by the Borrower of any extension of
credit shall be deemed to be a statement to the effect set forth in clauses (i)
and (ii), with the same effect as the delivery to the Agent and the Lenders of a
certificate signed by a Responsible Officer, dated the date of such extension of
credit, stating that:
(i) The representations and warranties contained
in this Agreement and the other Loan Documents are correct in all
material respects on and as of the date of such extension of credit as
though made on and as of such date, other than any such representation
or warranty which relates to a specified prior date and except to the
extent the Agent and the Lenders have been notified by the Borrower
that any representation or warranty is not correct and the Majority
Lenders have explicitly waived in writing compliance with such
representation or warranty; and
(ii) No event has occurred and is continuing, or
would result from such extension of credit, which constitutes a Default
or an Event of Default; and
(b) Availability. Without limiting Section 10.2(b), the
amount of the Availability shall be sufficient to make each such Revolving Loan
without exceeding the Availability, provided, however, that the foregoing
conditions precedent are not conditions to each Lender participating in or
reimbursing Bank of America for such Lenders' Pro Rata Share of any Non-Ratable
Loan Advance as provided in Section 2.2(h) (Non-Ratable Loans) or the Agent for
such Lenders' Pro Rata Share of any Agent Advance as provided in Section 2.2(i)
(Agent Advances).
ARTICLE XI
DEFAULT; REMEDIES
Section 11.1 Events of Default.
It shall constitute an event of default ("Event of Default") if any one
or more of the following shall occur for any reason:
(a) any failure to pay the principal of or interest on
any of the Obligations when due, whether upon demand or otherwise;
(b) any failure to pay any of the Obligations except as
set forth in (a) above within five (5) days of the date when due, whether upon
demand or otherwise;
(c) any representation or warranty made or deemed made by
the Borrower in this Agreement or by the Borrower in any of the other Loan
Documents, any Financial Statement, or any certificate furnished by the Borrower
at any time to the Agent or any Lender shall prove to be untrue in any material
respect as of the date on which made, deemed made, or furnished;
63
71
(d) any representation or warranty under any of the
Purchase and Contribution Agreements or any servicing agreement shall prove to
be untrue in any material respect as of the date on which made, deemed made, or
furnished;
(e) the failure of the Borrower to perform, observe or
comply with any covenant, condition or agreement contained in this Agreement,
and:
(i) only with respect to a failure under
subsections (a) through and including (e) only of Section 7.2 (Financial
Information), such failure continues uncured for a period of five (5) days and,
in the case a failure under subsection (b) such failure occurs more than twice
in any twelve (12) month period and in the case of a failure under subsection
(c) such failure occurs more than once in any twelve (12) month period, or
(ii) only with respect to a failure under:
(A) Section 7.1 (Books and Records),
(B) Section 9.1 (Payment of Taxes and
Other Indebtedness) with respect to clauses (a), (b)
and (c) only to the extent such failure when
aggregated with all such failures under Section 9.1
does not exceed $1,000,000 in the aggregate,
(C) Section 9.2 (Preservation of
Existence and Franchises), or
(D) Section 9.5 (Maintenance of
Property), or
(E) Section 9.7 (Compliance with ERISA),
if the Borrower after discovering any such failure under this
clause (ii), fails to diligently and continuously pursue the
cure of such failure or such failure continues uncured thirty
(30) days after discovery by a Responsible Officer of the
Borrower;
(f) any default shall occur in the observance or
performance of any of the covenants and agreements contained in this Agreement,
any other Loan Documents, or any other agreement entered into at any time to
which the Borrower and the Agent or any Lender are party in connection with the
transactions contemplated by this Agreement or any of the other Loan Documents,
or if any such agreement or document shall terminate (other than in accordance
with its terms or the terms hereof or with the written consent of the Agent and
the Majority Lenders) or become void or unenforceable, without the written
consent of the Agent and the Majority Lenders;
(g) default shall occur with respect to any Debt For
Borrowed Money (other than the Obligations) in an outstanding principal amount
which exceeds $1,000,000, or under any agreement or instrument under or pursuant
to which any such Debt For Borrowed Money may have been issued, created,
assumed, or guaranteed by the Borrower, and such default shall continue for more
than the period of grace, if any, therein specified, if the effect thereof (with
or without the giving of notice or further lapse of time or both) is to
accelerate, or to permit the
64
72
holders of any such Debt For Borrowed Money to accelerate, the maturity of any
such Debt For Borrowed Money; or any such Debt For Borrowed Money shall be
declared due and payable or be required to be prepaid (other than by a regularly
scheduled required prepayment) prior to the stated maturity thereof;
(h) the Borrower, FTL or any Originator shall suffer an
Event of Bankruptcy to exist;
(i) the Borrower shall file a certificate of dissolution
under applicable state law or shall be liquidated, dissolved or wound-up or
shall commence or have commenced against it any action or proceeding for
dissolution, winding-up or liquidation, or shall take any corporate action in
furtherance thereof;
(j) all or any material part of the property of the
Borrower shall be nationalized, expropriated or condemned, seized or otherwise
appropriated, or custody or control of such property or of the Borrower shall be
assumed by any Governmental Authority or any court of competent jurisdiction at
the instance of any Governmental Authority, except where contested in good faith
by proper proceedings diligently pursued where a stay of enforcement is in
effect;
(k) unless adequately insured in the opinion of the
Agent, the entry of a final judgment for the payment of money involving more
than $1,000,000 against the Borrower, and the failure by the Borrower to
discharge the same, or cause it to be discharged, within sixty (60) days from
the date of the order, decree or process under which or pursuant to which such
judgment was entered, or to secure a stay of execution pending appeal of such
judgment;
(l) any execution or attachment shall be levied against
the Collateral, or any part thereof, and such execution or attachment shall not
be set aside, discharged or stayed within sixty (60) days after the same shall
have been levied;
(m) any loss, theft, damage or destruction of any item
or items of Collateral or other property of the Borrower occurs which materially
and adversely affects the property, business, operation, prospects, or condition
of the Borrower and is not adequately covered by insurance;
(n) there occurs a Material Adverse Effect as to the
Borrower, FTL, any Subsidiary of FTL, or any Originator;
(o) there is filed against the Borrower 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 (i) is not dismissed
within one hundred twenty (120) days, and (ii) would reasonably be expected to
result in the confiscation or forfeiture of any material portion of the
