EXHIBIT 10.1
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CREDIT AGREEMENT
DATED AS OF OCTOBER 11, 2002
by and among
COMFORT SYSTEMS USA, INC.,
as Borrower,
and
THE OTHER PERSONS PARTY HERETO THAT
ARE DESIGNATED AS CREDIT PARTIES,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent, L/C Issuer and a Lender,
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO,
as Lenders
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TABLE OF CONTENTS
Page
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SECTION 1. AMOUNTS AND TERMS OF LOANS.............................................................................1
1.1 Loans...........................................................................................1
1.2 Interest and Applicable Margins.................................................................8
1.3 Fees...........................................................................................10
1.4 Payments.......................................................................................11
1.5 Prepayments....................................................................................12
1.6 Maturity.......................................................................................13
1.7 Loan Accounts..................................................................................14
1.8 Yield Protection; Illegality...................................................................14
1.9 Taxes..........................................................................................15
SECTION 2. AFFIRMATIVE COVENANTS.................................................................................17
2.1 Compliance With Laws and Contractual Obligations...............................................18
2.2 Maintenance of Properties; Insurance...........................................................19
2.3 Inspection; Lender Meeting.....................................................................19
2.4 Organizational Existence.......................................................................20
2.5 Environmental Matters..........................................................................20
2.6 Landlords' Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases..........20
2.7 Further Assurances.............................................................................21
2.8 Interest Rate Agreement........................................................................21
2.9 Cash Management System.........................................................................22
SECTION 3. NEGATIVE COVENANTS....................................................................................22
3.1 Indebtedness...................................................................................22
3.2 Liens and Related Matters......................................................................23
3.3 Investments....................................................................................23
3.4 Contingent Obligations.........................................................................24
3.5 Restricted Payments............................................................................25
3.6 Restriction on Fundamental Changes.............................................................25
3.7 Disposal of Assets or Subsidiary Stock.........................................................28
3.8 Transactions with Affiliates...................................................................29
3.9 Conduct of Business............................................................................29
3.10 Changes Relating to Indebtedness...............................................................29
3.11 Fiscal Year....................................................................................29
3.12 Press Release; Public Offering Materials.......................................................29
3.13 Subsidiaries...................................................................................30
3.14 Bank Accounts..................................................................................30
3.15 Hazardous Materials............................................................................30
3.16 ERISA..........................................................................................30
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3.17 Sale-Leasebacks................................................................................30
3.18 Prepayments of Other Indebtedness..............................................................30
SECTION 4. FINANCIAL COVENANTS/REPORTING.........................................................................31
4.1 Lease Limits...................................................................................31
4.2 Minimum EBITDA.................................................................................31
4.3 Minimum Fixed Charge Coverage Ratio............................................................32
4.4 Minimum Interest Coverage Ratio................................................................32
4.5 Maximum Leverage Ratio.........................................................................32
4.6 Financial Statements and Other Reports.........................................................32
4.7 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement.............36
SECTION 5. REPRESENTATIONS AND WARRANTIES........................................................................36
5.1 Disclosure.....................................................................................36
5.2 No Material Adverse Effect.....................................................................37
5.3 No Conflict....................................................................................37
5.4 Organization, Powers, Capitalization and Good Standing.........................................37
5.5 Financial Statements and Projections...........................................................38
5.6 Intellectual Property..........................................................................38
5.7 Investigations, Audits, Etc....................................................................39
5.8 Employee Matters...............................................................................39
5.9 Solvency.......................................................................................39
5.10 Litigation; Adverse Facts......................................................................39
5.11 Use of Proceeds; Margin Regulations............................................................39
5.12 Ownership of Property; Liens...................................................................40
5.13 Environmental Matters..........................................................................41
5.14 ERISA..........................................................................................42
5.15 Brokers........................................................................................43
5.16 Deposit and Disbursement Accounts..............................................................43
5.17 Agreements and Other Documents.................................................................43
5.18 Insurance......................................................................................43
SECTION 6. DEFAULT, RIGHTS AND REMEDIES..........................................................................43
6.1 Event of Default...............................................................................43
6.2 Suspension or Termination of Commitments.......................................................47
6.3 Acceleration and other Remedies................................................................47
6.4 Performance by Agent...........................................................................47
6.5 Application of Proceeds........................................................................48
SECTION 7. CONDITIONS TO LOANS...................................................................................48
7.1 Conditions to Initial Loans....................................................................48
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7.2 Conditions to All Loans........................................................................48
SECTION 8. ASSIGNMENT AND PARTICIPATION..........................................................................49
8.1 Assignment and Participations..................................................................49
8.2 Agent..........................................................................................51
8.3 Set Off and Sharing of Payments................................................................56
8.4 Disbursement of Funds..........................................................................57
8.5 Disbursements of Advances; Payment.............................................................57
SECTION 9. MISCELLANEOUS.........................................................................................59
9.1 Indemnities....................................................................................59
9.2 Amendments and Waivers.........................................................................60
9.3 Notices........................................................................................61
9.4 Failure or Indulgence Not Waiver; Remedies Cumulative..........................................62
9.5 Marshaling; Payments Set Aside.................................................................62
9.6 Severability...................................................................................62
9.7 Lenders' Obligations Several; Independent Nature of Lenders' Rights............................62
9.8 Headings.......................................................................................63
9.9 Applicable Law.................................................................................63
9.10 Successors and Assigns.........................................................................63
9.11 No Fiduciary Relationship; Limited Liability...................................................63
9.12 Construction...................................................................................63
9.13 Confidentiality................................................................................63
9.14 CONSENT TO JURISDICTION........................................................................64
9.15 WAIVER OF JURY TRIAL...........................................................................64
9.16 Survival of Warranties and Certain Agreements..................................................65
9.17 Entire Agreement...............................................................................65
9.18 Counterparts; Effectiveness....................................................................65
9.19 Replacement of Lenders.........................................................................65
9.20 Delivery of Termination Statements and Mortgage Releases.......................................67
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INDEX OF APPENDICES
Annexes
Annex A - Definitions
Annex B - Pro Rata Shares and Commitment Amounts
Annex C - Closing Checklist
Annex D - Pro Forma
Annex E - Lenders' Bank Accounts
Annex F - Cash Management System
Exhibits
Exhibit 1.1(a) - Term Note
Exhibit 1.1(b)(i) - Revolving Note
Exhibit 1.1(b)(ii) - Notice of Revolving Credit Advance
Exhibit 1.1(c) - Swing Line Note
Exhibit 1.2(e) - Notice of Continuation/Conversion
Exhibit 4.6(d) - Availability Certificate
Exhibit 4.6(l) - Compliance and Excess Cash Flow Certificate
Exhibit 8.1 - Assignment Agreement
Schedules
Schedule 3.2 - Liens
Schedule 3.4 - Contingent Obligations
Schedule 3.8 - Affiliate Transactions
Schedule 5.4(a) - Jurisdictions of Organization and Qualifications
Schedule 5.4(b) - Capitalization
Schedule 5.6 - Intellectual Property
Schedule 5.7 - Investigations and Audits
Schedule 5.8 - Employee Matters
Schedule 5.10 - Litigation
Schedule 5.11 - Use of Proceeds
Schedule 5.12 - Real Estate
Schedule 5.13 - Environmental Matters
Schedule 5.14 - ERISA
Schedule 5.15 - Brokers
Schedule 5.16 - Deposit and Disbursement Accounts
Schedule 5.17 - Agreements and Other Documents
Schedule 5.18 - Insurance
Schedule A - Subordinated Debt
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CREDIT AGREEMENT
This
CREDIT AGREEMENT is dated as of October 11, 2002 and
entered into by and among Comfort Systems USA, Inc., a Delaware corporation
("Borrower"), the other persons designated as "Credit Parties" on the signature
pages hereof, the financial institutions who are or hereafter become parties to
this Agreement as Lenders, and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation (in its individual capacity "GE Capital"), as the initial L/C Issuer
and as Agent.
RECITALS:
WHEREAS, Borrower desires that Lenders extend a term credit
facility and a revolving credit facility to Borrower to fund the repayment of
certain indebtedness of Borrower, to provide working capital financing for
Borrower and its Subsidiaries and to provide funds for other general corporate
purposes of Borrower and its Subsidiaries; and
WHEREAS, Borrower desires to secure all of its Obligations (as
hereinafter defined) under the Loan Documents (as hereinafter defined) by
granting to Agent, for the benefit of Agent and Lenders, a security interest in
and lien upon substantially all of its personal property and certain of its
owned real property; and
WHEREAS, each of Borrower's Subsidiaries is willing to
guaranty all of the Obligations of Borrower and to grant to Agent, for the
benefit of Agent and Lenders, a security interest in and lien upon substantially
all of its personal property and certain of its owned real property to secure
the Obligations; and
WHEREAS, all capitalized terms herein shall have the meanings
ascribed thereto in Annex A hereto which is incorporated herein by reference.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Borrower, Credit Parties,
Lenders and Agent agree as follows:
SECTION 1.
AMOUNTS AND TERMS OF LOANS
1.1 Loans. Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Borrower and the other
Credit Parties contained herein:
(a) Term Loan. Each Term Lender agrees, severally and not
jointly, to lend to Borrower in one draw, on the Closing Date, its Pro Rata
Share of the aggregate amount of
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$15,000,000 (the "Term Loan"). Borrower shall repay the Term Loan through
periodic payments on the dates and in the amounts indicated below ("Scheduled
Installments").
Date Scheduled Installment
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December 31, 2002 $ 375,000.00
March 31, 2003 $ 375,000.00
June 30, 2003 $ 375,000.00
September 30, 2003 $ 375,000.00
December 31, 2003 $ 562,500.00
March 31, 2004 $ 562,500.00
June 30, 2004 $ 562,500.00
September 30, 2004 $ 562,500.00
December 31, 2004 $ 750,000.00
March 31, 2005 $ 750,000.00
June 30, 2005 $ 750,000.00
September 30, 2005 $ 750,000.00
December 31, 2005 $ 937,500.00
March 31, 2006 $ 937,500.00
June 30, 2006 $ 937,500.00
September 30, 2006 $ 937,500.00
December 31, 2006 $ 1,125,000.00
March 31, 2007 $ 1,125,000.00
June 30, 2007 $ 1,125,000.00
Fifth Anniversary of the Closing Date $ 1,125,000.00
The final installment shall in all events equal the entire remaining principal
balance of the Term Loan. Amounts borrowed under this Section 1.1(a) and repaid
may not be reborrowed.
The Term Loan shall be evidenced by promissory notes
substantially in the form of Exhibit 1.1(a) (each a "Term Note" and,
collectively, the "Term Notes"), and Borrower shall execute and deliver each
Term Note to the applicable Term Lender. Each Term Note shall represent the
obligation of Borrower to pay the amount of the applicable Term Lender's Term
Loan Commitment, together with interest thereon.
(b) Revolving Loans.
Each Revolving Lender agrees, severally and not
jointly, to make available to Borrower from time to time until the Commitment
Termination Date its Pro Rata Share of advances (each a "Revolving Credit
Advance") requested by Borrower hereunder. The Pro Rata Share of the Revolving
Loan of any Revolving Lender shall not at any time exceed its separate Revolving
Loan Commitment and the outstanding principal amount of the Revolving Loans
(including Swing Line Loans) shall not at any time exceed the aggregate
Revolving Loan Commitments. Revolving Credit Advances may be repaid and
reborrowed; provided, that the amount of any Revolving Credit Advance to be made
at any time shall not exceed Borrowing
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Availability. All Revolving Loans shall be repaid in full on the Commitment
Termination Date. Borrower shall execute and deliver to each Revolving Lender a
note to evidence the Revolving Loan Commitment of that Revolving Lender. Each
note shall be in the principal amount of the Revolving Loan Commitment of the
applicable Revolving Lender, dated the Closing Date and substantially in the
form of Exhibit 1.1(b)(i) (each a "Revolving Note" and, collectively, the
"Revolving Notes"). If at any time the outstanding Revolving Loans (including
the Swing Line Loans) exceed the then Borrowing Availability (any such excess
Revolving Loans are herein referred to collectively as "Overadvances"), Lenders
shall not be obligated to make Revolving Credit Advances, no additional Letters
of Credit shall be issued and first the Swing Line Loans and then the Revolving
Loans must be repaid immediately and then Letters of Credit cash collateralized
in an amount sufficient to eliminate all Overadvances. All Overadvances shall
constitute Index Rate Loans and shall bear interest at the Default Rate.
Revolving Loans which are Index Rate Loans may be requested in any amount with
one (1) Business Day prior written notice required for funding requests equal to
or greater than $5,000,000. For funding requests for such Loans less than
$5,000,000, written notice must be provided by 1:00 p.m. (
New York time) on the
Business Day on which the Loan is to be made. All LIBOR Loans require three (3)
Business Days prior written notice. Written notices for funding requests shall
be in the form attached as Exhibit 1.1(b)(ii) ("Notice of Revolving Credit
Advance").
(c) Swing Line Facility.
(i) Agent shall notify the Swing Line Lender upon
Agent's receipt of any Notice of Revolving Credit Advance. Subject to the terms
and conditions hereof, the Swing Line Lender may, in its discretion, make
available from time to time until the Commitment Termination Date advances
(each, a "Swing Line Advance") in accordance with any such notice. The
provisions of this Section 1.1(c) shall not relieve Revolving Lenders of their
obligations to make Revolving Credit Advances under Section 1.1(b); provided
that if the Swing Line Lender makes a Swing Line Advance pursuant to any such
notice, such Swing Line Advance shall be in lieu of any Revolving Credit Advance
that otherwise may be made by Revolving Lenders pursuant to such notice. Except
as provided in Section 1.1(b)(ii) above, the aggregate amount of Swing Line
Advances outstanding shall not exceed at any time the lesser of (A) the Swing
Line Commitment and (B) Borrowing Availability ("Swing Line Availability").
Until the Commitment Termination Date, Borrower may from time to time borrow,
repay and reborrow under this Section 1.1(c). Each Swing Line Advance shall be
made pursuant to a Notice of Revolving Credit Advance delivered by Borrower to
Agent in accordance with Section 1.1(b). Unless the Swing Line Lender has
received at least one (1) Business Day's prior written notice from Requisite
Revolving Lenders instructing it not to make a Swing Line Advance, the Swing
Line Lender shall, notwithstanding the failure of any condition precedent set
forth in Section 7.2, be entitled to fund that Swing Line Advance, and to have
each Revolving Lender make Revolving Credit Advances in accordance with Section
1.1(c)(iii) or purchase participating interests in accordance with Section
1.1(c)(iv). Notwithstanding any other provision of this Agreement or the other
Loan Documents, the Swing Line Loan shall constitute an Index Rate Loan.
Borrower shall repay the aggregate outstanding principal amount of the Swing
Line Loan upon demand therefor by Agent. The entire unpaid balance of the Swing
Line Loan and all other
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noncontingent Obligations shall be immediately due and payable in full in
immediately available funds on the Commitment Termination Date if not sooner
paid in full.
(ii) Borrower shall execute and deliver to the Swing Line
Lender a promissory note to evidence the Swing Line Commitment. Such note shall
be in the principal amount of the Swing Line Commitment of the Swing Line
Lender, dated the Closing Date and substantially in the form of Exhibit 1.1(c)
(the "Swing Line Note"). The Swing Line Note shall represent the obligation of
Borrower to pay the amount of the Swing Line Commitment or, if less, the
aggregate unpaid principal amount of all Swing Line Advances made to Borrower
together with interest thereon as prescribed in Section 1.2.
(iii) The Swing Line Lender, at any time and from time to time
in its sole and absolute discretion but no less frequently than once weekly,
shall on behalf of Borrower (and Borrower hereby irrevocably authorizes the
Swing Line Lender to so act on its behalf) request each Revolving Lender
(including the Swing Line Lender) to make a Revolving Credit Advance to Borrower
(which shall be an Index Rate Loan) in an amount equal to that Revolving
Lender's Pro Rata Share of the principal amount of the Swing Line Loan (the
"Refunded Swing Line Loan") outstanding on the date such notice is given. Unless
any of the events described in Sections 6.1(f) and 6.1(g) has occurred (in which
event the procedures of Section 1.1(c)(iv) shall apply) and regardless of
whether the conditions precedent set forth in this Agreement to the making of a
Revolving Credit Advance are then satisfied, each Revolving Lender shall
disburse directly to Agent, its Pro Rata Share of a Revolving Credit Advance on
behalf of the Swing Line Lender, prior to 3:00 p.m. (
New York time), in
immediately available funds on the Business Day next succeeding the date that
notice is given. The proceeds of those Revolving Credit Advances shall be
immediately paid to the Swing Line Lender and applied to repay the Refunded
Swing Line Loan.
(iv) If, prior to refunding a Swing Line Loan with a Revolving
Credit Advance pursuant to Section 1.1(c)(iii), one of the events described in
Sections 6.1(f) or 6.1(g) has occurred, then, subject to the provisions of
Section 1.1(c)(v) below, each Revolving Lender shall, on the date such Revolving
Credit Advance was to have been made for the benefit of Borrower, purchase from
the Swing Line Lender an undivided participation interest in the Swing Line Loan
in an amount equal to its Pro Rata Share (determined with respect to Revolving
Loans) of such Swing Line Loan. Upon request, each Revolving Lender shall
promptly transfer to the Swing Line Lender, in immediately available funds, the
amount of its participation interest.
(v) Each Revolving Lender's obligation to make Revolving
Credit Advances in accordance with Section 1.1(c)(iii) and to purchase
participation interests in accordance with Section 1.1(c)(iv) shall be absolute
and unconditional and shall not be affected by any circumstance, including (A)
any setoff, counterclaim, recoupment, defense or other right that such Revolving
Lender may have against the Swing Line Lender, Borrower or any other Person for
any reason whatsoever; (B) the occurrence or continuance of any Default or Event
of Default; (C) any inability of Borrower to satisfy the conditions precedent to
borrowing set forth in this Agreement at any time or (D) any other circumstance,
happening or event whatsoever,
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whether or not similar to any of the foregoing. Swing Line Lender shall be
entitled to recover, on demand, from each Revolving Lender the amounts required
pursuant to Sections 1.1.(c)(iii) or 1.1(c)(iv), as the case may be. If any
Revolving Lender does not make available such amounts to Agent or the Swing Line
Lender, as applicable, the Swing Line Lender shall be entitled to recover, on
demand, such amount on demand from such Revolving Lender, together with interest
thereon for each day from the date of non-payment until such amount is paid in
full at the Federal Funds Rate for the first two Business Days and at the Index
Rate thereafter.
(d) Letters of Credit.
(i) Letter of Credit Facility. The Revolving Loan
Commitment may, in addition to advances under the Revolving Loan, be utilized,
upon the request of Borrower, for the issuance of Letters of Credit. Immediately
upon the issuance by an L/C Issuer of a Letter of Credit, and without further
action on the part of Agent or any of the Lenders, each Revolving Lender shall
be deemed to have purchased from such L/C Issuer a participation in such Letter
of Credit (or in its obligation under a risk participation agreement with
respect thereto) equal to such Revolving Lender's Pro Rata Share of the
aggregate amount available to be drawn under such Letter of Credit.
(ii) Maximum Amount. The aggregate amount of Letter
of Credit Obligations with respect to all Letters of Credit outstanding at any
time shall not exceed $20,000,000 ("L/C Sublimit").
(iii) Reimbursement. Borrower shall be irrevocably
and unconditionally obligated forthwith without presentment, demand, protest or
other formalities of any kind, to reimburse any L/C Issuer on demand in
immediately available funds for any amounts paid by such L/C Issuer with respect
to a Letter of Credit, including all reimbursement payments, Fees, Charges,
costs and expenses paid by such L/C Issuer. Borrower hereby authorizes and
directs Agent, at Agent's option, to debit Borrower's account (by increasing the
outstanding principal balance of the Revolving Credit Advances) in the amount of
any payment made by an L/C Issuer with respect to any Letter of Credit. All
amounts paid by an L/C Issuer with respect to any Letter of Credit that are not
immediately repaid by Borrower with the proceeds of a Revolving Credit Advance
or otherwise shall bear interest at the interest rate applicable to Revolving
Loans which are Index Rate Loans plus, at the election of Agent or Requisite
Revolving Lenders, an additional two percent (2.00%) per annum. Each Revolving
Lender agrees to fund its Pro Rata Share of any Revolving Loan made pursuant to
this Section 1.1(d)(iii). In the event Agent elects not to debit Borrower's
account by increasing the outstanding principal balance of the Revolving Credit
Advances and Borrower otherwise fails to reimburse the L/C Issuer in full on the
date of any payment in respect of a Letter of Credit, Agent shall promptly
notify each Revolving Lender of the amount of such unreimbursed payment and the
accrued interest thereon and each Revolving Lender, on the next Business Day
prior to 3:00 p.m. (
New York time), shall deliver to Agent an amount equal to
its Pro Rata Share thereof in same day funds. Each Revolving Lender hereby
absolutely and unconditionally agrees to pay to the L/C Issuer upon demand by
the L/C Issuer such Revolving Lender's Pro Rata Share of each payment made by
the L/C Issuer in respect of a Letter of Credit and not immediately reimbursed
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by Borrower or satisfied through a debit of Borrower's account. Each Revolving
Lender acknowledges and agrees that its obligations pursuant to this subsection
in respect of Letters of Credit are absolute and unconditional and shall not be
affected by any circumstance whatsoever, including setoff, counterclaim, the
occurrence and continuance of a Default or an Event of Default or any failure by
Borrower to satisfy any of the conditions set forth in Section 7.2. If any
Revolving Lender fails to make available to the L/C Issuer the amount of such
Revolving Lender's Pro Rata Share of any payments made by the L/C Issuer in
respect of a Letter of Credit as provided in this Section 1.1(d)(iii), the L/C
Issuer shall be entitled to recover such amount on demand from such Revolving
Lender together with interest at the Index Rate.
(iv) Request for Letters of Credit. Borrower shall
give Agent at least three (3) Business Days prior written notice specifying the
date a Letter of Credit is requested to be issued, the amount and the name and
address of the beneficiary and a description of the transactions proposed to be
supported thereby. If Agent informs Borrower that the L/C Issuer cannot issue
the requested Letter of Credit directly, Borrower may request that L/C Issuer
arrange for the issuance of the requested Letter of Credit under a risk
participation agreement with another financial institution reasonably acceptable
to Agent, L/C Issuer and Borrower. The issuance of any Letter of Credit under
this Agreement shall be subject to the conditions that the Letter of Credit (i)
supports a transaction entered into in the ordinary course of business of
Borrower and (ii) is in a form, is for an amount and contains such terms and
conditions as are reasonably satisfactory to the L/C Issuer and, in the case of
standby letters of credit, Agent. The initial notice requesting the issuance of
a Letter of Credit shall be accompanied by the form of the Letter of Credit and
the Master Standby Agreement or Master Documentary Agreement, as applicable, and
an application for a letter of credit, if any, then required by the L/C Issuer
completed in a manner satisfactory to such L/C Issuer. If any provision of any
application or reimbursement agreement is inconsistent with the terms of this
Agreement, then the provisions of this Agreement, to the extent of such
inconsistency, shall control.
(v) Expiration Dates of Letters of Credit. The
expiration date of each Letter of Credit shall be on a date which is not later
than the earlier of (a) one year from its date of issuance or (b) the thirtieth
(30th) day prior to the date set forth in clause (a) of the definition of the
term Commitment Termination Date. Notwithstanding the foregoing, a Letter of
Credit may provide for automatic extensions of its expiration date for one (1)
or more successive one (1) year periods provided that the L/C Issuer has the
right to terminate such Letter of Credit on each such annual expiration date and
no renewal term may extend the term of the Letter of Credit to a date that is
later than the thirtieth (30th) day prior to the date set forth in clause (a) of
the definition of the term Commitment Termination Date. The L/C Issuer may elect
not to renew any such Letter of Credit and, upon direction by Agent or Requisite
Revolving Lenders, shall not renew any such Letter of Credit at any time during
the continuance of an Event of Default, provided that, in the case of a
direction by Agent or Requisite Revolving Lenders, the L/C Issuer receives such
directions prior to the date notice of non-renewal is required to be given by
the L/C Issuer and the L/C Issuer has had a reasonable period of time to act on
such notice.
(vi) Obligations Absolute. The obligation of Borrower
to reimburse the L/C Issuer, Agent and Lenders for payments made in respect of
Letters of Credit issued by
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the L/C Issuer shall be unconditional and irrevocable and shall be paid under
all circumstances strictly in accordance with the terms of this Agreement,
including the following circumstances: (a) any lack of validity or
enforceability of any Letter of Credit; (b) any amendment or waiver of or any
consent or departure from all or any of the provisions of any Letter of Credit
or any Loan Document; (c) the existence of any claim, set-off, defense or other
right which Borrower, any of its Subsidiaries or Affiliates or any other Person
may at any time have against any beneficiary of any Letter of Credit, Agent, any
L/C Issuer, any Lender or any other Person, whether in connection with this
Agreement, any other Loan Document or any other related or unrelated agreements
or transactions; (d) any draft or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect; (e) payment
under any Letter of Credit against presentation of a draft or other document
that does not substantially comply with the terms of such Letter of Credit; or
(f) any other act or omission to act or delay of any kind of any L/C Issuer,
Agent, any Lender or any other Person or any other event or circumstance
whatsoever that might, but for the provisions of this Section 1.1(d)(vi),
constitute a legal or equitable discharge of Borrower's obligations hereunder.
(vii) Obligations of L/C Issuers. Each L/C Issuer
(other than GE Capital) hereby agrees that it will not issue a Letter of Credit
hereunder until it has provided Agent with written notice specifying the amount
and intended issuance date of such Letter of Credit and Agent has returned a
written acknowledgment of such notice to L/C Issuer. Each L/C Issuer (other than
GE Capital) further agrees to provide to Agent: (a) a copy of each Letter of
Credit issued by such L/C Issuer promptly after its issuance; (b) a weekly
report summarizing available amounts under Letters of Credit issued by such L/C
Issuer, the dates and amounts of any draws under such Letters of Credit, the
effective date of any increase or decrease in the face amount of any Letters of
Credit during such week and the amount of any unreimbursed draws under such
Letters of Credit; and (c) such additional information reasonably requested by
Agent from time to time with respect to the Letters of Credit issued by such L/C
Issuer. Without limiting the generality of the foregoing, it is expressly
understood and agreed by Borrower that the absolute and unconditional obligation
of Borrower to Agent and Lenders hereunder to reimburse payments made under a
Letter of Credit will not be excused by the gross negligence or willful
misconduct of the L/C Issuer. However, the foregoing shall not be construed to
excuse an L/C Issuer from liability to Borrower to the extent of any direct
damages (as opposed to consequential damages, with Borrower hereby waiving all
claims for any consequential damages to the extent permitted by applicable law)
suffered by Borrower that are subject to indemnification under the Master
Standby Agreement or the Master Documentary Agreement.
(e) Funding Authorization. The proceeds of all Loans made
pursuant to this Agreement subsequent to the Closing Date are to be funded by
Agent by wire transfer to the account designated by Borrower below (the
"Disbursement Account"):
Bank: Bank One, NA
Dallas, Texas
ABA#: 1110006
Account #: ▇▇▇▇▇▇▇▇
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Account Name: Comfort Systems USA, Inc.
Concentration Account
Borrower shall provide Agent with written notice of any change in the foregoing
instructions at least three (3) Business Days before the desired effective date
of such change.
1.2 Interest and Applicable Margins.
(a) Borrower shall pay interest to Agent, for the ratable
benefit of Lenders, in accordance with the various Loans being made by each
Lender, in arrears on each applicable Interest Payment Date, at the following
rates: (i) with respect to the Revolving Credit Advances which are designated as
Index Rate Loans (and for all other Obligations not otherwise set forth below),
the Index Rate plus the Applicable Revolver Index Margin per annum or, with
respect to Revolving Credit Advances which are designated as LIBOR Loans, the
applicable LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum; (ii)
with respect to such portion of the Term Loan designated as an Index Rate Loan,
the Index Rate plus the Applicable Term Loan Index Margin per annum or, with
respect to such portion of the Term Loan designated as a LIBOR Loan, the
applicable LIBOR Rate plus the Applicable Term Loan LIBOR Margin per annum; and
(iii) with respect to the Swing Line Loan, the Index Rate plus the Applicable
Revolver Index Margin per annum.
The Applicable Margins are as follows:
Applicable Revolver Index Margin 2.25%
Applicable Revolver LIBOR Margin 3.25%
Applicable Term Loan Index Margin 2.75%
Applicable Term Loan LIBOR Margin 3.75%
Applicable L/C Margin 3.25%
Applicable Unused Line Fee Margin 0.50%
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(b) If any payment on any Loan becomes due and payable on a
day other than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis
and interest shall be made by Agent on the basis of a 360-day year, in each case
for the actual number of days occurring in the period for which such Fees and
interest are payable. The Index Rate is a floating rate determined for each day.
Each determination by Agent of an interest rate and Fees hereunder shall be
final, binding and conclusive on Borrower, absent manifest error.
