EXHIBIT 10.1
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of December 16, 2005
among
BLACK WARRIOR WIRELINE CORP.,
as Borrower,
THE OTHER CREDIT PARTIES FROM TIME TO TIME SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent, Agent, and Lender
GE CAPITAL MARKETS, INC.
as Lead Arranger
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TABLE OF CONTENTS
PAGE
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1. AMOUNT AND TERMS OF CREDIT..................................................... 2
1.1 Credit Facilities........................................................ 2
1.2 Swap Related Reimbursement Obligations................................... 6
1.3 Prepayments.............................................................. 8
1.4 Use of Proceeds.......................................................... 12
1.5 Interest and Applicable Margins.......................................... 12
1.6 Eligible Accounts........................................................ 15
1.7 Intentionally Omitted.................................................... 18
1.8 Cash Management Systems.................................................. 18
1.9 Fees..................................................................... 18
1.10 Receipt of Payments...................................................... 19
1.11 Application and Allocation of Payments................................... 19
1.12 Loan Account and Accounting.............................................. 20
1.13 Indemnity................................................................ 20
1.14 Access................................................................... 22
1.15 Taxes.................................................................... 22
1.16 Capital Adequacy; Increased Costs; Illegality............................ 23
1.17 Single Loan.............................................................. 25
2. CONDITIONS PRECEDENT........................................................... 25
2.1 Conditions to the Initial Loans.......................................... 25
2.2 Further Conditions to Each Loan.......................................... 27
3. REPRESENTATIONS AND WARRANTIES................................................. 27
3.1 Corporate Existence; Compliance with Law................................. 29
3.2 Executive Offices, Collateral Locations, FEIN, Organizational Number..... 30
3.3 Corporate Power, Authorization, Enforceable Obligations.................. 30
3.4 Financial Statements and Projections..................................... 30
3.5 Material Adverse Effect.................................................. 31
3.6 Ownership of Property; Liens............................................. 32
3.7 Labor Matters............................................................ 32
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness 33
3.9 Government Regulation.................................................... 33
3.10 Margin Regulations....................................................... 33
3.11 Taxes.................................................................... 34
3.12 ERISA.................................................................... 34
3.13 No Litigation............................................................ 35
3.14 Brokers.................................................................. 35
3.15 Intellectual Property.................................................... 36
3.16 Full Disclosure.......................................................... 36
3.17 Environmental Matters.................................................... 36
3.18 Insurance................................................................ 37
3.19 Deposit and Disbursement Accounts........................................ 37
3.20 Government Contracts....................................................... 37
3.21 Customer and Trade Relations............................................... 37
3.22 Agreements and Other Documents............................................. 37
3.23 Solvency................................................................... 38
3.24 Subordinated Debt.......................................................... 38
4. FINANCIAL STATEMENTS AND INFORMATION............................................. 39
4.1 Reports and Notices........................................................ 39
4.2 Communication with Accountants............................................. 40
5. AFFIRMATIVE COVENANTS............................................................ 40
5.1 Maintenance of Existence and Conduct of Business........................... 40
5.2 Payment of Charges......................................................... 40
5.3 Books and Records.......................................................... 41
5.4 Insurance; Damage to or Destruction of Collateral.......................... 41
5.5 Compliance with Laws....................................................... 43
5.6 Supplemental Disclosure.................................................... 43
5.7 Intellectual Property...................................................... 43
5.8 Environmental Matters...................................................... 43
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters and Real Estate
Purchases.................................................................. 44
5.10 Mortgages.................................................................. 44
5.11 Further Assurances......................................................... 36
5.12 Certificates of Title...................................................... 36
5.13 Subordinated Noteholder Consents........................................... 44
6. NEGATIVE COVENANTS............................................................... 47
6.1 Mergers, Subsidiaries, Etc................................................. 47
6.2 Investments; Loans and Advances............................................ 47
6.3 Indebtedness............................................................... 48
6.4 Employee Loans and Affiliate Transactions.................................. 49
6.5 Capital Structure and Business............................................. 49
6.6 Guaranteed Indebtedness.................................................... 49
6.7 Liens...................................................................... 49
6.8 Sale of Stock and Assets................................................... 50
6.9 ERISA...................................................................... 50
6.10 Financial Covenants........................................................ 51
6.11 Hazardous Materials........................................................ 51
6.12 Sale-Leasebacks............................................................ 51
6.13 Cancellation of Indebtedness............................................... 51
6.14 Restricted Payments........................................................ 51
6.15 Change of Corporate Name or Location; Change of Fiscal Year................ 51
6.16 No Impairment of Intercompany Transfers.................................... 52
6.17 No Speculative Transactions................................................ 52
6.18 Leases; Real Estate Purchases.............................................. 52
6.19 Changes Relating to Subordinated Debt; Material Contracts.................. 52
7. TERM............................................................................. 53
7.1 Termination................................................................ 53
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7.2 Survival of Obligations Upon Termination of Financing Arrangements....... 53
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES.......................................... 53
8.1 Events of Default........................................................ 53
8.2 Remedies................................................................. 55
8.3 Waivers by Credit Parties................................................ 56
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT............................. 56
9.1 Assignment and Participations............................................ 56
9.2 Appointment of Agent..................................................... 58
9.3 Agent's Reliance, Etc.................................................... 59
9.4 GE Capital and Affiliates................................................ 60
9.5 Lender Credit Decision................................................... 60
9.6 Indemnification.......................................................... 60
9.7 Successor Agent.......................................................... 61
9.8 Setoff and Sharing of Payments........................................... 61
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in Concert. 62
10. SUCCESSORS AND ASSIGNS.......................................................... 65
10.1 Successors and Assigns................................................... 65
11. MISCELLANEOUS................................................................... 66
11.1 Complete Agreement; Modification of Agreement............................ 66
11.2 Amendments and Waivers................................................... 66
11.3 Fees and Expenses........................................................ 68
11.4 No Waiver................................................................ 69
11.5 Remedies................................................................. 70
11.6 Severability............................................................. 70
11.7 Conflict of Terms........................................................ 70
11.8 Confidentiality.......................................................... 70
11.9 GOVERNING LAW............................................................ 70
11.10 Notices.................................................................. 71
11.11 Section Titles........................................................... 72
11.12 Counterparts............................................................. 72
11.13 WAIVER OF JURY TRIAL..................................................... 72
11.14 Press Releases and Related Matters....................................... 72
11.15 Reinstatement............................................................ 73
11.16 Advice of Counsel........................................................ 73
11.17 No Strict Construction................................................... 73
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INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B (Section 1.8) - Cash Management System
Annex C (Section 2.1(a)) - Closing Checklist
Annex D (Section 4.1(a)) - Financial Statements and Projections -- Reporting
Annex E(Section 4.1(b)) - Collateral Reports
Annex F (Section 6.10) - Financial Covenants
Annex G (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex H (Section 11.10) - Notice Addresses
Annex I (from Annex A -
Commitments definition) Commitments as of Closing Date
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.1(b)(i) - Form of Term Note
Exhibit 1.1(c)(i) - Form of Notice of CapEx Advance
Exhibit 1.1(c)(ii) - Form of CapEx Note
Exhibit 1.1(d)(ii) - Form of Swing Line Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 4.1(b) - Form of Borrowing Base Certificate
Exhibit 9.1(b) - Form of Assignment Agreement
Schedule 1.1 - Agent's Representatives
Disclosure Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Disclosure Schedule 3.1 - Type of Entity; State of Organization
Disclosure Schedule 3.2 - Executive Offices, Collateral Locations, FEIN
Disclosure Schedule 3.4(a) - Financial Statements
Disclosure Schedule 3.4(b) - Pro Forma
Disclosure Schedule 3.4(c) - Projections
Disclosure Schedule 3.4(d) - Fair Salable Balance Sheet
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - ERISA Plans
Disclosure Schedule 3.13 - Litigation
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
Disclosure Schedule 3.19 - Deposit and Disbursement Accounts
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Disclosure Schedule 3.20 - Government Contracts
Disclosure Schedule 3.21 - Customer and Trade Relations
Disclosure Schedule 3.22 - Material Agreements
Disclosure Schedule 3.24 - Subordinated Notes and Subordinated Note Holders
Disclosure Schedule 5.1 - Trade Names
Disclosure Schedule 6.3 - Indebtedness
Disclosure Schedule 6.4(a) - Transactions with Affiliates
Disclosure Schedule 6.7 - Existing Liens
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This SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"), dated
as of December 16, 2005, among BLACK WARRIOR WIRELINE CORP., a Delaware
corporation (the "Borrower"); the other Credit Parties from time to time
signatory hereto; GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation
(in its individual capacity, "GE Capital"), for itself, as a Lender, as Swing
Line Lender and as Agent for Lenders (in such capacity, "Agent" or "First Lien
Agent"), and the other Lenders from time to time parties hereto.
RECITALS
WHEREAS, Borrower, Credit Parties, the Lenders and Agent are parties to that
certain Credit Agreement dated as of September 14, 2001, as amended from time
to time, including without limitation as amended and restated by that certain
Amended and Restated Credit Agreement, dated as of November 14, 2004, and as
further amended thereafter (as so amended prior to the date hereof, the
"Original Credit Agreement"); and
WHEREAS, Borrower has requested that Lenders amend and restate the Original
Credit Agreement to increase the Revolving Loan Commitment to $15,000,000, to
increase the Term Loan Commitment to $30,000,000, to extend an additional
$5,000,000 facility to Borrower for the purpose of funding capital
expenditures, to permit the Borrower to consummate the Acquisition (as defined
below), and to permit the Borrower to incur certain subordinated indebtedness
pursuant to the terms of the Second Lien Credit Agreement (as defined below) on
the date hereof, as well as to modify the Original Credit Agreement in certain
other respects, and subject to the terms and conditions hereof, the Lenders and
Agent are willing to do so;
WHEREAS, Borrower has agreed to continue to secure all of its obligations
under the Loan Documents with a First Priority Lien in favor of Agent, for the
benefit of Agent and Lenders, upon all of its existing and after-acquired
personal and real property; and
WHEREAS, all subsidiaries of Borrower are willing to guarantee all of the
obligations of Borrower to Agent and Lenders under the Loan Documents and to
grant to Agent, for the benefit of Agent and Lenders, a First Priority Lien
upon all of such existing and after-acquired personal and real property of such
subsidiaries to secure such guaranty and obligations; and
WHEREAS, capitalized terms used in this Agreement shall have the meanings
ascribed to them in Annex A and, for purposes of this Agreement and the other
Loan Documents, the rules of construction set forth in Annex A shall govern.
All Annexes, Disclosure Schedules, Exhibits and other attachments
(collectively, "Appendices") hereto, or expressly identified to this Agreement,
are incorporated herein by reference, and taken together with this Agreement,
shall constitute but a single agreement. These Recitals shall be construed as
part of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
parties hereto agree that the Original Credit Agreement is amended and restated
as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Credit Facilities.
(a) Revolving Credit Facility.
(i) Subject to the terms and conditions hereof, each Revolving
Lender agrees 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"). The Pro Rata Share of the Revolving Loan of any Revolving
Lender shall not at any time exceed its separate Revolving Loan Commitment. The
obligations of each Revolving Lender hereunder shall be several and not joint.
Until the Commitment Termination Date, Borrower may from time to time borrow,
repay and reborrow under this Section 1.1(a); provided that the amount of any
Revolving Credit Advance to be made at any time shall not exceed Borrowing
Availability at such time. Borrowing Availability may be reduced by Reserves
imposed by Agent in its reasonable credit judgment. Each Revolving Credit
Advance shall be made on notice by Borrower to one of the representatives of
Agent identified in Schedule 1.1 at the address specified therein. Any such
notice must be given no later than (1) 11:00 a.m. (New York time) on the
Business Day of the proposed Revolving Credit Advance, in the case of an Index
Rate Loan, or (2) 11:00 a.m. (New York time) on the date which is three (3)
Business Days prior to the proposed Revolving Credit Advance, in the case of a
LIBOR Loan. Each such notice (a "Notice of Revolving Credit Advance") must be
given in writing (by telecopy or overnight courier) substantially in the form of
Exhibit 1.1(a)(i), and shall include the information required in such Exhibit
and such other information as may be required by Agent. If Borrower desires to
have the Revolving Credit Advances bear interest by reference to a LIBOR Rate,
Borrower must comply with Section 1.5(e).
(ii) Except as provided in Section 1.12, 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(a)(ii) (each a
"Revolving Note" and, collectively, the "Revolving Notes"). Each Revolving Note
shall represent the obligation of Borrower to pay the amount of the applicable
Revolving Lender's Revolving Loan Commitment or, if less, such Revolving
Lender's Pro Rata Share of the aggregate unpaid principal amount of all
Revolving Credit Advances to Borrower together with interest thereon as
prescribed in Section 1.5. The entire unpaid balance of the aggregate Revolving
Loan and all other non-contingent Obligations shall be immediately due and
payable in full in immediately available funds on the Commitment Termination
Date.