Collateral;
(p) for any reason other than the failure of the Agent to
take any action available to it to maintain perfection of the Agent's Liens,
pursuant to the Loan Documents, any Loan Document ceases to be in full force and
effect or any Lien with respect to any material portion of the Collateral
intended to be secured thereby ceases to be, or is not, valid, perfected
65
73
and prior to all other Liens (other than the Agent's Liens) or is terminated,
revoked or declared void;
(q) (i) an ERISA Event shall occur with respect to a
Pension Plan or Multi-employer Plan which has resulted or would reasonably be
expected to result in liability of the Borrower under Title IV of ERISA to the
Pension Plan, Multi-employer Plan or the PBGC in an aggregate amount in excess
of $10,000,000; (ii) the aggregate amount of Unfunded Pension Liability among
all Pension Plans at any time exceeds $10,000,000; or (iii) the Borrower or any
ERISA Affiliate shall fail to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multi-employer Plan in an
aggregate amount in excess of $10,000,000;
(r) there occurs a Change of Control;
(s) a default or event of default (as defined in the
applicable documents) occurs under the terms of (i) FTL Senior Credit Agreement,
(ii) any evidence of Debt For Borrowed Money (other than the obligations under
FTL Senior Credit Agreement) in an outstanding principal amount which exceeds
$10,000,000 and (iii) any agreement or instrument under or pursuant to which any
such Debt For Borrowed Money may have been issued, created, assumed, or
guaranteed by FTL, and such default shall continue for more than the period of
grace, if any, therein specified, if the effect thereof (with or without the
giving of notice or further lapse of time or both) is to accelerate, or to
permit the holders of any such Debt For Borrowed Money to accelerate, the
maturity of any such Debt For Borrowed Money; or any such Debt For Borrowed
Money shall be declared due and payable or be required to be prepaid (other than
by a regularly scheduled required prepayment) prior to the stated maturity
thereof;
(t) one hundred percent (100%) of the issued and
outstanding stock of the Borrower shall cease to be owned by Union;
(u) the Borrower, in the opinion of the Agent, shall
cease to be a Special Purpose Entity;
(v) a default or event of default, as defined therein,
occurs under any Purchase and Contribution Agreements or the Servicing Agreement
or any sale under any of the Purchase and Contribution Agreements shall not be a
true sale;
(w) except in conformance with Section 9.23 (Transaction
Documents), any Transaction Documents terminate, are revoked, or are declared
void (or the Borrower or any Affiliates or any of their successors or assigns of
gives notice or makes an assertion to that effect).
Section 11.2 Remedies.
(a) Reduction; Limitation of Advances. If a Default or an
Event of Default exists, the Agent may, in its discretion, and shall, at the
direction of the Majority Lenders, do one or more of the following at any time
or times and in any order, without notice to or demand on the Borrower: (i)
reduce the Maximum Revolver Amount, or the advance rates against Eligible
Receivables used in computing the Availability, or reduce one or more of the
other elements
66
74
used in computing the Availability; and (ii) restrict the amount of or refuse to
make Revolving Loans. If an Event of Default exists, the Agent shall, at the
direction of the Majority Lenders, do one or more of the following, in addition
to the actions described in the preceding sentence, at any time or times and in
any order, without notice to or demand on the Borrower: (A) terminate the
Commitments and this Agreement; (B) declare any or all Obligations to be
immediately due and payable; provided, however, that upon the occurrence of any
Event of Default described in Section 11.1(h) or Section 11.1(i), the
Commitments shall automatically and immediately expire and all Obligations shall
automatically become immediately due and payable without notice or demand of any
kind; and (C) pursue its other rights and remedies under the Loan Documents and
applicable law.
(b) Collateral and Possession. If an Event of Default has
occurred and is continuing: (i) the Agent shall have for the benefit of the
Lenders, in addition to all other rights of the Agent and the Lenders, the
rights and remedies of a secured party under the UCC; (ii) the Agent may, at any
time, take possession of the Collateral and keep it on the Borrower's premises,
at no cost to the Agent or any Lender, or remove any part of it to such other
place or places as the Agent may desire, or the Borrower shall, upon the Agent's
demand, at the Borrower's cost, assemble the Collateral and make it available to
the Agent at a place reasonably convenient to the Agent; (iii) the Agent may, at
any time, choose the Servicer, and (iv) the Agent may sell and deliver any
Collateral at public or private sales, for cash, upon credit or otherwise, at
such prices and upon such terms as the Agent deems advisable, in its discretion
exercised in accordance with applicable laws, and may, if the Agent deems it
reasonable, postpone or adjourn any sale of the Collateral by an announcement at
the time and place of sale or of such postponed or adjourned sale without giving
a new notice of sale. Without in any way requiring notice to be given in the
following manner, the Borrower agrees that any notice by the Agent of sale,
disposition or other intended action hereunder or in connection herewith,
whether required by the UCC or otherwise, shall constitute reasonable notice to
the Borrower if such notice is mailed by registered or certified mail, return
receipt requested, postage prepaid, or is delivered personally against receipt,
at least five (5) Business Days prior to such action to the Borrower's address
specified in or pursuant to Section 15.7 (Notices). If any Collateral is sold on
terms other than payment in full at the time of sale, no credit shall be given
against the Obligations until the Agent or the Lenders receive payment, and if
the buyer defaults in payment, the Agent may resell the Collateral without
further notice to the Borrower. In the event the Agent seeks to take possession
of all or any portion of the Collateral by judicial process, the Borrower
irrevocably waives: (A) the posting of any bond, surety or security with respect
thereto which might otherwise be required; (B) any demand for possession prior
to the commencement of any suit or action to recover the Collateral; and (C) any
requirement that the Agent retain possession and not dispose of any Collateral
until after trial or final judgment. The Borrower agrees that the Agent has no
obligation to preserve rights to the Collateral or marshal any Collateral for
the benefit of any Person. The Agent is hereby granted a license or other right
to use, without charge, the Borrower's labels, patents, copyrights, name, trade
secrets, trade names, trademarks, and advertising matter, or any similar
property, in completing production of, advertising or selling any Collateral,
and the Borrower's rights under all licenses and all franchise agreements shall
inure to the Agent's benefit for such purpose. The proceeds of sale shall be
applied first to all expenses of sale, including attorneys' fees, and then to
the Obligations in whatever order the Agent elects. The Agent will return any
excess to the Borrower and the Borrower shall remain liable for any deficiency.