(d) So long as an Event of Default has occurred and is
continuing under Section 6.1(a), (f) or (g) and without notice of any kind, or
so long as any other Event of Default has occurred and is continuing and at the
election of Agent (or upon the written request of Requisite Lenders) confirmed
by written notice from Agent to Borrower, the interest rates applicable to the
Loans and the Letter of Credit Fee shall be increased by two percentage points
(2%) per annum above the rates of interest or the rate of such Fee otherwise
applicable hereunder ("Default Rate"), and all outstanding Obligations shall
bear interest at the Default Rate applicable to such Obligations. Interest and
Letter of Credit Fees at the Default Rate shall accrue from the initial date of
such Event of Default until that Event of Default is cured or waived and shall
be payable upon demand, but in any event, shall be payable on the next regularly
scheduled payment date set forth herein for such Obligation.
(e) Borrower shall have the option to (i) request that any
Revolving Credit Advance be made as a LIBOR Loan, (ii) convert at any time all
or any part of outstanding Loans (other than the Swing Line Loan) from Index
Rate Loans to LIBOR Loans, (iii) convert any LIBOR Loan to an Index Rate Loan,
subject to payment of the LIBOR Breakage Fee in accordance with Section 1.3(d)
if such conversion is made prior to the expiration of the LIBOR Period
applicable thereto, or (iv) continue all or any portion of any Loan (other than
the Swing Line Loan) as a LIBOR Loan upon the expiration of the applicable LIBOR
Period and the succeeding LIBOR Period of that continued Loan shall commence on
the first day after the last day of the LIBOR Period of the Loan to be
continued. Any Loan or group of Loans having the same proposed LIBOR Period to
be made or continued as, or converted into, a LIBOR Loan must be in a minimum
amount of $1,000,000 and integral multiples of $500,000 in excess of such
amount. Any such election must be made by 1:00 p.m. (
New York time) on the 3rd
Business Day prior to (1) the date of any proposed Revolving Credit Advance
which is to bear interest at the LIBOR Rate, (2) the end of each LIBOR Period
with respect to any LIBOR Loans to be continued as such, or (3) the date on
which Borrower wishes to convert any Index Rate Loan to a LIBOR Loan for a LIBOR
Period designated by Borrower in such election. If no election is received with
respect to a LIBOR Loan by 1:00 p.m. (
New York time) on the 3rd Business Day
prior to the end of the LIBOR Period with respect thereto, that LIBOR Loan shall
be converted to an Index Rate Loan at the end of its LIBOR Period. Borrower must
make such election by notice to Agent in writing, by fax or overnight courier.
In the case of any conversion or continuation, such election must be made
pursuant to a written notice (a "Notice of Conversion/Continuation") in the form
of Exhibit 1.2(e). No Loan shall be made, converted into
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or continued as a LIBOR Loan, if an Event of Default has occurred and is
continuing and Agent or Requisite Lenders have determined not to make or
continue any Loan as a LIBOR Loan as a result thereof. For the period from the
Closing Date until the earlier of (i) 45 days after the Closing Date or (ii)
completion of primary syndication as determined by Agent, no Loan may be made as
or converted into a LIBOR Loan having an interest period of greater than
one-month, and to the extent that additional Lenders are brought into the
syndicate and become party to this Agreement during any such one-month interest
period, Borrower shall pay the LIBOR Breakage Fee to Agent for the benefit of
all Lenders that funded or were prepared to fund any such one-month LIBOR Loan.
(f) Notwithstanding anything to the contrary set forth in this
Section 1.2, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrower shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on behalf
of Lenders, is equal to the total interest that would have been received had the
interest rate payable hereunder been (but for the operation of this paragraph)
the interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, interest hereunder shall be paid at the rate(s) of
interest and in the manner provided in Sections 1.2(a) through (e), unless and
until the rate of interest again exceeds the Maximum Lawful Rate, and at that
time this paragraph shall again apply. In no event shall the total interest
received by any Lender pursuant to the terms hereof exceed the amount that such
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. If the Maximum
Lawful Rate is calculated pursuant to this paragraph, such interest shall be
calculated at a daily rate equal to the Maximum Lawful Rate divided by the
number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this Section 1.2(f), a court of competent
jurisdiction shall determine by a final, non-appealable order that a Lender has
received interest hereunder in excess of the Maximum Lawful Rate, Agent shall,
to the extent permitted by applicable law, promptly apply such excess as
specified in Section 1.5(e) and thereafter shall refund any excess to Borrower
or as such court of competent jurisdiction may otherwise order.
1.3 Fees.
(a) Fee Letter. Borrower shall pay to GE Capital,
individually, the Fees specified in that certain fee letter of even date
herewith between Borrower and GE Capital (the "GE Capital Fee Letter"), at the
times specified for payment therein.
(b) Unused Line Fee. As additional compensation for the
Revolving Lenders, Borrower shall pay to Agent, for the ratable benefit of such
Lenders, in arrears, on the first Business Day of each calendar quarter prior to
the Commitment Termination Date and on the Commitment Termination Date, a fee
for Borrower's non-use of available funds in an amount equal to the Applicable
Unused Line Fee Margin per annum multiplied by the difference
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between (x) the Maximum Amount (as it may be reduced from time to time and as
then in effect) and (y) the average for the period of the daily closing balances
of the Revolving Loan and the Swing Line Loan outstanding during the period for
which such Fee is due.
(c) Letter of Credit Fee. Borrower agrees to pay to Agent for
the benefit of Revolving Lenders, as compensation to such Revolving Lenders for
Letter of Credit Obligations incurred hereunder, (i) all costs and expenses
incurred by Agent or any Lender on account of such Letter of Credit Obligations,
and (ii) for each month during which any Letter of Credit Obligation shall
remain outstanding, a fee (the "Letter of Credit Fee") computed at a rate per
annum equal to the Applicable L/C Margin per annum and calculated on the basis
of a 360-day year on the maximum amount available from time to time to be drawn
under the applicable Letter of Credit. Such fee shall be paid to Agent for the
benefit of the Revolving Lenders in arrears, on the first day of each calendar
quarter and on the Commitment Termination Date. In addition, Borrower shall pay
to any L/C Issuer, on demand, such fees (including all per annum fees), charges
and expenses of such L/C Issuer in respect of the issuance, negotiation,
acceptance, amendment, transfer and payment of such Letter of Credit or
otherwise payable pursuant to the application and related documentation under
which such Letter of Credit is issued.
(d) LIBOR Breakage Fee. Upon (i) any default by Borrower in
making any borrowing of, conversion into or continuation of any LIBOR Loan
following Borrower's delivery to Agent of any LIBOR Loan request in respect
thereof or (ii) any payment of a LIBOR Loan on any day that is not the last day
of the LIBOR Period applicable thereto (including as set forth in Section 1.2(e)
hereof) (regardless of the source of such prepayment and whether voluntary, by
acceleration or otherwise), Borrower shall pay Agent, for the benefit of all
Lenders that funded or were prepared to fund any such LIBOR Loan, the LIBOR
Breakage Fee.
(e) Expenses and Attorneys Fees. Borrower agrees to promptly
pay all reasonable fees, charges, costs and expenses (including reasonable
attorneys' fees and expenses and the allocated cost of internal legal staff)
incurred by Agent in connection with any matters contemplated by or arising out
of the Loan Documents, in connection with the examination, review, due diligence
investigation, documentation, negotiation, closing and syndication of the
transactions contemplated herein and in connection with the continued
administration of the Loan Documents including any amendments, modifications,
consents and waivers. Borrower agrees to promptly pay reasonable documentation
charges assessed by Agent for amendments, waivers, consents and any of the
documentation prepared by Agent's internal legal staff. Borrower agrees to
promptly pay all reasonable fees, charges, costs and expenses (including
reasonable fees, charges, costs and expenses of attorneys, auditors (whether
internal or external), appraisers, consultants and advisors and the allocated
cost of internal legal staff) incurred by Agent in connection with any Event of
Default, work-out or action to enforce any Loan Document or to collect any
payments due from Borrower or any other Credit Party. In addition, in connection
with any work-out or action to enforce any Loan Document or to collect any
payments due from Borrower or any other Credit Party, Borrower agrees to
promptly pay all reasonable fees, charges, costs and expenses incurred by
Lenders for one (1) counsel acting for all Lenders other than Agent. All fees,
charges, costs and expenses for which Borrower is
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responsible under this Section 1.3(e) shall be deemed part of the Obligations
when incurred, payable upon demand or in accordance with the final sentence of
Section 1.4 and secured by the Collateral.
1.4 Payments. All payments by Borrower of the Obligations shall be
without deduction, defense, setoff or counterclaim and shall be made in same day
funds and delivered to Agent, for the benefit of Agent and Lenders, as
applicable, by wire transfer to the following account or such other place as
Agent may from time to time designate in writing.
ABA No. 0210010
Account Number 502-328
Bankers Trust Company
New York,
New York
ACCOUNT NAME: GECC/CAF DEPOSITORY
Reference: GE Capital re: Comfort Systems USA, Inc.
Borrower shall receive credit on the day of receipt for funds received by Agent
by 2:00 p.m. (
New York time). In the absence of timely receipt, such funds shall
be deemed to have been paid on the next Business Day. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a Business Day,
the payment may be made on the next succeeding Business Day and such extension
of time shall be included in the computation of the amount of interest and Fees
due hereunder.
Borrower hereby authorizes Lenders to make Revolving Credit
Advances, on the basis of their Pro Rata Shares, or Swing Line Advances for the
payment of Scheduled Installments, interest, Fees and expenses, Letter of Credit
reimbursement obligations and any amounts required to be deposited with respect
to outstanding Letter of Credit Obligations pursuant to Section 6.3.
1.5 Prepayments.
(a) Voluntary Prepayments of Loans. At any time, Borrower may
prepay the Loans, in whole or in part, without premium or penalty subject to the
payment of LIBOR Breakage Fees, if applicable. Prepayments of Term Loans shall
be applied in accordance with Section 1.5(e) or as otherwise may be agreed by
Requisite Lenders.
(b) Prepayments from Excess Cash Flow. Within one hundred
(100) days after the end of each Fiscal Year commencing with the Fiscal Year
ended December 31, 2002, Borrower shall prepay the Loans in an amount equal to
fifty percent (50%) of the Excess Cash Flow for such Fiscal Year. The
calculation shall be based on the audited Financial Statements for Borrower and
its Subsidiaries. The payments shall be applied in accordance with Section
1.5(e).
(c) Prepayments from Asset Dispositions. Immediately upon
receipt of any Net Proceeds aggregating less than $1,000,000 during any Fiscal
Year that are not reinvested as permitted below, Borrower shall apply such Net
Proceeds to repay the Revolving Loans then
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outstanding (but with no permanent reduction of the Revolving Loan Commitment).
On the 180th day after the receipt of any Net Proceeds aggregating less than
$1,000,000 during any Fiscal Year that are not reinvested as permitted below,
Borrower shall repay the Loans by an amount equal to the amount of such Net
Proceeds. The payments shall be applied in accordance with Section 1.5(e).
Notwithstanding the foregoing, Borrower may reinvest up to all of the Net
Proceeds, within 180 days of receipt thereof, in productive replacement assets
of a kind then used or useable in the business of Borrower or a Subsidiary which
is a Credit Party. If Borrower does not so reinvest such Net Proceeds within the
applicable time period, Borrower shall promptly repay the Loans by an amount
equal to the amount of such Net Proceeds not so reinvested. The payments shall
be applied in accordance with Section 1.5(e).
(d) Prepayments from Issuance of Securities. Immediately upon
the receipt by Borrower or any of its Subsidiaries of the proceeds of the
issuance of Stock (other than (1) proceeds from the issuance of Stock to
employees, officers, or directors of Borrower as part of a stock option or other
similar management incentive plan or program and (2) proceeds of the issuance of
Stock to Borrower or any Subsidiary of Borrower), Borrower shall prepay the
Loans in an amount equal to such proceeds, net of underwriting discounts and
commissions and other reasonable costs associated therewith. The payments shall
be applied in accordance with Section 1.5(e).
(e) Application of Proceeds. With respect to the prepayments
described in Sections 1.5(a), 1.5(b), 1.5(c) or 1.5(d), such prepayments shall
first be applied in payment of the Term Loan in the inverse order of maturity of
the Scheduled Installments and, at any time after the Term Loan shall have been
prepaid in full, such prepayments shall then be applied to reduce the
outstanding principal balance of the Swing Line Loan and then the Revolving
Credit Advances (without any corresponding reduction of the Revolving Loan
Commitment). Considering each type of Loan being prepaid separately, any such
prepayment shall be applied first to Index Rate Loans of the type required to be
prepaid before application to LIBOR Loans of the type required to be prepaid, in
each case in a manner which minimizes any resulting LIBOR Breakage Fee.
(f) Letter of Credit Obligations. In the event any Letters of
Credit are outstanding at the time that the Revolving Loan Commitment is
terminated, Borrower shall (1) deposit with Agent for the benefit of all
Revolving Lenders cash in an amount equal to 105% of the aggregate outstanding
Letter of Credit Obligations to be available to Agent to reimburse payments of
drafts drawn under such Letters of Credit and pay any Fees and expenses related
thereto and (2) prepay the fee payable under Section 1.3(d) with respect to such
Letters of Credit for the full remaining terms of such Letters of Credit. Upon
termination of any such Letter of Credit, the unearned portion of such prepaid
fee attributable to such Letter of Credit shall be refunded to Borrower.
1.6 Maturity. All of the Obligations shall become due and payable as
otherwise set forth herein, but in any event all of the remaining Obligations
shall become due and payable upon termination of this Agreement. Until all
Obligations have been fully paid and satisfied (other than contingent
indemnification obligations to the extent no unsatisfied claim has been
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asserted), the Revolving Loan Commitment has been terminated and all Letters of
Credit have been terminated or otherwise secured to the satisfaction of Agent,
Agent shall be entitled to retain the security interests in the Collateral
granted under the Collateral Documents and the ability to exercise all rights
and remedies available to them under the Loan Documents and applicable laws.
Notwithstanding anything contained in this Agreement to the contrary, upon any
termination of the Revolving Loan Commitment, all of the Obligations shall be
due and payable.
1.7 Loan Accounts. Agent shall maintain a loan account (the "Loan
Account") on its books to record: all Advances and the Term Loans(s), all
payments made by Borrower, and all other debits and credits as provided in this
Agreement with respect to the Loans or any other Obligations. All entries in the
Loan Account shall be made in accordance with Agent's customary accounting
practices as in effect from time to time. The balance in the Loan Account, as
recorded on Agent's most recent printout or other written statement, shall,
absent manifest error, be presumptive evidence of the amounts due and owing to
Agent and Lenders by Borrower; provided that any failure to so record or any
error in so recording shall not limit or otherwise affect Borrower's duty to pay
the Obligations. Agent shall render to Borrower a monthly accounting of
transactions with respect to the Loans setting forth the balance of the Loan
Account for the immediately preceding month. Unless Borrower notifies Agent in
writing of any objection to any such accounting (specifically describing the
basis for such objection), within thirty (30) days after the date thereof, each
and every such accounting shall, absent manifest error, be deemed final, binding
and conclusive on Borrower in all respects as to all matters reflected therein.
Only those items expressly objected to in such notice shall be deemed to be
disputed by Borrower. Notwithstanding any provision herein contained to the
contrary, any Lender may elect (which election may be revoked) to dispense with
the issuance of Notes to that Lender and may rely on the Loan Account as
evidence of the amount of Obligations from time to time owing to it.
1.8 Yield Protection; Illegality.
(a) Capital Adequacy and Other Adjustments. In the event that
any Lender shall have determined that the adoption after the date hereof of any
law, treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar requirements
or compliance by any Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy, reserve requirements or similar
requirements (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) from any central bank or governmental
agency or body having jurisdiction does or shall have the effect of increasing
the amount of capital, reserves or other funds required to be maintained by such
Lender or any corporation controlling such Lender and thereby reducing the rate
of return on such Lender's or such corporation's capital as a consequence of its
obligations hereunder, then Borrower shall from time to time within fifteen (15)
days after notice and demand from such Lender (together with the certificate
referred to in the next sentence and with a copy to Agent) pay to Agent, for the
account of such Lender, additional amounts sufficient to compensate such Lender
for such reduction. A certificate as to the amount of such cost and showing the
basis of the computation of such cost
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submitted by such Lender to Borrower and Agent shall, absent manifest error, be
final, conclusive and binding for all purposes.
(b) Increased LIBOR Funding Costs; Illegality. Notwithstanding
anything to the contrary contained herein, if the introduction of or any change
in any law, rule, regulation, treaty or directive (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any LIBOR Loan, then,
unless that Lender is able to make or to continue to fund or to maintain such
LIBOR Loan at another branch or office of that Lender without, in that Lender's
opinion, adversely affecting it or its Loans or the income obtained therefrom,
on notice thereof and demand therefor by such Lender to Borrower through Agent,
(i) the obligation of such Lender to agree to make or to make or to continue to
fund or maintain LIBOR Loans shall terminate and (ii) Borrower shall forthwith
prepay in full all outstanding LIBOR Loans owing to such Lender, together with
interest accrued thereon, unless Borrower, within five (5) Business Days after
the delivery of such notice and demand, converts all LIBOR Loans into Index Rate
Loans. If, after the date hereof, the introduction of, change in or
interpretation of any law, rule, regulation, treaty or directive would impose or
increase reserve requirements (other than as taken into account in the
definition of LIBOR) or otherwise increase the cost to any Lender of making or
maintaining a LIBOR Loan, then Borrower shall from time to time within fifteen
(15) days after notice and demand from Agent (together with the certificate
referred to in the next sentence) pay to Agent, for the account of all such
affected Lenders, additional amounts sufficient to compensate such Lenders for
such increased cost. A certificate as to the amount of such cost and showing the
basis of the computation of such cost submitted by Agent on behalf of all such
affected Lenders to Borrower shall, absent manifest error, be final, conclusive
and binding for all purposes.
1.9 Taxes.
(a) No Deductions. Any and all payments or reimbursements made
hereunder or under the Notes shall be made free and clear of and without
deduction for any and all Charges, taxes, levies, imposts, deductions or
withholdings, and all liabilities with respect thereto of any nature whatsoever
imposed by any taxing authority, excluding such taxes to the extent imposed on
Agent's or a Lender's net income by the jurisdiction in which Agent or such
Lender is organized. If Borrower shall be required by law to deduct any such
amounts from or in respect of any sum payable hereunder to any Lender or Agent,
then the sum payable hereunder shall be increased as may be necessary so that,
after making all required deductions, such Lender or Agent receives an amount
equal to the sum it would have received had no such deductions been made.
(b) Changes in Tax Laws. In the event that, subsequent to the
Closing Date, (1) any changes in any existing law, regulation, treaty or
directive or in the interpretation or application thereof, (2) any new law,
regulation, treaty or directive enacted or any interpretation or application
thereof, or (3) compliance by Agent or any Lender with any request or directive
(whether or not having the force of law) from any Governmental Authority:
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(i) does or shall subject Agent or any Lender to any
tax of any kind whatsoever with respect to this Agreement, the other Loan
Documents or any Loans made or Letters of Credit issued hereunder, or change the
basis of taxation of payments to Agent or such Lender of principal, fees,
interest or any other amount payable hereunder (except for net income taxes, or
franchise taxes imposed in lieu of net income taxes, imposed generally by
federal, state or local taxing authorities with respect to interest or
commitment Fees or other Fees payable hereunder or changes in the rate of tax on
the overall net income of Agent or such Lender); or
(ii) does or shall impose on Agent or any Lender any
other condition or increased cost in connection with the transactions
contemplated hereby or participations herein;
And the result of any of the foregoing is to increase the cost to Agent or any
such Lender of issuing any Letter of Credit or making or continuing any Loan
hereunder, as the case may be, or to reduce any amount receivable hereunder,
then, in any such case, Borrower shall promptly pay to Agent or such Lender,
upon its demand, any additional amounts necessary to compensate Agent or such
Lender, on an after-tax basis, for such additional cost or reduced amount
receivable, as determined by Agent or such Lender with respect to this Agreement
or the other Loan Documents. If Agent or such Lender becomes entitled to claim
any additional amounts pursuant to this Section 1.9(b), it shall promptly notify
Borrower of the event by reason of which Agent or such Lender has become so
entitled. A certificate as to any additional amounts payable pursuant to the
foregoing sentence submitted by Agent or such Lender to Borrower (with a copy to
Agent) shall, absent manifest error, be final, conclusive and binding for all
purposes.
(c) Foreign Lenders. Each Lender organized under the laws of a
jurisdiction outside the United States (a "Foreign Lender") shall provide to
Borrower and Agent a properly completed and executed IRS Form W-8BEN or Form
W-8ECI or other applicable form, certificate or document prescribed by the IRS
of the United States certifying as to such Foreign Lender's entitlement to such
exemption with respect to payments to be made to such Foreign Lender under this
Agreement and under the Notes (a "Certificate of Exemption"). Prior to becoming
a Lender under this Agreement and within fifteen (15) days after a reasonable
written request of Borrower or Agent from time to time thereafter, each Foreign
Lender that becomes a Lender under this Agreement shall provide a Certificate of
Exemption to Borrower and Agent. If a Foreign Lender is entitled to an exemption
with respect to payments to be made to such Foreign Lender under this Agreement
and does not provide a Certificate of Exemption to Borrower and Agent within the
time periods set forth in the preceding sentence, Borrower shall withhold taxes
from payments to such Foreign Lender at the applicable statutory rates and
Borrower shall not be required to pay any additional amounts as a result of such
withholding, provided that all such withholding shall cease upon delivery by
such Foreign Lender of a Certificate of Exemption to Borrower and Agent.
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SECTION 2.
AFFIRMATIVE COVENANTS
Each Credit Party executing this Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
and until the Termination Date:
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2.1 Compliance With Laws and Contractual Obligations. Each Credit Party
will (a) comply with and shall cause each of its Subsidiaries to comply with (i)
the requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority (including, without limitation, laws, rules, regulations
and orders relating to taxes, employer and employee contributions, securities,
employee retirement and welfare benefits, environmental protection matters and
employee health and safety) as now in effect and which may be imposed in the
future in all jurisdictions in which any Credit Party or any of its Subsidiaries
is now doing business or may hereafter be doing business and (ii) the
obligations, covenants and conditions contained in all Contractual Obligations
of such Credit Party or any of its Subsidiaries other than those laws, rules,
regulations, orders and provisions of such Contractual Obligations the
noncompliance with which could not be reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect, and (b) maintain or
obtain and shall cause each of its Subsidiaries to maintain or obtain all
licenses, qualifications and permits now held or hereafter required to be held
by such Credit Party or any of its Subsidiaries, for which the loss, suspension,
revocation or failure to obtain or renew, could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect. This Section
2.1 shall not preclude any Credit Party or its Subsidiaries from contesting any
taxes or other payments, if they are being diligently contested in good faith in
a manner which stays enforcement thereof and if appropriate expense provisions
have been recorded in conformity with GAAP, subject to Section 3.2.
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2.2 Maintenance of Properties; Insurance. Each Credit Party will
maintain or cause to be maintained in good repair, working order and condition
all material properties used in the business of such Credit Party and its
Subsidiaries, ordinary wear and tear excepted, and will make or cause to be made
all appropriate repairs, renewals and replacements thereof. Each Credit Party
will maintain or cause to be maintained, with financially sound and reputable
insurers, public liability and property damage insurance with respect to its
business and properties and the business and properties of its Subsidiaries
against loss or damage of the kinds customarily carried or maintained by
corporations of established reputation engaged in similar businesses and in
amounts acceptable to Agent and will deliver evidence thereof to Agent. The
Credit Parties will maintain business interruption insurance providing for an
aggregate annual coverage limit for business interruption and property loss in
an amount not less than $25,000,000. Each Credit Party shall cause Agent,
pursuant to endorsements and/or assignments in form and substance reasonably
satisfactory to Agent, to be named as lender's loss payee in the case of
casualty insurance, additional insured in the case of all liability insurance
and assignee in the case of all business interruption insurance, in each case
for the benefit of Agent and Lenders. Each policy of insurance or endorsement
shall contain a clause requiring the insurer to give not less than 30 days'
prior written notice to Agent in the event of cancellation of such policy. Each
Credit Party represents and warrants that it and each of its Subsidiaries
currently maintains all material properties as set forth above and maintains all
insurance described above. In the event any Credit Party fails to provide Agent
with evidence of the insurance coverage required by this Agreement, Agent may
purchase insurance at such Credit Party's expense to protect Agent's interests
in the Collateral. This insurance may, but need not, protect such Credit Party's
interests. The coverage purchased by Agent may not pay any claim made by such
Credit Party or any claim that is made against such Credit Party in connection
with the Collateral. Such Credit Party may later cancel any insurance purchased
by Agent, but only after providing Agent with evidence that such Credit Party
has obtained insurance as required by this Agreement. If Agent purchases
insurance for the Collateral, such Credit Party will be responsible for the
costs of that insurance, including interest and other Charges imposed by Agent
in connection with the placement of the insurance, until the effective date of
the cancellation or expiration of the insurance. The costs of the insurance may
be added to the Obligations. The costs of the insurance may be more than the
cost of insurance such Credit Party is able to obtain on its own.
2.3 Inspection; Lender Meeting. Each Credit Party shall permit any
authorized representatives of Agent to visit, audit and inspect any of the
properties of such Credit Party and its Subsidiaries, including its and their
financial and accounting records, and to make copies and take extracts
therefrom, and to discuss its and their affairs, finances and business with its
and their officers and certified public accountants, at such reasonable times
during normal business hours and as often as may be reasonably requested.
Representatives of each Lender will be permitted to accompany representatives of
Agent during each visit, inspection and discussion referred to in the
immediately preceding sentence. Without in any way limiting the foregoing, each
Credit Party will participate and will cause key management personnel of each
Credit Party and its Subsidiaries to participate in a meeting with Agent and
Lenders at least once during each year, which meeting shall be held at such time
and such place as may be reasonably requested by Agent.
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2.4 Organizational Existence. Except as otherwise permitted by Section
3.6, each Credit Party will and will cause its Subsidiaries to at all times
preserve and keep in full force and effect its organizational existence and all
rights and franchises material to its business.
2.5 Environmental Matters. Each Credit Party shall and shall cause each
of its Subsidiaries to: (a) conduct its operations and keep and maintain its
Real Estate in compliance with all Environmental Laws and Environmental Permits
other than noncompliance that could not reasonably be expected to have a
Material Adverse Effect; (b) implement any and all investigation, remediation,
removal and response actions that are commercially necessary to maintain the
value and marketability of the Real Estate or commercially reasonable to
otherwise comply with Environmental Laws and Environmental Permits pertaining to
the presence, generation, treatment, storage, use, disposal, transportation or
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of its Real Estate; (c) notify Agent promptly after such Credit Party or any
Subsidiary thereof becomes aware of any violation of Environmental Laws or
Environmental Permits or any Release on, at, in, under, above, to, from or about
any Real Estate that is reasonably likely to result in Environmental Liabilities
to a Credit Party or its Subsidiaries in excess of $50,000; and (d) promptly
forward to Agent a copy of any order, notice, request for information or any
communication or report received by such Credit Party or any Subsidiary thereof
in connection with any such violation or Release or any other matter relating to
any Environmental Laws or Environmental Permits that could reasonably be
expected to result in Environmental Liabilities in excess of $50,000, in each
case whether or not the Environmental Protection Agency or any Governmental
Authority has taken or threatened any action in connection with any such
violation, Release or other matter. If Agent at any time has a reasonable basis
to believe that there may be a violation of any Environmental Laws or
Environmental Permits by any Credit Party or any Subsidiary thereof or any
Environmental Liability arising thereunder, or a Release of Hazardous Materials
on, at, in, under, above, to, from or about any of its Real Estate, that, in
each case, could reasonably be expected to have a Material Adverse Effect, then
each Credit Party and its Subsidiaries shall, upon Agent's written request (i)
cause the performance of such environmental audits including subsurface sampling
of soil and groundwater, and preparation of such environmental reports, at
Borrower's expense, as Agent may from time to time reasonably request, which
shall be conducted by reputable environmental consulting firms reasonably
acceptable to Agent and shall be in form and substance reasonably acceptable to
Agent, and (ii) permit Agent or its representatives to have access to all Real
Estate for the purpose of conducting such environmental audits and testing as
Agent deems appropriate, including subsurface sampling of soil and groundwater.
Borrower shall reimburse Agent for the costs of such audits and tests and the
same will constitute a part of the Obligations secured hereunder.