(iii) Any provision of this Agreement to the contrary
notwithstanding, at the request of Borrower, in its discretion Agent may (but
shall have absolutely no obligation to), make Revolving Credit Advances to
Borrower on behalf of Revolving Lenders in amounts that cause the outstanding
balance of the aggregate Revolving Loan to exceed the Borrowing Base (less the
Swing Line Loan) (any such excess Revolving Credit Advances are herein referred
to collectively as "Overadvances"); provided that (A) no such event or
occurrence shall
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cause or constitute a waiver of Agent's, the Swing Line Lender's or Revolving
Lenders' right to refuse to make any further Overadvances, Swing Line Advances
or Revolving Credit Advances, or incur any Letter of Credit Obligations, as the
case may be, at any time that an Overadvance exists, and (B) no Overadvance
shall result in a Default or Event of Default due to Borrower's failure to
comply with Section 1.3(b)(i) for so long as Agent permits such Overadvance to
remain outstanding, but solely with respect to the amount of such Overadvance.
In addition, Overadvances may be made even if the conditions to lending set
forth in Section 2 have not been met. All Overadvances shall constitute Index
Rate Loans, shall bear interest at the Default Rate and shall be payable on the
earlier of demand or the Commitment Termination Date. Except as otherwise
provided in Section 1.11(b), the authority of Agent to make Overadvances is
limited to an aggregate amount not to exceed $1,500,000 at any time, shall not
cause the Revolving Loan to exceed the Maximum Revolver Amount, and may be
revoked prospectively by a written notice to Agent signed by Revolving Lenders
holding more than 50% of the Revolving Loan Commitments.
(b) Term Loan.
(i) Subject to the terms and conditions hereof, each Term Lender
agrees to make a term loan (collectively, the "Term Loan") on the Closing Date
to Borrower in an original principal amount equal to the lesser of (i) such
Lender's Term Loan Commitment and (ii) such Lender's Pro Rata Share of an amount
equal to 77% of the Forced Liquidation Value of all Eligible Term Equipment (as
of the Closing Date, the Forced Liquidation Value of the Eligible Term Equipment
is at least $39,200,000). The obligations of each Term Lender hereunder shall be
several and not joint. The Term Loan shall be evidenced by promissory notes
substantially in the form of Exhibit 1.1(b)(i) (each a "Term Note" and
collectively the "Term Notes"), and, except as provided in Section 1.12,
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 as prescribed in Section 1.5. Subject to the terms and conditions
hereof, $6,266,666.71 of the "Term Loans" extended under the Original Credit
Agreement shall continue outstanding hereunder as a portion of the Term Loan,
allocated pro rata to the Term Lenders based upon their Term Loan Commitments.
(ii) Borrower shall repay the principal amount of the Term Loan in
twelve (12) consecutive quarterly installments, each in the amount of $1,100,000
on the first day of each Fiscal Quarter, commencing on January 1, 2006 and
continuing thereafter. The final thirteenth installment shall be due and payable
on January 1, 2009, and shall be in the amount of $16,800,000 or, if different,
the remaining principal balance of the Term Loan.
(iii) Notwithstanding Section 1.1(b)(ii), the aggregate outstanding
principal balance of the Term Loan shall be due and payable in full in
immediately available funds on the Commitment Termination Date, if not sooner
paid in full. No payment with respect to the Term Loan may be reborrowed.
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(iv) Each payment of principal with respect to the Term Loan shall
be paid to Agent for the ratable benefit of each Term Lender, ratably in
proportion to each such Term Lender's respective Term Loan Commitment.
(c) CapEx Facility.
(i) Subject to the terms and conditions hereof, each CapEx Lender
agrees to make available to Borrower from time to time until the CapEx
Commitment Termination Date its Pro Rata Share of advances (each, a "CapEx
Advance"). The Pro Rata Share of the CapEx Loan of any CapEx Lender shall not at
any time exceed its separate CapEx Loan Commitment. The obligations of each
CapEx Lender hereunder shall be several and not joint. Until the CapEx
Commitment Termination Date, Borrower may borrow under this Section 1.1(c);
provided that after giving effect to such CapEx Advance, the CapEx Loan shall
not exceed CapEx Borrowing Availability at such time, measured on a pro forma
basis for any Eligible CapEx Equipment to be purchased with such CapEx Advance,
and the other conditions precedent set forth in Sections 2.2 and 2.3 shall have
been satisfied. Each CapEx Advance shall be made on notice by Borrower to one of
the representatives of Agent identified in Schedule 1.1 at the address specified
therein. Any such notice must be given no later than 11:00 a.m. (New York time)
on the date that is ten (10) Business Days prior to the date of the proposed
CapEx Advance. Each such notice (a "Notice of CapEx Advance") must be given in
writing (by telecopy or overnight courier) substantially in the form of Exhibit
1.1(c)(i), and shall include the information required in such Exhibit and in
Section 2.3 and such other information as may be required by Agent. If Borrower
desires to have the CapEx Advances bear interest by reference to a LIBOR Rate,
Borrower must comply with Section 1.5(e).
(ii) Except as provided in Section 1.12, Borrower shall execute and
deliver to each CapEx Lender a note to evidence the CapEx Loan Commitment of
that CapEx Lender. Each note shall be in the principal amount of the CapEx Loan
Commitment of the applicable CapEx Lender, dated the Closing Date and
substantially in the form of Exhibit 1.1(c)(ii) (each a "CapEx Note" and,
collectively, the "CapEx Notes"). Each CapEx Note shall represent the obligation
of Borrower to pay the amount of the applicable CapEx Lender's CapEx Loan
Commitment or, if less, such CapEx Lender's Pro Rata Share of the aggregate
unpaid principal amount of all CapEx Advances to Borrower together with interest
thereon as prescribed in Section 1.5. The entire unpaid balance of the aggregate
CapEx Loan and all other non-contingent Obligations shall be immediately due and
payable in full in immediately available funds on the Commitment Termination
Date.
(iii) Borrower shall repay the CapEx Loan in eight (8) consecutive
quarterly installments, each in an amount equal to 1/20th of the principal
amount of the CapEx Loan funded on or prior to the CapEx Commitment Termination
Date, on the first day of each Fiscal Quarter, commencing on January 1, 2007 and
continuing thereafter. The final ninth installment shall be due and payable on
January 1, 2009, and shall be in the amount of the entire remaining principal
balance of the CapEx Loan. No payment with respect to the CapEx Loan may be
reborrowed. Each payment of principal with respect to the CapEx Loan shall be
paid to
4
Agent for the ratable benefit of each CapEx Lender making a CapEx Loan, ratably
in proportion to each such CapEx Lender's respective CapEx Loan Commitment.
(d) 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(d) shall not relieve Revolving Lenders of their obligations to make
Revolving Credit Advances under Section 1.1(a); 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 Credit Lenders pursuant to such notice. The aggregate amount
of Swing Line Advances outstanding shall not exceed at any time the lesser of
(A) the Swing Line Commitment and (B) the lesser of the Maximum Revolver Amount
and (except for Overadvances) the Borrowing Base, in each case, less the
outstanding balance of the Revolving Loan at such time ("Swing Line
Availability"). Until the Commitment Termination Date, Borrower may from time to
time borrow, repay and reborrow under this Section 1.1(d). 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(a). Any such notice must be
given no later than 11:00 a.m. (New York time) on the Business Day of the
proposed Swing Line Advance. 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 Sections
2.2, be entitled to fund that Swing Line Advance, and to have such Revolving
Lender make Revolving Credit Advances in accordance with Section 1.1(d)(iii) or
purchase participating interests in accordance with Section 1.1(d)(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.
(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(d)(ii) (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 1.5. The entire unpaid balance of the
Swing Line Loan and all other 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.
(iii) The Swing Line Lender, at any time and from time to time 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
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(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 8.1(h) or 8.1(i) has
occurred (in which event the procedures of Section 1.1(d)(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(d)(iii), one of the events described in
Sections 8.1(h) or 8.1(i) has occurred, then, subject to the provisions of
Section 1.1(d)(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 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(d)(iii) and to purchase participation
interests in accordance with Section 1.1(d)(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, whether or not similar to any of the foregoing.
If any Revolving Lender does not make available to Agent or the Swing Line
Lender, as applicable, the amount required pursuant to Sections 1.1(d)(iii) or
1.1(d)(iv), as the case may be, the Swing Line Lender shall be entitled to
recover such amount on demand from such Revolving Lender, together with interest
thereon for each day from the date of non-payment until such amount is paid in
full at the Federal Funds Rate for the first two (2) Business Days and at the
Index Rate thereafter.
(e) Reliance on Notices. Agent shall be entitled to rely upon, and shall
be fully protected in relying upon, any Notice of Revolving Credit Advance,
Notice of Conversion/Continuation or similar notice believed by Agent to be
genuine. Agent may assume that each Person executing and delivering any notice
in accordance herewith was duly authorized, unless the responsible individual
acting thereon for Agent has actual knowledge to the contrary.
1.2 Swap Related Reimbursement Obligations.
6
(a) Borrower agrees to reimburse GE Capital in immediately available
funds in the amount of any payment made by GE Capital under a Swap Related L/C
(such reimbursement obligation, whether contingent upon payment by GE Capital
under the Swap Related L/C or otherwise, being herein called a "Swap Related
Reimbursement Obligation"). No Swap Related Reimbursement Obligation for any
Swap Related L/C may exceed the amount of the payment obligations owed by
Borrower under the interest rate protection or hedging agreement or transaction
supported by the Swap Related L/C.
(b) A Swap Related Reimbursement Obligation shall be due and payable by
Borrower within one (1) Business Day after the date on which the related
payment is made by GE Capital under the Swap Related L/C.
(c) Any Swap Related Reimbursement Obligation shall, during the period
in which it is unpaid, bear interest at the rate per annum equal to the LIBOR
Rate plus one percent (1%), as if the unpaid amount of the Swap Related
Reimbursement Obligation were a LIBOR Loan, and not at any otherwise applicable
Default Rate. Such interest shall be payable upon demand. The following
additional provisions apply to the calculation and charging of interest by
reference to the LIBOR Rate:
(i) The LIBOR Rate shall be determined for each successive one-month
LIBOR Period during which the Swap Related Reimbursement Obligation is unpaid,
notwithstanding the occurrence of any Event of Default and even if the LIBOR
Period were to extend beyond the Commitment Termination Date.
(ii) If a Swap Related Reimbursement Obligation is paid during a
monthly period for which the LIBOR Rate is determined, interest shall be pro-
rated and charged for the portion of the monthly period during which the Swap
Related Reimbursement Obligation was unpaid. Section 1.13(b) shall not apply to
any payment of a Swap Related Reimbursement Obligation during the monthly
period.
(iii) Notwithstanding the last paragraph of the definition of "LIBOR
Rate", if the LIBOR Rate is no longer available from Telerate News Service, the
LIBOR Rate shall be determined by GE Capital from such financial reporting
service or other information available to GE Capital as in GE Capital's
reasonable discretion indicates GE Capital's cost of funds.
(d) Except as provided in the foregoing provisions of this Section 1.2
and in Section 11.3, Borrower shall not be obligated to pay to GE Capital or
any of its Affiliates any other fees, charges or expenses, in respect of a Swap
Related L/C or arranging for any interest rate protection or hedging agreement
or transaction supported by the Swap Related L/C. GE Capital and its Affiliates
shall look to the beneficiary of a Swap Related L/C for payment of any such
letter of credit fees or other fees, charges or expenses and such beneficiary
may factor such fees, charges, or expenses into the pricing of any interest
rate protection or hedging arrangement or transaction supported by the Swap
Related L/C.
7
(e) If any Swap Related L/C is revocable prior to its scheduled expiry
date, GE Capital agrees not to revoke the Swap Related L/C unless the
Commitment Termination Date or an Event of Default has occurred.
(f) GE Capital or any of its Affiliates shall be permitted to (i)
provide confidential or other information furnished to it by any of the Credit
Parties (including, without limitation, copies of any documents and information
in or referred to in the Closing Checklist, Financial Statements and Compliance
Certificates) to a beneficiary or potential beneficiary of a Swap Related L/C
and (ii) receive confidential or other information from the beneficiary or
potential beneficiary relating to any agreement or transaction supported or to
be supported by the Swap Related L/C. However, no confidential information shall
be provided to any Person under this paragraph unless the Person has agreed to
comply with the covenant substantially as contained in Section 11.8 of this
Agreement.
1.3 Prepayments.
(a) Voluntary Prepayments; Reductions or Termination in Commitments.