67
75
(c) Waiver by Borrower. If an Event of Default exists,
the Borrower hereby waives all rights to notice and hearing prior to the
exercise by the Agent of the Agent's rights to repossess the Collateral without
judicial process or to replevy, attach or levy upon the Collateral without
notice or hearing.
ARTICLE XII
TERM AND TERMINATION
Section 12.1 Term and Termination.
The term of this Agreement shall end on the Stated Termination Date.
The Agent upon direction from the Majority Lenders may terminate this Agreement
without notice during the continuation of an Event of Default. Upon the
effective date of termination of this Agreement for any reason whatsoever, all
Obligations (including, without limitation, all unpaid principal, accrued
interest and any early termination or prepayment fees or penalties) shall become
immediately due and payable. Notwithstanding the termination of this Agreement,
until all Obligations are indefeasibly paid and performed in full in cash, the
Borrower shall remain bound by the terms of this Agreement and shall not be
relieved of any of its Obligations hereunder, and the Agent and the Lenders
shall retain all their rights and remedies hereunder (including, without
limitation, the Agent's Liens in and all rights and remedies with respect to all
then existing and after-arising Collateral).
ARTICLE XIII
AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
Section 13.1 No Waivers; Cumulative Remedies.
No failure by the Agent or any Lender to exercise any right, remedy, or
option under this Agreement or any present or future supplement thereto, or in
any other agreement between or among the Borrower and the Agent and/or any
Lender, or delay by the Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by the Agent or any Lender will be effective
unless it is in writing, and then only to the extent specifically stated. No
waiver by the Agent or the Lenders on any occasion shall affect or diminish the
Agent's and each Lender's rights thereafter to require strict performance by the
Borrower of any provision of this Agreement. The Agent's and each Lender's
rights under this Agreement will be cumulative and not exclusive of any other
right or remedy which the Agent or any Lender may have.
Section 13.2 Amendments and Waivers.
No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent with respect to any departure by the Borrower
therefrom, shall be effective unless the same shall be in writing and signed by
the Majority Lenders (or by the Agent at the written request of the Majority
Lenders) and the Borrower and then any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no such waiver, amendment, or consent shall, unless in
writing and signed by all the Lenders and the Borrower and acknowledged by the
Agent, do any of the following:
68
76
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement or
any other Loan Document for any payment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document;
(c) reduce the principal of, or the rate of interest
specified herein on any Loan, or any fees or other amounts payable hereunder or
under any other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the Lenders
or any of them to take any action hereunder;
(e) increase any of the percentages set forth in the
definition of Borrowing Base;
(f) amend this Section or any provision of the Agreement
providing for consent or other action by all Lenders;
(g) release Collateral other than as permitted by Section
14.11 (Collateral Matters);
(h) change the definitions of "Majority Lenders" or
"Required Lenders";
(i) increase the Maximum Revolver Amount; and
provided further, that no amendment, waiver or consent shall, unless in writing
and signed by the Agent, affect the rights or duties of the Agent under this
Agreement or any other Loan Document.
Section 13.3 Assignments; Participations.
(a) Assignment. With the written consent of the Agent and
(only if no Event of Default then exists) the Borrower, which consent shall not
be unreasonably withheld or delayed, any Lender, may assign and delegate to one
or more assignees (provided that no written consent of the Agent shall be
required in connection with any assignment and delegation by a Lender to an
Affiliate of such Lender) (each an "Assignee") all, or any ratable part of all,
of the Loans, the Commitments and the other rights and obligations of such
Lender hereunder, in a minimum amount of $10,000,000 or if less the entire
amount of such Lender's Commitment; provided, however, that the Borrower and the
Agent may continue to deal solely and directly with such Lender in connection
with the interest so assigned to an Assignee until (i) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Borrower
and the Agent by such Lender and the Assignee; (ii) such Lender and its Assignee
shall have delivered to the Borrower and the Agent an Assignment and Acceptance
in the form of EXHIBIT G ("Assignment and Acceptance") together with any Note or
Notes subject to such assignment and (iii) the assignor Lender or Assignee has
paid to the Agent a processing fee in the amount of $3,000.
69
77
(b) Effective date of Assignment. From and after the date
that the Agent notifies the assignor Lender that it has received an executed
Assignment and Acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assignor Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
(c) Confirmation and Agreements. By executing and
delivering an Assignment and Acceptance, the assigning Lender thereunder and the
Assignee thereunder confirm to and agree with each other and the other parties
hereto as follows: (i) other than as provided in such Assignment and Acceptance,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other Loan Document furnished pursuant hereto; (ii) such assigning Lender
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrower or the performance or observance by
the Borrower of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto; (iii) such Assignee confirms that it has
received a copy of this Agreement, together with such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such Assignee will,
independently and without reliance upon the Agent, such assigning Lender or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such Assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, 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.