2.6 Landlords' Agreements, Mortgagee Agreements, Bailee Letters and
Real Estate Purchases. Each Credit Party shall use reasonable efforts to obtain
a landlord's agreement, mortgagee agreement or bailee letter, as applicable,
from the lessor of each leased property, mortgagee of owned property or bailee
with respect to any warehouse, processor or converter facility or other location
where Collateral with a value in excess of $250,000 is stored or located, which
agreement or letter shall contain a waiver or subordination of all Liens or
claims that the landlord, mortgagee or bailee may assert against the Collateral
at that location, and shall
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otherwise be reasonably satisfactory in form and substance to Agent. After the
Closing Date, no additional new real property or new warehouse space (i.e. real
property or warehouse space in addition to that real property or warehouse space
leased as of the Closing Date) where any Collateral with a value in excess of
$250,000 shall be located shall be leased by any Credit Party or any Subsidiary
without the prior written consent of Agent which consent shall not be
unreasonably withheld or delayed, or, unless and until a satisfactory landlord
agreement or bailee letter, as appropriate, shall first have been obtained with
respect to such location. Each Credit Party shall and shall cause its
Subsidiaries to timely and fully pay (including allowance for any applicable
grace periods) and perform their payment obligations (other than payment
obligations in an aggregate maximum amount not to exceed $250,000 which may be
withheld from payment to the extent that good faith disputes exist) and to fully
perform their other material obligations under all leases and other agreements
with respect to each leased location or public warehouse where any Collateral is
or may be located.
2.7 Further Assurances.
(a) Each Credit Party shall, from time to time, execute such
guaranties, financing statements, documents, security agreements and reports as
Agent or Requisite Lenders at any time may reasonably request to evidence,
perfect or otherwise implement the guaranties and security for repayment of the
Obligations contemplated by the Loan Documents.
(b) In the event any Credit Party acquires a fee simple
ownership interest in real property having a value in excess of $1,000,000 after
the Closing Date, such Credit Party shall deliver to Agent a fully executed
mortgage or deed of trust over such real property in form and substance
satisfactory to Agent, together with such title insurance policies, surveys,
appraisals, evidence of insurance, legal opinions relating to the mortgage,
environmental assessments and other documents and certificates as shall be
required by Agent.
(c) Each Credit Party shall (i) cause each Person, upon its
becoming a Subsidiary of such Credit Party (provided that this shall not be
construed to constitute consent by any of the Lenders to any transaction not
expressly permitted by the terms of this Agreement), promptly to guaranty the
Obligations and to grant to Agent, for the benefit of Agent and Lenders, a
security interest in the personal and mixed property of such Person and owned
real property having a value in excess of $1,000,000 of such Person to secure
the Obligations and (ii) contemporaneously with taking the actions under clause
(i) hereof, pledge, or cause to be pledged, to Agent, for the benefit of Agent
and Lenders, all of the Stock of such Subsidiary to secure the Obligations. The
documentation for such guaranty, security and pledge shall be substantially
similar to the Loan Documents executed concurrently herewith with such
modifications as are reasonably requested by Agent. In the case of any foreign
Subsidiary, the sole requirement shall be for each Credit Party to pledge, or
cause to be pledged, to Agent, for the benefit of Agent and Lenders, 65% of the
Stock of such foreign Subsidiary to secure the Obligations.
2.8 Interest Rate Agreement. Within sixty (60) days after the Closing
Date, Borrower shall enter into, and shall thereafter maintain, Interest Rate
Agreements providing for interest
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rate protection (1) for an aggregate amount of at least fifty percent (50%) of
the principal amount of the Term Loan, as from time to time then outstanding,
(2) for a term expiring no earlier than one (1) year after the Closing Date and
(3) with other terms and conditions reasonably satisfactory to Agent.
2.9 Cash Management System. On or prior to the Closing Date, Borrower
and each Credit Party will establish and shall maintain until the Termination
Date, the cash management systems described in Annex F (the "Cash Management
System").
SECTION 3.
NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
until the Termination Date:
3.1 Indebtedness. The Credit Parties shall not and shall not cause or
permit their Subsidiaries directly or indirectly to create, incur, assume, or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness (other than pursuant to a Contingent Obligation permitted under
Section 3.4) except:
(a) the Obligations;
(b) intercompany Indebtedness arising from loans made by
Borrower to any Subsidiary which is a Credit Party to fund working capital
requirements of such Subsidiaries in the ordinary course of business; provided,
however, that all such Indebtedness shall be evidenced by promissory notes
having terms reasonably satisfactory to Agent, the sole originally executed
counterparts of which shall be pledged and delivered to Agent, for the benefit
of Agent and Lenders, as security for the Obligations (the "Intercompany
Notes");
(c) the unsecured, Subordinated Debt in a total amount not to
exceed $15,900,000 through the 30th day after the Closing Date and $7,950,000
thereafter in the aggregate at any time outstanding;
(d) Indebtedness not to exceed $500,000 in the aggregate at
any time outstanding secured by purchase money Liens or incurred with respect to
Capital Leases;
(e) Subordinated Debt (i.e. so-called "seller paper") incurred
in connection with and to the extent permitted in connection with a Permitted
Acquisition pursuant to Section 3.6 (including, without limitation, subsections
3.6(iv) and (vi));
(f) Indebtedness in respect of the Interest Rate Agreements
contemplated by Section 2.8;
(g) Indebtedness in respect of deferred software licensing
fees in connection with Borrower or any Credit Party licensing software in the
ordinary course of business consistent
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with past practices in a total amount not to exceed $1,000,000 in the aggregate
of any time outstanding;
(h) unsecured Indebtedness consisting of industrial revenue
bonds in a total amount not to exceed $300,000 in the aggregate at any time
outstanding; and
(i) any other unsecured Indebtedness not to exceed $1,000,000
in the aggregate at any time outstanding.
3.2 Liens and Related Matters.
(a) No Liens. The Credit Parties shall not and shall not cause
or permit their Subsidiaries to directly or indirectly create, incur, assume or
permit to exist any Lien on or with respect to any property or asset of such
Credit Party or any such Subsidiary, whether now owned or hereafter acquired, or
any income or profits therefrom, except Permitted Encumbrances (including,
without limitation, those Liens constituting Permitted Encumbrances existing on
the date hereof and renewals and extensions thereof, as set forth on Schedule
3.2).
(b) No Negative Pledges. Except with respect to specific
property to be sold pursuant to an executed agreement with respect to an Asset
Sale expressly permitted under Section 3.7, the Credit Parties shall not and
shall not cause or permit their Subsidiaries to directly or indirectly enter
into or assume any agreement (other than the Loan Documents) prohibiting the
creation or assumption of any Lien upon its properties or assets, whether now
owned or hereafter acquired (it being understood, however, that the Credit
Parties may incur Indebtedness in respect of purchase money financing and
Capital Leases to the extent permitted under Section 3.1(d)).
(c) No Restrictions on Subsidiary Distributions to Borrower.
Except as provided elsewhere in this Agreement, the Credit Parties shall not and
shall not cause or permit their Subsidiaries to directly or indirectly create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Subsidiary to:
(1) pay dividends or make any other distribution on any of such Subsidiary's
Stock owned by Borrower or any other Subsidiary; (2) pay any Indebtedness owed
to Borrower or any other Subsidiary; or (3) make loans or advances to Borrower
or any other Subsidiary.
3.3 Investments. The Credit Parties shall not and shall not cause or
permit their Subsidiaries to directly or indirectly make or own any Investment
in any Person except:
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(a) Borrower and its Subsidiaries may make and own Investments
in Cash Equivalents subject to Control Agreements in favor of Agent; provided
that such Cash Equivalents are not subject to setoff rights;
(b) Borrower may make intercompany loans to other Credit
Parties to the extent permitted under Section 3.1;
(c) Borrower and its Subsidiaries may make loans and advances
to employees for moving, entertainment, travel and other similar expenses in the
ordinary course of business not to exceed $500,000 in the aggregate at any time
outstanding;
(d) Borrower and its Subsidiaries may make capital
contributions after the Closing Date to their wholly-owned domestic Subsidiaries
which are Credit Parties in an amount not to exceed $250,000 in the aggregate
during the term of this Agreement; and
(e) other Investments by the Credit Parties in an amount not
exceeding $500,000 in the aggregate at any time outstanding.
3.4 Contingent Obligations. The Credit Parties shall not and shall not
cause or permit their Subsidiaries to directly or indirectly create or become or
be liable with respect to any Contingent Obligation except:
(a) Letter of Credit Obligations;
(b) those resulting from endorsement of negotiable instruments
for collection in the ordinary course of business;
(c) those existing on the Closing Date and described in
Schedule 3.4;
(d) those arising under indemnity agreements to title insurers
to cause such title insurers to issue to Agent mortgagee title
insurance policies;
(e) those arising with respect to customary indemnification
obligations incurred in connection with Asset Dispositions permitted
hereunder;
(f) those incurred in the ordinary course of business
consistent with past practices with respect to surety, performance and
return-of-money bonds and other similar obligations, those incurred in
accordance with customary practice for appeal bonds, and those incurred
by the Borrower's subsidiaries in favor of the Borrower's sureties
which have provided bonds to the Borrower in accordance with the
foregoing provisions of this Section 3.4(f);
(h) those incurred with respect to Indebtedness permitted by
Section 3.1 provided that any such Contingent Obligation is
subordinated to the Obligations to the same extent as the Indebtedness
to which it relates is subordinated to the Obligations;
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(i) those incurred in connection with customary retainage
provisions and customary warranty provisions entered into in the
ordinary course of business consistent with past practices;
(j) those resulting from guarantees by a Credit Party of an
obligation of another Credit Party; provided, that, the underlying
obligation is otherwise permitted under the terms and conditions of
this Agreement;
(k) those resulting from guarantees by Borrower of the
obligations of another Credit Party to the extent such guarantees are
given in lieu of surety bonds in the ordinary course of business
consistent with past practices;
(l) those incurred in the ordinary course of business in
connection with insurance programs;
(m) Contingent Obligations in respect of (i) the Interest Rate
Agreements contemplated by Section 2.8 and (ii) other non-speculative
Interest Rate Agreements hedging interest rate exposure with respect to
the Loans; and
(n) any other Contingent Obligation not expressly permitted
by clauses (a) through (m) above, so long as any such other Contingent
Obligations support obligations with aggregate exposure not to exceed
$1,000,000 at any time outstanding.
3.5 Restricted Payments. The Credit Parties shall not and shall not
cause or permit their Subsidiaries to directly or indirectly declare, order,
pay, make or set apart any sum for any Restricted Payment, except that:
(a) Wholly-owned Subsidiaries of Borrower may make Restricted
Payments to Borrower;
(b) Borrower may make regularly scheduled cash interest
payments pursuant to the terms of the Subordinated Debt; provided that
no Default or Event of Default exists at the time of any such
Restricted Payment or would occur as a result thereof, and may
repurchase the Subordinated Debt as expressly permitted under this
Agreement.
3.6 Restriction on Fundamental Changes. The Credit Parties shall not
and shall not cause or permit their Subsidiaries to directly or indirectly: (a)
amend, modify or waive any term or provision of its organizational documents,
including its articles of incorporation, certificates of designations pertaining
to preferred stock, by-laws, partnership agreement or operating agreement unless
required by law or unless the amendment, modification, or waiver would not
adversely affect any Credit Party, any Subsidiary of any Credit Party, Agent or
any Lender; (b) enter into any transaction of merger or consolidation except,
upon not less than five (5) Business Days prior written notice to Agent, any
wholly-owned Subsidiary of Borrower may be merged with or into Borrower
(provided that Borrower is the surviving entity) or any other wholly-owned
Subsidiary of Borrower; (c) liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution); or (d) acquire by purchase or otherwise all or any
substantial part of
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the business or assets of any other Person. Notwithstanding the foregoing,
Borrower or through a newly formed Subsidiary that is a Credit Party or an
existing Subsidiary that is a Credit Party may acquire all or substantially all
of the assets (by way of an asset acquisition or Stock acquisition) of any
Person (the "Target") (in each case, a "Permitted Acquisition") subject to the
satisfaction of each of the following conditions:
(i) Agent shall receive at least 30 Business Days' prior
written notice of such proposed Permitted Acquisition, which notice shall
include a reasonably detailed description of such proposed Permitted
Acquisition;
(ii) such Permitted Acquisition shall only involve assets
located in the United States or Canada and comprising a business, or those
assets of a business, of the type engaged in by Borrower and its Subsidiaries as
of the Closing Date, and which business would not subject Agent or any Lender to
regulatory or third party approvals in connection with the exercise of its
rights and remedies under this Agreement or any other Loan Documents other than
approvals applicable to the exercise of such rights and remedies with respect to
Borrower and its Subsidiaries prior to such Permitted Acquisition;
(iii) such Permitted Acquisition shall be consensual and shall
have been approved by the Target's board of directors;
(iv) no additional Indebtedness, Guaranteed Indebtedness,
Contingent Obligations or other liabilities shall be incurred, assumed or
otherwise be reflected on a consolidated balance sheet of Borrower and its
Subsidiaries and Target after giving effect to such Permitted Acquisition,
except (A) Loans made hereunder, (B) Subordinated Debt (i.e., so-called "seller
paper" acquired in connection with a Permitted Acquisition), provided, that (a)
the terms of such Subordinated Debt shall be acceptable to Agent and (b)
Borrower and the other Credit Parties shall be in compliance with the terms of
this Section 3.6, including, but not limited to, clause (ix) below and all of
the other provisions of this Agreement, including, without limitation, Section
3.1(c), (C) Contingent Obligations of the Target to the extent such contingent
obligations are permitted under the terms of Section 3.4, (D) purchase money
financing and Capital Lease Obligations to the extent such purchase money
financing and Capital Lease Obligations are permitted under the terms of Section
3.1; and (E) ordinary course trade payables and other ordinary course
liabilities, accrued expenses, deferred revenue and "overbillings" with respect
to customer deposits and unsecured Indebtedness of the Target to the extent no
Default or Event of Default has occurred and is continuing or would result after
giving effect to such Permitted Acquisition;
(v) the sum of all amounts payable (including all (a)
transaction costs, (b) Indebtedness incurred or assumed in connection therewith
or otherwise reflected on a consolidated balance sheet of Borrower and its
Subsidiaries and Target, (c) liabilities (but only to the extent that there is
negative working capital) incurred or assumed in connection therewith or
otherwise reflected on a consolidated balance sheet of Borrower and its
Subsidiaries and Target, and (d) Contingent Obligations incurred or assumed in
connection therewith or otherwise reflected on a consolidated balance sheet of
Borrower and its Subsidiaries and Target) in
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connection with any such single Permitted Acquisition shall not exceed
$5,000,000 and for all Permitted Acquisitions shall not exceed $10,000,000
during any period of twelve consecutive months;
(vi) the Target shall not have incurred an operating loss for
the trailing twelve-month period preceding the date of the Permitted
Acquisition, as determined based upon the Target's financial statements
completed within sixty (60) days prior to the date of consummation of such
Permitted Acquisition;
(vii) the business and assets acquired in such Permitted
Acquisition shall be free and clear of all Liens (other than Permitted
Encumbrances);
(viii) at or prior to the closing of any Permitted
Acquisition, Agent will be granted a first priority perfected Lien (subject to
Permitted Encumbrances) in all assets acquired pursuant thereto (other than
owned real estate with a value of $1,000,000 or less) and Borrower and its
Subsidiaries and the Target shall have executed such documents and taken such
actions as may be required by Agent in connection therewith;
(ix) Concurrently with delivery of the notice referred to in
clause (i) above, Borrower shall have delivered to Agent, in form and substance
reasonably satisfactory to Agent:
(A) a pro forma consolidated balance sheet, income
statement and cash flow statement of Borrower and its Subsidiaries (the
"Acquisition Pro Forma"), based on recent financial statements, which shall be
complete and shall fairly present in all material respects the assets,
liabilities, financial condition and results of operations of Borrower and its
Subsidiaries in accordance with GAAP consistently applied, but taking into
account such Permitted Acquisition and the funding of all Loans in connection
therewith, and such Acquisition Pro Forma shall reflect that (x) average daily
excess Borrowing Availability for the 45-day period preceding the consummation
of such Permitted Acquisition would have exceeded $10,000,000 on a pro forma
basis (after giving effect to such Permitted Acquisition and all Loans funded in
connection therewith as if made on the first day of such period) and the
Acquisition Projections (as hereinafter defined) shall reflect that excess
Borrowing Availability of $10,000,000 shall continue for at least 45 days after
the consummation of such Permitted Acquisition, and (y) on a pro forma basis, no
Event of Default has occurred and is continuing or would result after giving
effect to such Permitted Acquisition and Borrower would have been in compliance
with the financial covenants set forth in Section 4 for the four quarter period
reflected in the Compliance and Excess Cash Flow Certificate most recently
delivered to Agent pursuant to Section 4.6(l) prior to the consummation of such
Permitted Acquisition (after giving effect to such Permitted Acquisition and all
Loans funded in connection therewith as if made on the first day of such
period);
(B) updated versions of the most recently delivered
Projections prepared in accordance with the Projections and otherwise on a basis
reasonably satisfactory to Agent (the "Acquisition Projections") and based upon
historical financial data of a recent date reasonably satisfactory to Agent,
taking into account such Permitted Acquisition; and
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(C) a certificate of the chief financial officer of
Borrower and its Subsidiaries to the effect that: (w) Borrower and Borrower, the
other Credit Parties and their Subsidiaries, taken as a whole, will be Solvent
upon the consummation of the Permitted Acquisition; (x) the Acquisition Pro
Forma fairly presents the financial condition of Borrower and its Subsidiaries
(on a consolidated basis) as of the date thereof after giving effect to the
Permitted Acquisition; (y) the Acquisition Projections are based upon
assumptions believed to be reasonable at the time the certificate is delivered
and based upon the historical performance of Borrower and its Subsidiaries and
the Target and show that Borrower and its Subsidiaries shall continue to be in
compliance with the financial covenants set forth in Section 4 for the shorter
of the 3-year period thereafter or the period ending on October 11, 2007; and
(z) Borrower and its Subsidiaries have completed their due diligence
investigation with respect to the Target and such Permitted Acquisition, which
investigation was conducted in a manner similar to that which would have been
conducted by a prudent purchaser of a comparable business and the results of
which investigation were delivered to Agent;
(x) on or prior to the date of such Permitted Acquisition,
Agent shall have received, in form and substance reasonably satisfactory to
Agent, copies of the acquisition agreement and related agreements and
instruments, and all opinions, certificates, lien search results and other
documents reasonably requested by Agent, including those specified in the last
sentence of Section 2.6;
(xi) on or prior to the date of such Permitted Acquisition,
Agent shall have received, in form and substance reasonably satisfactory to
Agent, environmental assessments with respect to any real property to be
acquired; and
(xii) at the time of such Permitted Acquisition and after
giving effect thereto, no Default or Event of Default has occurred and is
continuing.
3.7 Disposal of Assets or Subsidiary Stock. The Credit Parties shall
not and shall not cause or permit their Subsidiaries to directly or indirectly
convey, sell, lease, sublease, transfer or otherwise dispose of, or grant any
Person an option to acquire, in one transaction or a series of related
transactions, any of its property, business or assets, whether now owned or
hereafter acquired, except for (a) sales of inventory in the ordinary course of
business and dispositions of obsolete equipment not used or useful in the
business and (b) Asset Dispositions by Borrower and its Subsidiaries if all of
the following conditions are met: (i) the market value of assets sold or
otherwise disposed of in any single transaction or series of related
transactions does not exceed $250,000 and the aggregate market value of assets
sold or otherwise disposed of in any Fiscal Year does not exceed $1,000,000;
(ii) the consideration received is at least equal to the fair market value of
such assets; (iii) the sole consideration received is cash; (iv) the Net
Proceeds of such Asset Disposition are applied to the extent, if any, required
by Section 1.5(c); (v) after giving effect to the Asset Disposition and the
repayment of Indebtedness, if any, with the proceeds thereof, Borrower is in
compliance on a pro forma basis with the covenants set forth in Section 4
recomputed for the most recently ended quarter for which information is
available and is in compliance with all other terms and conditions of this
Agreement; and (vi) no Default or Event of Default then exists or would result
from such Asset Disposition.
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3.8 Transactions with Affiliates. The Credit Parties shall not and
shall not cause or permit their Subsidiaries to directly or indirectly enter
into or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any management, consulting,
investment banking, advisory or other similar services) with any Affiliate or
with any director, officer or employee of any Credit Party, except (a) as set
forth on Schedule 3.8, (b) transactions in the ordinary course of and pursuant
to the reasonable requirements of the business of any such Credit Party or any
of its Subsidiaries and upon fair and reasonable terms which are no less
favorable to any such Credit Party or any of its Subsidiaries than would be
obtained in a comparable arm's length transaction with a Person that is not an
Affiliate, (c) payment of reasonable compensation and benefits to officers and
employees for services actually rendered to any such Credit Party or any of its
Subsidiaries and (d) payment of reasonable director's fees to non-officers of
Borrower who are directors.
3.9 Conduct of Business. The Credit Parties shall not and shall not
cause or permit their Subsidiaries to directly or indirectly engage in any
business other than businesses conducted on the date hereof and businesses
reasonably related or incidental thereto.
3.10 Changes Relating to Indebtedness. The Credit Parties shall not and
shall not cause or permit their Subsidiaries to directly or indirectly change or
amend the terms of any of its Indebtedness permitted by Section 3.1 (c) and (e)
if the effect of such amendment is to: (a) increase the interest rate on such
Indebtedness; (b) make earlier the dates upon which payments of principal or
interest are due on or principal amount of such Indebtedness; (c) add or make
more restrictive any covenant or event of default with respect to such
Indebtedness; (d) change the redemption or prepayment provisions of such
Indebtedness in a manner adverse to any Credit Party, any Subsidiary of any
Credit Party, Agent, or any Lender; (e) change the subordination provisions
thereof (or the subordination terms of any guaranty thereof); (f) change or
amend any other term if such change or amendment would increase the obligations
of the obligor or confer additional rights on the holder of such Indebtedness in
a manner adverse to any Credit Party or Lenders; (g) increase the portion of
interest payable in cash with respect to any Indebtedness for which interest is
payable by the issuance of payment-in-kind notes or is permitted to accrue; (h)
otherwise adversely affect Borrower or any other Credit Party; or (i) otherwise
adversely affect Agent or Lenders or Borrower's ability to repay the
Obligations.
3.11 Fiscal Year. No Credit Party shall change its Fiscal Year or
permit any of its Subsidiaries to change their respective fiscal years.
3.12 Press Release; Public Offering Materials. Each Credit Party
executing this Agreement agrees that neither it nor its Affiliates will in the
future issue any press releases or other public disclosure, including any
prospectus, proxy statement or other materials filed with any Governmental
Authority relating to a public offering of the Stock of any Credit Party, using
the name of GE Capital or its affiliates or referring to this Agreement, the
other Loan Documents or the Related Transactions Documents without at least two
(2) Business Days' prior notice to GE Capital and without the prior written
consent of GE Capital unless (and only to the extent that) such Credit Party or
Affiliate is required to do so under law and then, in any event, such Credit
Party or Affiliate will consult with GE Capital before issuing such press
release or other
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public disclosure. Each Credit Party consents to the publication by Agent or any
Lender of a tombstone or similar advertising material relating to the financing
transactions contemplated by this Agreement. Agent or such Lender shall provide
a draft of any such tombstone or similar advertising material to each Credit
Party for review and comment prior to the publication thereof. Agent reserves
the right to provide to industry trade organizations information necessary and
customary for inclusion in league table measurements.
3.13 Subsidiaries. The Credit Parties shall not and shall not cause or
permit their Subsidiaries to directly or indirectly establish, create or acquire
any new Subsidiary unless such Subsidiary shall become a Credit Party hereunder.
Such Subsidiary that becomes a Credit Party hereunder shall execute such
guaranties, financing statements, documents, security agreements, other
collateral documents and reports as Agent at any time may reasonably request as
contemplated by the provisions of Section 2.7 hereof.
3.14 Bank Accounts. The Credit Parties shall not and shall not cause or
permit their Subsidiaries to establish any new bank accounts other than in
compliance with the provisions of Annex F hereto.
3.15 Hazardous Materials. The Credit Parties shall not and shall not
cause or permit their Subsidiaries to cause or permit a Release of any Hazardous
Material on, at, in, under, above, to, from or about any of the Real Estate
where such Release would (a) violate in any respect, or form the basis for any
Environmental Liabilities by the Credit Parties or any of their Subsidiaries
under, any Environmental Laws or Environmental Permits in a manner that could
reasonably be expected to, either individually or in the aggregate, results in
costs in excess of $250,000 or (b) otherwise adversely impact the value or
marketability of any of the Real Estate or any of the Collateral, other than
such violations or Environmental Liabilities that could not reasonably be
expected to have a Material Adverse Effect.
3.16 ERISA. The Credit Parties shall not and shall not cause or permit
any ERISA Affiliate to, cause or permit to occur an ERISA Event to the extent
such ERISA Event could reasonably be expected to have a Material Adverse Effect.
3.17 Sale-Leasebacks. The Credit Parties shall not and shall not cause
or permit any of their Subsidiaries to engage in any sale-leaseback, synthetic
lease or similar transaction involving any of its assets.
3.18 Prepayments of Other Indebtedness. No Credit Party shall, directly
or indirectly, voluntarily purchase, redeem, defease or prepay any principal of,
premium, if any, interest or other amount payable in respect of any
Indebtedness, other than (i) the Obligations; (ii) Indebtedness secured by a
Permitted Encumbrance if the asset securing such Indebtedness has been sold or
otherwise disposed of in accordance with Section 3.7(b), (iii) Indebtedness
secured by a Permitted Encumbrance which is repaid solely with the proceeds of
new Indebtedness with the same maturity or a maturity beyond the maturity of the
Indebtedness repaid; provided that (a) such new Indebtedness is otherwise
permitted pursuant to Section 3.1 hereof, (b) any asset securing such
Indebtedness is the same asset which supported such repaid Indebtedness, and (c)
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there shall be no net costs, fees, penalties or other similar expenses incurred
in connection therewith, (iv) other Indebtedness in an aggregate amount not to
exceed $50,000 during the term of the Agreement; provided that no Default or
Event of Default shall have then occurred or be continuing or would result after
giving effect thereto; (v) intercompany Indebtedness reflecting amounts owing to
Borrower or one of its Subsidiaries and (vi) the repurchase and retirement or
other prepayment in full of all of the Subordinated Debt at or prior to the
maturity thereof in April 2003 for a purchase price not to exceed par (i.e. no
premium shall be paid); provided, that, with respect to clause (vi) hereof each
of the following is satisfied: (a) Borrower shall be in compliance with all of
the provisions of Section 4 both before making any such repurchase and
retirement or prepayment in full and on a pro forma basis after giving effect
thereto; (b) Borrower shall have excess Borrowing Availability of at least
$7,500,000 both before giving effect to such repurchase and retirement or
prepayment in full and after giving effect thereto; (c) no Default or Event of
Default shall have occurred and be continuing or would result after giving
effect to such repurchase and retirement or prepayment in full; and (d) the
terms and conditions of such repurchase and retirement or prepayment in full
shall otherwise be reasonably satisfactory to Agent.
SECTION 4.
FINANCIAL COVENANTS/REPORTING
Borrower covenants and agrees that from and after the date
hereof until the Termination Date, Borrower shall perform and comply with, and
shall cause each of the other Credit Parties to perform and comply with, all
covenants in this Section 4 applicable to such Person.
4.1 Lease Limits. Borrower will not and will not permit any of its
Subsidiaries directly or indirectly to become or remain liable in any way,
whether directly or by assignment or as a guarantor or other surety, for the
obligations of the lessee under any operating lease, synthetic lease or similar
off-balance sheet financing, if the aggregate amount of all rents (or
substantially equivalent payments) paid by Borrower and its Subsidiaries under
all such leases would exceed $25,000,000 in any Fiscal Year of Borrower.
4.2 Minimum EBITDA. Borrower and its Subsidiaries on a consolidated
basis shall have, at the end of each Fiscal Quarter set forth below, EBITDA for
the 12-month period then ended of not less than the following:
Period EBITDA
------ ------
September 30, 2002 $ 25,650,000
December 31, 2002 $ 25,650,000
March 31, 2003 $ 27,000,000
June 30, 2003 $ 27,000,000
September 30, 2003 $ 27,000,000
December 31, 2003 $ 27,000,000
March 31, 2004 $ 29,000,000
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June 30, 2004 $29,000,000
September 30, 2004 $29,000,000
December 31, 2004 $29,000,000
March 31, 2005 $31,000,000
and each Fiscal Quarter thereafter
4.3 Minimum Fixed Charge Coverage Ratio. Borrower and its Subsidiaries
shall have on a consolidated basis at the end of each Fiscal Quarter set forth
below, a Fixed Charge Coverage Ratio for the 12-month period then ended of not
less than the following:
2.30 to 1.0 for the Fiscal Quarter ending September 30, 2002;
2.30 to 1.0 for the Fiscal Quarter ending December 31, 2002;
2.50 to 1.0 for the Fiscal Quarter ending March 31, 2003;
2.50 to 1.0 for the Fiscal Quarter ending June 30, 2003;
2.70 to 1.0 for the Fiscal Quarter ending September 30, 2003;
2.70 to 1.0 for the Fiscal Quarter ending December 31, 2003; and
3.00 to 1.0 for each Fiscal Quarter ending thereafter.
4.4 Minimum Interest Coverage Ratio. Borrower and its Subsidiaries on a
consolidated basis shall have at the end of each and every Fiscal Quarter, an
Interest Coverage Ratio for the 12-month period then ended of not less than 3.00
to 1.0.