Borrower may at any time on at least five (5) days' prior written notice to
Agent (i) voluntarily prepay all or part of the Term Loan or CapEx Loan,
and/or (ii) permanently reduce or terminate the CapEx Loan Commitment and/
or (iii) permanently reduce (but not terminate) the Revolving Loan
Commitment; provided that (A) any such prepayments or reductions shall be
in a minimum amount of $500,000 and integral multiples of $250,000 in
excess of such amount, (B) the CapEx Loan Commitment shall not be reduced
to an amount less than the amount of the CapEx Loan then outstanding and
(C) the Revolving Loan Commitment shall not be reduced to an amount less
than the aggregate amount of the Revolving Loan and Swing Line Loan then
outstanding. In addition, Borrower may at any time on at least ten (10)
days' prior written notice to Agent terminate the Revolving Loan
Commitment; provided that upon such termination, all Loans and other
Obligations shall be immediately due and payable in full and all
Commitments shall be terminated. Any voluntary prepayment of the Term Loan
or CapEx Loan, any reduction or termination of the CapEx Loan Commitment
and any termination of the Revolving Loan Commitment must be accompanied by
payment of the Fee required by Section 1.9(d) plus the payment of any LIBOR
funding breakage costs in accordance with Section 1.13(b). Upon any such
reduction or termination of the Revolving Loan Commitment, Borrower's right
to request Revolving Credit Advances, or request Swing Line Advances, shall
simultaneously be permanently reduced or terminated, as the case may be.
Upon any such reduction or termination of the CapEx Loan Commitment,
Borrower's right to request CapEx Advances shall simultaneously be
permanently reduced or terminated, as the case may be. Each notice of
partial prepayment shall designate the Loans or other Obligations to which
such prepayment is to be applied; provided that any partial prepayments of
the Term Loan or CapEx Loan shall be applied to prepay the scheduled
installments of the Term Loan or CapEx Loan, as the case may be, in inverse
order of maturity.
8
(b) Mandatory Prepayments.
(i) If at any time the aggregate outstanding balances of the
Revolving Loan and the Swing Line Loan exceed the lesser of (A) the Maximum
Revolver Amount and (B) the Borrowing Base, Borrower shall immediately repay the
aggregate outstanding Revolving Credit Advances to the extent required to
eliminate such excess. Notwithstanding the foregoing, any Overadvance made
pursuant to Section 1.1(a)(iii) shall be repaid in accordance with Section
1.1(a)(iii).
(ii) If at any time the aggregate outstanding Term Loan exceeds (i)
for the period commencing on the Closing Date to and including the date upon
which Agent receives a new or updated appraisal of the Eligible Term Equipment
performed by an Acceptable Appraiser at the request of Agent, 77%, or such lower
percentage as the Agent shall determine in its sole discretion from time to
time, or (ii) at all other times, 75%, or such lower percentage as the Agent
shall determine in its sole discretion from time to time, of the Forced
Liquidation Value of Eligible Term Equipment, Borrower shall immediately repay
the aggregate outstanding Term Loan to the extent required to eliminate such
excess.
(iii) If at any time the aggregate outstanding CapEx Loan exceeds
the lesser of (A) the Maximum CapEx Amount and (B) 75%, or such lower percentage
as the Agent shall determine in its sole discretion from time to time, of the
Forced Liquidation Value of the Eligible CapEx Equipment, Borrower shall
immediately repay the aggregate outstanding CapEx Advances to the extent
required to eliminate such excess.
(iv) Immediately upon receipt by any Credit Party of (x) any working
capital, earnings, balance sheet or similar adjustment payment under the
Acquisition Agreement, (y) proceeds of any asset disposition (excluding proceeds
of asset dispositions permitted by Section 6.8) or (z) proceeds from any sale of
Stock of any Subsidiary of any Credit Party, Borrower shall prepay the Loans in
an amount equal to all such adjustment payments or proceeds, net of (A)
commissions and other reasonable and customary transaction costs, fees and
expenses properly attributable to such transaction and payable by such Credit
Party in connection therewith (in each case, paid to non-Affiliates), (B)
transfer taxes, (C) amounts payable to holders of senior Liens on such asset (to
the extent such Liens constitute Permitted Encumbrances hereunder), if any, and
(D) an appropriate reserve for income taxes in accordance with GAAP in
connection therewith. Any such prepayment shall be applied in accordance with
Section 1.3(c).
(v) If the Borrower issues any Stock in a public offering, other
than Stock issued upon the exercise of warrants, options or other convertible
securities, or the exchange of the foregoing for Stock, outstanding on the
Closing Date, on or before December 31, 2006, no later than the Business Day
following the date of receipt of the cash proceeds thereof, Borrower shall
prepay the Loans, the Second Lien Loans and the Junior Capital in an amount
equal to all such cash proceeds, net of underwriting discounts and commissions
and other reasonable costs paid to non-Affiliates in connection therewith (the
"Net Equity Proceeds"), in the following manner:
9
(A) 100% of the first $50,000,000 in Net Equity Proceeds
received by the Borrower shall be applied to prepay or redeem the Junior
Capital;
(B) Net Equity Proceeds in excess of $50,000,000 and up to
$75,000,000 received by the Borrower shall be allocated 40% to prepay or redeem
the Junior Capital, 30% to prepay the Loans and 30% to prepay the Second Lien
Loans;
(C) Net Equity Proceeds in excess of $75,000,000 and up to
$100,000,000 received by the Borrower shall be allocated 60% to prepay or redeem
the Junior Capital, 20% to prepay the Loans and 20% to prepay the Second Lien
Loans; and
(D) Net Equity Proceeds in excess of $100,000,000 received by
the Borrower shall be allocated 80% to prepay or redeem the Junior Capital, 10%
to prepay the Loans and 10% to prepay the Second Lien Loans.
To the extent the Junior Capital is paid in full under the foregoing provisions
prior to the prepayment in full of the Loans and Second Lien Loans, the
remaining Net Equity Proceeds shall be allocated 50% to the Loans and 50% to
the Second Lien Loans. Notwithstanding the foregoing, if any Event of Default
has occurred and is continuing, and Agent has notified Borrower in writing of
such Event of Default (or Second Lien Agent has notified Borrower in writing of
the equivalent event of default under the Second Lien Credit Agreement), at the
time the Borrower receives Net Equity Proceeds, 100% of such Net Equity
Proceeds shall be allocated to the Loans, without application of any portion
thereof to Junior Capital or Second Lien Loans. Any Net Equity Proceeds
allocated in this clause (v) to prepay the Loans shall be applied in accordance
with Section 1.3(c).
(vi) If any Credit Party issues any Stock (other than Stock
contemplated to be issued in subsection (v) above) or any Debt at any time
(other than Debt permitted to be incurred under Section 6.3), no later than the
Business Day following the date of receipt of the cash proceeds thereof,
Borrower shall prepay the Loans in an amount equal to all such cash proceeds,
net of underwriting discounts and commissions and other reasonable costs paid to
non-Affiliates in connection therewith. Any such prepayment shall be applied in
accordance with Section 1.3(c).
(vii) Until the Termination Date, Borrower shall prepay the
Obligations on the date that is ten (10) days after the earlier of (A) the date
on which Borrower's annual audited Financial Statements for the immediately
preceding Fiscal Year are delivered pursuant to Annex D or (B) the date on which
such annual audited Financial Statements were required to be delivered pursuant
to Annex D, in an amount equal to seventy-five percent (75%) of Excess Cash Flow
for the immediately preceding Fiscal Year; provided that no prepayment under
this Section 1.3(b)(vii) shall be required for Borrower's 2005 Fiscal Year. Any
prepayments from Excess Cash Flow paid pursuant to this clause (vi) shall be
applied in accordance with Section 1.3(c). Each such prepayment shall be
accompanied by a certificate signed by Borrower's chief financial officer
certifying the manner in which Excess Cash Flow and the resulting prepayment
were calculated, which certificate shall be in form and substance satisfactory
to Agent.
10
(c) Application of Certain Mandatory Prepayments. Any prepayments made
by Borrower pursuant to Sections 1.3(b)(iv), (b)(v), (b)(vi) or (b)(vii) above
shall be applied as follows: first, to Fees and reimbursable expenses of Agent
then due and payable pursuant to any of the Loan Documents; second, to interest
then due and payable on the Term Loan and CapEx Loan, pro rata between the Term
Loan and CapEx Loan; third, to prepay the scheduled principal installments on
the Term Loan and CapEx Loan, allocated pro rata between the Term Loan and
CapEx Loan, and applied to principal installments in inverse order of maturity,
until such Term Loan and CapEx Loan shall have been prepaid in full; and to the
extent that any Event of Default has occurred and is continuing and the
Requisite Revolving Lenders so elect, any remaining portion of such prepayments
shall be applied as follows: fourth, to interest then due and payable on the
Swing Line Loan; fifth, to the principal balance of the outstanding Swing Line
Loan until the same has been repaid in full; sixth, to interest then due and
payable on Revolving Credit Advances; and seventh, to the principal balance of
the outstanding Revolving Credit Advances until the same shall have been paid
in full. The Revolving Loan Commitment shall be permanently reduced by the
amount of any prepayments allocated as set forth in clauses fifth and seventh
above, and to the extent that the after giving effect to any such reduction in
the Revolving Loan Commitment, the Swingline Commitment would exceed the
Revolving Loan Commitment, the Swingline Commitment shall be reduced to the
Revolving Loan Commitment. Promptly upon notice of, or receipt of any proceeds
for, prepayment of the Loans under this Section 1.3(c), Agent shall notify the
Lenders of the proposed allocation of such prepayment. Notwithstanding anything
in this Section 1.3(c), each Lender shall have the right to waive any portion
of the prepayment to be allocated to the principal amount of such Lender's Term
Loan (if any) by notifying Agent of its election in writing no later than one
Business Day after receipt of Agent's notice. Failure of a Lender to notify
Agent of any waiver of such prepayment within such time period shall be deemed
to be acceptance thereof. To the extent that (i) one or more Lenders waive all
or any portion of any prepayment to be allocated to the principal amount of the
Term Loans under this Section 1.3(c), or (ii) any proceeds remain after
allocating any prepayment in the manner set forth above (collectively, the
"Waived Prepayments"), Borrower shall apply the Waived Prepayments to the
repayment of the Second Lien Loan.
(d) Application of Prepayments from Insurance Proceeds and Condemnation
Proceeds. Prepayments from insurance or condemnation proceeds in accordance
with Section 5.4(b) or (c) and any Mortgages, respectively, shall be applied as
follows: insurance proceeds from casualties or losses to cash or Inventory
shall be applied, first, to the Swing Line Loans and, second, to Revolving
Credit Advances; insurance or condemnation proceeds from casualties or losses
to Equipment, Fixtures and Real Estate shall be allocated pro rata to the Term
Loan and CapEx Loan, and applied to principal installments in inverse order of
maturity. Neither the Revolving Loan Commitment nor the Swing Line Commitment
shall be permanently reduced by the amount of any such prepayments.
(e) No Implied Consent. Nothing in this Section 1.3 shall be construed
to constitute Agent's or any Lender's consent to any transaction that is not
permitted by other provisions of this Agreement or the other Loan Documents.
11
1.4 Use of Proceeds. Borrower shall utilize the proceeds of the Term Loan
solely to continue outstanding $6,266,666.71 of the "Term Loans" made under the
Original Credit Agreement and to finance the Acquisition. Borrower shall
utilize the proceeds of the CapEx Loan solely to finance capital expenditures.
Borrower shall utilize the proceeds of the Revolving Loan and Swing Line Loan
solely to finance the Borrower's ordinary working capital, capital expenditure
and general corporate needs. Disclosure Schedule (1.4) contains a description
of Borrower's sources and uses of funds as of the Closing Date, including Loans
to be made on that date, and a funds flow memorandum detailing how funds from
each source are to be transferred to particular uses. Notwithstanding the
foregoing, with the prior written consent of the Agent, Borrower may use up to
$2,000,000 in the aggregate of the proceeds of the Loans for the following
purposes: (i) on the Closing Date, to redeem or prepay Subordinated Debt if the
holders of such Subordinated Debt do not deliver a consent to the transactions
contemplated hereby and an extension of the maturity date of their Subordinated
Notes to at least 91 days after the Second Lien Maturity Date and (ii) during
the period commencing on the Closing Date through and including December 31,
2006, to redeem or prepay Subordinated Debt if the holders of such Subordinated
Debt do not convert their Subordinated Debt to Stock in connection with the
Borrower's issuance of Stock during such period, so long as, in each case (i)
the Agent, for the ratable benefit of the Revolving Lenders, receives a
refinancing fee equal to 1.25% of the amount of any such Subordinated Debt so
repaid and (ii) the proceeds of such Revolving Loan are sent by Agent by wire
transfer (A) directly to the holders of such Subordinated Debt or (B) with
respect to amounts drawn on the Closing Date, to an escrow account at Rosen,
Cook, Sledge, Davis, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A., counsel for the Credit Parties,
pursuant to an escrow agreement acceptable to Agent for subsequent disbursement
to such holders; provided that if any such Subordinated Debt is not repaid on
or prior to December 31, 2005, the Credit Parties shall cause such counsel to
return all such unused funds to Borrower no later than 5:00 p.m. New York time
on such date and such funds shall be applied by Borrower on such date to the
principal repayment of the Revolving Loan to the extent thereof. In no event
may any such unused funds be applied by Borrower to the principal installments
of the Term Loan or CapEx Loan.