(d) Substitute Notes. Within five (5) Business Days after
its receipt of notice by the Agent that it has received an executed Assignment
and Acceptance and payment of the processing fee, the Borrower shall execute and
deliver to the Agent, new Notes evidencing such Assignee's assigned Loans and,
if the assignor Lender has retained a portion of its Loans and its Commitment,
replacement Notes in the principal amount of the Loans retained by the assignor
Lender (such Notes to be in exchange for, but not in payment of, the Notes held
by such Lender). Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance, this Agreement shall be deemed to
be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender pro tanto.
70
78
(e) Participations. Any Lender may at any time sell to
one or more commercial banks, financial institutions, or other Persons not
Affiliates of the Borrower (a "Participant") participating interests in any
Loans, the Commitment of that Lender and the other interests of that Lender (the
"originating Lender") hereunder and under the other Loan Documents; provided,
however, that (i) the originating Lender's obligations under this Agreement
shall remain unchanged, (ii) the originating Lender shall remain solely
responsible for the performance of such obligations, (iii) the Borrower and the
Agent shall continue to deal solely and directly with the originating Lender in
connection with the originating Lender's rights and obligations under this
Agreement and the other Loan Documents, and (iv) no Lender shall transfer or
grant any participating interest under which the Participant has rights to
approve any amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document, and all amounts payable by the Borrower
hereunder shall be determined as if such Lender had not sold such participation;
except that, if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable during the
continuation of an Event of Default, each Participant shall be deemed to have
the right of set-off in respect of its participating interest in amounts owing
under this Agreement to the same extent and subject to the same limitation as if
the amount of its participating interest were owing directly to it as a Lender
under this Agreement.
(f) Pledge of Interest. Notwithstanding any other
provision in this Agreement, any Lender may at any time create a security
interest in, or pledge, all or any portion of its rights under and interest in
this Agreement in favor of any Federal Reserve Bank in accordance with
Regulation A of the FRB or U.S. Treasury Regulation 31 CFR ss.203.14, and such
Federal Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
ARTICLE XIV
THE AGENT
Section 14.1 Appointment and Authorization.
Each Lender hereby designates and appoints Bank of America, National
Association as its Agent under this Agreement and the other Loan Documents and
each Lender hereby irrevocably authorizes the Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to it
by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. The Agent agrees to act as such on
the express conditions contained in this Section 14.1. The provisions of this
Section 14.1 are solely for the benefit of the Agent and the Lenders and the
Borrower shall have no rights as a third party beneficiary of any of the
provisions contained herein. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express)
71
79
obligations arising under agency doctrine of any applicable law. Instead, such
term is used merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent contracting
parties. Except as expressly otherwise provided in this Agreement, the Agent
shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions which the Agent is expressly entitled to take or assert under
this Agreement and the other Loan Documents, including, without limitation, (a)
the determination of the applicability of ineligibility criteria with respect to
the calculation of the Availability, (b) the making of Agent Advances pursuant
to Section 2.2(i) (Agent Advances), and (c) the exercise of remedies pursuant to
Section 11.2 (Remedies), and any action so taken or not taken shall be deemed
consented to by the Lenders.
Section 14.2 Delegation of Duties.
The Agent may execute any of its duties under this Agreement or any
other Loan Document by or through agents, employees or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence or misconduct of
any agent or attorney-in-fact that it selects as long as such selection was made
without gross negligence or willful misconduct.
Section 14.3 Liability of Agent.
None of the Agent-Related Persons shall (a) be liable for any action
taken or omitted to be taken by any of them under or in connection with this
Agreement or any other Loan Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct), or (b) be
responsible in any manner to any of the Lenders for any recital, statement,
representation or warranty made by the Borrower or any Affiliate of the
Borrower, or any officer thereof, contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower or any of the Borrower's
Subsidiaries or Affiliates.
Section 14.4 Reliance by Agent.
(a) Writings, etc. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Borrower), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the
72
80
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Majority Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
(b) Conditions Precedent. For purposes of determining
compliance with the conditions specified in Section 10.1 (Conditions Precedent),
each Lender that has executed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
either sent by the Agent to such Lender for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to the Lender.
Section 14.5 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default, except with respect to defaults
in the payment of principal, interest and fees required to be paid to the Agent
for the account of the Lenders, unless the Agent shall have received written
notice from a Lender or the Borrower referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a "notice of
default." The Agent will notify the Lenders of its receipt of any such notice.
The Agent shall take such action with respect to such Default or Event of
Default as may be requested by the Majority Lenders in accordance with Section
11.2 (Remedies); provided, however, that unless and until the Agent has received
any such request, the 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.
Section 14.6 Credit Decision.
Each Lender acknowledges that none of the Agent-Related Persons has
made any representation or warranty to it, and that no act by the Agent
hereinafter taken, including any review of the affairs of the Borrower and its
Affiliates, shall be deemed to constitute any representation or warranty by any
Agent-Related Person to any Lender. Each Lender represents to the Agent that it
has, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower and
its Affiliates, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrower. Each Lender also represents that
it will, independently and without reliance upon any Agent-Related Person and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the Agent,
the Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the
73
81
business, prospects, operations, property, financial and other condition or
creditworthiness of the Borrower which may come into the possession of any of
the Agent-Related Persons.
Section 14.7 Indemnification.
Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent
not reimbursed by or on behalf of the Borrower and without limiting the
obligation of the Borrower to do so), pro rata, from and against any and all
Indemnified Liabilities as such term is defined in Section 15.10 (Indemnity of
the Agent and the Lenders); provided, however, that no Lender shall be liable
for the payment to the Agent-Related Persons of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Borrower. The undertaking in this Section shall survive the payment of
all Obligations hereunder and the resignation or replacement of the Agent.
Section 14.8 Agent in Individual Capacity.
Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with the Borrower and/or FTL, its Subsidiaries and Affiliates
(including, without limitation, those arising under the FTL Senior Credit
Agreement from time to time) as though Bank of America were not the Agent
hereunder and without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, Bank of America or its Affiliates
may receive information regarding the Borrower or its Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Borrower or such Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to its Loans, Bank
of America shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though it were not the Agent, and the
terms "Lender" and "Lenders" include Bank of America in its individual capacity.
Section 14.9 Successor Agent.
The Agent may resign as Agent upon 30 days' notice to the Lenders and
the Borrower. In the event Bank of America sells all of its Commitments and
Revolving Loans as part of a sale, transfer or other disposition by Bank of
America of substantially all of its loan portfolio, Bank of America shall resign
as Agent and such purchaser or transferee shall become the successor Agent
hereunder. If the Agent resigns under this Agreement, subject to the proviso in
the preceding sentence, the Majority Lenders shall appoint from among the
Lenders a successor agent for the Lenders. If no successor agent is appointed
prior to the effective date of the resignation of the Agent, the Agent may
appoint, after consulting with the Lenders and the Borrower, a successor agent
from among the Lenders. Upon the acceptance of its appointment as successor
agent hereunder, such successor agent shall succeed to all the rights, powers
and duties of the retiring
74
82
Agent and the term "Agent" shall mean such successor agent and the retiring
Agent's appointment, powers and duties as Agent shall be terminated. After any
retiring Agent's resignation hereunder as Agent, the provisions of this ARTICLE
XIV (The Agent) shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement. If no successor agent
has accepted appointment as Agent by the date which is thirty (30) days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of the Agent hereunder until such time, if any, as the
Majority Lenders appoint a successor agent as provided for above.
Notwithstanding the foregoing, in the event that Bank of America assigns all of
its Loans to an Affiliate, such Affiliate shall automatically become the
successor Agent hereunder upon the effective date of such assignment.
Section 14.10 Withholding Tax.
(a) Foreign Corporation. If any Lender is a "foreign
corporation, partnership or trust" within the meaning of the Code and such
Lender claims exemption from, or a reduction of, U.S. withholding tax under
Sections 1441 or 1442 of the Code, such Lender agrees with and in favor of the
Agent, to deliver to the Agent:
(i) if such Lender claims an exemption from, or
a reduction of, withholding tax under a United States tax treaty,
properly completed IRS Forms 1001 and W-8 before the payment of any
interest in the first calendar year and before the payment of any
interest in each third succeeding calendar year during which interest
may be paid under this Agreement;
(ii) if such Lender claims that interest paid
under this Agreement is exempt from United States withholding tax
because it is effectively connected with a United States trade or
business of such Lender, two properly completed and executed copies of
IRS Form 4224 before the payment of any interest is due in the first
taxable year of such Lender and in each succeeding taxable year of such
Lender during which interest may be paid under this Agreement, and IRS
Form W-9; and
(iii) such other form or forms as may be required
under the Code or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax.
Such Lender agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) Withholding Tax - IRS Form 1001. If any Lender claims
exemption from, or reduction of, withholding tax under a United States tax
treaty by providing IRS Form 1001 and such Lender sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Borrower to another Lender, such exempt Lender agrees to notify the Agent of the
percentage amount in which it is no longer the beneficial owner of Obligations
of the Borrower to such Lender. To the extent of such percentage amount, the
Agent will treat such Lender's IRS Form 1001 as no longer valid.
75
83
(c) Withholding Tax - IRS Form 4224. If any Lender
claiming exemption from United States withholding tax by filing IRS Form 4224
with the Agent sells, assigns, grants a participation in, or otherwise transfers
all or part of the Obligations of the Borrower to another Lender, such exempt
Lender agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d) Reduction of Withholding Tax. If any Lender is
entitled to a reduction in the applicable withholding tax, the Agent may
withhold from any interest payment to such Lender an amount equivalent to the
applicable withholding tax after taking into account such reduction. If the
forms or other documentation required by subsection (a) of this Section are not
delivered to the Agent, then the Agent may withhold from any interest payment to
such Lender not providing such forms or other documentation an amount equivalent
to the applicable withholding tax.
(e) Indemnification of Agent. If the IRS or any other
Governmental Authority of the United States or other jurisdiction asserts a
claim that the Agent did not properly withhold tax from amounts paid to or for
the account of any Lender (because the appropriate form was not delivered, was
not properly executed, or because such Lender failed to notify the Agent of a
change in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Lender shall
indemnify the Agent fully for all amounts paid, directly or indirectly, by the
Agent as tax or otherwise, including penalties and interest, and including any
taxes imposed by any jurisdiction on the amounts payable to the Agent under this
Section, together with all costs and expenses (including Attorney Costs). The
obligation of the Lenders under this subsection shall survive the payment of all
Obligations and the resignation or replacement of the Agent.
Section 14.11 Collateral Matters.
(a) Release of Agent's Lien. The Lenders hereby
irrevocably authorize the Agent, at its option and in its sole discretion, to
release any Agent's Lien upon any Collateral (i) upon the termination of the
Commitments and payment and satisfaction in full by Borrower of all Loans
(whether or not any of such obligations are due) and all other Obligations; (ii)
constituting property being sold or disposed of if the Borrower certifies to the
Agent that the sale or disposition is made in compliance with Section 9.5
(Maintenance of Property) (and the Agent may rely conclusively on any such
certificate, without further inquiry); (iii) constituting property in which the
Borrower owned no interest at the time the Lien was granted or at any time
thereafter; or (iv) constituting property leased to the Borrower under a lease
which has expired or been terminated in a transaction permitted under this
Agreement. Except as provided above, the Agent will not release any of the
Agent's Liens without the prior written authorization of the Lenders. Upon
request by the Agent or the Borrower at any time, the Lenders will confirm in
writing the Agent's authority to release any Agent's Liens upon particular types
or items of Collateral pursuant to this Section 14.11(a).