4.5 Maximum Leverage Ratio. Borrower and its Subsidiaries on a
consolidated basis shall have, at the end of each Fiscal Quarter set forth
below, a Leverage Ratio as of the last day of such Fiscal Quarter and for the
12-month period then ended of not more than the following:
1.75 to 1.0 for the Fiscal Quarter ending September 30, 2002;
1.75 to 1.0 for the Fiscal Quarter ending December 31, 2002;
1.75 to 1.0 for the Fiscal Quarter ending March 31, 2003;
1.75 to 1.0 for the Fiscal Quarter ending June 30, 2003;
1.50 to 1.0 for the Fiscal Quarter ending September 30, 2003;
1.50 to 1.0 for the Fiscal Quarter ending December 31, 2003;
1.50 to 1.0 for the Fiscal Quarter ending March 31, 2004;
1.50 to 1.0 for the Fiscal Quarter ending June 30, 2004;
1.25 to 1.0 for each Fiscal Quarter ending thereafter.
4.6 Financial Statements and Other Reports. Borrower will maintain, and
cause each of its Subsidiaries to maintain, a system of accounting established
and administered in accordance with sound business practices to permit
preparation of Financial Statements in conformity with GAAP (it being understood
that monthly Financial Statements are not required to have footnote
disclosures). Borrower will deliver each of the Financial Statements and other
reports described below to Agent (and each Lender in the case of the Financial
Statements and other reports described in Sections 4.6 (a), (b), (d), (e), (f),
(g), (h) and (l)).
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(a) Monthly Financials. As soon as available and in any event
within thirty (30) days after the end of each month (including the last month of
Borrower's Fiscal Year), Borrower will deliver (1) the consolidated balance
sheet of BORROWER and its Subsidiaries, as at the end of such month, and the
related consolidated statements of income, stockholders' equity and cash flow
for such month and for the period from the beginning of the then current Fiscal
Year of Borrower to the end of such month, and (2) in the case of income
statements, a report setting forth in comparative form the corresponding figures
for the corresponding periods of the previous Fiscal Year and the corresponding
figures from the most recent Projections for the current Fiscal Year delivered
pursuant to Section 4.6(f).
(b) Year-End Financials. As soon as available and in any event
within ninety (90) days after the end of each Fiscal Year of Borrower, Borrower
will deliver (1) the consolidated and consolidating balance sheets of Borrower
and its Subsidiaries, as at the end of such year, and the related consolidated
and consolidating statements of income, stockholders' equity and cash flow for
such Fiscal Year, (2) a schedule of the outstanding Indebtedness for borrowed
money of Borrower and its Subsidiaries describing in reasonable detail each such
debt issue or loan outstanding and the principal amount and amount of accrued
and unpaid interest with respect to each such debt issue or loan and (3) a
report with respect to the consolidated Financial Statements from a firm of
Certified Public Accountants selected by Borrower and reasonably acceptable to
Agent, which report shall be prepared in accordance with Statement of Auditing
Standards No. 58 (the "Statement") "Reports on Audited Financial Statements" and
such report shall be "Unqualified" (as such term is defined in such Statement).
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(c) Accountants' Reports. Reasonably promptly following
receipt thereof, Borrower will deliver copies of all significant reports
submitted by Borrower's firm of certified public accountants in connection with
each annual, interim or special audit or review of any type of the Financial
Statements or related internal control systems of Borrower or its Subsidiaries
made by such accountants, including any comment letter submitted by such
accountants to management in connection with their services.
(d) EBITDA Availability Certificate. As soon as available and
in any event within fifteen (15) Business Days after the end of each month, and
from time to time upon the request of Agent, Borrower will deliver an EBITDA
Availability Certificate (in substantially the same form as Exhibit 4.6(d), the
"EBITDA Availability Certificate") as at the last day of such period.
(e) Management Report. Together with each delivery of
Financial Statements of Borrower pursuant to Sections 4.6(a) and (b), Borrower
will deliver a management report (1) describing the operations and financial
condition of Borrower and its Subsidiaries for the month then ended and the
portion of the current Fiscal Year then elapsed (or for the Fiscal Year then
ended in the case of year-end financials) and (2) discussing the reasons for any
significant variations. The information above shall be presented in reasonable
detail and shall be certified by the chief financial officer of Borrower to the
effect that such information fairly presents the results of operations and
financial condition of Borrower and its Subsidiaries as at the dates and for the
periods indicated.
(f) Projections; Annual Budget. As soon as available and in
any event no later than 45 days after the end of each Fiscal Year, Borrower will
deliver Projections of Borrower and its Subsidiaries for the forthcoming three
(3) Fiscal Years, year by year, and for the forthcoming Fiscal Year, Fiscal
Quarter by Fiscal Quarter. As soon as available, but not later than 45 days
after the end of each Fiscal Year, Borrower will deliver an annual operating
plan for Borrower, as certified by the Chief Financial Officer of Borrower, for
the following Fiscal Year, which (i) includes a statement of all of the material
assumptions on which such plan is based, (ii) includes quarterly balance sheets,
income statements and statements of cash flow for the following year, (iii)
integrates sales, gross profits, operating expenses, operating profit, cash flow
projections and Borrowing Availability projections, all prepared on the same
basis and in similar detail as that on which operating results are reported (and
in the case of cash flow projections, representing management's good faith
estimates of future financial performance based on historical performance), and
including plans for Capital Expenditures; and (iv) includes a management
discussion and analysis.
(g) SEC Filings and Press Releases. With reasonable promptness
following their becoming available, Borrower will deliver copies of (1) all
Financial Statements, reports, notices and proxy statements sent or made
available by Borrower or any of its Subsidiaries to its Stockholders, (2) all
regular and periodic reports and all registration statements and prospectuses,
if any, filed by Borrower or any of its Subsidiaries with any securities
exchange or with the Securities and Exchange Commission, any Governmental
Authority or any private regulatory
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authority, and (3) all press releases and other statements made available by
Borrower or any of its Subsidiaries to the public concerning developments in the
business of any such Person.
(h) Events of Default, Etc. Promptly upon any officer of
Borrower obtaining knowledge of any of the following events or conditions,
Borrower shall deliver copies of all notices given or received by Borrower or
any of its Subsidiaries with respect to any such event or condition and a
certificate of Borrower's chief executive officer or chief financial officer
specifying the nature and period of existence of such event or condition and
what action Borrower or any of its Subsidiaries has taken, is taking and
proposes to take with respect thereto: (1) any condition or event that
constitutes, or which would reasonably be expected to result in the occurrence
of, an Event of Default or Default; (2) any notice that any Person has given to
Borrower or any of its Subsidiaries or any other action taken with respect to a
claimed default or event or condition of the type referred to in Section 6.1(b);
(3) any event or condition that could reasonably be expected to result in any
Material Adverse Effect; or (4) any default or event of default with respect to
any Indebtedness in excess of $50,000 in principal amount, either individually
or in the aggregate, of Borrower or any of its Subsidiaries.
(i) Litigation. Reasonably promptly following any executive
officer of any Credit Party obtaining knowledge of (1) the institution of any
action, charge, claim, demand, suit, proceeding, petition, governmental
investigation, tax audit or arbitration now pending or, to the best knowledge of
such Credit Party after due inquiry, threatened against or affecting any Credit
Party or any of its Subsidiaries or any property of any Credit Party or any of
its Subsidiaries ("Litigation") not previously disclosed by Borrower to Agent
that would reasonably be expected to, either individually or in the aggregate,
result in a cost in excess of $500,000 or (2) any material development in any
action, suit, proceeding, governmental investigation or arbitration at any time
pending against or affecting any Credit Party or any property of any Credit
Party which, in each case, would reasonably be expected to have a Material
Adverse Effect, Borrower will reasonably promptly give notice thereof to Agent
and provide such other information as may be reasonably available to them to
enable Agent and its counsel to evaluate such matter.
(j) Notice of Corporate and other Changes. Borrower shall
provide reasonably prompt written notice of (1) all jurisdictions in which a
Credit Party becomes qualified after the Closing Date to transact business, (2)
any change after the Closing Date in the authorized and issued Stock of any
Credit Party or any Subsidiary of any Credit Party, other than issuances of
Stock to employees, officers or directors of Borrower as part of a stock option
or other similar management incentive plan or program, or any amendment to their
articles or certificate of incorporation, by-laws, partnership agreement or
other organizational documents, (3) any Subsidiary created or acquired by any
Credit Party or any of its Subsidiaries after the Closing Date, such notice, in
each case, to identify the applicable jurisdictions, capital structures or
Subsidiaries, as applicable, and (4) any other event that occurs after the
Closing Date which would cause any of the representations and warranties in
Section 5 of this Agreement or in any other Loan Document to be untrue or
misleading in any material respect. The foregoing notice requirement shall not
be construed to constitute consent by any of the Lenders to any transaction
referred to above which is not expressly permitted by the terms of this
Agreement.
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(k) Other Information. With reasonable promptness, Borrower
will deliver such other information and data with respect to any Credit Party or
any Subsidiary of any Credit Party as from time to time may be reasonably
requested by Agent.
(l) Compliance and Excess Cash Flow Certificate. Together with
each delivery of Financial Statements of Borrower and its Subsidiaries pursuant
to Sections 4.6(a) (but only to the extent delivered at the end of a month that
is also the end of a Fiscal Quarter or Fiscal Year) and Section 4.6(b), Borrower
will deliver a fully and properly completed Compliance and Excess Cash Flow
Certificate (in substantially the same form as Exhibit 4.6(l) (the "Compliance
and Excess Cash Flow Certificate") signed by Borrower's chief executive officer
or chief financial officer.
(m) Taxes. Borrower shall provide reasonably prompt written
notice of (i) the execution or filing with the IRS or any other Governmental
Authority of any agreement or other document extending, or having the effect of
extending, the period for assessment or collection of any Charges by any Credit
Party or any of its Subsidiaries and (ii) any agreement by any Credit Party or
any of its Subsidiaries or request directed to any Credit Party or any of its
Subsidiaries to make any adjustment under IRC Section 481(a), by reason of a
change in accounting method or otherwise, which could reasonably be expected to
have a Material Adverse Effect.
4.7 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement. For purposes of this Agreement, all accounting terms not
otherwise defined herein shall have the meanings assigned to such terms in
conformity with GAAP. Financial statements and other information furnished to
Agent pursuant to Section 4.6 or any other section (unless specifically
indicated otherwise) shall be prepared in accordance with GAAP as in effect at
the time of such preparation; provided that no Accounting Change shall affect
financial covenants, standards or terms in this Agreement; provided further that
Borrower shall prepare footnotes to the Financial Statements required to be
delivered hereunder that show the differences between the Financial Statements
delivered (which reflect such Accounting Changes) and the basis for calculating
financial covenant compliance (without reflecting such Accounting Changes).
SECTION 5.
REPRESENTATIONS AND WARRANTIES
To induce Agent and Lenders to enter into the Loan Documents,
to make Loans and to issue or cause to be issued Letters of Credit, Borrower and
the other Credit Parties executing this Agreement, jointly and severally,
represent, warrant and covenant to Agent and each Lender that the following
statements are and, after giving effect to the Related Transactions, will remain
true, correct and complete until the Termination Date with respect to all Credit
Parties.
5.1 Disclosure. No representation or warranty of any Credit Party
contained in this Agreement, the Financial Statements referred to in Section
5.5, the other Related Transactions Documents or any other document, certificate
or written statement furnished to Agent or any Lender by or on behalf of any
such Person for use in connection with the Loan Documents or the
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Related Transactions Documents contains any untrue statement of a material fact
or omitted, omits or will omit to state a material fact necessary in order to
make the statements contained herein or therein, when taken as a whole, not
misleading in light of the circumstances in which the same were made.
5.2 No Material Adverse Effect. As of the Closing Date, since December
31, 2001 there have been no events or changes in facts or circumstances
affecting any Credit Party or any of its Subsidiaries which individually or in
the aggregate have had or could reasonably be expected to have a Material
Adverse Effect and that have not been disclosed herein or in the attached
Disclosure Schedules.
5.3 No Conflict. The consummation of the Related Transactions does not
and will not violate or conflict with any laws, rules, regulations or orders of
any Governmental Authority or violate, conflict with, result in a breach of, or
constitute a default (with due notice or lapse of time or both) under any
Contractual Obligation or organizational documents of any Credit Party or any of
its Subsidiaries except if such violations, conflicts, breaches or defaults
could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
5.4 Organization, Powers, Capitalization and Good Standing.
(a) Organization and Powers. Each of the Credit Parties and
each of their Subsidiaries is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and qualified to do
business in all states where such qualification is required except where failure
to be so qualified could not reasonably be expected to have a Material Adverse
Effect. The jurisdiction of organization and all jurisdictions in which each
Credit Party is qualified to do business on the Closing Date are set forth on
Schedule 5.4(a). Each of the Credit Parties and each of their Subsidiaries has
all requisite organizational power and authority to own and operate its
properties, to carry on its business as now conducted and proposed to be
conducted, to enter into each Related Transactions Document to which it is a
party and to incur the Obligations, grant liens and security interests in the
Collateral and carry out the Related Transactions.
(b) Capitalization. As of the Closing Date: (i) the authorized
Stock of each of the Borrower's Subsidiaries is as set forth on Schedule 5.4(b);
(ii) all issued and outstanding Stock of each of the Credit Parties and each of
their Subsidiaries is duly authorized and validly issued, fully paid and
nonassessable, and on such Stock was issued in compliance with all applicable
state, federal and foreign laws concerning the issuance of securities; (iii) all
issued and outstanding Stock of each of the Credit Parties, other than the
Borrower (as to which no representation and warranty is made under this clause
(iii)), and each of their Subsidiaries is free and clear of all liens other than
those in favor of Agent, for the benefit of itself and lenders; (iv) the
identity of the holders of the Stock of each of the Borrower's Subsidiaries and
the percentage of their fully-diluted ownership of the Stock of each of the
Subsidiaries is set forth on Schedule 5.4(b); and (v) no Stock of any of the
Borrower's Subsidiaries, other than those described above, are issued and
outstanding. Except as provided in Schedule 5.4(b), as of the
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Closing Date, there are no preemptive or other outstanding rights, options,
warrants, conversion rights or similar agreements or understandings for the
purchase or acquisition from any Credit Party or any of their Subsidiaries of
any Stock of any such entity.
(c) Binding Obligation. This Agreement is, and the other
Related Transactions Documents when executed and delivered will be, the legally
valid and binding obligations of the applicable parties thereto, each
enforceable against each of such parties, as applicable, in accordance with
their respective terms.
(d) Compliance with Laws. Each Credit Party represents and
warrants that it (i) is in compliance and each of its Subsidiaries is in
compliance with the requirements of all applicable laws, rules, regulations and
orders of any Governmental Authority and the obligations, conditions and
covenants contained in all Contractual Obligations other than those laws, rules,
regulations, orders and provisions of such Contractual Obligations the
noncompliance with which could not be reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect, and (ii) maintains
and each of its Subsidiaries maintains all material licenses, qualifications and
permits referred to in Section 2.1.
5.5 Financial Statements and Projections. All Financial Statements
concerning Borrower and its respective Subsidiaries which have been or will
hereafter be furnished to Agent pursuant to this Agreement, including those
listed below, have been or will be prepared in accordance with GAAP consistently
applied (except as disclosed therein) and presented and will present fairly in
all material respects the financial condition of the entities covered thereby as
at the dates thereof and the results of their operations for the periods then
ended, subject to, in the case of unaudited Financial Statements, the absence of
footnotes and normal year-end adjustments.
(a) The consolidated balance sheet at December 31, 2001 and
the related statements of income and cash flows of Borrower and its
Subsidiaries, for the Fiscal Year then ended, audited by Ernst & Young
LLP.
(b) The consolidated balance sheet at June 30, 2002 and the
related statements of income and cash flows of Borrower and its
Subsidiaries for the six (6) months then ended.
(c) The consolidated balance sheet at August 31, 2002 and the
related statements of income and cash flows of Borrower and its
Subsidiaries for the eight (8) months then ended.
The Projections delivered on or prior to the Closing Date and the updated
Projections delivered pursuant to Section 4.6(h) represent and will represent as
of the date thereof the good faith estimate of Borrower and its senior
management based on assumptions believed to be reasonable at the time the
Projections were delivered.
5.6 Intellectual Property. Each of the Credit Parties and its
Subsidiaries owns, is licensed to use or otherwise has the right to use, all
Intellectual Property necessary for the
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conduct of its business as currently conducted that is material to the condition
(financial or other), business or operations of such Credit Party and its
Subsidiaries and all such material Intellectual Property is identified on
Schedule 5.6 and fully protected and/or duly and properly registered, filed or
issued in the appropriate office and jurisdictions for such registrations,
filings or issuances. Except as disclosed in Schedule 5.6, the use of such
Intellectual Property by the Credit Parties and their Subsidiaries and the
conduct of their businesses does not and has not been alleged by any Person to
infringe on the rights of any Person in a manner that could reasonably be
expected to have a Material Adverse Effect.
5.7 Investigations, Audits, Etc. As of the Closing Date, except as set
forth on Schedule 5.7, no Credit Party or any of their Subsidiaries is the
subject of any review or audit by the IRS or any governmental investigation
concerning the violation or possible violation of any law.
5.8 Employee Matters. Except as set forth on Schedule 5.8, (a) on the
Closing Date no Credit Party or Subsidiary of a Credit Party nor any of their
respective employees is subject to any collective bargaining agreement, (b) on
the Closing Date no petition for certification or union election is pending with
respect to the employees of any Credit Party or any of their Subsidiaries and no
union or collective bargaining unit has sought such certification or recognition
with respect to the employees of any Credit Party or any of their Subsidiaries,
(c) there are no strikes, slowdowns, work stoppages or controversies pending or,
to the best knowledge of any Credit Party after due inquiry, threatened between
any Credit Party or any of their Subsidiaries and its respective employees,
other than employee grievances arising in the ordinary course of business which
could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect and (d) hours worked by and payment made to
employees of each Credit Party and each of their Subsidiaries comply with the
Fair Labor Standards Act and each other federal, state, local or foreign law
applicable to such matters, other than those the noncompliance with which could
not be reasonably be expected to have, either individually or in the aggregate,
a Material Adverse Effect. Except as set forth on Schedule 5.8, on the Closing
Date, neither Borrower nor any of its Subsidiaries is party to an employment
contract with any officer or director thereof.
5.9 Solvency. (a) The Borrower is Solvent; and
(b) The Borrower, each of the other Credit Parties and their
Subsidiaries, taken as a whole, are Solvent.
5.10 Litigation; Adverse Facts. Except as set forth on Schedule 5.10,
there are no judgments outstanding against any Credit Party or any of its
Subsidiaries or affecting any property of any Credit Party or any of its
Subsidiaries, nor is there any Litigation pending, or to the best knowledge of
any Credit Party threatened, against any Credit Party or any of its Subsidiaries
which could reasonably be expected to result in any Material Adverse Effect.
5.11 Use of Proceeds; Margin Regulations.
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(a) No part of the proceeds of any Loan will be used for
"buying" or "carrying" "margin stock" within the respective meanings of such
terms under Regulation U of the Board of Governors of the Federal Reserve System
as now and from time to time hereafter in effect or for any other purpose that
violates the provisions of the regulations of the Board of Governors of the
Federal Reserve System. If requested by Agent, each Credit Party will furnish to
Agent and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form 0-1, as applicable, referred to in
Regulation U.
(b) Borrower shall utilize the proceeds of the Loans solely
for the Refinancing (and to pay any related transaction expenses), and for the
financing of Borrower's ordinary working capital and general corporate needs.
Schedule 5.11 contains a description of Borrower's sources and uses of funds as
of the Closing Date, including Loans and Letter of Credit Obligations to be made
or incurred on that date, and a funds flow memorandum detailing how funds from
each source are to be transferred for particular uses.
5.12 Ownership of Property; Liens. As of the Closing Date, the real
estate ("Real Estate") listed in Schedule 5.12 constitutes all of the real
property owned, leased, subleased, or used by any Credit Party or any of its
Subsidiaries. No Credit Party owns any real estate with a fair market value in
excess of $1,000,000 on the Closing Date and Schedule 5.12 lists all material
leases of real estate in effect on the Closing Date. Each of the Credit Parties
and each of its Subsidiaries owns good and marketable fee simple title to all of
its owned material Real Estate, and valid and marketable leasehold interests in
all of its leased material Real Estate, and copies of all such material leases
have been delivered to Agent. Schedule 5.12 further describes any Real Estate
with respect to which any Credit Party or any of its Subsidiaries is a lessor,
sublessor or assignor as of the Closing Date. Each of the Credit Parties and
each of its Subsidiaries also has good and marketable title to, or valid
leasehold interests in, all of its personal property and assets except where
such failure could not reasonably be expected, either individually or in the
aggregate, to have a Material Adverse Effect. As of the Closing Date, none of
the properties and assets of any Credit Party or any of its Subsidiaries are
subject to any Liens other than Permitted Encumbrances, and there are no facts,
circumstances or conditions known to Borrower that may result in any Liens
(including Liens arising under Environmental Laws) other than Permitted
Encumbrances against the properties or assets of any Credit Party or any of its
Subsidiaries. Each of the Credit Parties and each of its Subsidiaries has
received all deeds, assignments, waivers, consents, nondisturbance and
attornment or similar agreements, bills of sale and other documents, and has
duly effected all recordings, filings and other actions necessary to establish,
protect and perfect in all material respects such Credit Party's or Subsidiary's
right, title and interest in and to all such Real Estate and other properties
and assets. Schedule 5.12 also describes any purchase options, rights of first
refusal or other similar contractual rights pertaining to any Real Estate as of
the Closing Date. As of the Closing Date, no portion of any Credit Party's or
any of its Subsidiaries' Real Estate has suffered any material damage by fire or
other casualty loss that has not heretofore been repaired and restored in all
material respects to its original condition or otherwise remedied. As of the
Closing Date, all material permits required to have been issued or appropriate
to enable the Real Estate to be lawfully occupied and used for all of the
purposes for which it is currently occupied and used have been lawfully issued
and are in full force and effect.
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5.13 Environmental Matters.
(a) Except as set forth in Schedule 5.13, as of the Closing
Date: (i) the Real Estate is free of contamination from any Hazardous Material
except for such contamination that could not reasonably be expected to adversely
impact the value or marketability of such Real Estate and that could not
reasonably be expected to result in Environmental Liabilities of the Credit
Parties or their Subsidiaries in excess of $250,000 in the aggregate; (ii) no
Credit Party and no Subsidiary of a Credit Party has caused or suffered to occur
any Release of Hazardous Materials on, at, in, under, above, to, from or about
any of their Real Estate that could reasonably be expected, either individually
or in the aggregate, to result in costs in excess of $250,000; (iii) the Credit
Parties and their Subsidiaries are and have been in compliance with all
Environmental Laws, except for such noncompliance that could not reasonably be
expected to result in Environmental Liabilities of the Credit Parties or their
Subsidiaries in excess of $250,000 in the aggregate (iv) the Credit Parties and
their Subsidiaries have obtained, and are in compliance with, all Environmental
Permits required by Environmental Laws for the operations of their respective
businesses as presently conducted or as proposed to be conducted, except where
the failure to so obtain or comply with such Environmental Permits could not
reasonably be expected to result in Environmental Liabilities of the Credit
Parties or their Subsidiaries in excess of $250,000 in the aggregate, and all
such Environmental Permits are valid, uncontested and in good standing; (v) no
Credit Party and no Subsidiary of a Credit Party is involved in operations or
knows of any facts, circumstances or conditions, including any Releases of
Hazardous Materials, that are likely to result in any Environmental Liabilities
of such Credit Party or Subsidiary which could reasonably be expected to be in
excess of $250,000 in the aggregate, and no Credit Party or Subsidiary of a
Credit Party has permitted any current or former tenant or occupant of the Real
Estate to engage in any such operations; (vi) there is no Litigation arising
under or related to any Environmental Laws, Environmental Permits or Hazardous
Material that seeks damages, penalties, fines, costs or expenses in excess of
$250,000 in the aggregate or injunctive relief against, or that alleges criminal
misconduct by any Credit Party or any Subsidiary of a Credit Party; (vii) no
notice has been received by any Credit Party or any Subsidiary of a Credit Party
identifying any of them as a "potentially responsible party" or requesting
information under CERCLA or analogous state statutes, and to the knowledge of
the Credit Parties, there are no facts, circumstances or conditions that may
result in any of the Credit Parties or their Subsidiaries being identified as a
"potentially responsible party" under CERCLA or analogous state statutes; and
(viii) the Credit Parties have provided to Agent copies of all existing
environmental reports, reviews and audits and all written information pertaining
to actual or potential Environmental Liabilities, in each case relating to any
of the Credit Parties or their Subsidiaries.
(b) Each Credit Party hereby acknowledges and agrees that
Agent (i) is not now, and has not ever been, in control of any of the Real
Estate or affairs of such Credit Party or its Subsidiaries, and (ii) does not
have the capacity through the provisions of the Loan Documents or otherwise to
influence any Credit Party's or its Subsidiaries' conduct with respect to the
ownership, operation or management of any of their Real Estate or compliance
with Environmental Laws or Environmental Permits.
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5.14 ERISA.
(a) Schedule 5.14 lists all Plans and separately identifies
all Pension Plans, including Title IV Plans (other than Multiemployer Plans),
ESOPs and Welfare Plans, including all Retiree Welfare Plans. Copies of all such
listed Plans, together with a copy of the latest form IRS/DOL 5500-series for
each such Plan have been delivered to Agent. Except with respect to
Multiemployer Plans, each Qualified Plan has been determined by the IRS to
qualify under Section 401 of the IRC, the trusts created thereunder have been
determined to be exempt from tax under the provisions of Section 501 of the IRC,
and nothing has occurred that would cause the loss of such qualification or
tax-exempt status. Except as provided in Schedule 5.14 and except for any
Multiemployer Plans, each Plan is in compliance with the material applicable
provisions of ERISA and the IRC, including the timely filing of all reports
required under the IRC or ERISA, including the statement required by 29 CFR
Section 2520.104-23 provided, however, that notwithstanding the foregoing, with
respect to any Multiemployer Plans, the foregoing is limited to the knowledge of
the Borrower. With respect to any Multiemployer Plan, the determination whether
a complete withdrawal has occurred is made under ERISA Section 4203(b). Neither
any Credit Party nor ERISA Affiliate has failed to make any contribution or pay
any amount due as required by either Section 412 of the IRC or Section 302 of
ERISA or the terms of any such Plan. Neither any Credit Party nor ERISA
Affiliate has engaged in a "prohibited transaction," as defined in Section 406
of ERISA and Section 4975 of the IRC, in connection with any Plan, that would
subject any Credit Party to a material tax on prohibited transactions imposed by
Section 502(i) of ERISA or Section 4975 of the IRC.
(b) Except as set forth in Schedule 5.14 or with respect to
any Multiemployer Plan: (i) no Title IV Plan has any Unfunded Pension Liability;
(ii) no ERISA Event or event described in Section 4062(e) of ERISA with respect
to any Title IV Plan has occurred or is reasonably expected to occur; (iii)
there are no pending, or to the knowledge of Borrower, threatened claims (other
than claims for benefits in the normal course), sanctions, actions or lawsuits,
asserted or instituted against any Plan or any Person as fiduciary or sponsor of
any Plan that could reasonably be expected, either individually or in the
aggregate, to result in costs in excess of $100,000; (iv) within the last five
years no Title IV Plan of any Credit Party or ERISA Affiliate has been
terminated, whether or not in a "standard termination" as that term is used in
Section 404(b)(1) of ERISA, nor has any Title IV Plan of any Credit Party or
ERISA Affiliate (determined at any time within the past five years) with
Unfunded Pension Liabilities been transferred outside of the "controlled group"
(within the meaning of Section 4001(a)(14) of ERISA) of any Credit Party or
ERISA Affiliate; (v) except in the case of any ESOP, Stock of all Credit Parties
and their ERISA Affiliates makes up, in the aggregate, no more than 10% of fair
market value of the assets of any Plan measured on the basis of fair market
value as of the Closing Date; and (vi) no liability under any Title IV Plan has
been satisfied with the purchase of a contract from an insurance company that is
not rated AAA by S&P or an equivalent rating by another nationally recognized
rating agency.
(c) With respect to any Multiemployer Plan, (i) no Credit
Party or ERISA Affiliate has incurred or reasonably expects to incur any
liability as a result of a complete or partial withdrawal from a Multiemployer
Plan (ii) to the knowledge of Borrower, no Multiemployer Plan is in
reorganization status within the meaning of ERISA Section 4241; (iii) to the
knowledge of Borrower, no
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Multiemployer Plan is insolvent within the meaning of ERISA Section 4245; and
(iv) to the knowledge of the Borrower, there has been no termination of a
Multiemployer Plan within the meaning of ERISA Section 4041A.
5.15 Brokers. Except as set forth on Schedule 5.15, no broker or finder
acting on behalf of any Credit Party or Affiliate thereof brought about the
obtaining, making or closing of the Loans or the Related Transactions, and no
Credit Party or Affiliate thereof has any obligation to any Person in respect of
any finder's or brokerage fees in connection therewith.