1.5 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, the Index Rate plus the
Applicable Revolver Index Margin per annum or, at the election of Borrower,
the applicable LIBOR Rate plus the Applicable Revolver LIBOR Margin per
annum, (ii) with respect to the Term Loan, the Index Rate plus the
Applicable Term Loan Index Margin per annum or, at the election of
Borrower, the applicable LIBOR Rate plus the Applicable Term Loan LIBOR
Margin per annum, (iii) with respect to the CapEx Loan, the Index Rate plus
the Applicable CapEx Loan Index Margin per annum or, at the election of
Borrower, the applicable LIBOR Rate plus the Applicable CapEx Loan LIBOR
Margin per annum, and (iv) with respect to the Swing Line Loan, the Index
Rate plus the Applicable Revolver Index Margin per annum.
12
As of the Closing Date, the Applicable Margins are as follows:
Applicable Revolver Index Margin 0.75%
Applicable Revolver LIBOR Margin 2.25%
Applicable Term Loan Index Margin 2.25%
Applicable Term Loan LIBOR Margin 3.75%
Applicable Capex Loan Index Margin 2.25%
Applicable Capex Loan LIBOR Margin 3.75%
Applicable Unused Line Fee Margin 0.50%
The Applicable Margins may be adjusted by reference to the following
grids:
LEVEL OF
IF LEVERAGE RATIO IS: APPLICABLE MARGINS:
---------------------------- -------------------
< 1.50:1.00 Level I
<= 2.00:1.00, but => 1.50:1.00 Level II
> 2.00:1.00 Level III
APPLICABLE MARGINS
----------------------------
LEVEL I LEVEL II LEVEL III
------- -------- ---------
Applicable Revolver Index Margin 1.00% 1.25% 1.50%
Applicable Revolver LIBOR Margin 2.00% 2.25% 2.50%
Applicable Term Loan Index Margin 2.50% 2.75% 3.00%
Applicable Term Loan LIBOR Margin 3.50% 3.75% 4.00%
Applicable CapEx Loan Index Margin 2.50% 2.75% 3.00%
Applicable CapEx Loan LIBOR Margin 3.50% 3.75% 4.00%
Applicable Unused Line Fee Margin 0.50% 0.50% 0.50%
Adjustments in the Applicable Margins commencing with the Fiscal Quarter ending
June 30, 2006 shall be implemented quarterly on a prospective basis, for each
calendar month commencing at least five (5) days after the date of delivery to
Lenders of the quarterly unaudited
13
or annual audited (as applicable) Financial Statements evidencing the need for
an adjustment. Concurrently with the delivery of those Financial Statements,
Borrower shall deliver to Agent and Lenders a certificate, signed by its chief
financial officer, setting forth in reasonable detail the basis for the
continuance of, or any change in, the Applicable Margins. Failure to timely
deliver such Financial Statements shall, in addition to any other remedy
provided for in this Agreement, result in an increase in the Applicable Margins
to the highest level set forth in the foregoing grid, until the first day of
the first calendar month following the delivery of those Financial Statements
demonstrating that such an increase is not required. If an Event of Default has
occurred and is continuing at the time any reduction in the Applicable Margins
is to be implemented, that reduction shall be deferred until the first day of
the first calendar month following the date on which such Event of Default is
waived or cured.
(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
interest and Fees are payable. The Index Rate is a floating rate determined
for each day. Each determination by Agent of interest rates 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 8.1(a), (h) or (i), or so long as any other Default or 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 shall be
increased by two percentage points (2%) per annum above the rates of
interest or the rate of such Fees otherwise applicable hereunder ("Default
Rate"), and all outstanding Obligations shall bear interest at the Default
Rate applicable to such Obligations. Interest at the Default Rate shall
accrue from the initial date of such Default or Event of Default until that
Default or Event of Default is cured or waived and shall be payable upon
demand.
(e) Subject to the conditions precedent set forth in Section 2.2,
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, upon
payment of an administrative fee of $250 and, subject to payment of LIBOR
breakage costs in accordance with Section 1.13(b) 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 $5,000,000
14
and integral multiples of $500,000 in excess of such amount. Any such
election must be made by 11:00 a.m. (New York time) on the third Business
Day prior to (1) the date of any proposed 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 11:00 a.m. (New York time) on the third Business
Day prior to the end of the LIBOR Period with respect thereto (or if a
Default or an Event of Default has occurred and is continuing or if the
additional conditions precedent set forth in Section 2.2 shall not have
been satisfied), 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 telecopy 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 1.5(e). No Loan may be made as or converted into a LIBOR Loan until
the earlier of (i) forty-five (45) days after the Closing Date or (ii)
completion of primary syndication as determined by Agent.
(f) Notwithstanding anything to the contrary set forth in this Section
1.5, if a court of competent jurisdiction determines in a final order that
the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the
Maximum Lawful Rate would be so exceeded, the rate of interest payable
hereunder shall be equal to the Maximum Lawful Rate; provided, however, that
if at any time thereafter the rate of interest payable hereunder is less
than the Maximum Lawful Rate, 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. 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
1.5(f), a court of competent jurisdiction shall finally determine 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 in the order specified in Section 1.11 and thereafter shall refund
any excess to Borrower or as a court of competent jurisdiction may otherwise
order.
1.6 Eligible Accounts. All of the Accounts owned by Borrower and the other
Credit Parties and reflected in the most recent Borrowing Base Certificate
delivered by Borrower to Agent shall be "Eligible Accounts" for purposes of
this Agreement, except any Account to which any of the exclusionary criteria
set forth below applies. Agent shall have the right to establish, modify or
eliminate Reserves against Eligible Accounts from time to time in its
reasonable credit judgment. In addition, Agent reserves the right, at any time
and from time to
15
time after the Closing Date, to adjust any of the criteria set forth below, to
establish new criteria and to adjust advance rates with respect to Eligible
Accounts, in its reasonable credit judgment, subject to the approval of
Requisite Revolving Lenders in the case of changes in the eligibility criteria
set forth below or in advance rates, in each case, which have the effect of
making more credit available. Eligible Accounts shall not include any Account
of Borrower or any other Credit Party:
(a) that does not arise from the sale of goods or the performance of
services by such Credit Party in the ordinary course of its business;
(b) (i) upon which such Credit Party's right to receive payment is not
absolute or is contingent upon the fulfillment of any condition whatsoever
or (ii) as to which such Credit Party is not able to bring suit or
otherwise enforce its remedies against the Account Debtor through judicial
process or (iii) if the Account represents a progress billing consisting of
an invoice for goods sold or used or services rendered pursuant to a
contract under which the Account Debtor's obligation to pay that invoice is
subject to such Credit Party's completion of further performance under such
contract or is subject to the equitable lien of a surety bond issuer;
(c) in the event that any defense, counterclaim, setoff or dispute is
asserted as to such Account;
(d) that is not a true and correct statement of bona fide indebtedness
incurred in the amount of the Account for merchandise sold to or services
rendered and accepted by the applicable Account Debtor;
(e) with respect to which an invoice, reasonably acceptable to Agent in
form and substance, has not been sent to the applicable Account Debtor;
(f) that (i) is not owned by a Credit Party or (ii) is subject to any
Lien of any other Person, other than (x) Liens in favor of Agent, on behalf
of itself and Lenders and (y) subject to the Intercreditor Agreement, the
Liens securing the Second Lien Loan;
(g) that arises from a sale to any director, officer, other employee or
Affiliate of any Credit Party, or to any entity that has any common officer
or director with any Credit Party;
(h) that is the obligation of an Account Debtor that is the United
States government or a political subdivision thereof, or any state, county
or municipality or department, agency or instrumentality thereof unless
Agent, in its sole discretion, has agreed to the contrary in writing and
such Credit Party, if necessary or desirable, has complied with respect to
such obligation with the Federal Assignment of Claims Act of 1940, or any
applicable state, county or municipal law restricting assignment thereof;
16
(i) that is the obligation of an Account Debtor located in a foreign
country other than Canada unless payment thereof is assured by a letter of
credit assigned and delivered to Agent, reasonably satisfactory to Agent as
to form, amount and issuer;
(j) to the extent such Credit Party or any Subsidiary thereof is liable
for goods sold or services rendered by the applicable Account Debtor to such
Credit Party or any Subsidiary thereof but only to the extent of the
potential offset;
(k) that arises with respect to goods that are delivered on a ▇▇▇▇-
and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale
or other terms by reason of which the payment by the Account Debtor is or
may be conditional;
(l) that is in default; provided, that, without limiting the generality
of the foregoing, an Account shall be deemed in default upon the occurrence
of any of the following:
(i) the Account is not paid within the earlier of: sixty (60) days
following its due date or ninety (90) days following its original
invoice date; provided that any Account with respect to Burlington,
Chevron USA and Denbury Offshore shall be in default if not paid within
the earlier of ninety (90) days following its due date or one hundred
twenty (120) days following its original invoice date;
(ii) the Account Debtor obligated upon such Account suspends
business, makes a general assignment for the benefit of creditors or
fails to pay its debts generally as they come due; or
(iii) a petition is filed by or against any Account Debtor
obligated upon such Account under any bankruptcy law or any other
federal, state or foreign (including any provincial) receivership,
insolvency relief or other law or laws for the relief of debtors;
(m) that is the obligation of an Account Debtor if 50% or more of the
Dollar amount of all Accounts owing by that Account Debtor are ineligible
under the other criteria set forth in this Section 1.6;
(n) as to which Agent's Lien thereon, on behalf of itself and Lenders,
is not a First Priority perfected Lien;
(o) as to which any of the representations or warranties in the Loan
Documents are untrue;
(p) to the extent such Account is evidenced by a judgment, Instrument or
Chattel Paper;
(q) to the extent such Account exceeds any credit limit established by
Agent, in its reasonable credit judgment;
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(r) to the extent that such Account, together with all other Accounts
owing by such Account Debtor and its Affiliates as of any date of
determination exceed 10% of all Eligible Accounts, except for such Account
Debtor(s) approved in advance by Agent, for which the limit shall be 15%;
(s) that is payable in any currency other than Dollars; or
(t) that is otherwise unacceptable to Agent in its reasonable credit
judgment.
1.7 Intentionally Omitted.
1.8 Cash Management Systems. On or prior to the Closing Date, Borrower will
establish and will maintain until the Termination Date, the cash management
systems described in Annex B (the "Cash Management Systems").
1.9 Fees.
(a) Borrower shall pay to GE Capital, individually, the Fees specified
in the GE Capital Fee Letter, at the times specified for payment therein.
(b) 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 month 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 (calculated on the basis of a 360-day year for actual days
elapsed) multiplied by the difference between (x) the Maximum Revolver
Amount (as it may be reduced from time to time) and (y) the average for the
period of the daily closing balances of the aggregate Revolving Loan and
Swing Line Loan outstanding during the period for which such Fee is due.
(c) As additional compensation for the CapEx Lenders, Borrower shall pay
to Agent, for the ratable benefit of such Lenders, in arrears, on the first
Business Day of each month prior to the CapEx Commitment Termination Date
and on the CapEx 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 (calculated on the basis of a 360-day year for actual days
elapsed) multiplied by the difference between (x) the Maximum CapEx Amount
(as it may be reduced from time to time) and (y) the average for the period
of the daily closing balances of the CapEx Loan outstanding during the
period for which such Fee is due.