(b) Execution of Releases by Agent. Upon receipt by the
Agent of any authorization required pursuant to Section 14.11(a) (Release of
Agent's Lien) from the Lenders of the Agent's authority to release any Agent's
Liens upon particular types or items of Collateral, and upon at least five (5)
Business Days' prior written request by the Borrower, the Agent shall (and is
hereby irrevocably authorized by the Lenders to) execute such documents as may
be
76
84
necessary to evidence the release of the Agent's Liens upon such Collateral;
provided, however, that (i) the Agent shall not be required to execute any such
document on terms which, in the Agent's opinion, would expose the Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Obligations or any Liens
(other than those expressly being released) upon (or obligations of the Borrower
in respect of) all interests retained by the Borrower, including (without
limitation) the proceeds of any sale, all of which shall continue to constitute
part of the Collateral.
(c) Limitation of Agent's Obligations. The Agent shall
have no obligation whatsoever to any of the Lenders to assure that the
Collateral exists or is owned by the Borrower or is cared for, protected or
insured or has been encumbered, or that the Agent's Liens have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
the Agent pursuant to any of the Loan Documents, it being understood and agreed
that in respect of the Collateral, or any act, omission or event related
thereto, the Agent may act in any manner it may deem appropriate, in its sole
discretion given the Agent's own interest in the Collateral in its capacity as
one of the Lenders and that the Agent shall have no other duty or liability
whatsoever to any Lender as to any of the foregoing.
Section 14.12 Restrictions on Actions by Lenders; Sharing of
Payments.
(a) Set off. Each of the Lenders agrees that it shall
not, without the express consent of all Lenders, and that it shall, to the
extent it is lawfully entitled to do so, upon the request of all Lenders, set
off against the Obligations, any amounts owing by such Lender to the Borrower or
any accounts of the Borrower now or hereafter maintained with such Lender. Each
of the Lenders further agrees that it shall not, unless specifically requested
to do so by the Agent, take or cause to be taken any action to enforce its
rights under this Agreement or against the Borrower, including, without
limitation, the commencement of any legal or equitable proceedings, to foreclose
any Lien on, or otherwise enforce any security interest in, any of the
Collateral.
(b) Remittance to Agent or Purchase of Pro Rata Share. If
at any time or times any Lender shall receive (i) by payment, foreclosure,
setoff or otherwise, any proceeds of Collateral or any payments with respect to
the Obligations of the Borrower to such Lender arising under, or relating to,
this Agreement or the other Loan Documents, except for any such proceeds or
payments received by such Lender from the Agent pursuant to the terms of this
Agreement, or (ii) payments from the Agent in excess of such Lender's ratable
portion of all such distributions by the Agent, such Lender shall promptly (A)
turn the same over to the Agent, in kind, and with such endorsements as may be
required to negotiate the same to the Agent, or in same day funds, as
applicable, for the account of all of the Lenders and for application to the
Obligations in accordance with the applicable provisions of this Agreement, or
(B) purchase, without recourse or warranty, an undivided interest and
participation in the Obligations owed to the other Lenders so that such excess
payment received shall be applied ratably as among the Lenders in accordance
with their Pro Rata Shares; provided, however, that if all or part of such
excess payment received by the purchasing party is thereafter recovered from it,
those purchases
77
85
of participations shall be rescinded in whole or in part, as applicable, and the
applicable portion of the purchase price paid therefor shall be returned to such
purchasing party, but without interest except to the extent that such purchasing
party is required to pay interest in connection with the recovery of the excess
payment.
Section 14.13 Agency for Perfection.
Each Lender hereby appoints each other Lender as agent for the purpose
of perfecting the Lenders' security interest in assets that, in accordance with
Article 9 of the UCC can be perfected only by possession. Should any Lender
(other than the Agent) obtain possession of any such Collateral, such Lender
shall notify the Agent thereof, and, promptly upon the Agent's request therefor
shall deliver such Collateral to the Agent or in accordance with the Agent's
instructions.
Section 14.14 Payments by Agent to Lenders.
All payments to be made by the Agent to the Lenders shall be made by
bank wire transfer or internal transfer of immediately available funds to:
if to Bank of America: Bank of America, National Association
ABA # ▇▇▇▇▇▇▇▇▇
Chicago IL
Bank of America Business Credit
Acct# 86667-00418
Reference: FTL Receivables
or pursuant to such other wire transfer instructions as each party may designate
for itself by written notice to the Agent. Concurrently with each such payment,
the Agent shall identify whether such payment (or any portion thereof)
represents principal, premium or interest on the Revolving Loans or otherwise.
Section 14.15 Concerning the Collateral and the Related Loan
Documents.
Each Lender authorizes and directs the Agent to enter into this
Agreement and the other Loan Documents relating to the Collateral, for the
ratable benefit of the Agent and the Lenders. Each Lender agrees that any action
taken by the Agent, Majority Lenders or Required Lenders, as applicable, in
accordance with the terms of this Agreement or the other Loan Documents relating
to the Collateral, and the exercise by the Agent, the Majority Lenders, or the
Required Lenders, as applicable, of their respective powers set forth therein or
herein, together with such other powers that are reasonably incidental thereto,
shall be binding upon all of the Lenders.
Section 14.16 Field Audit and Examination Reports; Disclaimer by
Lenders.
By signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish
such Lender, promptly after it becomes available, a copy of each field
audit or examination report (each a "Report" and collectively,
"Reports") prepared by the Agent;
78
86
(b) expressly agrees and acknowledges that neither Bank
of America nor the Agent (i) makes any representation or warranty as to
the accuracy of any Report, or (ii) shall be liable for any information
contained in any Report;
(c) expressly agrees and acknowledges that the Reports
are not comprehensive audits or examinations, that the Agent or other
party performing any audit or examination will inspect only specific
information regarding the Borrower and will rely significantly upon the
Borrower's books and records, as well as on representations of the
Borrower's personnel;
(d) agrees to keep all Reports confidential and strictly
for its internal use, and not to distribute except to its participants,
or use any Report in any other manner; and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to
hold the Agent and any such other Lender preparing a Report harmless
from any action the indemnifying Lender may take or conclusion the
indemnifying Lender may reach or draw from any Report in connection
with any loans or other credit accommodations that the indemnifying
Lender has made or may make to the Borrower, or the indemnifying
Lender's participation in, or the indemnifying Lender's purchase of, a
loan or loans of the Borrower; and (ii) to pay and protect, and
indemnify, defend and hold the Agent and any such other Lender
preparing a Report harmless from and against, the claims, actions,
proceedings, damages, costs, expenses and other amounts (including,
without limitation, Attorney Costs) incurred by the Agent and any such
other Lender preparing a Report as the direct or indirect result of any
third parties who might obtain all or part of any Report through the
indemnifying Lender.
Section 14.17 Relation Among Lenders.
The Lenders are not partners or co-venturers, and no Lender shall be
liable for the acts or omissions of, or (except as otherwise set forth herein in
case of the Agent) authorized to act for, any other Lender.
ARTICLE XV
MISCELLANEOUS
Section 15.1 Cumulative Remedies; No Prior Recourse to Collateral.
The enumeration herein of the Agent's and each Lender's rights and
remedies is not intended to be exclusive, and such rights and remedies are in
addition to and not by way of limitation of any other rights or remedies that
the Agent and the Lenders may have under the UCC or other applicable law. The
Agent and the Lenders shall have the right, in their sole discretion, to
determine which rights and remedies are to be exercised and in which order. The
exercise of one right or remedy shall not preclude the exercise of any others,
all of which shall be cumulative. The Agent and the Lenders may, without
limitation, proceed directly against the Borrower to collect the Obligations
without any prior recourse to the Collateral. No failure to
79
87
exercise and no delay in exercising, on the part of the Agent or any Lender, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.
Section 15.2 Severability.
The illegality or unenforceability of any provision of this Agreement
or any instrument or agreement required hereunder shall not in any way affect or
impair the legality or enforceability of the remaining provisions of this
Agreement or any instrument or agreement required hereunder.
Section 15.3 Governing Law; Choice of Forum; Service of Process;
Jury Trial Waiver.
(a) APPLICABLE LAW. THIS AGREEMENT SHALL BE INTERPRETED
AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE
WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF LAWS PROVISIONS PROVIDED
THAT PERFECTION ISSUES WITH RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO
APPLICABLE CHOICE OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF
THE STATE OF ILLINOIS; PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
(b) JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN
DISTRICT OF ILLINOIS, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE BORROWER, THE AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE
BORROWER, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. NOTWITHSTANDING THE FOREGOING: (i) THE AGENT AND THE LENDERS
SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR
ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE AGENT OR THE LENDERS
DEEM NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER
SECURITY FOR THE OBLIGATIONS AND (ii) EACH OF THE PARTIES 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.
(c) SERVICE OF PROCESS. THE 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 THE BORROWER AT ITS ADDRESS SET
80
88
FORTH IN Section 15.7 (NOTICES) 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. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF AGENT OR THE LENDERS
TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.
(d) WAIVER OF JURY TRIAL. THE BORROWER, THE LENDERS, THE
AGENT AND THE SYNDICATION AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED
PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. THE BORROWER, THE LENDERS, THE AGENT AND THE SYNDICATION
AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER
AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
Section 15.4 Survival of Representations and Warranties.
All of the Borrower's representations and warranties contained in this
Agreement shall survive the execution, delivery, and acceptance thereof by the
parties, notwithstanding any investigation by the Agent or the Lenders or their
respective agents.
Section 15.5 Other Security and Guaranties.
The Agent, may, without notice or demand and without affecting the
Borrower's obligations hereunder, from time to time: (a) take from any Person
and hold collateral (other than the Collateral) for the payment of all or any
part of the Obligations and exchange, enforce or 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 Obligations and release or substitute any such endorser
or guarantor, or any Person who has given any Lien in any other collateral as
security for the payment of all or any part of the Obligations, or any other
Person in any way obligated to pay all or any part of the Obligations.
Section 15.6 Fees and Expenses.
The Borrower agrees to pay to the Agent, for its benefit, on demand,
all reasonable costs and expenses that Agent pays or incurs in connection with
the negotiation, preparation, syndication, consummation, administration,
enforcement, and termination of this Agreement or any of the other Loan
Documents, including, without limitation: (a) Attorney Costs; (b) costs
81
89
and expenses (including attorneys' and paralegals' fees and disbursements which
shall include, without duplication of Attorney Costs, the allocated costs of
Agent's in-house counsel fees and disbursements) for any amendment, supplement,
waiver, consent, or subsequent closing in connection with the Loan Documents and
the transactions contemplated thereby; (c) costs and expenses of lien and title
searches and title insurance; (d) taxes, fees and other charges for filing
financing statements and continuations, and other actions to perfect, protect,
and continue the Agent's Liens (including costs and expenses paid or incurred by
the Agent in connection with the consummation of Agreement); (e) sums paid or
incurred to pay any amount or take any action required of the Borrower under the
Loan Documents that the Borrower fails to pay or take; (f) costs of appraisals,
inspections, and verifications of the Collateral, including, without limitation,
travel, lodging, and meals for inspections of the Collateral and the Borrower's
operations by the Agent plus the Agent's then customary charge for field
examinations and audits and the preparation of reports thereof (such charge is
currently $750 per day (or portion thereof) for each agent or employee of the
Agent with respect to each field examination or audit); (g) costs and expenses
of forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining Payment Accounts and lock boxes; (h) costs and
expenses of preserving and protecting the Collateral; and (i) costs and expenses
(including attorneys' and paralegals' fees and disbursements which shall include
the allocated cost of Agent's in-house counsel fees and disbursements, without
duplication of Attorneys' Costs) paid or incurred to obtain payment of the
Obligations, enforce the Agent's Liens, sell or otherwise realize upon the
Collateral, and otherwise enforce the provisions of the Loan Documents, or to
defend any claims made or threatened against the Agent or any Lender arising out
of the transactions contemplated hereby (including without limitation,
preparations for and consultations concerning any such matters). The foregoing
shall not be construed to limit any other provisions of the Loan Documents
regarding costs and expenses to be paid by the Borrower. All of the foregoing
costs and expenses shall be charged to the Borrower's Loan Account as Revolving
Loans as described in Section 4.4 (Payments as Revolving Loans).