5.16 Deposit and Disbursement Accounts. Schedule 5.16 lists all banks
and other financial institutions at which any Credit Party maintains deposit or
other accounts as of the Closing Date, including any Disbursement Accounts, and
such Schedule correctly identifies the name, address and telephone number of
each depository, the name in which the account is held, a description of the
purpose of the account, and the complete account number therefor.
5.17 Agreements and Other Documents. As of the Closing Date, each
Credit Party has provided to Agent or its counsel, on behalf of Lenders, access
to or accurate and complete copies (or summaries) of all of the following
agreements or documents to which it is subject and each of which is listed in
Schedule 5.17: supply agreements and purchase agreements not terminable by such
Credit Party within sixty (60) days following written notice issued by such
Credit Party and involving transactions in excess of $1,000,000 per annum, other
than contracts with customers entered into in the ordinary course of business
consistent with past practices; leases of Equipment having a remaining term of
one year or longer and requiring aggregate rental and other payments in excess
of $500,000 per annum; licenses and permits held by the Credit Parties, the
absence of which could reasonably be expected to have a Material Adverse Effect;
instruments and documents evidencing any Indebtedness or Guaranteed Indebtedness
of such Credit Party and any Lien granted by such Credit Party with respect
thereto; and instruments and agreements evidencing the issuance of any equity
securities, warrants, rights or options to purchase equity securities of such
Credit Party.
5.18 Insurance. Schedule 5.18 lists all insurance policies of any
nature maintained, as of the Closing Date, for current occurrences by each
Credit Party, as well as a summary of the key business terms of each such policy
such as deductibles, coverage limits and term of policy.
SECTION 6.
DEFAULT, RIGHTS AND REMEDIES
6.1 Event of Default. "Event of Default" shall mean the occurrence or
existence of any one or more of the following:
(a) Payment. (1) Failure to pay any installment or other
payment of principal of any Loan when due, or to repay Revolving Loans to reduce
their balance to the maximum amount of Revolving Loans then permitted to be
outstanding or to reimburse any L/C Issuer for any payment made by such L/C
Issuer under or in respect of any Letter of Credit when due or
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(2) failure to pay, within two (2) Business Days after the due date, any
interest on any Loan or any other amount due under this Agreement or any of the
other Loan Documents; or
(b) Default in Other Agreements. (1) Any Credit Party or any
of its Subsidiaries fails to pay (i) if no grace period applies, when due or,
(ii) if applicable, within any available grace period any principal or interest
on Indebtedness (other than the Loans) or any Contingent Obligations or (2)
breach or default of any Credit Party or any of its Subsidiaries, or the
occurrence of any condition or event, with respect to any Indebtedness (other
than the Loans) or any Contingent Obligations, if the effect of such breach,
default or occurrence is to cause or to permit the holder or holders then to
cause, Indebtedness and/or Contingent Obligations having an individual principal
amount or a liquidated claim in excess of $1,000,000 or having an aggregate
principal amount in excess of $2,500,000 to become or be declared due prior to
their stated maturity or to become a liquidated claim; or
(c) Breach of Certain Provisions. Failure of any Credit Party
to perform or comply with any term or condition contained in that portion of
Section 2.2 relating to the Credit Parties' obligation to maintain insurance,
Section 2.3, Section 3, Section 4.1, 4.2, 4.3 or 4.4; or
(d) Breach of Warranty. Any representation, warranty,
certification or other statement made by any Credit Party in any Loan Document
or in any statement or certificate at any time given by such Person in writing
pursuant or in connection with any Loan Document is false in any material
respect (without duplication of materiality qualifiers contained therein) on the
date made; or
(e) Other Defaults Under Loan Documents. Any Credit Party
defaults in the performance of or compliance with any term contained in this
Agreement or the other Loan Documents (other than occurrences described in other
provisions of this Section 6.1 for which a different grace or cure period is
specified, or for which no cure period is specified and which constitute
immediate Events of Default) and such default is not remedied or waived within
thirty (30) days, or, in the case of any default in the performance of or
failure of any Credit Party to comply with any term or condition contained in
Sections 4.6(a) and 4.6(l) (only to the extent such relates to the delivery
concurrently with financial statements required by Section 4.6(a)), five (5)
Business Days, in the case of any default in the performance of or failure of
any Credit Party to comply with any term or condition contained in Section
4.6(d), two (2) Business Days, and in the case of any default in the performance
of or failure of any Credit Party to comply with any term or condition contained
in Section 4.6(b), 4.6(f) and 4.6(l) (only to the extent it relates to the
delivery concurrently with financial statements required by Section 4.6(b)),
fifteen (15) days after the earlier of (1) receipt by Borrower of notice from
Agent or Requisite Lenders of such default or (2) actual knowledge of Borrower
or any other Credit Party of such default; or
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc. (1)
A court enters a decree or order for relief with respect to any Credit Party in
an involuntary case under the Bankruptcy Code, which decree or order is not
stayed or other similar relief is not granted under any applicable federal or
state law; or (2) the continuance of any of the following events for forty-five
(45) days unless dismissed, bonded or discharged: (a) an involuntary case is
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commenced against any Credit Party, under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect; or (b) a decree or order of a
court for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over any Credit Party, or over
all or a substantial part of its property, is entered; or (c) a receiver,
trustee or other custodian is appointed without the consent of a Credit Party,
for all or a substantial part of the property of the Credit Party; or
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(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. (1)
any Credit Party commences a voluntary case under the Bankruptcy Code, or
consents to the entry of an order for relief in an involuntary case or to the
conversion of an involuntary case to a voluntary case under any such law or
consents to the appointment of or taking possession by a receiver, trustee or
other custodian for all or a substantial part of its property; or (2) any Credit
Party makes any assignment for the benefit of creditors; or (3) the Board of
Directors of any Credit Party adopts any resolution or otherwise authorizes
action to approve any of the actions referred to in this Section 6.1(g); or
(h) Judgment and Attachments. Any money judgment, writ or
warrant of attachment, or similar process in connection with a judgment (other
than those described elsewhere in this Section 6.1) involving (1) an amount in
any individual case in excess of $250,000 or (2) an amount in the aggregate at
any time in excess of $500,000 (in either case to the extent not adequately
covered by insurance as to which the insurance company has acknowledged coverage
in writing) is entered or filed against one or more of the Credit Parties or any
of their respective assets and remains undischarged, unvacated, unbonded or
unstayed for a period of thirty (30) days or in any event later than five (5)
Business Days prior to the date of any proposed sale thereunder; or
(i) Dissolution. Any order, judgment or decree is entered
against any Credit Party decreeing the dissolution or split up of such Credit
Party and such order remains undischarged or unstayed for a period in excess of,
in the case of the Borrower, fifteen (15) days or, in the case of any other
Credit Party, thirty (30) days; or
(j) Solvency. Any Credit Party ceases to be Solvent, fails to
pay its debts as they become due or admits in -------- writing its present or
prospective inability to pay its debts as they become due; or
(k) Invalidity of Loan Documents. Any of the Loan Documents
for any reason, other than a partial or full release in accordance with the
terms thereof, ceases to be in full force and effect or is declared to be null
and void, or any Credit Party denies that it has any further liability under any
Loan Documents to which it is party, or gives notice to such effect; or
(l) Damage; Casualty. Any event occurs, whether or not insured
or insurable, as a result of which revenue-producing activities cease or are
substantially curtailed at any facility of any Credit Party generating more than
10% of EBITDA of Borrower and its Subsidiaries for the Fiscal Year preceding
such event and such cessation or curtailment continues for more than 15 days; or
(m) Change of Control. A Change of Control occurs; or
(n) Subordinated Indebtedness. The failure of any Credit Party
or any creditor of Borrower or any of its Subsidiaries to comply with the terms
of any subordination or intercreditor agreement or any subordination provisions
of any note or other document running to the benefit of Agent or Lenders, or if
any such document becomes null and void or any party denies further liability
under any such document or provides notice to that effect.
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6.2 Suspension or Termination of Commitments. Upon the occurrence of
any Default or Event of Default, Agent may, and at the request of Requisite
Revolving Lenders Agent shall, without notice or demand, immediately suspend or
terminate all or any portion of Lenders' obligations to make additional Loans or
issue or cause to be issued Letters of Credit under the Revolving Loan
Commitment; provided that, in the case of a suspension, if the subject condition
or event is waived by Requisite Revolving Lenders or cured within any applicable
grace or cure period, the Commitments shall be reinstated.
6.3 Acceleration and other Remedies. Upon the occurrence of any Event
of Default described in Sections 6.1(f) or 6.1(g), the Commitments shall be
immediately terminated and all of the Obligations, including the Revolving
Loans, shall automatically become immediately due and payable, without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other requirements of any kind, all of which are hereby
expressly waived by Borrower, and the Commitment shall thereupon terminate. Upon
the occurrence and during the continuance of any other Event of Default, Agent
may, and at the request of the Requisite Lenders, Agent shall, by written notice
to Borrower (a) reduce the aggregate amount of the Commitments from time to
time, (b) declare all or any portion of the Loans and all or any portion of the
other Obligations to be, and the same shall forthwith become, immediately due
and payable together with accrued interest thereon, (c) terminate all or any
portion of the obligations of Agent, L/C Issuers and Lenders to make Revolving
Credit Advances and issue Letters of Credit, (d) demand that Borrower
immediately deliver cash to Agent for the benefit of L/C Issuers (and Borrower
shall then immediately so deliver) in an amount equal to 105% of the aggregate
outstanding Letter of Credit Obligations and (e) exercise any other remedies
which may be available under the Loan Documents or applicable law. Borrower
hereby grants to Agent, for the benefit of L/C Issuers and each Lender with a
participation in any Letters of Credit then outstanding, a security interest in
such cash collateral to secure all of the Letter of Credit Obligations. Any such
cash collateral shall be made available by Agent to L/C Issuers to reimburse L/C
Issuers for payments of drafts drawn under such Letters of Credit and any Fees,
Charges and expenses of L/C Issuers with respect to such Letters of Credit and
the unused portion thereof, after all such Letters of Credit shall have expired
or been fully drawn upon, shall be applied to repay any other Obligations. After
all such Letters of Credit shall have expired or been fully drawn upon and all
Obligations shall have been satisfied and paid in full, the balance, if any, of
such cash collateral shall be returned to Borrower. Borrower shall from time to
time execute and deliver to Agent such further documents and instruments as
Agent may request with respect to such cash collateral.
6.4 Performance by Agent. If any Credit Party shall fail to perform any
covenant, duty or agreement contained in any of the Loan Documents, Agent may
perform or attempt to perform such covenant, duty or agreement on behalf of such
Credit Party after the expiration of any cure or grace periods set forth herein.
In such event, such Credit Party shall, at the request of Agent, promptly pay
any amount reasonably expended by Agent in such performance or attempted
performance to Agent, together with interest thereon at the highest rate of
interest in effect upon the occurrence of an Event of Default as specified in
Section 1.2(d) from the date of such expenditure until paid. Notwithstanding the
foregoing, it is expressly agreed that Agent
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shall not have any liability or responsibility for the performance of any
obligation of any Credit Party under this Agreement or any other Loan Document.
6.5 Application of Proceeds. Notwithstanding anything to the contrary
contained in this Agreement, upon the occurrence and during the continuance of
an Event of Default, (a) Borrower irrevocably waives the right to direct the
application of any and all payments at any time or times thereafter received by
Agent from or on behalf of Borrower, and Agent shall have the continuing and
exclusive right to apply and to reapply any and all payments received at any
time or times after the occurrence and during the continuance of an Event of
Default against the Obligations in such manner as Agent may deem advisable
notwithstanding any previous application by Agent and (b) in the absence of a
specific determination by Agent with respect thereto, the proceeds of any sale
of, or other realization upon, all or any part of the Collateral shall be
applied: first, to all Fees, costs and expenses incurred by or owing to Agent
and any Lender with respect to this Agreement, the other Loan Documents or the
Collateral; second, to accrued and unpaid interest on the Obligations (including
any interest which but for the provisions of the Bankruptcy Code, would have
accrued on such amounts); third, to the principal amount of the Obligations
outstanding (other than Obligations owed to any Lender under an Interest Rate
Agreement); and fourth to any other obligations of Borrower owing to Agent or
any Lender under the Loan Documents or any Interest Rate Agreement. Any balance
remaining shall be delivered to Borrower or to whomever may be lawfully entitled
to receive such balance or as a court of competent jurisdiction may direct.
SECTION 7.
CONDITIONS TO LOANS
The obligations of Lenders and L/C Issuers to make Loans and
to issue or cause to be issued Letters of Credit are subject to satisfaction of
all of the applicable conditions set forth below.
7.1 Conditions to Initial Loans. The obligations of Lenders and L/C
Issuers to make the initial Loans and to issue or cause to be issued Letters of
Credit on the Closing Date are, in addition to the conditions precedent
specified in Section 7.2, subject to the delivery of all documents listed on,
the taking of all actions set forth on and the satisfaction of all other
conditions precedent listed in the Closing Checklist attached hereto as Annex C,
all in form and substance, or in a manner, satisfactory to Agent and Lenders.
7.2 Conditions to All Loans. Except as otherwise expressly provided
herein, no Lender or L/C Issuer shall be obligated to fund any Advance or incur
any Letter of Credit Obligation, if, as of the date thereof (the "Funding
Date"):
(a) any representation or warranty by any Credit Party
contained herein or in any other Loan Document is untrue or incorrect in any
material respect (without duplication of any materiality qualifier contained
therein) as of such date, except to the extent that such representation or
warranty expressly relates to an earlier date, and Agent or Requisite Revolving
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Lenders have determined not to make such Advance or incur such Letter of Credit
Obligation as a result of the fact that such warranty or representation is
untrue or incorrect;
(b) any Default or Event of Default has occurred and is
continuing or would result after giving effect to any Advance (or the incurrence
of any Letter of Credit Obligation), and Agent or Requisite Revolving Lenders
shall have determined not to make any Advance or incur any Letter of Credit
Obligation as a result of that Default or Event of Default; or
(c) after giving effect to any Advance (or the incurrence of
any Letter of Credit Obligations), the outstanding amount of the Revolving Loan
would exceed remaining Borrowing Availability (except as provided in Section
1.1(b)(ii)).
The request and acceptance by Borrower of the proceeds of any Advance, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the
date thereof, (i) a representation and warranty by Borrower that the conditions
in this Section 7.2 have been satisfied and (ii) a reaffirmation by Borrower of
the granting and continuance of Agent's Liens, on behalf of itself and Lenders,
pursuant to the Collateral Documents.
SECTION 8.
ASSIGNMENT AND PARTICIPATION
8.1 Assignment and Participations.
(a) Subject to the terms of this Section 8.1, any Lender may
make an assignment to a Qualified Assignee of, or sale of participations in, at
any time or times, the Loan Documents, Loans, Letter of Credit Obligations and
any Commitment or any portion thereof or interest therein, including any
Lender's rights, title, interests, remedies, powers or duties thereunder. Any
assignment by a Lender shall: (i) require the consent of Agent (which consent
shall not be unreasonably withheld or delayed with respect to a Qualified
Assignee) and the execution of an assignment agreement (an "Assignment
Agreement" substantially in the form attached hereto as Exhibit 8.1 and
otherwise in form and substance reasonably satisfactory to, and acknowledged by,
Agent); (ii) be conditioned on such assignee Lender representing to the
assigning Lender and Agent that it is purchasing the applicable Loans to be
assigned to it for its own account, for investment purposes and not with a view
to the distribution thereof; (iii) after giving effect to any such partial
assignment, the assignee Lender shall have Commitments in an amount at least
equal to $5,000,000 and the assigning Lender shall have retained Commitments in
an amount at least equal to $5,000,000; (iv) require a payment by the assignor
or the assignee to Agent of an assignment fee of $3,500 and (v) so long as no
Event of Default has occurred and is continuing, require the consent of
Borrower, which shall not be unreasonably withheld or delayed and shall be
deemed granted if not objected to within three (3) Business Days following
notice thereof to Borrower; provided that no such consent shall be required for
an assignment to a Qualified Assignee. Notwithstanding the above, Agent may in
its sole and absolute discretion permit any assignment by a Lender to a Person
or Persons that are not Qualified Assignees, subject to the approval of
Borrower, if no Event of Default has occurred and is continuing. In the case of
an
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assignment by a Lender under this Section 8.1, the assignee shall have, to the
extent of such assignment, the same rights, benefits and obligations as all
other Lenders hereunder. The assigning Lender shall be relieved of its
obligations hereunder with respect to its Commitments or assigned portion
thereof from and after the date of such assignment. Borrower hereby acknowledges
and agrees that any assignment shall give rise to a direct obligation of
Borrower to the assignee and that the assignee shall be considered to be a
"Lender." In all instances, each Lender's liability to make Loans hereunder
shall be several and not joint and shall be limited to such Lender's Pro Rata
Share of the applicable Commitment. In the event Agent or any Lender assigns or
otherwise transfers all or any part of the Obligations, Agent or any such Lender
shall so notify Borrower and Borrower shall, upon the request of Agent or such
Lender, execute new Notes in exchange for the Notes, if any, being assigned.
Notwithstanding the foregoing provisions of this Section 8.1(a), (a) any Lender
may at any time pledge the Obligations held by it and such Lender's rights under
this Agreement and the other Loan Documents to a Federal Reserve Bank, (b) any
Lender that is an investment fund may assign the Obligations held by it and such
Lender's rights under this Agreement and the other Loan Documents to another
investment fund managed by the same investment advisor or pledge such
Obligations and rights to trustee for the benefit of its investors and (c) any
Lender may assign the Obligations to an Affiliate of such Lender or to a Person
that is a Lender prior to the date of such assignment.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrower hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). Solely for purposes of Sections 1.8,
1.9, 8.3 and 9.1, Borrower acknowledges and agrees that a participation shall
give rise to a direct obligation of Borrower to the participant and the
participant shall be considered to be a "Lender." Except as set forth in the
preceding sentence neither Borrower nor any other Credit Party shall have any
obligation or duty to any participant. Neither Agent nor any Lender (other than
the Lender selling a participation) shall have any duty to any participant and
may continue to deal solely with the Lender selling a participation as if no
such sale had occurred.
(c) Except as expressly provided in this Section 8.1, no
Lender shall, as between Borrower and that Lender, or Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party shall assist each Lender permitted to
sell assignments or participations under this Section 8.1 as required to enable
the assigning or selling Lender to effect any such assignment or participation,
including the execution and delivery of any and all agreements, notes and other
documents and instruments as shall be requested and the prompt
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preparation of informational materials for, and the participation of management
in meetings with, potential assignees or participants, all on a timetable
established by Agent in its sole discretion. Each Credit Party executing this
Agreement shall certify the correctness, completeness and accuracy of all
descriptions of the Credit Parties and their respective affairs contained in any
selling materials provided by it and all other information provided by it and
included in such materials, except that any Projections delivered by Borrower
shall only be certified by Borrower as having been prepared by Borrower in
compliance with the representations contained in Section 5.5. Agent shall
maintain in its offices located at
New York,
New York or such other offices as
Agent may determine a "register" for recording name, address, commitment and
Loans owing to each Lender.
(e) A Lender may furnish any information concerning Credit
Parties in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants); provided that
such Lender shall obtain from assignees or participants confidentiality
covenants substantially equivalent to those contained in Section 9.13.
(f) So long as no Event of Default has occurred and is
continuing, no Lender shall assign or sell participations in any portion of its
Loans or Commitments to a potential Lender or participant, if, as of the date of
the proposed assignment or sale, the assignee Lender or participant would be
subject to capital adequacy or similar requirements under Section 1.8(a),
increased costs or an inability to fund LIBOR Loans under Section 1.8(b), or
withholding taxes in accordance with Section 1.9.
8.2 Agent.
(a) Appointment. Each Lender hereby designates and appoints GE
Capital as its Agent under this Agreement and the other Loan Documents, and each
Lender hereby irrevocably authorizes Agent to execute and deliver the Collateral
Documents and to take such action or to refrain from taking such action on its
behalf under the provisions of this Agreement and the other Loan Documents and
to exercise such powers as are set forth herein or therein, together with such
other powers as are reasonably incidental thereto. Agent is authorized and
empowered to amend, modify, or waive any provisions of this Agreement or the
other Loan Documents on behalf of Lenders subject to the requirement that
certain of Lenders' consent be obtained in certain instances as provided in this
Section 8.2 and Section 9.2. The provisions of this Section 8.2 are solely for
the benefit of Agent and Lenders and neither Borrower nor any other Credit Party
shall have any rights as a third party beneficiary of any of the provisions
hereof. In performing its functions and duties under this Agreement, Agent shall
act solely as agent of Lenders and does not assume and shall not be deemed to
have assumed any obligation toward or relationship of agency or trust with or
for Borrower or any other Credit Party. Agent may perform any of its duties
hereunder, or under the Loan Documents, by or through its agents or employees.
(b) Nature of Duties. The duties of Agent shall be mechanical
and administrative in nature. Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender. Nothing in this Agreement or
any of the Loan Documents, express or implied, is
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intended to or shall be construed to impose upon Agent any obligations in
respect of this Agreement or any of the Loan Documents except as expressly set
forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of each Credit Party in
connection with the extension of credit hereunder and shall make its own
appraisal of the creditworthiness of each Credit Party, and Agent shall have no
duty or responsibility, either initially or on a continuing basis, to provide
any Lender with any credit or other information with respect thereto (other than
as expressly required herein). If Agent seeks the consent or approval of any
Lenders to the taking or refraining from taking any action hereunder, then Agent
shall send notice thereof to each Lender. Agent shall promptly notify each
Lender any time that the Requisite Lenders or Requisite Revolving Lenders have
instructed Agent to act or refrain from acting pursuant hereto.
(c) Rights, Exculpation, Etc. Neither Agent nor any of its
officers, directors, employees or agents shall be liable to any Lender for any
action taken or omitted by them hereunder or under any of the Loan Documents, or
in connection herewith or therewith, except that Agent shall be liable to the
extent of its own gross negligence or willful misconduct as determined by a
final non-appealable order by a court of competent jurisdiction. Agent shall not
be liable for any apportionment or distribution of payments made by it in good
faith and if any such apportionment or distribution is subsequently determined
to have been made in error the sole recourse of any Lender to whom payment was
due but not made, shall be to recover from other Lenders any payment in excess
of the amount to which they are determined to be entitled (and such other
Lenders hereby agree to return to such Lender any such erroneous payments
received by them). In no event shall Agent be liable for punitive, special,
consequential, incidental, exemplary or other similar damages. In performing its
functions and duties hereunder, Agent shall exercise the same care which it
would in dealing with loans for its own account, but neither Agent nor any of
its agents or representatives shall be responsible to any Lender for any
recitals, statements, representations or warranties herein or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility, or
sufficiency of this Agreement or any of the Loan Documents or the transactions
contemplated thereby, or for the financial condition of any Credit Party. Agent
shall not be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any of the Loan Documents or the financial condition of any Credit Party, or the
existence or possible existence of any Default or Event of Default. Agent may at
any time request instructions from Requisite Lenders, Requisite Revolving
Lenders or all affected Lenders with respect to any actions or approvals which
by the terms of this Agreement or of any of the Loan Documents Agent is
permitted or required to take or to grant. If such instructions are promptly
requested, Agent shall be absolutely entitled to refrain from taking any action
or to withhold any approval and shall not be under any liability whatsoever to
any Person for refraining from any action or withholding any approval under any
of the Loan Documents until it shall have received such instructions from the
Requisite Lenders, Requisite Revolving Lenders or such other portion of the
Lenders as shall be prescribed by this Agreement. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against Agent as
a result of Agent acting or refraining from acting under this Agreement or any
of the other Loan Documents in accordance with the instructions of Requisite
Lenders, Requisite Revolving Lenders or all
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affected Lenders, as applicable; and, notwithstanding the instructions of
Requisite Lenders, Requisite Revolving Lenders or all affected Lenders, as
applicable, Agent shall have no obligation to take any action if it believes, in
good faith, that such action is deemed to be illegal by Agent or exposes Agent
to any liability for which it has not received satisfactory indemnification in
accordance with Section 8.2(e).
(d) Reliance. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any written or oral notices, statements,
certificates, orders or other documents or any telephone message or other
communication (including any writing, telex, fax or telegram) believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person, and with respect to all matters pertaining to this Agreement
or any of the Loan Documents and its duties hereunder or thereunder. Agent shall
be entitled to rely upon the advice of legal counsel, independent accountants,
and other experts selected by Agent in its sole discretion.
(e) Indemnification. Lenders will reimburse and indemnify
Agent for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including, without
limitation, attorneys' fees and expenses), advances or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by, or asserted against
Agent in any way relating to or arising out of this Agreement or any of the Loan
Documents or any action taken or omitted by Agent under this Agreement or any of
the Loan Documents, in proportion to each Lender's Pro Rata Share, but only to
the extent that any of the foregoing is not reimbursed by Borrower; provided,
however, that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, advances or disbursements to the extent resulting from Agent's gross
negligence or willful misconduct as determined by a final non-appealable order
by a court of competent jurisdiction. If any indemnity furnished to Agent for
any purpose shall, in the opinion of Agent, be insufficient or become impaired,
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against even if so directed by the Requisite Lenders, Requisite
Revolving Lenders or such other portion of the Lenders as shall be prescribed by
this Agreement until such additional indemnity is furnished. The obligations of
Lenders under this Section 8.2(e) shall survive the payment in full of the
Obligations and the termination of this Agreement.
(f) GE Capital Individually. With respect to its Commitments
hereunder, GE Capital shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities as and to the
extent set forth herein for any other Lender. The terms "Lenders," "Requisite
Lenders," "Requisite Revolving Lenders" or any similar terms shall, unless the
context clearly otherwise indicates, include GE Capital in its individual
capacity as a Lender or one of the Requisite Lenders, or Requisite Revolving
Lenders. GE Capital, either directly or through strategic affiliations, may lend
money to, acquire equity or other ownership interests in, provide advisory
services to and generally engage in any kind of banking, trust or other business
with any Credit Party as if it were not acting as Agent pursuant hereto and
without any duty to account therefor to Lenders. GE Capital, either directly or
through strategic affiliations, may accept fees and other consideration from any
Credit Party for services in connection with this Agreement or otherwise without
having to account for the same to Lenders. Each Lender acknowledges that GE
Capital has obtained certain warrants to obtain equity interests in Borrower and
may acquire certain equity
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interests in Borrower (whether upon exercise of the warrants or otherwise), and
acknowledges the potential conflict of interest of GE Capital, as Agent and as a
Lender and as a holder of the warrants and any equity interests of Borrower and
consents thereto.
(g) Successor Agent.
(i) Resignation. Agent may resign from the
performance of all its agency functions and duties hereunder at any time by
giving at least thirty (30) Business Days' prior written notice to Borrower and
Lenders. Such resignation shall take effect upon the acceptance by a successor
Agent of appointment pursuant to clause (ii) below or as otherwise provided in
clause (ii) below.
(ii) Appointment of Successor. Upon any such notice
of resignation pursuant to clause (i) above, Requisite Lenders shall appoint a
successor Agent which, unless an Event of Default has occurred and is
continuing, shall be reasonably acceptable to Borrower. If a successor Agent
shall not have been so appointed within the thirty (30) Business Day period
referred to in clause (i) above, the retiring Agent, upon notice to Borrower,
shall then appoint a successor Agent who shall serve as Agent until such time,
if any, as Requisite Lenders appoint a successor Agent as provided above.
(iii) Successor Agent. Upon the acceptance of any
appointment as Agent under the Loan Documents by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under the Loan
Documents. After any retiring Agent's resignation as Agent, the provisions of
this Section 8.2 shall continue to inure to its benefit as to any actions taken
or omitted to be taken by it in its capacity as Agent.
(h) Collateral Matters.
(i) Release of Collateral. Lenders hereby irrevocably
authorize Agent, at its option and in its discretion, to release or authorize
the release of any Lien granted to or held by Agent upon any Collateral (x) upon
termination of the Commitments and payment and satisfaction of all Obligations
(other than contingent indemnification obligations to the extent no claims
giving rise thereto have been asserted) or (y) constituting property being sold
or disposed of if Borrower certifies to Agent that the sale or disposition is
made in compliance with the provisions of this Agreement (and Agent may rely in
good faith conclusively on any such certificate, without further inquiry).
(ii) Confirmation of Authority; Execution of
Releases. Without in any manner limiting Agent's authority to act without any
specific or further authorization or consent by Lenders (as set forth in Section
8.2(h)(i)), each Lender agrees to confirm in writing, upon request by Agent or
Borrower, the authority to release any Collateral conferred upon Agent under
clauses (x) and (y) of Section 8.2(h)(i). Upon receipt by Agent of any required
confirmation from the Requisite Lenders of its authority to release any
particular item or types of
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Collateral, and upon at least seven (7) Business Days' prior written request by
Borrower, Agent shall (and is hereby irrevocably authorized by Lenders to)
execute such documents as may be necessary to evidence the release of the Liens
granted to Agent upon such Collateral; provided, however, that (x) Agent shall
not be required to execute any such document on terms which, in Agent's opinion,
would expose Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty,
and (y) such release shall not in any manner discharge, affect or impair the
Obligations or any Liens upon (or obligations of any Credit Party, in respect
of), all interests retained by any Credit Party, including the proceeds of any
sale, all of which shall continue to constitute part of the Collateral.