(d) If Borrower (1) pays after acceleration, (2) prepays all or any
portion of the Term Loan, (3) reduces or terminates the Revolving Loan
Commitment or (4) prepays the CapEx Loan or reduces or terminates the CapEx
Loan Commitment, whether voluntarily or involuntarily and whether before or
after acceleration of the Obligations or if the Commitments are otherwise
terminated, Borrower shall pay to Agent, for the benefit of Lenders as
liquidated damages and compensation for the costs of being prepared to make
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funds available hereunder an amount equal to the Applicable Percentage (as
defined below) multiplied by the sum of (i) the principal amount of the
Term Loan and CapEx Loan paid after acceleration or prepaid, (ii) the
amount of the reduction in the Revolving Loan Commitment and (iii) the
amount of the reduction in CapEx Loan Commitment (not accompanied by a
prepayment of the CapEx Loan). As used herein, the term "Applicable
Percentage" shall mean (x) one percent (1.00%), in the case of a prepayment
on or prior to the first anniversary of the Closing Date, (y) one half of
one percent (0.50%), in the case of a prepayment after the first
anniversary of the Closing Date but on or prior to the second anniversary
thereof, and (z) one quarter of one percent (0.25%), in the case of a
prepayment after the second anniversary of the Closing Date but on or prior
to the third anniversary thereof. The Credit Parties agree that the
Applicable Percentages are a reasonable calculation of Lenders' lost
profits in view of the difficulties and impracticality of determining
actual damages resulting from an early termination of the Commitments.
Notwithstanding the foregoing, no prepayment fee shall be payable by
Borrower upon a mandatory prepayment made pursuant to Sections 1.3(b)(i),
(ii), (iii), (iv) or (vii) or Section 1.16(c); provided that in the case of
prepayments made pursuant to Sections 1.3(b)(iv), the transaction giving
rise to the applicable prepayment is expressly permitted under Section 6.
1.10 Receipt of Payments. Borrower shall make each payment under this
Agreement not later than 2:00 p.m. (New York time) on the day when due in
immediately available funds in Dollars to the Collection Account. For purposes
of computing interest and Fees and determining Borrowing Availability as of any
date, all payments shall be deemed received on the Business Day immediately
following the Business Day on which immediately available funds therefor are
received in the Collection Account prior to 2:00 p.m. New York time. Payments
received after 2:00 p.m. New York time on any Business Day or on a day that is
not a Business Day shall be deemed to have been received on the following
Business Day.
1.11 Application and Allocation of Payments.
(a) So long as no Default or Event of Default has occurred and is
continuing, (i) payments consisting of proceeds of Accounts received in the
ordinary course of business shall be applied, first, to the Swing Line Loan
and, second, to the Revolving Loan; (ii) payments matching specific
scheduled payments then due shall be applied to those scheduled payments;
(iii) voluntary prepayments shall be applied as determined by Borrower,
subject to the provisions of Section 1.3(a); and (iv) mandatory prepayments
shall be applied as set forth in Sections 1.3(c) and 1.3(d). All payments
and prepayments applied to a particular Loan shall be applied ratably to
the portion thereof held by each Lender as determined by its Pro Rata
Share. As to any other payment, and as to all payments made when a Default
or Event of Default has occurred and is continuing or following the
Commitment Termination Date, Borrower hereby irrevocably waives the right
to direct the application of any and all payments received from or on
behalf of Borrower, and Borrower hereby irrevocably agrees that Agent shall
have the continuing exclusive right to apply any and all such payments
against the Obligations as Agent may deem advisable notwithstanding any
previous entry by Agent in the Loan Account or any other books and records.
In the absence of a specific determination by Agent with respect thereto,
payments shall be applied
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to amounts then due and payable in the following order: (1) to Fees and
Agent's expenses reimbursable hereunder; (2) to interest on the Swing Line
Loan; (3) to principal payments on the Swing Line Loan, (4) to interest on
the other Loans and unpaid Swap Related Reimbursement Obligations, ratably
in proportion to the interest accrued as to each Loan and unpaid Swap
Related Reimbursement Obligation, as applicable; (5) to principal payments
on the other Loans and unpaid Swap Related Reimbursement Obligations,
ratably to the aggregate, combined principal balance of the other Loans and
unpaid Swap Related Reimbursement Obligations; and (6) to all other
Obligations, including expenses of Lenders to the extent reimbursable under
Section 11.3.
(b) Agent is authorized to, and at its sole election may, charge to the
Revolving Loan balance on behalf of Borrower and cause to be paid all Fees,
expenses, Charges, costs (including insurance premiums in accordance with
Section 5.4(a)) and interest and principal, other than principal of the
Revolving Loan, owing by Borrower under this Agreement or any of the other
Loan Documents if and to the extent Borrower fails to pay promptly any such
amounts as and when due, even if the amount of such charges would exceed
Borrowing Availability at such time. At Agent's option and to the extent
permitted by law, any charges so made shall constitute part of the
Revolving Loan hereunder.
1.12 Loan Account and Accounting. Agent shall maintain a loan account (the
"Loan Account") on its books to record: all Advances and the Term Loan, 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.
1.13 Indemnity.
(a) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and hold harmless each of Agent, Lenders and their
respective Affiliates, and each such Person's respective officers,
directors, employees, attorneys, agents and representatives (each, an
"Indemnified Person"), from and against any and all suits, actions,
proceedings,
20
claims, damages, losses, liabilities and expenses (including reasonable
attorneys' fees and disbursements and other costs of investigation or
defense, including those incurred upon any appeal) that may be instituted
or asserted by any third party, any Credit Party or any Subsidiary of any
Credit Party against or incurred by any such Indemnified Person as the
result of credit having been extended, suspended or terminated under this
Agreement and the other Loan Documents and the administration of such
credit, and in connection with or arising out of the transactions
contemplated hereunder and thereunder and any actions or failures to act in
connection therewith, including any and all Environmental Liabilities and
legal costs and expenses arising out of or incurred in connection with
disputes between or among any parties to any of the Loan Documents
(collectively, "Indemnified Liabilities"); provided, that no such Credit
Party shall be liable for any indemnification to an Indemnified Person to
the extent that any such suit, action, proceeding, claim, damage, loss,
liability or expense results from that Indemnified Person's gross
negligence or willful misconduct (as finally determined by a court of
competent jurisdiction). NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR
LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR
THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS
DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING
BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A
RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
(b) To induce Lenders to provide the LIBOR Rate option on the terms
provided herein, if (i) any LIBOR Loans are repaid in whole or in part
prior to the last day of any applicable LIBOR Period (whether that
repayment is made pursuant to any provision of this Agreement or any other
Loan Document or occurs as a result of acceleration, by operation of law or
otherwise); (ii) Borrower shall default in payment when due of the
principal amount of or interest on any LIBOR Loan; (iii) Borrower shall
refuse to accept any borrowing of, or shall request a termination of, any
borrowing of, conversion into or continuation of, LIBOR Loans after
Borrower has given notice requesting the same in accordance herewith; or
(iv) Borrower shall fail to make any prepayment of a LIBOR Loan after
Borrower has given a notice thereof in accordance herewith, then Borrower
shall indemnify and hold harmless each Lender from and against all losses,
costs and expenses resulting from or arising from any of the foregoing.
Such indemnification shall include any loss (including loss of margin) or
expense arising from the reemployment of funds obtained by it or from fees
payable to terminate deposits from which such funds were obtained. For the
purpose of calculating amounts payable to a Lender under this subsection,
each Lender shall be deemed to have actually funded its relevant LIBOR Loan
through the purchase of a deposit bearing interest at the LIBOR Rate in an
amount equal to the amount of that LIBOR Loan and having a maturity
comparable to the relevant LIBOR Period; provided, 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 this subsection. This covenant shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable
hereunder. As promptly as practicable under the circumstances, each Lender
shall provide
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Borrower with its written calculation of all amounts payable pursuant to
this Section 1.13(b), and such calculation shall be binding on the parties
hereto unless Borrower shall object in writing within ten (10) Business
Days of receipt thereof, specifying the basis for such objection in detail.
1.14 Access. Each Credit Party that is a party hereto shall, during normal
business hours, from time to time upon one (1) Business Day's prior notice as
frequently as Agent determines to be appropriate: (a) provide Agent and any of
its officers, employees and agents access to its properties, facilities,
advisors and employees (including officers) of each Credit Party and to the
Collateral, (b) permit Agent, and any of its officers, employees and agents, to
inspect, audit and make extracts from any Credit Party's books and records, and
(c) permit Agent, and its officers, employees and agents, to inspect, review,
evaluate and make test verifications and counts of the Accounts, Inventory and
other Collateral of any Credit Party. If a Default or Event of Default has
occurred and is continuing or if access is necessary to preserve or protect the
Collateral as determined by Agent, each such Credit Party shall provide such
access to Agent and to each Lender at all times and without advance notice.
Furthermore, so long as any Event of Default has occurred and is continuing,
Borrower shall provide Agent and each Lender with access to its suppliers and
customers. Each Credit Party shall make available to Agent and its counsel, as
quickly as is possible under the circumstances, originals or copies of all
books and records that Agent may reasonably request. Each Credit Party shall
deliver any document or instrument necessary for Agent, as it may from time to
time reasonably request, to obtain records from any service bureau or other
Person that maintains records for such Credit Party, and shall maintain
duplicate records or supporting documentation on media, including computer
tapes and discs owned by such Credit Party. Agent will give Lenders at least
five (5) days' prior written notice of regularly scheduled audits.
Representatives of other Lenders may accompany Agent's representatives on
regularly scheduled audits at no charge to Borrower.
1.15 Taxes.
(a) Any and all payments by Borrower hereunder (including any payments
made pursuant to Section 1.13) or under the Notes shall be made, in
accordance with this Section 1.15, free and clear of and without deduction
for any and all present or future Taxes. If Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder
(including any sum payable pursuant to Section 1.13) or under the Notes,
(i) the sum payable shall be increased as much as shall be necessary so
that after making all required deductions (including deductions applicable
to additional sums payable under this Section 1.15) Agent or Lenders, as
applicable, receive an amount equal to the sum they would have received had
no such deductions been made, (ii) Borrower shall make such deductions, and
(iii) Borrower shall pay the full amount deducted to the relevant taxing or
other authority in accordance with applicable law. Within thirty (30) days
after the date of any payment of Taxes, Borrower shall furnish to Agent the
original or a certified copy of a receipt evidencing payment thereof. Agent
and Lenders shall not be obligated to return or refund any amounts received
pursuant to this Section.
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(b) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and, within ten (10) days of demand therefor, pay Agent
and each Lender for the full amount of Taxes (including any Taxes imposed
by any jurisdiction on amounts payable under this Section 1.15) paid by
Agent or such Lender, as appropriate, and any liability (including
penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally asserted.
(c) Each Lender organized under the laws of a jurisdiction outside the
United States (a "Foreign Lender") as to which payments to be made under
this Agreement or under the Notes are exempt from United States withholding
tax under an applicable statute or tax treaty shall provide to Borrower and
Agent a properly completed and executed IRS Form W-8ECI or Form W-8BEN or
other applicable form, certificate or document prescribed by the IRS or the
United States certifying as to such Foreign Lender's entitlement to such
exemption (a "Certificate of Exemption"). Any foreign Person that seeks to
become a Lender under this Agreement shall provide a Certificate of
Exemption to Borrower and Agent prior to becoming a Lender hereunder. No
foreign Person may become a Lender hereunder if such Person fails to
deliver a Certificate of Exemption in advance of becoming a Lender.
1.16 Capital Adequacy; Increased Costs; Illegality.
(a) If any Lender shall have determined that any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy, reserve requirements or similar requirements or
compliance by any Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not
having the force of law), in each case, adopted after the Closing Date,
from any central bank or other Governmental Authority increases or would
have the effect of increasing the amount of capital, reserves or other
funds required to be maintained by such Lender and thereby reducing the
rate of return on such Lender's capital as a consequence of its obligations
hereunder, then Borrower shall from time to time upon demand by such Lender
(with a copy of such demand 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 that reduction and showing the
basis of the computation thereof submitted by such Lender to Borrower and
to Agent shall, absent manifest error, be final, conclusive and binding for
all purposes.
(b) If, due to either (i) the introduction of or any change in any law
or regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each
case adopted after the Closing Date, there shall be any increase in the
cost to any Lender of agreeing to make or making, funding or maintaining
any Loan, then Borrower shall from time to time, upon demand by such Lender
(with a copy of such demand to Agent), pay to Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost,
submitted to Borrower and to Agent by such Lender, shall be conclusive and
binding on Borrower for all purposes, absent manifest error. Each Lender
23
agrees that, as promptly as practicable after it becomes aware of any
circumstances referred to above which would result in any such increased
cost, the affected Lender shall, to the extent not inconsistent with such
Lender's internal policies of general application, use reasonable
commercial efforts to minimize costs and expenses incurred by it and
payable to it by Borrower pursuant to this Section 1.16(b).
(c) Notwithstanding anything to the contrary contained herein, if the
introduction of or any change in any law or regulation (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 by Borrower 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.