Section 15.7 Notices.
Except as otherwise provided herein, all notices, demands and requests
that any party is required or elects to give to any other shall be in writing,
or by a telecommunications device capable of creating a written record, and any
such notice shall become effective (a) upon personal delivery thereof,
including, but not limited to, delivery by overnight mail and courier service,
(b) four (4) days after it shall have been mailed by United States mail, first
class, certified or registered, with postage prepaid or (c) in the case of
notice by such a telecommunications device, when properly transmitted, in each
case addressed to the party to be notified as follows:
If to the Agent: Bank of America, National Association
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
82
90
If to Syndication Agent: Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ C 28255
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
with copies to: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esquire
Miles & Stockbridge P.C.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to the Borrower: FTL Receivables Company
1 Fruit of the ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with copies to: ▇▇▇▇▇▇ Laznar, Esquire
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons designated above to
receive copies shall not adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
Section 15.8 Waiver of Notices.
Unless otherwise expressly provided herein, the Borrower waives
presentment, protest and notice of demand or dishonor and protest as to any
instrument, notice of intent to accelerate the Obligations and notice of
acceleration of the Obligations, as well as any and all other notices to which
it might otherwise be entitled. No notice to or demand on the Borrower that the
Agent or any Lender may elect to give shall entitle the Borrower to any or
further notice or demand in the same, similar or other circumstances.
Section 15.9 Binding Effect.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective representatives, successors, and assigns of the
parties hereto; provided, however, that no interest herein may be assigned by
the Borrower without prior written consent of the Agent and each Lender. The
rights and benefits of the Agent and the Lenders hereunder shall, if such
Persons so agree, inure to any party acquiring any interest in the Obligations
or any part thereof.
Section 15.10 Indemnity of the Agent and the Lenders by the
Borrower.
The Borrower agrees to defend, indemnify and hold the Agent-Related
Persons, and each Lender and each of its respective officers, directors,
employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person")
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses and disbursements
(including, without limitation, Attorney Costs) of any kind or nature whatsoever
83
91
which may at any time (including at any time following repayment of the Loans
and the termination, resignation or replacement of the Agent or replacement of
any Lender) be imposed on, incurred by or asserted against any such Person in
any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein, or the transactions contemplated hereby,
or any action taken or omitted by any such Person under or in connection with
any of the foregoing, including with respect to any investigation, litigation or
proceeding (including any Insolvency Proceeding or appellate proceeding) related
to or arising out of this Agreement, any other Loan Document, or the Loans or
the use of the proceeds thereof, whether or not any Indemnified Person is a
party thereto (all the foregoing, collectively, the "Indemnified Liabilities");
provided, that the Borrower shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities resulting solely from
the willful misconduct of such Indemnified Person. The agreements in this
Section shall survive payment of all other Obligations.
Section 15.11 Limitation of Liability.
No claim may be made by the Borrower, any Lender or other Person
against the Agent, any Lender, or the affiliates, directors, officers, officers,
employees, or agents of any of them for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this Agreement or any other Loan Document, or any act, omission or event
occurring in connection therewith, and the Borrower and each Lender hereby
waive, release and agree not to ▇▇▇ upon any claim for such damages, whether or
not accrued and whether or not known or suspected to exist in its favor.
Section 15.12 Final Agreement.
This Agreement and the other Loan Documents are intended by the
Borrower, the Agent and the Lenders to be the final, complete, and exclusive
expression of the agreement between them. This Agreement supersedes any and all
prior oral or written agreements relating to the subject matter hereof. No
modification, rescission, waiver, release, or amendment of any provision of this
Agreement or any other Loan Document shall be made, except by a written
agreement signed by the Borrower and a duly authorized officer of each of the
Agent and the requisite Lenders.
Section 15.13 Counterparts.
This Agreement may be executed in any number of counterparts, and by
the Agent, each Lender and the Borrower in separate counterparts, each of which
shall be an original, but all of which shall together constitute one and the
same agreement; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
Section 15.14 Captions.
The captions contained in this Agreement are for convenience of
reference only, are without substantive meaning and should not be construed to
modify, enlarge, or restrict any provision.
84
92
Section 15.15 Right of Setoff.
In addition to any rights and remedies of the Lenders provided by law,
if an Event of Default exists or the Loans have been accelerated, each Lender is
authorized at any time and from time to time, without prior notice to the
Borrower, any such notice being waived by the Borrower to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Lender to or for the credit or the
account of the Borrower against any and all Obligations owing to such Lender,
now or hereafter existing, irrespective of whether or not the Agent or such
Lender shall have made demand under this Agreement or any Loan Document and
although such Obligations may be contingent or unmatured. Each Lender agrees
promptly to notify the Borrower and the Agent after any such set-off and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.
NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE ANY RIGHT OF SET-OFF,
BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF THE
BORROWER HELD OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN CONSENT OF
THE AGENT.
The balance of this page has been intentionally left blank.
85
93
Signature Page to Loan and Security Agreement dated October 29, 1999.
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
"BORROWER"
FTL RECEIVABLES COMPANY
By:_________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President and Treasurer
"AGENT"
Bank of America, National Association, as
the Agent
By: _____________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
"LENDERS"
Commitment: $275,000,000 Bank of America, National Association, as a
Lender
By:______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
86