(iii) Absence of Duty. Agent shall have no obligation
whatsoever to any Lender or any other Person to assure that the property covered
by the Collateral Documents exists or is owned by Borrower or any other Credit
Party or is cared for, protected or insured or has been encumbered or that the
Liens granted to Agent 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 Agent in this Section 8.2(h) or
in any of the Loan Documents, it being understood and agreed that in respect of
the property covered by the Collateral Documents or any act, omission or event
related thereto, Agent may act in any manner it may deem appropriate, in its
discretion, given Agent's own interest in property covered by the Collateral
Documents as one of the Lenders and that Agent shall have no duty or liability
whatsoever to any of the other Lenders, provided that Agent shall exercise the
same care which it would in dealing with loans for its own account.
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(i) Agency for Perfection. Agent and each Lender hereby
appoint each other Lender as agent for the purpose of perfecting Agent's
security interest in assets which, in accordance with the Code in any applicable
jurisdiction, can be perfected by possession or control. Should any Lender
(other than Agent) obtain possession or control of any such assets, such Lender
shall notify Agent thereof, and, promptly upon Agent's request therefor, shall
deliver such assets to Agent or in accordance with Agent's instructions or
transfer control to Agent in accordance with Agent's instructions. Each Lender
agrees that it will not have any right individually to enforce or seek to
enforce any Collateral Document or to realize upon any collateral security for
the Loans unless instructed to do so by Agent in writing, it being understood
and agreed that such rights and remedies may be exercised only by Agent.
(j) Notice of Default. 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 Agent for the account of Lenders, unless Agent shall have received
written notice from a Lender or Borrower referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a "notice of
default". Agent will notify each Lender of its receipt of any such notice. Agent
shall take such action with respect to such Default or Event of Default as may
be requested by Requisite Lenders in accordance with Section 6. Unless and until
Agent has received any such request, 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 or in the best interests
of Lenders.
(k) Lender Actions Against Collateral. Each Lender agrees that
it will not take any action, nor institute any actions or proceedings, with
respect to the Loans, against Borrower or any Credit Party hereunder or under
the other Loan Documents or against any of the Real Estate encumbered by
Mortgages without the consent of the Required Lenders. With respect to any
action by Agent to enforce the rights and remedies of Agent and the Lenders
under this Agreement and the other Loan Documents, each Lender hereby consents
to the jurisdiction of the court in which such action is maintained, and agrees
to deliver its Notes to Agent to the extent necessary to enforce the rights and
remedies of Agent for the benefit of the Lenders under the Mortgages in
accordance with the provisions hereof.
8.3 Set Off and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, during the continuance of any Event of Default, each Lender is hereby
authorized by Borrower at any time or from time to time, with reasonably prompt
subsequent notice to Borrower (any prior or contemporaneous notice being hereby
expressly waived) to set off and to appropriate and to apply any and all (A)
balances held by such Lender at any of its offices for the account of Borrower
or any of its Subsidiaries (regardless of whether such balances are then due to
Borrower or its Subsidiaries), and (B) other property at any time held or owing
by such Lender to or for the credit or for the account of Borrower or any of its
Subsidiaries, against and on account of any of the Obligations; except that no
Lender shall exercise any such right without the prior written consent of Agent.
Any Lender exercising a right to set off shall purchase for cash (and the other
Lenders shall sell) interests in each of such other Lender's Pro Rata Share of
the Obligations as would be necessary to cause all Lenders to share the amount
so set off with each
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other Lender in accordance with their respective Pro Rata Shares. Borrower
agrees, to the fullest extent permitted by law, that any Lender may exercise its
right to set off with respect to amounts in excess of its Pro Rata Share of the
Obligations and upon doing so shall deliver such amount so set off to the Agent
for the benefit of all Lenders in accordance with their Pro Rata Shares.
8.4 Disbursement of Funds. Agent may, on behalf of Lenders, disburse
funds to Borrower for Loans requested. Each Lender shall reimburse Agent on
demand for all funds disbursed on its behalf by Agent, or if Agent so requests,
each Lender will remit to Agent its Pro Rata Share of any Loan before Agent
disburses same to Borrower. If Agent elects to require that each Lender make
funds available to Agent prior to a disbursement by Agent to Borrower, Agent
shall advise each Lender by telephone or fax of the amount of such Lender's Pro
Rata Share of the Loan requested by Borrower no later than 1:00 p.m. (New York
time) on the Funding Date applicable thereto, and each such Lender shall pay
Agent such Lender's Pro Rata Share of such requested Loan, in same day funds, by
wire transfer to Agent's account on such Funding Date. If any Lender fails to
pay the amount of its Pro Rata Share within one (1) Business Day after Agent's
demand, Agent shall promptly notify Borrower, and Borrower shall immediately
repay such amount to Agent. Any repayment required pursuant to this Section 8.4
shall be without premium or penalty. Nothing in this Section 8.4 or elsewhere in
this Agreement or the other Loan Documents, including the provisions of Section
8.5, shall be deemed to require Agent to advance funds on behalf of any Lender
or to relieve any Lender from its obligation to fulfill its commitments
hereunder or to prejudice any rights that Agent or Borrower may have against any
Lender as a result of any default by such Lender hereunder.
8.5 Disbursements of Advances; Payment.
(a) Advances; Payments.
(i) Revolving Lenders shall refund or participate in
the Swing Line Loan in accordance with clauses (iii) and (iv) of Section 1.1(c).
If the Swing Line Lender declines to make a Swing Line Loan or if Swing Line
Availability is zero, Agent shall notify Revolving Lenders, promptly after
receipt of a Notice of Revolving Credit Advance and in any event prior to 1:00
p.m. (New York time) on the date such Notice of a Revolving Credit Advance is
received, by fax, telephone or other similar form of transmission. Each
Revolving Lender shall make the amount of such Lender's Pro Rata Share of such
Revolving Credit Advance available to Agent in same day funds by wire transfer
to Agent's account as set forth in Section 1.1(e) not later than 3:00 p.m. (New
York time) on the requested Funding Date in the case of an Index Rate Loans and
not later than 11:00 a.m. (New York time) on the requested Funding Date in the
case of a LIBOR Loan. After receipt of such wire transfers (or, in the Agent's
sole discretion, before receipt of such wire transfers), subject to the terms
hereof, Agent shall make the requested Revolving Credit Advance to Borrower. All
payments by each Revolving Lender shall be made without setoff, counterclaim or
deduction of any kind.
(ii) At least once each calendar week or more
frequently at Agent's election (each, a "Settlement Date"), Agent shall advise
each Lender by telephone or fax of the amount of such Lender's Pro Rata Share of
principal, interest and Fees paid for the benefit of
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Lenders with respect to each applicable Loan. Provided that each Lender has
funded all payments and Advances required to be made by it and purchased all
participations required to be purchased by it under this Agreement and the other
Loan Documents as of such Settlement Date, Agent shall pay to each Lender such
Lender's Pro Rata Share of principal, interest and Fees paid by Borrower since
the previous Settlement Date for the benefit of such Lender on the Loans held by
it. Such payments shall be made by wire transfer to such Lender's account (as
specified by such Lender in Annex E or the applicable Assignment Agreement) not
later than 2:00 p.m. (New York time) on the next Business Day following each
Settlement Date. To the extent that any Lender (a "Non-Funding Lender") has
failed to fund all such payments and Advances or failed to fund the purchase of
all such participations, Agent shall be entitled to set off the funding
short-fall against that Non-Funding Lender's Pro Rata Share of all payments
received from Borrower.
(b) Availability of Lender's Pro Rata Share. Agent may assume
that each Revolving Lender will make its Pro Rata Share of each Revolving Credit
Advance available to Agent on each Funding Date. If such Pro Rata Share is not,
in fact, paid to Agent by such Revolving Lender when due, Agent will be entitled
to recover such amount on demand from such Revolving Lender without setoff,
counterclaim or deduction of any kind. If any Revolving Lender fails to pay the
amount of its Pro Rata Share forthwith upon Agent's demand, Agent shall promptly
notify Borrower and Borrower shall immediately repay such amount to Agent.
Nothing in this Section 8.5(b) or elsewhere in this Agreement or the other Loan
Documents shall be deemed to require Agent to advance funds on behalf of any
Revolving Lender or to relieve any Revolving Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Borrower may
have against any Revolving Lender as a result of any default by such Revolving
Lender hereunder. To the extent that Agent advances funds to Borrower on behalf
of any Revolving Lender and is not reimbursed therefor on the same Business Day
as such Advance is made, Agent shall be entitled to retain for its account all
interest accrued on such Advance until reimbursed by the applicable Revolving
Lender.
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under this
Agreement in the belief or expectation that a related payment has been or will
be received by Agent from Borrower and such related payment is not received by
Agent, then Agent will be entitled to recover such amount from such Lender on
demand without setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount
received by Agent under this Agreement must be returned to Borrower or paid to
any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any other Loan
Document, Agent will not be required to distribute any portion thereof to any
Lender. In addition, each Lender will repay to Agent on demand any portion of
such amount that Agent has distributed to such Lender, together with interest at
such rate, if any, as Agent is required to pay to Borrower or such other Person,
without setoff, counterclaim or deduction of any kind.
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(d) Non-Funding Lenders. The failure of any Non-Funding Lender
to make any Revolving Credit Advance or any payment required by it hereunder, or
to purchase any participation in any Swing Line Loan to be made or purchased by
it on the date specified therefor shall not relieve any other Lender (each such
other Revolving Lender, an "Other Lender") of its obligations to make such
Advance or purchase such participation on such date, but neither any Other
Lender nor Agent shall be responsible for the failure of any Non-Funding Lender
to make an Advance, purchase a participation or make any other payment required
hereunder. Notwithstanding anything set forth herein to the contrary, a
Non-Funding Lender shall not have any voting or consent rights under or with
respect to any Loan Document or constitute a "Lender" or a "Revolving Lender"
(or be included in the calculation of "Requisite Lenders", or "Requisite
Revolving Lenders" hereunder) for any voting or consent rights under or with
respect to any Loan Document.
(e) Dissemination of Information. Agent shall use reasonable
efforts to provide Lenders with any notice of Default or Event of Default
received by Agent from, or delivered by Agent to, any Credit Party, with notice
of any Event of Default of which Agent has actually become aware and with notice
of any action taken by Agent following any Event of Default; provided, that
Agent shall not be liable to any Lender for any failure to do so.
(f) Actions in Concert. Anything in this Agreement to the
contrary notwithstanding, each Lender hereby agrees with each other Lender that
no Lender shall take any action to protect or enforce its rights arising out of
this Agreement or the Notes (including exercising any rights of setoff) without
first obtaining the prior written consent of Agent and Requisite Lenders, it
being the intent of Lenders that any such action to protect or enforce rights
under this Agreement and the Notes shall be taken in concert and at the
direction or with the consent of Agent or Requisite Lenders. Agent is authorized
to issue all notices to be issued by or on behalf of the Lenders with respect to
any Subordinated Debt.
SECTION 9.
MISCELLANEOUS
9.1 Indemnities. Borrower agrees to indemnify, pay, and hold Agent,
each Lender, each L/C Issuer and their respective officers, directors,
employees, agents, accountants, and attorneys (the "Indemnitees") harmless from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs and expenses (including all reasonable
fees and expenses of counsel to such Indemnitees) of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the
Indemnitee as a result of such Indemnitees being a party to this Agreement or
the transactions consummated pursuant to this Agreement or otherwise relating to
any of the Related Transactions; provided, that Borrower shall have no
obligation to an Indemnitee hereunder with respect to liabilities to the extent
resulting from (a) the gross negligence or willful misconduct of that Indemnitee
as determined by a court of competent jurisdiction or (b) any claim by an
Indemnitee against its accountants or counsel. If and to the extent that the
foregoing undertaking may be unenforceable for any reason, Borrower agrees to
make the maximum contribution to the payment and satisfaction thereof which is
permissible under applicable law.
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9.2 Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by
Agent, no amendment, modification, termination or waiver of any provision of
this Agreement or any other Loan Document, or any consent to any departure by
any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by Borrower, and by Requisite Lenders, Requisite
Revolving Lenders or all affected Lenders, as applicable. Except as set forth in
clauses (b) and (c) below, all such amendments, modifications, terminations or
waivers requiring the consent of any Lenders shall require the written consent
of Requisite Lenders.
(b) No amendment, modification, termination or waiver of or
consent with respect to any provision of this Agreement that waives compliance
with the conditions precedent set forth in Section 7.2 to the making of any Loan
or the incurrence of any Letter of Credit Obligations shall be effective unless
the same shall be in writing and signed by Agent, Requisite Revolving Lenders
and Borrower. Notwithstanding anything contained in this Agreement to the
contrary, no waiver or consent with respect to any Default or any Event of
Default shall be effective for purposes of the conditions precedent to the
making of Loans or the incurrence of Letter of Credit Obligations set forth in
Section 7.2 unless the same shall be in writing and signed by Agent, Requisite
Revolving Lenders and Borrower.
(c) No amendment, modification, termination or waiver shall,
unless in writing and signed by Agent and each Lender directly affected thereby:
(i) increase the principal amount of any Lender's Commitment (which action shall
be deemed only to affect those Lenders whose Commitments are increased and may
be approved by Requisite Lenders, including those Lenders whose Commitments are
increased); (ii) reduce the principal of, rate of interest on or Fees payable
with respect to any Loan or Letter of Credit Obligations of any affected Lender;
(iii) extend any scheduled payment date or final maturity date of the principal
amount of any Loan of any affected Lender; (iv) waive, forgive, defer, extend or
postpone any payment of interest or Fees as to any affected Lender (which action
shall be deemed only to affect those Lenders to whom such payments are made);
(v) release any Guaranty or, except as otherwise permitted in Section 3.7,
release Collateral with a book value exceeding 5% of the book value of all
assets in the aggregate in any one (1) year (which action shall be deemed to
directly affect all Lenders); (vi) change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Loans that shall be required for
Lenders or any of them to take any action hereunder; and (vii) amend or waive
this Section 9.2 or the definitions of the terms "Requisite Lenders", or
"Requisite Revolving Lenders" insofar as such definitions affect the substance
of this Section 9.2. Furthermore, no amendment, modification, termination or
waiver affecting the rights or duties of Agent or L/C Issuers under this
Agreement or any other Loan Document shall be effective unless in writing and
signed by Agent or L/C Issuers, as the case may be, in addition to Lenders
required hereinabove to take such action. Each amendment, modification,
termination or waiver shall be effective only in the specific instance and for
the specific purpose for which it was given. No amendment, modification,
termination or waiver shall be required for Agent to take additional Collateral
pursuant to any Loan Document. No amendment, modification, termination or waiver
of any provision of any Note shall be effective without the written concurrence
of the holder of that Note. No notice to or demand on any Credit Party in
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any case shall entitle such Credit Party or any other Credit Party to any other
or further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
Section 9.2 shall be binding upon each holder of the Notes at the time
outstanding and each future holder of the Notes.
9.3 Notices. Any notice or other communication required shall be in
writing addressed to the respective party as set forth below and may be
personally served, telecopied, sent by overnight courier service or U.S. mail
and shall be deemed to have been given: (a) if delivered in person, when
delivered; (b) if delivered by fax, on the date of transmission if transmitted
on a Business Day before 4:00 p.m. New York Time; (c) if delivered by overnight
courier, one (1) Business Day after delivery to the courier properly addressed;
or (d) if delivered by U.S. mail, four (4) Business Days after deposit with
postage prepaid and properly addressed.
Notices shall be addressed as follows:
If to Borrower: Comfort Systems USA, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
ATTN: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Comfort Systems USA, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Agent or GE Capital: GENERAL ELECTRIC CAPITAL
CORPORATION
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: Comfort Systems USA, Inc.
Account Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: GENERAL ELECTRIC CAPITAL
CORPORATION
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
ATTN: Corporate Counsel Commercial
Finance - Merchant Banking
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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and
GENERAL ELECTRIC CAPITAL
CORPORATION
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: Corporate Counsel Commercial
Finance - Merchant Banking
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
WINSTON & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to a Lender: To the address set forth on the
signature page hereto or in the
applicable Assignment Agreement
9.4 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
or delay on the part of Agent or any Lender to exercise, nor any partial
exercise of, any power, right or privilege hereunder or under any other Loan
Documents shall impair such power, right, or privilege or be construed to be a
waiver of any Default or Event of Default. All rights and remedies existing
hereunder or under any other Loan Document are cumulative to and not exclusive
of any rights or remedies otherwise available.
9.5 Marshaling; Payments Set Aside. Neither Agent nor any Lender shall
be under any obligation to marshal any assets in payment of any or all of the
Obligations. To the extent that Borrower makes payment(s) or Agent enforces its
Liens or Agent or any Lender exercises its right of set-off, and such payment(s)
or the proceeds of such enforcement or set-off is subsequently invalidated,
declared to be fraudulent or preferential, set aside, or required to be repaid
by anyone, then to the extent of such recovery, the Obligations or part thereof
originally intended to be satisfied, and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or set-off had not occurred.
9.6 Severability. The invalidity, illegality, or unenforceability in
any jurisdiction of any provision under the Loan Documents shall not affect or
impair the remaining provisions in the Loan Documents.
9.7 Lenders' Obligations Several; Independent Nature of Lenders'
Rights. The obligation of each Lender hereunder is several and not joint and no
Lender shall be responsible for the obligation or commitment of any other Lender
hereunder. In the event that any Lender at any time should fail to make a Loan
as herein provided, the Lenders, or any of them, at their sole option, may make
the Loan that was to have been made by the Lender so failing to make such
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Loan. Nothing contained in any Loan Document and no action taken by Agent or any
Lender pursuant hereto or thereto shall be deemed to constitute Lenders to be a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt.
9.8 Headings. Section and subsection headings are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purposes or be given substantive effect.
9.9 Applicable Law. THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS
WHICH DOES NOT EXPRESSLY SET FORTH APPLICABLE LAW SHALL BE GOVERNED BY AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
9.10 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns except that Borrower may not assign its rights or obligations hereunder
without the written consent of all Lenders.
9.11 No Fiduciary Relationship; Limited Liability. No provision in the
Loan Documents and no course of dealing between the parties shall be deemed to
create any fiduciary duty owing to Borrower by Agent or any Lender. Borrower
agrees that neither Agent nor any Lender shall have liability to Borrower
(whether sounding in tort, contract or otherwise) for losses suffered by
Borrower in connection with, arising out of, or in any way related to the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless and to the extent that it is determined that such losses resulted from
the gross negligence or willful misconduct of the party from which recovery is
sought as determined by a final non-appealable order by a court of competent
jurisdiction. Neither Agent nor any Lender shall have any liability with respect
to, and Borrower hereby waives, releases and agrees not to ▇▇▇ for, any special,
indirect or consequential damages suffered by Borrower in connection with,
arising out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.
9.12 Construction. Agent, each Lender, Borrower and each other Credit
Party acknowledge that each of them has had the benefit of legal counsel of its
own choice and has been afforded an opportunity to review the Loan Documents
with its legal counsel and that the Loan Documents shall be construed as if
jointly drafted by Agent, each Lender, Borrower and each other Credit Party.
9.13 Confidentiality. Agent and each Lender agree to exercise their
best efforts to keep confidential any non-public information delivered pursuant
to the Loan Documents and identified as such by Borrower and not to disclose
such information to Persons other than to potential assignees or participants or
to Persons employed by or engaged by Agent a Lender or a Lender's assignees or
participants including attorneys, auditors, professional consultants, rating
agencies, insurance industry associations and portfolio management services. The
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confidentiality provisions contained in this Section 9.13 shall not apply to
disclosures (i) required to be made by Agent or any Lender to any regulatory or
governmental agency or pursuant to legal process or (ii) consisting of general
portfolio information that does not identify Borrower. The obligations of Agent
and Lenders under this Section 9.13 shall supersede and replace the obligations
of Agent and Lenders under any confidentiality agreement in respect of this
financing executed and delivered by Agent or any Lender prior to the date
hereof.
9.14 CONSENT TO JURISDICTION. BORROWER AND CREDIT PARTIES HEREBY
CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN NEW
YORK COUNTY, BOROUGH OF MANHATTAN, STATE OF NEW YORK AND IRREVOCABLY AGREE THAT,
SUBJECT TO AGENT'S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN
SUCH COURTS. BORROWER AND CREDIT PARTIES EXPRESSLY SUBMIT AND CONSENT TO THE
JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON
CONVENIENS. BORROWER AND CREDIT PARTIES HEREBY WAIVE PERSONAL SERVICE OF ANY AND
ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON
BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO
BORROWER, AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL
BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED. IN ANY LITIGATION,
TRIAL, ARBITRATION OR OTHER DISPUTE RESOLUTION PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ALL DIRECTORS, OFFICERS, EMPLOYEES
AND AGENTS OF BORROWER, CREDIT PARTIES OR ANY OF THEIR AFFILIATES SHALL BE
DEEMED TO BE EMPLOYEES OR MANAGING AGENTS OF BORROWER OR SUCH CREDIT PARTY FOR
PURPOSES OF ALL APPLICABLE LAW OR COURT RULES REGARDING THE PRODUCTION OF
WITNESSES BY NOTICE FOR TESTIMONY (WHETHER IN A DEPOSITION, AT TRIAL OR
OTHERWISE). BORROWER AND CREDIT PARTIES AGREE THAT AGENT'S OR ANY LENDER'S
COUNSEL IN ANY SUCH DISPUTE RESOLUTION PROCEEDING MAY EXAMINE ANY OF THESE
INDIVIDUALS AS IF UNDER CROSS-EXAMINATION AND THAT ANY DISCOVERY DEPOSITION OF
ANY OF THEM MAY BE USED IN THAT PROCEEDING AS IF IT WERE AN EVIDENCE DEPOSITION.
BORROWER AND CREDIT PARTIES IN ANY EVENT WILL USE ALL COMMERCIALLY REASONABLE
EFFORTS TO PRODUCE IN ANY SUCH DISPUTE RESOLUTION PROCEEDING, AT THE TIME AND IN
THE MANNER REQUESTED BY AGENT OR ANY LENDER, ALL PERSONS, DOCUMENTS (WHETHER IN
TANGIBLE, ELECTRONIC OR OTHER FORM) OR OTHER THINGS UNDER THEIR CONTROL AND
RELATING TO THE DISPUTE.
9.15 WAIVER OF JURY TRIAL. BORROWER, CREDIT PARTIES, AGENT AND EACH
LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS. BORROWER, CREDIT PARTIES, AGENT AND EACH LENDER ACKNOWLEDGE THAT THIS
WAIVER IS A MATERIAL
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INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE
WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.
BORROWER, CREDIT PARTIES, AGENT AND EACH LENDER WARRANT AND REPRESENT THAT EACH
HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND
THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
9.16 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement, the making of the Loans, issuances of Letters of
Credit and the execution and delivery of the Notes. Notwithstanding anything in
this Agreement or implied by law to the contrary, the agreements of Borrower set
forth in Sections 1.3(e), 1.8, 1.9 and 9.1 shall survive the repayment of the
Obligations and the termination of this Agreement.
9.17 Entire Agreement. This Agreement, the Notes and the other Loan
Documents embody the entire agreement among the parties hereto and supersede all
prior commitments, agreements, representations, and understandings, whether oral
or written, relating to the subject matter hereof, and may not be contradicted
or varied by evidence of prior, contemporaneous, or subsequent oral agreements
or discussions of the parties hereto. All Exhibits, Schedules and Annexes
referred to herein are incorporated in this Agreement by reference and
constitute a part of this Agreement.
9.18 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which
counterparts together shall constitute but one in the same instrument. This
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto.
9.19 Replacement of Lenders. Within fifteen (15) days after receipt by
Borrower of written notice and demand from any Lender for payment pursuant to
Section 1.8 or 1.9 or, as provided in this Section 9.19(c), in the case of
certain refusals by any Lender to consent to certain proposed amendments,
modifications, terminations or waivers with respect to this Agreement that have
been approved by Requisite Lenders, Requisite Revolving Lenders or all affected
Lenders, as applicable (any such Lender demanding such payment or refusing to so
consent being referred to herein as an "Affected Lender"), Borrower may, at its
option, notify Agent and such Affected Lender of its intention to do one of the
following:
(i) Borrower may obtain, at Borrower's expense, a
replacement Lender ("Replacement Lender") for such Affected Lender, which
Replacement Lender shall be reasonably satisfactory to Agent. In the event
Borrower obtains a Replacement Lender that will purchase all outstanding
Obligations owed to such Affected Lender and assume its Commitments hereunder
within ninety (90) days following notice of Borrower's intention to do so, the
Affected Lender shall sell and assign all of its rights and delegate all of its
obligations under this
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Agreement to such Replacement Lender in accordance with the provisions of
Section 8.1, provided that Borrower has reimbursed such Affected Lender for any
administrative fee payable pursuant to Section 8.1 and, in any case where such
replacement occurs as the result of a demand for payment pursuant to Section 1.8
or 1.9, paid all amounts required to be paid to such Affected Lender pursuant to
Section 1.8 or 1.9 through the date of such sale and assignment; or
(ii) Borrower may, with Agent's consent, prepay in
full all outstanding Obligations owed to such Affected Lender and terminate such
Affected Lender's Pro Rata Share of the Revolving Loan Commitment, in which case
the Revolving Loan Commitment will be reduced by the amount of such Pro Rata
Share. Borrower shall, within ninety (90) days following notice of its intention
to do so, prepay in full all outstanding Obligations owed to such Affected
Lender (including, in any case where such prepayment occurs as the result of a
demand for payment for increased costs, such Affected Lender's increased costs
for which it is entitled to reimbursement under this Agreement through the date
of such prepayment), and terminate such Affected Lender's obligations under the
Revolving Loan Commitment.
(b) In the case of a Non-Funding Lender pursuant to Section
8.5(a), at Borrower's request, Agent or a Person acceptable to Agent shall have
the right with Agent's consent and in Agent's sole discretion (but shall have no
obligation) to purchase from any Non-Funding Lender, and each Non-Funding Lender
agrees that it shall, at Agent's request, sell and assign to Agent or such
Person, all of the Loans and Commitments of that Non-Funding Lender for an
amount equal to the principal balance of all Loans held by such Non-Funding
Lender and all accrued interest and Fees with respect thereto through the date
of sale, such purchase and sale to be consummated pursuant to an executed
Assignment Agreement.
(c) If, in connection with any proposed amendment,
modification, waiver or termination pursuant to Section 9.2 (a "Proposed
Change"):
(i) requiring the consent of all affected Lenders,
the consent of Requisite Lenders is obtained, but the consent of other Lenders
whose consent is required is not obtained (any such Lender whose consent is not
obtained as described in this clause (i) and in clauses (ii), (iii) and (iv)
below being referred to as a "Non-Consenting Lender"),
(ii) requiring the consent of Requisite Revolving
Lenders, the consent of Revolving Lenders holding 51% or more of the aggregate
Revolving Loan Commitments is obtained, but the consent of Requisite Revolving
Lenders is not obtained, or
(iii) requiring the consent of Requisite Lenders, the
consent of Lenders holding 51% or more of the aggregate Commitments is obtained,
but the consent of Requisite Lenders is not obtained,
then, so long as Agent is not a Non-Consenting Lender, at Borrower's request
Agent, or a Person reasonably acceptable to Agent, shall have the right with
Agent's consent and in Agent's sole discretion (but shall have no obligation) to
purchase from such Non-Consenting Lenders, and such Non-Consenting Lenders agree
that they shall, upon Agent's request, sell and assign to Agent or such Person,
all of the Loans and Commitments of such Non-Consenting Lenders for
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an amount equal to the principal balance of all Loans held by the Non-Consenting
Lenders and all accrued interest and Fees with respect thereto through the date
of sale, such purchase and sale to be consummated pursuant to an executed
Assignment Agreement.
9.20 Delivery of Termination Statements and Mortgage Releases. Upon
payment in full in cash and performance of all of the Obligations (other than
indemnification Obligations), termination of the Commitments and a release of
all claims against Agent and Lenders, and so long as no suits, actions
proceedings, or claims are pending or threatened against any Indemnitee
asserting any damages, losses or liabilities that are indemnified liabilities
hereunder, Agent shall deliver to Borrower termination statements, mortgage
releases and other documents necessary or appropriate to evidence the
termination of the Liens securing payment of the Obligations.
Witness the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
BORROWER:
COMFORT SYSTEMS USA, INC.
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
Title: Executive Vice President
-----------------------------------
CREDIT PARTIES:
ACI MECHANICAL, INC.
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ARC COMFORT SYSTEMS USA, INC.
ACCURATE AIR SYSTEMS, L.P., BY
ATLAS-ACCURATE HOLDINGS, L.L.C.,
AS GENERAL PARTNER
ACCU-TEMP GP, INC.