(d) Within fifteen (15) days after receipt by Borrower of written notice
and demand from any Lender (an "Affected Lender") for payment of additional
amounts or increased costs as provided in Sections 1.15(a), 1.16(a) or
1.16(b), Borrower may, at its option, notify Agent and such Affected Lender
of its intention to replace the Affected Lender. So long as no Default or
Event of Default has occurred and is continuing, Borrower, with the consent
of Agent, may obtain, at Borrower's expense, a replacement Lender
("Replacement Lender") for the Affected Lender, which Replacement Lender
must be reasonably satisfactory to Agent. If Borrower obtains a Replacement
Lender within ninety (90) days following notice of their intention to do
so, the Affected Lender must sell and assign its Loans and Commitments to
such Replacement Lender for an amount equal to the principal balance of all
Loans held by the Affected Lender and all accrued interest and Fees with
respect thereto through the date of such sale; provided, that Borrower
shall have reimbursed such Affected Lender for the additional amounts or
increased costs that it is entitled to receive under this Agreement through
the date of such sale and assignment. Notwithstanding the foregoing,
Borrower shall not have the right to obtain a Replacement Lender if the
Affected Lender rescinds its demand for increased costs or additional
amounts within fifteen (15) days following its receipt of Borrower's notice
of intention to replace such Affected Lender. Furthermore, if Borrower
gives a notice of intention to replace and does not so replace such
Affected Lender within ninety (90) days thereafter, Borrower's rights under
this Section 1.16(d) shall terminate with respect to such Affected Lender
and Borrower shall promptly pay all increased costs or additional amounts
demanded by such Affected Lender pursuant to Sections 1.15(a), 1.16(a) and
1.16(b).
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1.17 Single Loan. All Loans to Borrower and all of the other Obligations of
Borrower arising under this Agreement and the other Loan Documents shall
constitute one general obligation of Borrower secured, until the Termination
Date, by all of the Collateral.
2. CONDITIONS PRECEDENT
2.1 Conditions to the Initial Loans. No Lender shall be obligated to make
any Loan on the Closing Date, or to take, fulfill, or perform any other action
hereunder, until the following conditions have been satisfied or provided for
in a manner satisfactory to Agent, or waived in writing by Agent and Lenders:
(a) Credit Agreement; Loan Documents. This Agreement or counterparts
hereof shall have been duly executed by, and delivered to, Borrower, each
other Credit Party, Agent and Lenders; and Agent shall have received such
documents, instruments, agreements and legal opinions as Agent shall
reasonably request in connection with the transactions contemplated by this
Agreement and the other Loan Documents, including all those listed in the
Closing Checklist attached hereto as Annex C, each in form and substance
reasonably satisfactory to Agent.
(b) Intentionally Omitted.
(c) Approvals. Agent shall have received (i) satisfactory evidence that
the Credit Parties have obtained all required consents and approvals of all
Persons including all requisite Governmental Authorities, to the execution,
delivery and performance of this Agreement and the other Loan Documents and
the consummation of the Related Transactions or (ii) an officer's
certificate in form and substance reasonably satisfactory to Agent
affirming that no such consents or approvals are required.
(d) Opening Availability. The Eligible Accounts supporting the initial
Revolving Credit Advance and the amount of the Reserves to be established
on the Closing Date shall be sufficient in value, as determined by Agent,
to provide Borrower with Borrowing Availability, after giving effect to the
initial Revolving Credit Advance made to Borrower and the consummation of
the Related Transactions (on a pro forma basis, with trade payables being
paid consistently with Borrower's historical practice, and expenses and
liabilities being paid in the ordinary course of business and without
acceleration of sales and without any deterioration of working capital) of
at least $7,000,000.
(e) Payment of Fees. Borrower shall have paid the Fees required to be
paid on the Closing Date in the respective amounts specified in Section 1.9
(including the Fees specified in the GE Capital Fee Letter), and shall have
reimbursed Agent for all fees, costs and expenses of closing presented as
of the Closing Date.
(f) Capital Structure: Other Indebtedness. The capital structure of each
Credit Party and the terms and conditions of all Indebtedness of each
Credit Party (including without limitation, with respect to the Second Lien
Loan and the Subordinated Notes) shall be acceptable to Agent in its sole
discretion; without limitation of the foregoing, the maturity of
25
all Subordinated Notes outstanding on the Closing Date shall have been
extended to no earlier than ninety (90) days after the Second Lien Maturity
Date, with no payments of interest or principal prior to such extended
maturity date, and the Borrower shall have received $25,000,000 in proceeds
from the Second Lien Loan.
(g) Due Diligence. Agent shall have completed its business,
environmental and legal due diligence with respect to the transactions
contemplated hereby and by the Related Transaction Documents, including (i)
asset appraisals, environmental audits, collateral audit, updates to
existing asset appraisals, environmental audits and collateral audits, and
to the extent requested by the Agent, a quality of earnings review of
Borrower, Bobcat and its Subsidiaries, and (ii) background checks on (x)
each Credit Party and each of its Affiliates and (y) the CEO of each Credit
Party and each of its Affiliates, in each case with results reasonably
satisfactory to Agent.
(h) Consummation of Related Transactions. Agent shall have received
fully executed copies of the Acquisition Agreement and final and complete
copies of each of the other Related Transactions Documents, each of which
shall be in full force and effect in form and substance reasonably
satisfactory to Agent. The Acquisition and the other Related Transactions
shall have been consummated in accordance with the terms of the Acquisition
Agreement and the other Related Transactions Documents. The "Consideration"
(as such term is defined in the Acquisition Agreement) will not exceed
$52,300,000. Agent shall have received fully executed copies of all
settlement agreements (including without limitation the Settlement
Agreement) and releases, in form and substance satisfactory to Agent,
resolving and releasing any and all claims of Centre Partners against any
Credit Party, together with evidence that all conditions precedent thereto
have been satisfied.
(i) Minimum EBITDA. Agent shall have received evidence that the Borrower
and its Subsidiaries on a consolidated basis shall have EBITDA for the 12-
month period ending on September 30, 2005, assuming the Acquisition and the
other transactions contemplated hereby had occurred on October 1, 2004, of
not less than $26,000,000.
(j) Maximum Leverage. Agent shall have received evidence that the
Borrower and its Subsidiaries on a consolidated bases shall have (i) a
Leverage Ratio for the 12-month period ending on September 30, 2005,
assuming the Acquisition and the other transactions contemplated hereby had
occurred on October 1, 2004, of not more than 2.5:1.0 and (ii) a First Tier
Leverage Ratio for the 12-month period ending on September 30, 2005,
assuming the Acquisition and the other transactions contemplated hereby had
occurred on October 1, 2004, of not more than 1.5:1.0.
Each Lender, by delivering its signature page to this Agreement or to any
Assignment Agreement, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Credit Document, the Intercreditor Agreement,
the Subordination Agreements and each other documents required to be approved
by Agent, Requisite Lenders or Lenders, as applicable on the Closing Date.
26
2.2 Further Conditions to Each Advance. Except as otherwise expressly
provided herein, no Lender shall be obligated to fund any Advance, convert or
continue any Loan as a LIBOR Loan, if, as of the date thereof:
(a) (i) any representation or warranty by any Credit Party contained
herein or in any other Loan Document is untrue or incorrect as of such
date, except to the extent that such representation or warranty expressly
relates to an earlier date and except for changes therein expressly
permitted or expressly contemplated by this Agreement and (ii) Agent or
Requisite Revolving Lenders or Requisite CapEx Lenders, as the case may be,
have determined not to make such Advance, convert or continue any Loan as
LIBOR Loan as a result of the fact that such warranty or representation is
untrue or incorrect;
(b) any event or circumstance having a Material Adverse Effect has
occurred since the date hereof as determined by the Requisite Revolving
Lenders or Requisite CapEx Lenders, as the case may be, and Agent or
Requisite Revolving Lenders or Requisite CapEx Lenders have determined not
to make such Advance, convert or continue any Loan as a LIBOR Loan as a
result of the fact that such event or circumstance has occurred;
(c) any Default or Event of Default has occurred and is continuing or
would result after giving effect to any Advance, and Agent or Requisite
Revolving Lenders or Requisite CapEx Lenders, as the case may be, shall
have determined not to make any Advance, convert or continue any Loan as a
LIBOR Loan as a result of that Default or Event of Default; or
(d) after giving effect to any Revolving Advance, the outstanding
principal amount of the aggregate Revolving Loan would exceed the lesser of
the Borrowing Base and the Maximum Revolver Amount, in each case, less the
then outstanding principal amount of the Swing Line Loan.
The request and acceptance by Borrower of the proceeds of any Advance 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 2.2 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.
2.3 Further Conditions to Each CapEx Advance. Except as otherwise expressly
provided herein, and in addition to the conditions set forth in Section 2.2, no
CapEx Lender shall be obligated to fund any CapEx Advance unless, as of the
date thereof:
(a) the CapEx Lenders shall have received from Borrower a certificate
executed by the Chief Financial Officer of Borrower that (A) describes in
detail the Equipment to be financed with the proceeds of such CapEx
Advance, (B) sets forth the "hard" and "soft" costs of such Equipment,
including without limitation the purchase price for such Equipment, as well
as the taxes, transportation costs, installation costs and licensing costs
associated therewith, (C) demonstrates that after giving pro forma effect
to the requested CapEx Advance, as if such CapEx Advance (and any
associated interest expense and principal
27
repayments) had been made on the first day of the four fiscal quarter
period ending as of the most recent Fiscal Quarter for which Borrower is
required under this Agreement to have delivered Financial Statements to the
Lenders, Borrower would be in compliance with all covenants set forth in
Annex F;
(b) if requested by the Agent in its sole discretion or at the direction
of Requisite CapEx Lenders, the CapEx Lenders shall have received an
appraisal in form and substance satisfactory to the Agent from an
Acceptable Appraiser of the Equipment to be financed with the proceeds of
such CapEx Advance setting forth the Forced Liquidation Value of such
Equipment; provided, further, that with respect to new Equipment purchased
from a vendor that is not an Affiliate, the Agent shall accept a "desktop"
appraisal of such Equipment from an Acceptable Appraiser;
(c) the requested CapEx Advance does not exceed the lesser of (i) 80%,
or such lower percentage as the Agent shall determine in its sole
discretion from time to time, of the arms-length purchase price of the
Equipment to be financed with the proceeds of such CapEx Advance (excluding
all taxes, transportation costs, installation costs, licensing costs ,
labor and all other "soft" costs) and (ii) to the extent Agent has
requested an appraisal, 75%, or such lower percentage as the Agent shall
determine in its sole discretion from time to time, of the Forced
Liquidation Value reported in the appraisal described in subsection (b)
above;
(d) the CapEx Lenders shall have received from Borrower such other
information and documents relating to such Equipment as the CapEx Lenders
shall have requested; and
(e) the CapEx Lenders shall have determined in their sole discretion
that the Equipment proposed by Borrower to be financed with the proceeds of
the CapEx Advance is Eligible CapEx Equipment, which determination shall be
evidenced by the funding of the requested CapEx Advance.