ACCU-TEMP LP, INC.
ACCU-TEMP LLC,
BY ACCU-TEMP GP, INC., AS ACTING MEMBER
AIR SOLUTIONS USA, INC.
AIR TEMP, INC.
ATLAS-ACCURATE HOLDINGS, L.L.C.,
BY CS53 ACQUISITION CORP.,
AS ACTING MEMBER
ATLAS AIR CONDITIONING
COMPANY, L.P., BY ATLAS-ACCURATE
HOLDINGS, L.L.C., AS GENERAL PARTNER
▇▇▇▇▇▇▇▇▇'▇ MECHANICAL CONTRACTORS, INC.
BCM CONTROLS CORPORATION
CARSON BROTHERS, INC.
CEL, INC.
CENTRAL MECHANICAL, INC.
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COMFORT SYSTEMS USA (ARKANSAS), INC.
COMFORT SYSTEMS USA (BALTIMORE), INC.
COMFORT SYSTEMS USA (BOWLING GREEN), INC.
COMFORT SYSTEMS USA (BRISTOL), INC.
COMFORT SYSTEMS USA (CLEVELAND), INC.
COMFORT SYSTEMS USA (FLORIDA), INC.
COMFORT SYSTEMS USA G.P., INC.
COMFORT SYSTEMS US (HARTFORD), INC.
COMFORT SYSTEMS USA (INTERMOUNTAIN), INC.
COMFORT SYSTEMS USA NATIONAL SERVICE
ORGANIZATION, INC.
COMFORT SYSTEMS USA (OREGON), INC.
COMFORT SYSTEMS USA (SOUTH BOSTON), INC.
COMFORT SYSTEMS USA (SYRACUSE), INC.
COMFORT SYSTEMS USA (TEXAS), L.P.,
BY COMFORT SYSTEMS USA G.P., INC.,
AS GENERAL PARTNER
COMFORT SYSTEMS USA (TWIN CITIES), INC.
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COMFORT SYSTEMS USA (WESTERN MICHIGAN),
INC.
CS44 ACQUISITION CORP.
CS53 ACQUISITION CORP.
DESIGN MECHANICAL INCORPORATED
EASTERN HEATING & COOLING, INC.
ESS ENGINEERING, INC.
GULFSIDE MECHANICAL, INC.
H & M MECHANICAL, INC.
HELM CORPORATION
HELM CORPORATION SAN ▇▇▇▇▇
▇▇▇▇ MECHANICAL CORPORATION
INDUSTRIAL COOLING INC.
J & J MECHANICAL, INC.
▇▇▇▇▇ AIR CONDITIONING ENTERPRISE INC.
▇▇▇▇▇▇ HEATING, INC.
MECHANICAL SERVICE GROUP, INC.
MECHANICAL TECHNICAL
SERVICES, L.P., BY ATLAS-ACCURATE
HOLDINGS, L.L.C., AS GENERAL PARTNER
MJ MECHANICAL SERVICES, INC.
▇▇▇▇ MECHANICAL CONTRACTORS, INC.
-▇▇-
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ MECHANICAL, INC.
OK SHEET METAL AND AIR CONDITIONING, INC.
QUALITY AIR HEATING & COOLING, INC.
S&K AIR CONDITIONING CO., INC.
S. I. ▇▇▇▇▇▇▇ COMPANY, INC.
▇.▇. ▇▇▇▇▇▇▇▇ COMPANY, INC.
SA ASSOCIATES, INC.
SALMON & ALDER, LLC,
BY SA ASSOCIATES, INC., AS ACTING
MEMBER
SEASONAIR, INC.
▇▇▇▇▇▇ PLUMBING & HEATING, INC.
STANDARD HEATING & AIR CONDITIONING
COMPANY
SUPERIOR MECHANICAL SYSTEMS, INC.
TARGET CONSTRUCTION, INC.
TEMP-RIGHT SERVICE, INC.
THE CAPITAL REFRIGERATION COMPANY
TRI-CITY MECHANICAL, INC.
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UNITED ENVIRONMENTAL
SERVICES, L.P., BY ATLAS-ACCURATE
HOLDINGS, L.L.C., AS GENERAL PARTNER
WEATHER ENGINEERING, INC.
WESTERN BUILDING SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Title: Senior Vice President
----------------------------------
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GENERAL ELECTRIC CAPITAL CORPORATION,
AS AGENT, AN L/C ISSUER AND A LENDER
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Its Duly Authorized Signatory
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ANNEX A
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have
(unless otherwise provided elsewhere in the Loan Documents) the following
respective meanings and all references to Sections, Exhibits, Schedules or
Annexes in the following definitions shall refer to Sections, Exhibits,
Schedules or Annexes of or to the Agreement:
"Account Debtor" means any Person who may become obligated to
any Credit Party under, with respect to, or on account of, an Account, Chattel
Paper or General Intangibles (including a payment intangible).
"Accounting Changes" means: (a) changes in accounting
principles required by GAAP and implemented by Borrower or any of its
Subsidiaries; and (b) changes in accounting principles recommended by Borrower's
certified public accountants and implemented by Borrower or any of its
Subsidiaries.
"Accounts" means all "accounts," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, including (a) all
accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper or
Instruments), (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of each Credit Party's rights
in, to and under all purchase orders or receipts for goods or services, (c) all
of each Credit Party's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Credit Party), (e) all healthcare insurance receivables, and (f) all
collateral security of any kind, now or hereafter in existence, given by any
Account Debtor or other Person with respect to any of the foregoing.
"Advances" means any Revolving Credit Advance or Swing Line
Advance, as the context may require.
"Affected Lender" has the meaning ascribed to it in Section
9.19(a).
"Affiliate" means, with respect to any Person, (a) each Person
that, directly or indirectly, owns or controls, whether beneficially, or as a
trustee, guardian or other fiduciary,
A-1
10% or more of the Stock having ordinary voting power in the election of
directors of such Person, (b) each Person that controls, is controlled by or is
under common control with such Person, (c) each of such Person's officers,
directors, joint venturers and partners and (d) in the case of Borrower, the
immediate family members, spouses and lineal descendants of individuals who are
Affiliates of Borrower. For the purposes of this definition, "control" of a
Person shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of its management or policies, whether through the
ownership of voting securities, by contract or otherwise; provided, however,
that the term "Affiliate" shall specifically exclude Agent and each Lender.
"Agent" means GE Capital in its capacity as Agent for Lenders
or its successor appointed pursuant to Section 8.2.
"Agreement" means this
Credit Agreement (including all
schedules, subschedules, annexes and exhibits hereto), as the same may be
amended, supplemented, restated or otherwise modified from time to time.
"Applicable L/C Margin" means the per annum fee, from time to
time in effect, payable with respect to outstanding Letter of Credit Obligations
as determined by reference to Section 1.2(a).
"Applicable Margins" means collectively the Applicable L/C
Margin, the Applicable Unused Line Fee Margin, the Applicable Revolver Index
Margin, the Applicable Term Loan Index Margin, the Applicable Revolver LIBOR
Margin and the Applicable Term Loan LIBOR Margin.
"Applicable Revolver Index Margin" means the per annum
interest rate margin payable in addition to the Index Rate applicable to the
Revolving Loan, as determined by reference to Section 1.2(a).
"Applicable Revolver LIBOR Margin" means the per annum
interest rate payable in addition to the LIBOR Rate applicable to the Revolving
Loan, as determined by reference to Section 1.2(a).
"Applicable Term Loan Index Margin" means the per annum
interest rate payable in addition to the Index Rate applicable to the Term Loan,
as determined by reference to Section 1.2(a).
"Applicable Term Loan LIBOR Margin" means the per annum
interest rate payable in addition to the LIBOR Rate applicable to the Term Loan,
as determined by reference to Section 1.2(a).
"Applicable Unused Line Fee Margin" means the per annum fee
payable in respect of Borrower's non-use of committed funds pursuant to Section
1.3(b), which fee is determined by reference to Section 1.2 (a).
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"Asset Disposition" means the disposition whether by sale,
lease, transfer, loss, damage, destruction, casualty, condemnation or otherwise
of any of the following: (a) any of the Stock or other equity or ownership
interest of any of Borrower's Subsidiaries or (b) any or all of the assets of
Borrower or any of its Subsidiaries other than sales of Inventory in the
ordinary course of business.
"Assignment Agreement" has the meaning ascribed to it in
Section 8.1(a).
"Bankruptcy Code" means the provisions of Title 11 of the
United States Code, 11 U.S.C. Sections 101 et seq. or any other applicable
bankruptcy, insolvency or similar laws.
"Borrower" has the meaning ascribed to it in the preamble to
the Agreement.
"Borrower Pledge Agreement" means the Pledge Agreement of even
date herewith executed by Borrower in favor of Agent, on behalf of itself and
Lenders, pledging the Stock of each of its direct Subsidiaries.
"Borrowing Availability" means as of any date of determination
the lesser of (i) the Maximum Amount and (ii) EBITDA Availability in each case,
less the sum of (a) the Revolving Loan then outstanding (including the
outstanding balance of Letter of Credit Obligations), and (b) the Swing Line
Loan then outstanding.
"Business Day" means any day that is not a Saturday, a Sunday
or a day on which banks are required or permitted to be closed in the State of
New York or the State of Texas and in reference to LIBOR Loans shall mean any
such day that is also a LIBOR Business Day.
"Capital Expenditures" has the meaning ascribed to it in
Section 4.3 of Schedule 1 to Exhibit 4.6(1).
"Capital Lease" means, with respect to any Person, any lease
of any property (whether real, personal or mixed) by such Person as lessee that,
in accordance with GAAP, would be required to be classified and accounted for as
a capital lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital
Lease of any Person, the amount of the obligation of the lessee thereunder that,
in accordance with GAAP, would appear on a balance sheet of such lessee in
respect of such Capital Lease.
"Cash Equivalents" means: (i) marketable securities (A) issued
or directly and unconditionally guaranteed as to interest and principal by the
United States government or (B) issued by any agency of the United States
government the obligations of which are backed by the full faith and credit of
the United States, in each case maturing within one (1) year after acquisition
thereof; (ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after acquisition
thereof and having, at the time of
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acquisition, a rating of at least A-1 from S&P or at least P-1 from ▇▇▇▇▇'▇;
(iii) commercial paper maturing no more than one year from the date of
acquisition and, at the time of acquisition, having a rating of at least A-1
from S&P or at least P-1 from ▇▇▇▇▇'▇; (iv) certificates of deposit or bankers'
acceptances issued or accepted by any Lender or by any commercial bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia that is at least (A) "adequately capitalized" (as defined
in the regulations of its primary Federal banking regulator) and (B) has Tier 1
capital (as defined in such regulations) of not less than $250,000,000, in each
case maturing within one year after issuance or acceptance thereof; (v) shares
of any money market mutual or similar funds that (A) has substantially all of
its assets invested continuously in the types of investments referred to in
clauses (i) through (iv) above, (B) has net assets of not less than $500,000,000
and (C) has the highest rating obtainable from either S&P or ▇▇▇▇▇'▇; and (vi)
repurchase or reverse purchase agreements respecting obligations with a term of
not more than seven days for underlying securities of the types described in
clause (i) and (ii) above entered into with any bank listed in or meeting the
qualifications specified in clause (iv) above.
"Certificate of Exemption" has the meaning ascribed to it in
Section 1.9(c).
"Change of Control" means any of the following: (a) any person
or group of persons (within the meaning of the Securities Exchange Act of 1934)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 20% or more of the issued and outstanding shares of
Stock of Borrower having the right to vote for the election of directors of
Borrower under ordinary circumstances; (b) during any period of twelve
consecutive calendar months, individuals who at the beginning of such period
constituted the board of directors of Borrower (together with any new directors
whose election by the board of directors of Borrower or whose nomination for
election by the Stockholders of Borrower was approved by a vote of at least a
majority of the directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason other than death or disability to
constitute a majority of the directors then in office; or (c) Borrower ceases to
own (directly or indirectly) and control all of the economic and voting rights
associated with all of the outstanding Stock of any of its Subsidiaries other
than those, if any, sold pursuant to Asset Dispositions expressly permitted
under Section 3.7 of the Agreement or consented to in writing by Requisite
Lenders.
"Charges" means all federal, state, county, city, municipal,
local, foreign or other governmental taxes (including premiums and other amounts
owed to the PBGC at the time due and payable), levies, assessments, charges,
liens, claims or encumbrances upon or relating to (a) the Collateral, (b) the
Obligations, (c) the employees, payroll, income or gross receipts of any Credit
Party, (d) any Credit Party's ownership or use of any properties or other
assets, or (e) any other aspect of any Credit Party's business.
"Chattel Paper" means any "chattel paper," as such term is
defined in the Code, including electronic chattel paper, now owned or hereafter
acquired by any Credit Party, wherever located.
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"Closing Checklist" means the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with the Agreement, the other Loan
Documents and the transactions contemplated thereunder, substantially in the
form attached hereto as Annex C.
"Closing Date" means October 11, 2002.
"Code" means the Uniform Commercial Code as the same may, from
time to time, be enacted and in effect in the State of New York; provided, that
to the extent that the Code is used to define any term herein or in any Loan
Document and such term is defined differently in different Articles or Divisions
of the Code, the definition of such term contained in Article or Division 9
shall govern; provided further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, Agent's or any Lender's Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of New York, the term "Code" shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
"Collateral" means the property covered by the Security
Agreement, the Mortgages (if any), and the other Collateral Documents and any
other property, real or personal, tangible or intangible, now existing or
hereafter acquired, that may at any time be or become subject to a security
interest or Lien in favor of Agent, on behalf of itself and Lenders, to secure
the Obligations or any portion thereof.
"Collateral Documents" means the Security Agreement, the
Pledge Agreements, the Guaranties, the Mortgages (if any), the Trademark
Security Agreements and all similar agreements entered into guaranteeing payment
of, or granting a Lien upon property as security for payment of, the Obligations
or any portion thereof.
"Commitment Termination Date" means the earliest of (a)
October 11, 2005, (b) the date of termination of Lenders' obligations to make
Advances and to incur Letter of Credit Obligations or permit existing Loans to
remain outstanding pursuant to Section 6.3, and (c) the date of (i) indefeasible
prepayment in full by Borrower of the Loans, (ii) the cancellation and return
(or stand-by guarantee) of all Letters of Credit or the cash collateralization
of all Letter of Credit Obligations pursuant to Section 1.5(f), and (iii) the
permanent reduction of the Commitments to zero dollars ($0).
"Commitments" means (a) as to any Lender, the aggregate of
such Lender's Revolving Loan Commitment and Term Loan Commitment as set forth on
Annex B to the Agreement or in the most recent Assignment Agreement executed by
such Lender and (b) as to all Lenders, the aggregate of all Lenders' Revolving
Loan Commitments and Term Loan Commitments, which aggregate commitment shall be
Fifty-Five Million Dollars ($55,000,000) on the Closing Date (comprised of
aggregate Revolving Loan Commitments of $40,000,000 and
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Term Loan Commitments of $15,000,000), as such Commitments may be reduced,
amortized or adjusted from time to time in accordance with the Agreement.
"Compliance and Excess Cash Flow Certificate" has the meaning
ascribed to it in Section 4.6.
"Consolidated Net Income" has the meaning ascribed to it in
Section 4.2 of Schedule 1 to Exhibit 4.6(l).
"Contingent Obligation" means, as applied to any Person, means
any direct or indirect liability of that Person: (i) with respect to Guaranteed
Indebtedness and with respect to any Indebtedness, lease, dividend or other
obligation of another Person if the purpose or intent of the Person incurring
such liability, or the effect thereof, is to provide assurance to the obligee of
such liability that such liability will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
liability will be protected (in whole or in part) against loss with respect
thereto; (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings; (iii) under any foreign exchange contract, currency swap agreement,
interest rate swap agreement (including Interest Rate Agreements) or other
similar agreement or arrangement designed to alter the risks of that Person
arising from fluctuations in currency values or interest rates, (iv) any
agreement, contract or transaction involving commodity options or future
contracts, (v) to make take-or-pay or similar payments if required regardless of
nonperformance by any other party or parties to an agreement, or (vi) pursuant
to any agreement to purchase, repurchase or otherwise acquire any obligation or
any property constituting security therefor, to provide funds for the payment or
discharge of such obligation or to maintain the solvency, financial condition or
any balance sheet item or level of income of another. Notwithstanding the
foregoing, the definition of Contingent Obligation shall not include the
following obligation or liabilities: (i) those incurred in connection with
customary retainage provisions and customary warranty provisions entered into in
the ordinary course of business; (ii) those resulting from guarantees by a
Credit Party of an obligation of any other Credit Party; provided that the
underlying obligation is otherwise expressly permitted under the Agreement; and
(iii) those resulting from guarantees by Borrower of any other Credit Party
which guarantees are given in lieu of surety bonds. The amount of any Contingent
Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported or, if not a fixed and determined amount, the maximum amount
so guaranteed.
"Contractual Obligations" means, as applied to any Person, any
indenture, mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject including
the Related Transactions Documents.
"Copyright License" means any and all rights nor owned or
hereafter acquired by any Credit Party under any written agreement granting any
right to use any Copyright or Copyright registration.
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"Copyrights" means all of the following now owned or hereafter
adopted or acquired by any Credit Party: (a) all copyrights and General
Intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any similar office or agency of the United
States, any state or territory thereof, or any other country or any political
subdivision thereof; and (b) all reissues, extensions or renewals thereof.
"Credit Parties" means Borrower, and each of its Subsidiaries
and each other Person who executes this Agreement as a "Credit Party" or a
Guaranty or who grants a Lien on all or part of its assets to secure all of part
of the Obligations.
"Current Assets" means, with respect to any Person, all
current assets of such Person as of any date of determination calculated in
accordance with GAAP, but excluding cash, cash equivalents and debts due from
Affiliates.
"Current Liabilities" means, with respect to any Person, all
liabilities that should, in accordance with GAAP, be classified as current
liabilities, and in any event shall include all Indebtedness payable on demand
or within one year from any date of determination without any option on the part
of the obligor to extend or renew beyond such year, all accruals for federal or
other taxes based on or measured by income and payable within such year, but
excluding the current portion of long-term debt required to be paid within one
year and the aggregate outstanding principal balances of the Revolving Loan and
the Swing Line Loan.
"Default" means any event that, with the passage of time or
notice or both, would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section
1.2(d).
"Disbursement Account" has the meaning ascribed to it in
Section 1.1(e).
"Disclosure Schedules" means the Schedules prepared by
Borrower and denominated as Schedules 3.2 through 5.18 in the index to the
Agreement.
"Documents" means any "document," as such term is defined in
the Code, including electronic documents, now owned or hereafter acquired by any
Credit Party, wherever located.
"Dollars" or "$" means lawful currency of the United States of
America.
"EBITDA" has the meaning ascribed to it in Section 4.2 of
Schedule 1 to Exhibit 4.6(l).
"EBITDA Availability" shall be determined pursuant to, and in
accordance with, Exhibit 4.6(d).
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"Environmental Laws" means all applicable federal, state,
local and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and any applicable judicial or
administrative interpretation thereof, including any applicable judicial or
administrative order, consent decree, order or judgment, imposing liability or
standards of conduct for or relating to the regulation and protection of human
health, safety, the environment and natural resources (including ambient air,
surface water, groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation). Environmental Laws include the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(42 U.S.C. Sections 9601 et seq.) ("CERCLA"); the Hazardous Materials
Transportation Authorization Act of 1994 (49 U.S.C. Sections 5101 et seq.); the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 et
seq.); the Solid Waste Disposal Act (42 U.S.C. Sections 6901 et seq.); the Toxic
Substance Control Act (15 U.S.C. Sections 2601 et seq.); the Clean Air Act (42
U.S.C. Sections 7401 et seq.); the Federal Water Pollution Control Act (33
U.S.C. Sections 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C.
Sections 651 et seq.); and the Safe Drinking Water Act (42 U.S.C. Sections
300(f) et seq.), and any and all regulations promulgated thereunder, and all
analogous state, local and foreign counterparts or equivalents and any transfer
of ownership notification or approval statutes.
"Environmental Liabilities" means, with respect to any Person,
all liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"Environmental Permits" means all permits, licenses,
authorizations, certificates, approvals or registrations required by any
Governmental Authority under any Environmental Laws.
"Equipment" means all "equipment," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located
and, in any event, including all such Credit Party's machinery and equipment,
including processing equipment, conveyors, machine tools, data processing and
computer equipment, including embedded software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
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instructions, warranties and rights with respect thereto, and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any
trade or business (whether or not incorporated) that, together with such Credit
Party, are treated as a single employer within the meaning of Sections 414(b),
(c), (m) or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any
ERISA Affiliate, (a) any event described in Section 4043(c) of ERISA with
respect to a Title IV Plan; (b) the withdrawal of any Credit Party or ERISA
Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (c) the complete or partial withdrawal of any Credit Party or any ERISA
Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (e) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Credit
Party or ERISA Affiliate to make when due required contributions to a
Multiemployer Plan or Title IV Plan unless such failure is cured within 30 days;
(g) any other event or condition that might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the
imposition of liability under Section 4069 or 4212(c) of ERISA; (h) the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA; or (i) the loss of a Qualified Plan's qualification or tax exempt
status; or (j) the termination of a Plan described in Section 4064 of ERISA.
"ESOP" means a Plan that is intended to satisfy the
requirements of Section 4975(e)(7) of the IRC.
"Event of Default" has the meaning ascribed to it in Section
6.1.
"Excess Cash Flow" has the meaning ascribed to it in Schedule
2 to Exhibit 4.6(l).
"Fair Labor Standards Act" means the Fair Labor Standards Act,
29 U.S.C. Section 201 et seq.
"Federal Funds Rate" means, for any day, a floating rate equal
to the weighted average of the rates on overnight federal funds transactions
among members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System.
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"Fees" means any and all fees payable to Agent or any Lender
pursuant to the Agreement or any of the other Loan Documents.
"Financial Statements" means the consolidated and
consolidating income statements, statements of cash flows and balance sheets of
Borrower and its Subsidiaries delivered in accordance with Section 4.6.
"Fiscal Quarter" means any of the quarterly accounting periods
of Borrower, ending on March 31, June 30, September 30, and December 31 of each
year.
"Fiscal Year" means any of the annual accounting periods of
Borrower ending on December 31 of each year.
"Fixed Charges" has the meaning ascribed to it in Section 4.3
of Schedule 1 to Exhibit 4.6(l).
"Fixed Charge Coverage Ratio" has the meaning ascribed to it
in Section 4.3 of Schedule 1 to Exhibit 4.6(l).
"Fixtures" means all "fixtures" as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party.
"Foreign Lender" has the meaning ascribed to it in Section
1.9(c).
"Funded Debt" means, with respect to any Person, without
duplication, all Indebtedness for borrowed money evidenced by notes, bonds,
debentures, or similar evidences of Indebtedness and that by its terms matures
more than one year from, or is directly or indirectly renewable or extendible at
such Person's option under a revolving credit or similar agreement obligating
the lender or lenders to extend credit over a period of more than one year from
the date of creation thereof, and specifically including Capital Lease
Obligations, current maturities of long-term debt, revolving credit and
short-term debt extendible beyond one year at the option of the debtor, and also
including, in the case of Borrower, the average daily Revolving Loan Balance
during the immediately preceding Fiscal month and all other Obligations
(including Letter of Credit Obligations, but only to the extent that, at the
time of measurement, such Letter of Credit Obligations exceed $10,000,000 in the
aggregate and the amount of the Term Loan outstanding less cash or Cash
Equivalents held by Borrower provided that such cash or Cash Equivalents are
held in a bank account of Borrower that is subject to a blocked account
agreement pursuant to the terms of Annex F hereof) and, without duplication,
Guaranteed Indebtedness consisting of guaranties of Funded Debt of other
Persons.
"Funding Date" has the meaning ascribed to it in Section 7.2.
"GAAP" means generally accepted accounting principles in the
United States of America, consistently applied.
"GE Capital" has the meaning ascribed to it in the Preamble.
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"GE Capital Fee Letter" has the meaning ascribed to it in
Section 1.3(a).
"General Intangibles" means "general intangibles," as such
term is defined in the Code, now owned or hereafter acquired by any Credit
Party, including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contractual Obligation, all payment intangibles,
customer lists, Licenses, Copyrights, Trademarks, Patents, and all applications
therefor and reissues, extensions or renewals thereof, rights in Intellectual
Property, interests in partnerships, joint ventures and other business
associations, licenses, permits, copyrights, trade secrets, proprietary or
confidential information, inventions (whether or not patented or patentable),
technical information, procedures, designs, knowledge, know-how, software, data
bases, data, skill, expertise, experience, processes, models, drawings,
materials and records, goodwill (including the goodwill associated with any
Trademark or Trademark License), all rights and claims in or under insurance
policies (including insurance for fire, damage, loss and casualty, whether
covering personal property, real property, tangible rights or intangible rights,
all liability, life, key man and business interruption insurance, and all
unearned premiums), uncertificated securities, chooses in action, deposit,
checking and other bank accounts, rights to receive tax refunds and other
payments, rights to receive dividends, distributions, cash, Instruments and
other property in respect of or in exchange for pledged Stock and Investment
Property, rights of indemnification, all books and records, correspondence,
credit files, invoices and other papers, including all tapes, cards, computer
runs and other papers and documents in the possession or under the control of
such Credit Party or any computer bureau or service company from time to time
acting for such Credit Party.
"Goods" means any "goods," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located,
including embedded software to the extent included in "goods" as defined in the
Code, manufactured homes, standing timber that is cut and removed for sale and
unborn young of animals.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guaranteed Indebtedness" means, as to any Person, any
obligation of such Person guaranteeing, providing comfort or otherwise
supporting any Indebtedness, lease, dividend, or other obligation ("primary
obligation") of any other Person (the "primary obligor") in any manner,
including any obligation or arrangement of such Person to (a) purchase or
repurchase any such primary obligation, (b) advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency or any balance sheet condition of the primary obligor, (c)
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation, (d) protect the beneficiary of such
arrangement from loss (other than product warranties given in the ordinary
course of business) or (e) indemnify the owner of such primary obligation
against loss in respect thereof. The amount of any Guaranteed Indebtedness at
any time shall be deemed to be an amount equal to the lesser
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at such time of (x) the stated or determinable amount of the primary obligation
in respect of which such Guaranteed Indebtedness is incurred and (y) the maximum
amount for which such Person may be liable pursuant to the terms of the
instrument embodying such Guaranteed Indebtedness, or, if not stated or
determinable, the maximum reasonably anticipated liability (assuming full
performance) in respect thereof.
"Guaranties" means, collectively, each Subsidiary Guaranty and
any other guaranty executed by any Guarantor in favor of Agent and Lenders in
respect of the Obligations.
"Guarantors" means each Subsidiary of Borrower and each other
Person, if any, that executes a guaranty or other similar agreement in favor of
Agent, for itself and the ratable benefit of Lenders, in connection with the
transactions contemplated by the Agreement and the other Loan Documents.
"Hazardous Material" means any substance, material or waste
that is regulated by, or forms the basis of liability now or hereafter under,
any Environmental Laws, including any material or substance that is (a) defined
as a "solid waste," "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste," "restricted hazardous waste,"
"pollutant," "contaminant," "hazardous constituent," "special waste," "toxic
substance" or other similar term or phrase under any Environmental Laws, or (b)
petroleum or any fraction or by-product thereof, asbestos, polychlorinated
biphenyls (PCB's), or any radioactive substance.
"Indebtedness" means, with respect to any Person, without
duplication (a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property payment for which is deferred six (6) months
or more, but excluding obligations to trade creditors incurred in the ordinary
course of business that are unsecured and not overdue by more than six (6)
months unless being contested in good faith, (b) all reimbursement and other
obligations with respect to letters of credit, bankers' acceptances and surety
bonds, whether or not matured, (c) all obligations evidenced by notes, bonds,
debentures or similar instruments, (d) all indebtedness created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations and the present
value (discounted at the Index Rate as in effect on the Closing Date) of future
rental payments under all synthetic leases, (f) all obligations of such Person
under commodity purchase or option agreements or other commodity price hedging
arrangements, in each case whether contingent or matured, (g) all obligations of
such Person under any foreign exchange contract, currency swap agreement,
interest rate swap (including Interest Rate Agreements), cap or collar agreement
or other similar agreement or arrangement designed to alter the risks of that
Person arising from fluctuations in currency values or interest rates, in each
case whether contingent or matured, (h) all Indebtedness referred to above
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in property or other
assets (including accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness, (i) without duplication to the extent
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included above, all Subordinated Debt (regardless of when incurred); (j)
"earnouts" and similar payment obligations, and (k) the Obligations.
"Indemnitees" has the meaning ascribed to it in Section 9.1.
"Index Rate" means, for any day, a floating rate equal to the
higher of (i) the rate publicly quoted from time to time by The Wall Street
Journal as the "base rate on corporate loans posted by at least 75% of the
nation's 30 largest banks" (or, if The Wall Street Journal ceases quoting a base
rate of the type described, the highest per annum rate of interest published by
the Federal Reserve Board in Federal Reserve statistical release H.15 (519)
entitled "Selected Interest Rates" as the Bank prime loan rate or its
equivalent), and (ii) the Federal Funds Rate plus 50 basis points per annum.
Each change in any interest rate provided for in the Agreement based upon the
Index Rate shall take effect at the time of such change in the Index Rate.
"Index Rate Loan" means a Loan or portion thereof bearing
interest by reference to the Index Rate.
"Instruments" means all "instruments," as such term is defined
in the Code, now owned or hereafter acquired by any Credit Party, wherever
located, and, in any event, including all certificated securities, all
certificates of deposit, and all promissory notes and other evidences of
indebtedness, other than instruments that constitute, or are a part of a group
of writings that constitute, Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks.
"Intercompany Notes" has the meaning ascribed to it in Section
3.1.
"Interest Coverage Ratio" has the meaning ascribed to it in
Section 4.4 of Schedule 1 to Exhibit 4.6(l).
"Interest Expense" has the meaning ascribed to it in Section
4.3 of Schedule 1 to Exhibit 4.6(l).
"Interest Payment Date" means (a) as to any Index Rate Loan,
the first Business Day of each Fiscal Quarter to occur while such Loan is
outstanding, and (b) as to any LIBOR Loan, the last day of the applicable LIBOR
Period; provided, that in the case of any LIBOR Period greater than three months
in duration, interest shall be payable at three month intervals and on the last
day of such LIBOR Period; and provided further that, in addition to the
foregoing, each of (x) the date upon which all of the Commitments have been
terminated and the Loans have been paid in full and (y) the Commitment
Termination Date shall be deemed to be an "Interest Payment Date" with respect
to any interest that has then accrued under the Agreement.
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or
similar agreement or arrangement designed to
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protect Borrower against fluctuations in interest rates entered into between
Borrower and any Lender pursuant to Section 2.8.
"Inventory" means any "inventory," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located,
including inventory, merchandise, goods and other personal property that are
held by or on behalf of any Credit Party for sale or lease or are furnished or
are to be furnished under a contract of service, or that constitute raw
materials, work in process, finished goods, returned goods, supplies or
materials of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies
and embedded software.
"Investment" means (i) any direct or indirect purchase or
other acquisition by Borrower or any of its Subsidiaries of any Stock, or other
ownership interest in, any other Person, and (ii) any direct or indirect loan,
advance or capital contribution by Borrower or any of its Subsidiaries to any
other Person, including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business.
"Investment Property" means all "investment property," as such
term is defined in the Code, now owned or hereafter acquired by any Credit
Party, wherever located, including: (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of such Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any Credit Party;
(iv) all commodity contracts of any Credit Party; and (v) all commodity accounts
held by any Credit Party.
"IRC" means the Internal Revenue Code of 1986, as amended, and
all regulations promulgated thereunder.
"IRS" means the Internal Revenue Service.
"L/C Issuer" means GE Capital or a Subsidiary thereof or a
bank or other legally authorized Person selected by or acceptable to Agent in
its sole discretion, in such Person's capacity as an issuer of Letters of Credit
hereunder.
"L/C Sublimit" has the meaning ascribed to it in Section
1.1(d).
"Lenders" means GE Capital, the other Lenders named on the
signature pages of the Agreement, and, if any such Lender shall decide to assign
all or any portion of the Obligations, such term shall include any assignee of
such Lender.
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"Letters of Credit" means documentary or standby letters of
credit issued for the account of Borrower by L/C Issuers, and bankers'
acceptances issued by Borrower, for which Agent and Lenders have incurred Letter
of Credit Obligations.
"Letter of Credit Fee" has the meaning ascribed to it in
Section 1.3(d).
"Letter of Credit Obligations" means all outstanding
obligations incurred by Agent and Lenders at the request of Borrower, whether
direct or indirect, contingent or otherwise, due or not due, in connection with
the issuance of Letters of Credit by L/C Issuers or the purchase of a
participation as set forth in Section 1.1(d) with respect to any Letter of
Credit. The amount of such Letter of Credit Obligations shall equal the maximum
amount that may be payable by Agent and Lenders thereupon or pursuant thereto.
"Leverage Ratio" has the meaning ascribed to it in Section 4.6
of Schedule 1 to Exhibit 4.6(l).
"LIBOR Breakage Fee" means an amount equal to the amount of
any actual losses, expenses, liabilities (including, without limitation, any
actual loss (including interest paid) in connection with the re-employment of
such funds, but specifically excluding any profit based on last opportunity
cost) that any Lender may sustain as a result of (i) any default by Borrower in
making any borrowing of, conversion into or continuation of any LIBOR Loan
following Borrower's delivery to Agent of any LIBOR Loan request in respect
thereof or (ii) any payment of a LIBOR Loan on any day that is not the last day
of the LIBOR Period applicable thereto (regardless of the source of such
prepayment and whether voluntary, by acceleration or otherwise). For purposes of
calculating amounts payable to a Lender under Section 1.3(d), each Lender shall
be deemed to have actually funded its relevant LIBOR Loan through the purchase
of a deposit bearing interest at LIBOR in an amount equal to the amount of that
LIBOR Loan and having a maturity and repricing characteristics comparable to the
relevant LIBOR Period; provided, however, that each Lender may fund each of its
LIBOR Loans in any manner it sees fit, and the foregoing assumption shall be
utilized only for the calculation of amounts payable under Section 1.3(d).
"LIBOR Business Day" means a Business Day on which banks in
the City of London are generally open for interbank or foreign exchange
transactions.
"LIBOR Loans" means a Loan or any portion thereof bearing
interest by reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each
period commencing on a LIBOR Business Day selected by Borrower pursuant to the
Agreement and ending one, two, three or six months thereafter, as selected by
Borrower's irrevocable notice to Agent as set forth in Section 1.2(e); provided,
that the foregoing provision relating to LIBOR Periods is subject to the
following:
(a) if any LIBOR Period would otherwise end on a day that is
not a LIBOR Business Day, such LIBOR Period shall be extended to the
next succeeding LIBOR
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Business Day unless the result of such extension would be to carry such
LIBOR Period into another calendar month in which event such LIBOR
Period shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the
date set forth in clause (a) of the definition of "Commitment
Termination Date" shall end two (2) LIBOR Business Days prior to such
date;
(c) any LIBOR Period that begins on the last LIBOR 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 LIBOR
Period) shall end on the last LIBOR Business Day of a calendar month;
(d) Borrower shall select LIBOR Periods so as not to require a
payment or prepayment of any LIBOR Loan during a LIBOR Period for such
Loan;
(e) Borrower shall select LIBOR Periods so that there shall be
no more than 5 separate LIBOR Loans in existence at any one time; and
(g) no LIBOR Period may be selected for any portion of the
Term Loan if a Scheduled Installment for such Term Loan is payable
during such LIBOR Period and the portion of such Term Loan which
constitutes an Index Rate Loan does not equal or exceed the amount of
such Scheduled Installment.
"LIBOR Rate" means for each LIBOR Period, a rate of interest
determined by Agent equal to:
(a) the offered rate for deposits in United States Dollars for
the applicable LIBOR Period that appears on Telerate Page 3750 as of
11:00 a.m. (London time), on the second full LIBOR Business Day next
preceding the first day of such LIBOR Period (unless such date is not a
Business Day, in which event the next succeeding Business Day will be
used); divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is two (2) LIBOR Business Days
prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations of
the Federal Reserve Board or other Governmental Authority having
jurisdiction with respect thereto, as now and from time to time in
effect) for Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Federal Reserve Board
that are required to be maintained by a member bank of the Federal
Reserve System.
If such interest rates shall cease to be available from
Telerate News Service, the LIBOR Rate shall be determined from such financial
reporting service or other information as shall be available to Agent.
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"License" means any Copyright License, Patent License,
Trademark License or other license of rights or interests now held or hereafter
acquired by any Credit Party.
"Lien" means any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the Code or comparable law of any jurisdiction).
"Litigation" has the meaning ascribed to it in Section 4.6(i).
"Loan Account" has the meaning ascribed to it in Section 1.7.
"Loan Documents" means the Agreement, the Notes, the
Collateral Documents, the GE Capital Fee Letter and all other agreements,
instruments, documents and certificates identified in the Closing Checklist
executed and delivered to, or in favor of, Agent or any Lenders and including
all other pledges, powers of attorney, consents, assignments, contracts,
notices, and all other written matter whether heretofore, now or hereafter
executed by or on behalf of any Credit Party, or any employee of any Credit
Party, and delivered to Agent or any Lender in connection with the Agreement or
the transactions contemplated thereby. Any reference in the Agreement or any
other Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to the Agreement or such Loan Document as
the same may be in effect at any and all times such reference becomes operative.
"Loans" means the Revolving Loan, the Swing Line Loan and the
Term Loan(s).
"Master Documentary Agreement" means the Master Agreement for
Documentary Letters of Credit dated as of the Closing Date between Borrower, as
Applicant, and GE Capital, as Issuer.
"Master Standby Agreement" means the Master Agreement for
Standby Letters of Credit dated as of the Closing Date between Borrower, as
Applicant, and GE Capital, as Issuer.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations, or financial or other condition of the
Borrower or the Credit Parties and their Subsidiaries considered as a whole, (b)
Borrower's ability to pay any of the Loans or any of the other Obligations in
accordance with the terms of the Agreement, (c) the Collateral or Agent's Liens,
on behalf of itself and Lenders, on the Collateral or the priority of such
Liens, or (d) Agent's or any Lender's rights and remedies under the Agreement
and the other Loan Documents.
"Maximum Amount" means, as of any date of determination, an
amount equal to the Revolving Loan Commitment of all Lenders as of that date.
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"Maximum Lawful Rate" has the meaning ascribed to it in
Section 1.2(f).
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investor's Services, Inc.
"Mortgages" means each of the mortgages, deeds of trust,
leasehold mortgages, leasehold deeds of trust, collateral assignments of leases
or other real estate security documents, if any, delivered by any Credit Party
to Agent on behalf of itself and Lenders with respect to the Real Estate.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate
is making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
"Net Proceeds" means cash proceeds received by Borrower or any
of its Subsidiaries from any Asset Disposition (including insurance proceeds,
awards of condemnation, and payments under notes or other debt securities
received in connection with any Asset Disposition), net of (a) the costs of such
Asset Disposition (including taxes attributable to such sale, lease or transfer)
and (b) amounts applied to repayment of Indebtedness (other than the
Obligations) secured by a Lien on the asset or property disposed.
"Non-Consenting Lender" has the meaning ascribed to it in
Section 9.19(c).
"Non-Funding Lender" has the meaning ascribed to it in Section
8.5(a).
"Notes" means, collectively, the Revolving Notes, the Swing
Line Note and the Term Notes.
"Notice of Conversion/Continuation" has the meaning ascribed
to it in Section 1.2(e).
"Notice of Revolving Credit Advance" has the meaning ascribed
to it in Section 1.1(b).
"Obligations" means all loans, advances, debts, liabilities
and obligations, for the performance of covenants, tasks or duties or for
payment of monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable), including
obligations pursuant to Interest Rate Agreements and Letter of Credit
Obligations, owing by any Credit Party to Agent or any Lender under any of the
Loan Documents, and all covenants and duties regarding such amounts, of any kind
or nature, present or future, whether or not evidenced by any note, agreement or
other instrument, arising under the Agreement or any of the other Loan
Documents. This term includes all principal, interest (including all interest
that accrues after the commencement of any case or proceeding by or against any
Credit Party in bankruptcy, whether or not allowed in such case or proceeding),
Fees, Charges, expenses, attorneys' fees and any other sum chargeable to any
Credit Party under the Agreement or any of the other Loan Documents.
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"Other Lender" has the meaning ascribed to it in Section
8.5(d).
"Overadvance" has the meaning ascribed to it in Section 1.1.
"Patent License" means rights under any written agreement now
owned or hereafter acquired by any Credit Party granting any right with respect
to any invention on which a Patent is in existence.
"Patents" means all of the following in which any Credit Party
now holds or hereafter acquires any interest: (a) all letters patent of the
United States or any other country, all registrations and recordings thereof,
and all applications for letters patent of the United States or of any other
country, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State or any other country, and (b) all reissues,
continuations, continuations-in-part or extensions thereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan described in Section 3(2) of
ERISA.
"Permitted Encumbrances" means the following encumbrances: (a)
Liens for taxes or assessments or other governmental Charges not yet due and
payable; (b) pledges or deposits of money securing statutory obligations under
workmen's compensation, unemployment insurance, social security or public
liability laws or similar legislation (excluding Liens under ERISA); (c) pledges
or deposits of money securing bids, tenders, contracts (other than contracts for
the payment of money) or leases to which any Credit Party is a party as lessee
made in the ordinary course of business; (d) inchoate and unperfected workers',
mechanics' or similar liens arising in the ordinary course of business; (e)
carriers', warehousemen's, suppliers' or other similar possessory liens arising
in the ordinary course of business and securing liabilities in an outstanding
aggregate amount not in excess of $200,000 at any time; (f) deposits securing,
or in lieu of, surety, appeal or customs bonds in proceedings to which any
Credit Party is a party; (g) any attachment or judgment lien not constituting an
Event of Default under Section 6.1; (h) zoning restrictions, easements,
licenses, or other restrictions on the use of any Real Estate or other minor
irregularities in title (including leasehold title) thereto, so long as the same
do not materially impair the use, value, or marketability of such Real Estate;
(i) presently existing or hereafter created Liens in favor of Agent, on behalf
of Lenders; (j) Liens existing on the date hereof and renewal, and extensions
thereof which Liens are set forth on Schedule 3.2; and (k) Liens securing
Indebtedness permitted by Section 3.1(d) provided that the Liens attach only to
the assets financed by such Indebtedness and any proceeds thereof; (l) common
law security interests of a surety in the actual proceeds of a project subject
to the underlying surety bond provided by such surety; and (m) inchoate Liens
arising under ERISA to secure Contingent Liabilities of any Credit Party.
"Person" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit corporation,
other entity or government (whether federal, state, county,
A-19
city, municipal, local, foreign, or otherwise, including any instrumentality,
division, agency, body or department thereof).
"Plan" means, at any time, an "employee benefit plan," as
defined in Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any Credit Party.
"Pledge Agreement" means the Pledge Agreement of even date
herewith executed by, to the extent applicable, Borrower's Subsidiaries, in
favor of Agent, on behalf of itself and Lenders, pledging all Stock of their
respective Subsidiaries.
"Pledge Agreements" means the Borrower Pledge Agreement, the
Pledge Agreement, and any other pledge agreement entered into after the Closing
Date by any Credit Party.
"Prior Lender" means the syndicate of Lenders for which Bank
One, N.A. serves as agent.
"Prior Lender Obligations" means any and all obligations of
the Borrower to the Prior Lender.
"Pro Forma" means the unaudited consolidated and consolidating
balance sheets of Borrower and its Subsidiaries prepared in accordance with GAAP
as of August 31 after giving effect to the Related Transactions. The Pro Forma
is annexed hereto as Annex D.
"Pro Rata Share" means with respect to all matters relating to
any Lender (a) with respect to the Revolving Loan, the percentage obtained by
dividing (i) the Revolving Loan Commitment of that Lender by (ii) the aggregate
Revolving Loan Commitments of all Lenders, (b) with respect to the Term Loan,
the percentage obtained by dividing (i) the Term Loan Commitment of that Lender
by (ii) the aggregate Term Loan Commitments of all Lenders, (c) with respect to
all Loans, the percentage obtained by dividing (i) the aggregate Commitments of
that Lender by (ii) the aggregate Commitments of all Lenders, and (d) with
respect to all Loans on and after the Commitment Termination Date, the
percentage obtained by dividing (i) the aggregate outstanding principal balance
of the Loans held by that Lender, by (ii) the outstanding principal balance of
the Loans held by all Lenders, as any such percentages may be adjusted by
assignments pursuant to Section 8.1.
"Projections" means Borrower's forecasted consolidated: (a)
balance sheets; (b) profit and loss statements; (c) cash flow statements; and
(d) capitalization statements, and otherwise consistent with the historical
Financial Statements of Borrower, together with appropriate supporting details
and a statement of underlying assumptions.
"Proposed Change" has the meaning ascribed to it in Section
9.19(c).
"Qualified Assignee" means (a) any Lender, any Affiliate of
any Lender and, with respect to any Lender that is an investment fund that
invests in commercial loans, any other
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investment fund that invests in commercial loans and that is managed or advised
by the same investment advisor as such Lender or by an Affiliate of such
investment advisor, and (b) any commercial bank, savings and loan association or
savings bank or any other entity which is an "accredited investor" (as defined
in Regulation D under the Securities Act of 1933) which extends credit or buys
loans as one of its businesses, including insurance companies, mutual funds,
lease financing companies and commercial finance companies, in each case, which
has a rating of BBB or higher from S&P and a rating of Baa2 or higher from
▇▇▇▇▇'▇ at the date that it becomes a Lender and which, through its applicable
lending office, is capable of lending to Borrower without the imposition of any
withholding or similar taxes; provided that no Person determined by Agent to be
acting in the capacity of a vulture fund or distressed debt purchaser shall be a
Qualified Assignee and no Person or Affiliate of such Person (other than a
Person that is already a Lender) holding Subordinated Debt or Stock issued by
any Credit Party shall be a Qualified Assignee.
"Qualified Plan" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"Real Estate" has the meaning ascribed to it in Section 5.12.
"Refinancing" means the repayment in full by Borrower of the
Prior Lender Obligations on the Closing Date.
"Refunded Swing Line Loan" has the meaning ascribed to it in
Section 1.1(c)(iii).
"Related Transactions" means the initial borrowing under the
Revolving Loan and the Term Loan on the Closing Date, the Refinancing, the
payment of all Fees, costs and expenses associated with all of the foregoing and
the execution and delivery of all of the Related Transactions Documents.
"Related Transactions Documents" means the Loan Documents and
all other agreements or instruments executed in connection with the Related
Transactions.
"Release" means any release, threatened release, spill,
emission, leaking, pumping, pouring, emitting, emptying, escape, injection,
deposit, disposal, discharge, dispersal, dumping, leaching or migration of
Hazardous Material in the indoor or outdoor environment, including the movement
of Hazardous Material through or in the air, soil, surface water, ground water
or property.
"Replacement Lender" has the meaning ascribed to it in Section
9.19(a).
"Requisite Lenders" means Lenders having (a) more than 66 2/3%
of the Commitments of all Lenders, or (b) if the Commitments have been
terminated, more than 66 2/3% of the aggregate outstanding amount of the Loans;
provided, however, that if there shall be more than one Lender, "Requisite
Lenders" shall at all times require at least two (2) Lenders.
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"Requisite Revolving Lenders" means Lenders having (a) more
than 66 2/3% of the Revolving Loan Commitments of all Lenders, or (b) if the
Revolving Loan Commitments have been terminated, more than 66 2/3% of the
aggregate outstanding amount of the Revolving Loan (with the Swing Line Loan
being attributed to the Lender making such Loan); provided, however, that if
there shall be more than one Revolving Lender, "Requisite Revolving Lenders"
shall at all times require at least two (2) Revolving Lenders.
"Restricted Payment" means, with respect to any Credit Party
(a) the declaration or payment of any dividend or the incurrence of any
liability to make any other payment or distribution of cash or other property or
assets in respect of Stock; (b) any payment on account of the purchase,
redemption, defeasance, sinking fund or other retirement of such Credit Party's
Stock or any other payment or distribution made in respect thereof, either
directly or indirectly; (c) any payment or prepayment of principal of, premium,
if any, or interest, fees or other charges on or with respect to, and any
redemption, purchase, retirement, defeasance, sinking fund or similar payment
and any claim for rescission with respect to, any Subordinated Debt; (d) any
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire Stock
of such Credit Party now or hereafter outstanding; (e) any payment of a claim
for the rescission of the purchase or sale of, or for material damages arising
from the purchase or sale of, any shares of such Credit Party's Stock or of a
claim for reimbursement, indemnification or contribution arising out of or
related to any such claim for damages or rescission; (f) any payment, loan,
contribution, or other transfer of funds or other property to any Stockholder of
such Credit Party other than (1) payment of compensation in the ordinary course
of business to Stockholders who are employees of such Credit Party and fees to
Members of the Borrower's Board of Directors who are not also employees for
service on the Borrower's Board of Directors and (2) payment for goods or
services provided in the ordinary course of business, on an arms length basis,
and, if to an Affiliate, in compliance with the provisions of Section 3.8 of the
Agreement.
"Retiree Welfare Plan" means, at any time, a Welfare Plan that
provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of employment,
other than continuation coverage provided pursuant to Section 4980B of the IRC
and at the sole expense of the participant or the beneficiary of the
participant.
"Revolving Credit Advance" has the meaning ascribed to it in
Section 1.1(b).
"Revolving Lenders" means those Lenders having a Revolving
Loan Commitment.
"Revolving Loan(s)" means, at any time, the sum of (i) the
aggregate amount of Revolving Credit Advances outstanding to Borrower (including
Swing Line Advances) plus (ii) the aggregate Letter of Credit Obligations
incurred on behalf of Borrower. Unless the context otherwise requires,
references to the outstanding principal balance of the Revolving Loan shall
include the outstanding balance of Letter of Credit Obligations.
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"Revolving Loan Commitment" means (a) as to any Lender, the
commitment of such Lender to make its Pro Rata Share of Revolving Credit
Advances or incur its Pro Rata Share of Letter of Credit Obligations (including,
in the case of the Swing Line Lender, its commitment to make Swing Line Advances
as a portion of its Revolving Loan Commitment) as set forth on Annex B or in the
most recent Assignment Agreement, if any, executed by such Lender and (b) as to
all Lenders, the aggregate commitment of all Lenders to make the Revolving
Credit Advances (including, in the case of the Swing Line Lender, Swing Line
Advances) or incur Letter of Credit Obligations, which aggregate commitment
shall be Forty Million Dollars ($40,000,000) on the Closing Date, as such amount
may be adjusted, if at all, from time to time in accordance with the Agreement.
"Revolving Notes" has the meaning ascribed to it in Section
1.1(b).
"S&P" means Standard & Poor's Ratings Services, a division of
the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Scheduled Installments" has the meaning ascribed to it in
Section 1.1(a).
"Security Agreement" means the Security Agreement of even date
herewith entered into by and among Agent, on behalf of itself and Lenders, and
each Credit Party that is a signatory thereto.
"Settlement Date" has the meaning ascribed to it in Section
8.5(a)(ii).
"Software" means all "software" as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, other than software
embedded in any category of Goods, including all computer programs and all
supporting information provided in connection with a transaction related to any
program.
"Solvent" means, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including subordinated and
contingent liabilities, of such Person; (b) the present fair saleable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts and liabilities,
including subordinated and contingent liabilities as they become absolute and
matured; (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (d) such Person is not engaged in a business or
transaction, and is not about to engage in a business or transaction, for which
such Person's property would constitute an unreasonably small capital. The
amount of contingent liabilities (such as Litigation, guaranties and pension
plan liabilities) at any time shall be computed as the amount that, in light of
all the facts and circumstances existing at the time, represents the amount that
can be reasonably be expected to become an actual or matured liability.
"Statement" has the meaning ascribed to it in Section 4.6(b).
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"Stock" means all shares, options, warrants, general or
limited partnership interests, membership interests or other equivalents
(regardless of how designated) of or in a corporation, partnership, limited
liability company or equivalent entity whether voting or nonvoting, including
common stock, preferred stock or any other "equity security" (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934).
"Stockholder" means, with respect to any Person, each holder
of Stock of such Person.
"Subordinated Debt" means the unsecured, subordinated
Indebtedness set forth on Schedule A (all of which subordinated Indebtedness
constitutes so-called "seller paper" and shall have been incurred in connection
with acquisitions completed prior to the Closing Date), and any other unsecured
Indebtedness incurred as so-called "seller paper" in connection with Permitted
Acquisitions consummated in compliance with Section 3.6 and subordinated to the
Obligations in a manner and form satisfactory to Agent, as to the right and time
of payment and as to any and all other rights and remedies thereunder.
"Subordinated Loan Documents" means any and all notes,
indentures, agreements, instruments and other documents evidencing, governing or
otherwise relating to any Subordinated Debt.
"Subsidiary" means, with respect to any Person, (a) any
corporation of which an aggregate of more than 50% of the outstanding Stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether, at the time, Stock of any other class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly,
owned legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person is
a general partner or may exercise the powers of a general partner. Unless the
context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of the Borrower.
"Subsidiary Guaranty" means the Subsidiary Guaranty of even
date herewith executed by one or more Subsidiaries of Borrower in favor of
Agent, on behalf of itself and Lenders.
"Swing Line Advance" has the meaning ascribed to it in
Section 1.1(c).
"Swing Line Availability" has the meaning ascribed to it in
Section 1.1(c).
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"Swing Line Commitment" means the commitment of the Swing Line
Lender to make Swing Line Advances as set forth on Annex B to the Agreement,
which commitment constitutes a subfacility of the Revolving Loan Commitment of
the Swing Line Lender.
"Swing Line Lender" means GE Capital.
"Swing Line Loan" means at any time, the aggregate amount of
Swing Line Advances outstanding to Borrower.
"Swing Line Note" has the meaning ascribed to it in Section
1.1(c).
"Termination Date" means the date on which (a) the Loans have
been indefeasibly repaid in full, (b) all other Obligations under the Agreement
and the other Loan Documents have been completely discharged, (c) all Letter of
Credit Obligations have been cash collateralized in the amount set forth in
Section 1.5(f), cancelled or backed by standby letters of credit acceptable to
Agent and (d) Borrower shall not have any further right to borrow any monies
under the Agreement.
"Term Lenders" means those Lenders having Term Loan
Commitments.
"Term Loan" has the meaning ascribed to it in Section 1.1(a).
"Term Note" has the meaning ascribed to it in Section 1.1(a).
"Term Loan Commitment" means (a) as to any Lender, the
commitment of such Lender to make its Pro Rata Share of the Term Loan (as set
forth on Annex B) in the maximum aggregate amount set forth in Section 1.1(a) or
in the most recent Assignment Agreement, if any, executed by such Lender and (b)
as to all Lenders, the aggregate commitment of all Lenders to make the Term
Loan, which aggregate commitment shall be Fifteen Million Dollars ($15,000,000)
on the Closing Date, as such amount may be adjusted from time to time in
accordance with the Agreement.
"Title IV Plan" means a Pension Plan (other than a
Multiemployer Plan), that is covered by Title IV of ERISA, and that any Credit
Party or ERISA Affiliate maintains, contributes to or has an obligation to
contribute to on behalf of participants who are or were employed by any of them.
"Trademark Security Agreements" means the Trademark Security
Agreements made in favor of Agent, on behalf of itself and Lenders, by each
applicable Credit Party.
"Trademark License" means rights under any written agreement
now owned or hereafter acquired by any Credit Party granting any right to use
any Trademark.
"Trademarks" means all of the following now owned or hereafter
adopted or acquired by any Credit Party: (a) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, internet
domain names, other source or business identifiers,
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prints and labels on which any of the foregoing have appeared or appear, designs
and general intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any state or territory thereof, or any other country or any
political subdivision thereof; (b) all reissues, extensions or renewals thereof;
and (c) all goodwill associated with or symbolized by any of the foregoing.
"Unfunded Pension Liability" means, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions for funding purposes in effect
under such Title IV Plan, and (b) for a period of 5 years following a
transaction which might reasonably be expected to be covered by Section 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by any
Credit Party or any ERISA Affiliate as a result of such transaction.
"Welfare Plan" means a Plan described in Section 3(1) of
ERISA.
Rules of construction with respect to accounting terms used in
the Agreement or the other Loan Documents shall be as set forth or referred to
in this Annex A. All other undefined terms contained in any of the Loan
Documents shall, unless the context indicates otherwise, have the meanings
provided for by the Code to the extent the same are used or defined therein; in
the event that any term is defined differently in different Articles or
Divisions of the Code, the definition contained in Article or Division 9 shall
control. Unless otherwise specified, references in the Agreement or any of the
Appendices to a Section, subsection or clause refer to such Section, subsection
or clause as contained in the Agreement. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to the Agreement as a whole,
including all Annexes, Exhibits and Schedules, as the same may from time to time
be amended, restated, modified or supplemented, and not to any particular
section, subsection or clause contained in the Agreement or any such Annex,
Exhibit or Schedule.
Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and the
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter genders. The words "including",
"includes" and "include" shall be deemed to be followed by the words "without
limitation"; the word "or" is not exclusive; references to Persons include their
respective successors and assigns (to the extent and only to the extent
permitted by the Loan Documents) or, in the case of governmental Persons,
Persons succeeding to the relevant functions of such Persons; and all references
to statutes and related regulations shall include any amendments of the same and
any successor statutes and regulations. Whenever any provision in any Loan
Document refers to the knowledge (or an analogous phrase) of any Credit Party,
such words are intended to signify that such Credit Party has actual knowledge
or awareness of a particular material fact or circumstance or that such Credit
Party, if it had exercised reasonable diligence, would have known or been aware
of such material fact or circumstance.
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