2.4 Effect of Amendment and Restatement. Upon this Agreement becoming
effective pursuant to Section 2.1, from and after the Closing Date: (a) the
Revolving Loan Commitments shall be adjusted in accordance with the terms
hereof, and the "Term Loans" outstanding under the Original Credit Agreement
shall be deemed to be a portion of the Term Loan and continue outstanding
hereunder; (b) all terms and conditions of the Original Credit Agreement and
any other "Loan Document" as defined therein, as amended by this Agreement and
the other Loan Documents being executed and delivered on the Closing Date,
shall be and remain in full force and effect, as so amended, and shall
constitute the legal, valid, binding and enforceable obligations of the Credit
Parties party thereto to Lenders and Agent; (c) the terms and conditions of the
Original Credit Agreement shall be amended as set forth herein and, as so
amended, shall be restated in their entirety, but only with respect to the
rights, duties and obligations among Borrower, Lenders and Agent accruing from
and after the Closing Date; (d) this Agreement shall not in any way release or
impair the rights, duties, Obligations or Liens created pursuant to the
Original Credit Agreement or any other Loan Document or affect the relative
priorities thereof, in each case to the extent in force and effect thereunder
as of the Closing Date, except as modified hereby or by documents, instruments
and agreements executed
28
and delivered in connection herewith, and all of such rights, duties,
Obligations and Liens are assumed, ratified and affirmed by the Borrower; (e)
all indemnification obligations of the Credit Parties under the Original Credit
Agreement and any other Loan Documents shall survive the execution and delivery
of this Agreement and shall continue in full force and effect for the benefit
of Lenders, Agent, and any other Person indemnified under the Original Credit
Agreement or any other Loan Document at any time prior to the Closing Date; (e)
the Obligations incurred under the Original Credit Agreement shall, to the
extent outstanding on the Closing Date, continue outstanding under this
Agreement and shall not be deemed to be paid, released, discharged or otherwise
satisfied by the execution of this Agreement, and this Agreement shall not
constitute a refinancing, substitution or novation of such Obligations or any
of the other rights, duties and obligations of the parties hereunder; (f) the
execution, delivery and effectiveness of this Agreement shall not operate as a
waiver of any right, power or remedy of Lenders or Agent under the Original
Credit Agreement, nor constitute a waiver of any covenant, agreement or
obligation under the Original Credit Agreement, except to the extent that any
such covenant, agreement or obligation is no longer set forth herein or is
modified hereby; and (g) any and all references in the Loan Documents to the
Original Credit Agreement shall, without further action of the parties, be
deemed a reference to the Original Credit Agreement, as amended and restated by
this Agreement, and as this Agreement shall be further amended or amended and
restated from time to time hereafter.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans, the Credit Parties executing this
Agreement, jointly and severally, make the following representations and
warranties to Agent and each Lender with respect to all Credit Parties, each
and all of which shall survive the execution and delivery of this Agreement (it
being understood and agreed that the representations and warranties made on the
Closing Date are deemed to be made concurrently with the consummation of the
Acquisition and the other Related Transactions and the borrowings under the
Second Lien Credit Agreement contemplated hereby):
3.1 Corporate Existence; Compliance with Law. Each Credit Party (a) is a
corporation, limited liability company or limited partnership duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation or organization set forth in Disclosure Schedule
(3.1); (b) is duly qualified to conduct business and is in good standing in
each other jurisdiction where its ownership or lease of property or the conduct
of its business requires such qualification, except where the failure to be so
qualified would not result in exposure to losses, damages or liabilities in
excess of $50,000; (c) has the requisite power and authority and the legal
right to own, pledge, mortgage or otherwise encumber and operate its
properties, to lease the property it operates under lease and to conduct its
business as now, heretofore and proposed to be conducted; (d) subject to
specific representations regarding Environmental Laws, has all material
licenses, permits, consents or approvals from or by, and has made all material
filings with, and has given all material notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (e) is in compliance with its charter and bylaws or
partnership or operating agreement, as applicable; and (f) subject to specific
representations set forth herein regarding ERISA,
29
Environmental Laws, tax and other laws, is in compliance with all applicable
provisions of law, except where the failure to comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
3.2 Executive Offices, Collateral Locations, FEIN, Organizational Number. As
of the Closing Date, each Credit Party's name as it appears in official filings
in its state of incorporation or organization, state of incorporation or
organization, organization type, organization number, if any, issued by the
state of incorporation or organization, the federal employer identification
number and the current location of each Credit Party's chief executive office
and the warehouses and premises at which any Collateral is located are set
forth in Disclosure Schedule (3.2), and, except as set forth in Disclosure
Schedule (3.2) none of such locations has changed within the 12 months
preceding the Closing Date.
3.3 Corporate Power, Authorization, Enforceable Obligations. The execution,
delivery and performance by each Credit Party of the Loan Documents to which it
is a party and the creation of all Liens provided for therein: (a) are within
such Person's power; (b) have been duly authorized by all necessary corporate,
limited liability company or limited partnership action; (c) do not contravene
any provision of such Person's charter, bylaws or partnership or operating
agreement as applicable; (d) do not violate any law or regulation, or any order
or decree of any court or Governmental Authority; (e) do not conflict with or
result in the breach or termination of, constitute a default under or
accelerate or permit the acceleration of any performance required by, any
indenture, mortgage, deed of trust, lease, agreement or other instrument to
which such Person is a party or by which such Person or any of its property is
bound; (f) do not result in the creation or imposition of any Lien upon any of
the property of such Person other than those in favor of Agent, on behalf of
itself and Lenders, pursuant to the Loan Documents and, subject to the
Intercreditor Agreement, the Second Lien Loan Documents; and (g) do not require
the consent or approval of any Governmental Authority or any other Person,
except those referred to in Section 2.1(c), all of which will have been duly
obtained, made or complied with prior to the Closing Date. Each of the Loan
Documents shall be duly executed and delivered by each Credit Party that is a
party thereto and each such Loan Document shall constitute a legal, valid and
binding obligation of such Credit Party enforceable against it in accordance
with its terms.
3.4 Financial Statements and Projections. Except for the Projections and the
Fair Salable Balance Sheet, all Financial Statements concerning Borrower and
its Subsidiaries that are referred to below have been prepared in accordance
with GAAP consistently applied throughout the periods covered (except as
disclosed therein and except, with respect to unaudited Financial Statements,
for the absence of footnotes, a statement of owners' equity and normal year-end
audit adjustments) and present fairly in all material respects the financial
position of the Persons covered thereby as at the dates thereof and the results
of their operations and cash flows for the periods then ended.
(a) Financial Statements. The following Financial Statements attached
hereto as Disclosure Schedule (3.4(a)) have been delivered on the date
hereof:
30
(i) The audited balance sheets at December 31, 2003 and 2004 and the
related statements of income and cash flows of Borrower for the Fiscal
Years then ended, certified by the Chief Financial Officer of Borrower.
(ii) The audited consolidated and consolidating balance sheets at
June 30, 2004 and 2005 and the related statements of income and cash
flows of Bobcat and its Subsidiaries for the fiscal years then ended.
(iii) The unaudited balance sheet(s) at September 30, 2005 and the
related statement(s) of income and cash flows of Borrower for the three
Fiscal Quarters then ended.
(iv) The unaudited consolidated and consolidating balance sheet(s)
at September 30, 2005 and the related statement(s) of income and cash
flows of Bobcat and its Subsidiaries for the one fiscal quarter then
ended.
(b) Pro Forma. The Pro Forma delivered on the date hereof and attached
hereto as Disclosure Schedule (3.4(b)) was prepared by Borrower giving pro
forma effect to the Related Transactions, was based on the unaudited
balance sheet of Borrower dated September 30, 2005 and the unaudited
consolidated balance sheet of Bobcat and its Subsidiaries dated September
30, 2005, and was prepared in accordance with GAAP, with only such
adjustments thereto as would be required in accordance with GAAP.
(c) Projections. The Projections delivered on the date hereof and
attached hereto as Disclosure Schedule (3.4(c)) have been prepared by
Borrower in light of the past operations of its businesses, but including
future payments of known contingent liabilities reflected on the Fair
Salable Balance Sheet, and reflect projections for the three year period
beginning on January 1, 2006 on a month-by-month basis for Fiscal Year
2006, and on an annual basis for Fiscal Years 2007 and 2008. The
Projections are based upon the same accounting principles as those used in
the preparation of the financial statements described above and the
estimates and assumptions stated therein, all of which Borrower believes to
be reasonable and fair in light of current conditions and current facts
known to Borrower and, as of the Closing Date, reflect Borrower's good
faith and reasonable estimates of the future financial performance of
Borrower and of the other information projected therein for the period set
forth therein.
(d) Fair Salable Balance Sheet. The Fair Salable Balance Sheet delivered
on the date hereof and attached hereto as Disclosure Schedule (3.4(d)) was
prepared by Borrower on the same basis as the Pro Forma, except that
Borrower's assets are set forth therein at their fair salable values on a
going concern basis and the liabilities set forth therein include all
contingent liabilities of Borrower stated at the reasonably estimated
present values thereof.
3.5 Material Adverse Effect. Between December 31, 2004 and the Closing Date
with respect to Borrower, and between June 30, 2005 and the Closing Date with
respect to all other Credit Parties: (a) no Credit Party has incurred any
obligations, contingent or
31
noncontingent liabilities, liabilities for Charges, long-term leases or unusual
forward or long-term commitments that are not reflected in the Pro Forma and
that, alone or in the aggregate, could reasonably be expected to have a Material
Adverse Effect, (b) no contract, lease or other agreement or instrument has been
entered into by any Credit Party or has become binding upon any Credit Party's
assets and no law or regulation applicable to any Credit Party has been adopted
that has had or could reasonably be expected to have a Material Adverse Effect,
and (c) no Credit Party is in default and to the best of Borrower's knowledge no
third party is in default under any material contract, lease or other agreement
or instrument, that alone or in the aggregate could reasonably be expected to
have a Material Adverse Effect. Between December 31, 2004 and the Closing Date
with respect to Borrower, and between June 30, 2005 and the Closing Date with
respect to all other Credit Parties, no event has occurred, that alone or
together with other events, could reasonably be expected to have a Material
Adverse Effect.
3.6 Ownership of Property; Liens. As of the Closing Date, the real estate
("Real Estate") listed in Disclosure Schedule (3.6) constitutes all of the real
property owned, leased, subleased, or used by any Credit Party. Each Credit
Party owns good and marketable fee simple title to all of its owned Real
Estate, and valid and marketable leasehold interests in all of its leased Real
Estate, all as described on Disclosure Schedule (3.6), and copies of all such
leases or a summary of terms thereof reasonably satisfactory to Agent have been
delivered to Agent. Disclosure Schedule (3.6) further describes any Real Estate
with respect to which any Credit Party is a lessor, sublessor or assignor as of
the Closing Date. Each Credit Party also has good and marketable title to, or
valid leasehold interests in, all of its personal property and assets. As of
the Closing Date, none of the properties and assets of any Credit Party are
subject to any Liens other than (i) Permitted Encumbrances, (ii) subject to the
Intercreditor Agreement, the Liens securing the Second Lien Loan and (iii)
subject to the Subordination Agreements, the Liens securing the Subordinated
Debt, and there are no facts, circumstances or conditions known to any Credit
Party that may result in any Liens (including Liens arising under Environmental
Laws) other than (i) Permitted Encumbrances, (ii) subject to the Intercreditor
Agreement, the Liens securing the Second Lien Loan and (iii) subject to the
Subordination Agreements, the Liens securing the Subordinated Debt. Each Credit
Party 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 such Credit Party's right, title and interest in
and to all such Real Estate and other properties and assets. Disclosure
Schedule (3.6) also describes any purchase options, rights of first refusal or
other similar contractual rights pertaining to any Real Estate. As of the
Closing Date, no portion of any Credit Party's 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.
3.7 Labor Matters. As of the Closing Date (a) no strikes or other material
labor disputes against any Credit Party are pending or, to any Credit Party's
knowledge, threatened; (b) all hours worked by and payments made to employees
of each Credit Party
32
comply with the Fair Labor Standards Act and each other federal, state, local
or foreign law applicable to such matters; (c) all payments due from any Credit
Party for employee health and welfare insurance have been paid or accrued as a
liability on the books of such Credit Party; (d) except as set forth in
Disclosure Schedule (3.7), no Credit Party is a party to or bound by any
collective bargaining agreement, management agreement, consulting agreement,
employment agreement, bonus, restricted stock, stock option, or stock
appreciation plan or agreement or any similar plan, agreement or arrangement
(and true and complete copies of any agreements described on Disclosure
Schedule (3.7) have been delivered to Agent); (e) there is no organizing
activity involving any Credit Party pending or, to any Credit Party's
knowledge, threatened by any labor union or group of employees; (f) there are
no representation proceedings pending or, to any Credit Party's knowledge,
threatened with the National Labor Relations Board, and no labor organization
or group of employees of any Credit Party has made a pending demand for
recognition; and (g) except as set forth in Disclosure Schedule (3.7), there
are no material complaints or charges against any Credit Party pending or, to
the knowledge of any Credit Party, threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in connection with, or
otherwise relating to the employment or termination of employment by any Credit
Party of any individual.
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Except as set forth in Disclosure Schedule (3.8), as of the
Closing Date, no Credit Party has any Subsidiaries, is engaged in any joint
venture or partnership with any other Person, or is an Affiliate of any other
Person. All of the issued and outstanding Stock of each Credit Party is owned
by each of the Stockholders and in the amounts set forth in Disclosure Schedule
(3.8). Except as set forth in Disclosure Schedule (3.8), there are no
outstanding rights to purchase, options, warrants or similar rights or
agreements pursuant to which any Credit Party may be required to issue, sell,
repurchase or redeem any of its Stock or other equity securities or any Stock
or other equity securities of its Subsidiaries. All outstanding Indebtedness
and Guaranteed Indebtedness of each Credit Party as of the Closing Date (except
for the Obligations) is described in Section 6.3 (including Disclosure Schedule
(6.3)).
3.9 Government Regulation. No Credit Party is an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act
of 1940. No Credit Party is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, or any other federal or
state statute that restricts or limits its ability to incur Indebtedness or to
perform its obligations hereunder. The making of the Loans by Lenders to
Borrower, the application of the proceeds thereof and repayment thereof and the
consummation of the Related Transactions will not violate any provision of any
such statute or any rule, regulation or order issued by the Securities and
Exchange Commission.
3.10 Margin Regulations. No Credit Party is engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" as such
terms are defined in Regulation U of the Federal Reserve Board as now and from
time to time hereafter in effect (such securities being referred to herein as
"Margin Stock"). No Credit Party owns any Margin
33
Stock, and none of the proceeds of the Loans or other extensions of credit
under this Agreement will be used, directly or indirectly, for the purpose of
purchasing or carrying any Margin Stock, for the purpose of reducing or
retiring any Indebtedness that was originally incurred to purchase or carry any
Margin Stock or for any other purpose that might cause any of the Loans or
other extensions of credit under this Agreement to be considered a "purpose
credit" within the meaning of Regulations T, U or X of the Federal Reserve
Board. No Credit Party will take or permit to be taken any action that might
cause any Loan Document to violate any regulation of the Federal Reserve Board.
3.11 Taxes. All tax returns, reports and statements, including information
returns, required by any Governmental Authority to be filed by any Credit Party
have been filed with the appropriate Governmental Authority and all Charges
have been paid prior to the date on which any fine, penalty, interest or late
charge may be added thereto for nonpayment thereof (or any such fine, penalty,
interest, late charge or loss has been paid), excluding Charges or other
amounts being contested in accordance with Section 5.2(b). Proper and accurate
amounts have been withheld by each Credit Party from its respective employees
for all periods in full and complete compliance with all applicable federal,
state, local and foreign laws and such withholdings have been timely paid to
the respective Governmental Authorities. Disclosure Schedule (3.11) sets forth
as of the Closing Date those taxable years for which any Credit Party's tax
returns are currently being audited by the IRS or any other applicable
Governmental Authority, and any assessments or threatened assessments in
connection with such audit, or otherwise currently outstanding. Except as
described in Disclosure Schedule (3.11), no Credit Party has executed or filed
with the IRS or any other Governmental Authority any agreement or other
document extending, or having the effect of extending, the period for
assessment or collection of any Charges. None of the Credit Parties and their
respective predecessors are liable for any Charges: (a) under any agreement
(including any tax sharing agreements) or (b) to each Credit Party's knowledge,
as a transferee. As of the Closing Date, no Credit Party has agreed or been
requested to make any adjustment under IRC Section 481(a), by reason of a
change in accounting method or otherwise, which would have a Material Adverse
Effect.
3.12 ERISA.
(a) Disclosure Schedule (3.12) lists (i) all ERISA Affiliates and (ii)
all Plans and separately identifies all Pension Plans, including Title IV
Plans, 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. Each Plan
is in compliance with the 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. No Credit
Party or any ERISA Affiliate has failed to make any contribution or pay any
amount due as required by either Section 412 of the IRC or Section 302 of
ERISA or the terms of any such Plan. No
34
Credit Party or any 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 Disclosure Schedule (3.12): (i) no Title IV
Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event
described in Section 4062(e) of ERISA with respect to any Title IV Plan has
occurred or is reasonably expected to occur; (iii) there are no pending, or
to the knowledge of any Credit Party, threatened claims (other than claims
for benefits in the normal course), sanctions, actions or lawsuits,
asserted or instituted against any Plan or any Person as fiduciary or
sponsor of any Plan; (iv) no Credit Party or ERISA Affiliate has incurred
or reasonably expects to incur any liability as a result of a complete or
partial withdrawal from a Multiemployer Plan; (v) within the last five
years no Title IV Plan of any Credit Party or ERISA Affiliate has been
terminated, whether or not in a "standard termination" as that term is used
in Section 4041(b)(1) of ERISA, nor has any Title IV Plan of any Credit
Party or any ERISA Affiliate (determined at any time within the last 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 (determined at such time); (vi) 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 latest valuation date of any Plan; and (vii) no liability under
any Title IV Plan has been satisfied with the purchase of a contract from
an insurance company that is not rated AAA by the Standard & Poor's
Corporation or an equivalent rating by another nationally recognized rating
agency.
3.13 No Litigation. No action, claim, lawsuit, demand, investigation or
proceeding is now pending or, to the knowledge of any Credit Party, threatened
against any Credit Party, before any Governmental Authority or before any
arbitrator or panel of arbitrators (collectively, "Litigation"), (a) that
challenges any Credit Party's right or power to enter into or perform any of
its obligations under the Loan Documents to which it is a party, or the
validity or enforceability of any Loan Document or any action taken thereunder,
or (b) that has a reasonable risk of being determined adversely to any Credit
Party and that, if so determined, could be reasonably be expected to have a
Material Adverse Effect. No Litigation is pending or threatened against any
Credit Party by Centre Partners. Except as set forth on Disclosure Schedule
(3.13), as of the Closing Date there is no Litigation pending or, to any Credit
Party's knowledge, threatened, that seeks damages in excess of $100,000 or
injunctive relief against, or alleges criminal misconduct of, any Credit Party.
3.14 Brokers. 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.
35
3.15 Intellectual Property. As of the Closing Date, each Credit Party owns
or has rights to use all Intellectual Property necessary to continue to conduct
its business as now or heretofore conducted by it or proposed to be conducted
by it, and each Patent, Trademark, Copyright and License is listed, together
with application or registration numbers, as applicable, in Disclosure Schedule
(3.15). Each Credit Party conducts its business and affairs without
infringement of or interference with any Intellectual Property of any other
Person in any material respect. Except as set forth in Disclosure Schedule
(3.15), no Credit Party is aware of any infringement claim by any other Person
with respect to any Intellectual Property.
3.16 Full Disclosure. No information contained in this Agreement, any of the
other Loan Documents, any Projections, Financial Statements or Collateral
Reports or other written reports from time to time delivered hereunder or any
written statement furnished by or on behalf of any Credit Party to Agent or any
Lender pursuant to the terms of this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not
misleading in light of the circumstances under which they were made. The Liens
granted to Agent, on behalf of itself and Lenders, pursuant to the Collateral
Documents will at all times be fully perfected First Priority Liens in and to
the Collateral described therein, subject, as to priority, only to Permitted
Encumbrances (and not Liens securing the Second Lien Loan or any Subordinated
Debt).
3.17 Environmental Matters.
(a) Except as set forth in Disclosure Schedule (3.17), as of the Closing
Date: (i) the Real Estate is free of contamination from any Hazardous
Material except for such contamination that would not adversely impact the
value or marketability of such Real Estate and that would not result in
Environmental Liabilities, that could reasonably be expected to exceed
$100,000; (ii) no Credit Party has caused or suffered to occur any Release
of Hazardous Materials on, at, in, under, above, to, from or about any of
its Real Estate; (iii) the Credit Parties are and have been in compliance
with all Environmental Laws, except for such noncompliance that would not
result in Environmental Liabilities which could reasonably be expected to
exceed $100,000; (iv) the Credit Parties have obtained, and are in
compliance with, all Environmental Permits required by Environmental Laws
for the operations of their respective businesses as presently conducted or
as proposed to be conducted, except where the failure to so obtain or
comply with such Environmental Permits would not result in Environmental
Liabilities that could reasonably be expected to exceed $100,000, and all
such Environmental Permits are valid, uncontested and in good standing; (v)
no Credit Party is involved in operations or knows of any facts,
circumstances or conditions, including any Releases of Hazardous Materials,
that are likely to result in any Environmental Liabilities of such Credit
Party which could reasonably be expected to exceed $100,000, and no Credit
Party has permitted any current or former tenant or occupant of the Real
Estate to engage in any such operations; (vi) there is no Litigation
arising under or related to any Environmental Laws, Environmental Permits
or Hazardous Material that seeks damages, penalties, fines, costs or
expenses in excess of $25,000 or injunctive relief against, or that alleges
criminal misconduct by, any Credit Party; (vii) no notice has been received
by any Credit Party identifying it as a "potentially responsible party" or
requesting information under CERCLA or
36
analogous state statutes, and to the knowledge of the Credit Parties, there
are no facts, circumstances or conditions that may result in any Credit
Party being identified as a "potentially responsible party" under CERCLA or
analogous state statutes; and (viii) the Credit Parties have provided to
Agent copies of all existing environmental reports, reviews and audits and
all written information pertaining to actual or potential Environmental
Liabilities, in each case relating to any Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that neither Agent
nor any Lender (i) is now, or has ever been, in control of any of the Real
Estate or any Credit Party's affairs, or (ii) has the capacity through the
provisions of the Loan Documents or otherwise to influence any Credit
Party's conduct with respect to the ownership, operation or management of
any of its Real Estate or compliance with Environmental Laws or
Environmental Permits.
3.18 Insurance. Disclosure Schedule (3.18) lists all insurance policies of
any nature maintained, as of the Closing Date, for current occurrences by each
Credit Party, as well as a summary of the terms of each such policy.
3.19 Deposit and Disbursement Accounts. Disclosure Schedule (3.19) lists all
banks and other financial institutions at which any Credit Party maintains
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.
3.20 Government Contracts. Except as set forth in Disclosure Schedule
(3.20), as of the Closing Date, no Credit Party is a party to any contract or
agreement with any Governmental Authority and no Credit Party's Accounts are
subject to the Federal Assignment of Claims Act (31 U.S.C. Section 3727) or any
similar state or local law.
3.21 Customer and Trade Relations. Except as set forth in Disclosure
Schedule (3.21), as of the Closing Date, there exists no actual or, to the
knowledge of any Credit Party, threatened termination or cancellation of, or
any material adverse modification or change in the business relationship of any
Credit Party with any customer or group of customers whose purchases during the
preceding 12 months caused them to be ranked among the ten largest customers of
such Credit Party; or the business relationship of any Credit Party with any
supplier material to its operations.
3.22 Agreements and Other Documents. As of the Closing Date, each Credit
Party has provided to Agent or its counsel, on behalf of Lenders, 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 Disclosure Schedule
(3.22): supply agreements and purchase agreements not terminable by such Credit
Party within sixty (60) days following written notice issued by such Credit
Party and involving transactions in excess of $1,000,000 per annum; 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
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which could be reasonably likely 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.
3.23 Solvency. Both before and after giving effect to (a) the Loans to be
made or incurred on the Closing Date or such other date as Loans requested
hereunder are made or incurred; (b) the disbursement of the proceeds of such
Loans pursuant to the instructions of Borrower; (c) the Acquisition and the
consummation of the other Related Transactions; and (d) the payment and accrual
of all transaction costs in connection with the foregoing, each Credit Party is
and will be Solvent.
3.24 Subordinated Debt; Second Lien Loan. (A) As of the Closing Date,
Borrower has provided to Agent or its counsel, on behalf of Lenders, accurate
and complete copies of all outstanding Subordinated Notes (including all
schedules, exhibits, amendments, supplements, modifications, assignments,
consents and all other documents delivered pursuant thereto or in connection
therewith), each of which is listed in Disclosure Schedule (3.24). Disclosure
Schedule (3.24) also sets forth a true and correct list of all Subordinated
Note Holders. Borrower had the corporate power and authority to incur the
Indebtedness evidenced by the Subordinated Notes and to enter into the consent
or amendment to the Subordinated Notes contemplated as a condition to the
closing of this Credit Agreement. Each Subordination Agreement is enforceable
against the holders of the Subordinated Notes signatory thereto by Agent and
Lenders. All Obligations constitute Senior Indebtedness entitled to the
benefits of the subordination provisions contained in the Subordination
Agreements. Borrower acknowledges that Agent and each Lender are entering into
this Agreement and are extending the Commitments in reliance upon the
subordination provisions contained in the Subordination Agreements and this
Section 3.24.
(B) As of the Closing Date, Borrower has provided to Agent or its counsel,
on behalf of Lenders, accurate and complete copies of the Second Lien Loan
Documents (including all schedules, exhibits, amendments, supplements,
modifications, assignments and all other documents delivered pursuant thereto
or in connection therewith). Borrower has the corporate power and authority to
incur the Second Lien Loan and to enter into and perform the Second Lien Loan
Documents. The Intercreditor Agreement is enforceable by Agent against the
lenders under the Second Lien Credit Agreement and the Second Lien Agent.
Borrower acknowledges that Agent and each Lender are entering into this
Agreement and are extending the Commitments in reliance upon the lien
subordination provisions contained in the Intercreditor Agreement and this
Section 3.24.
3.25 Acquisition Agreement. As of the Closing Date, Borrower has delivered
to Agent a complete and correct copy of the Acquisition Agreement (including
all schedules, exhibits, amendments, supplements, modifications, assignments
and all other documents delivered pursuant thereto or in connection therewith).
No Credit Party and no other Person party thereto is in default in the
performance or compliance with any provisions thereof. The
38
Acquisition Agreement complies with, and the Acquisition has been consummated
in accordance with, all applicable laws. The Acquisition Agreement is in full
force and effect as of the Closing Date and has not been terminated, rescinded
or withdrawn. All requisite approvals by Governmental Authorities having
jurisdiction over any Seller, any Credit Party and other Persons referenced
therein, with respect to the transactions contemplated by the Acquisition
Agreement, have been obtained, and no such approvals impose any conditions to
the consummation of the transactions contemplated by the Acquisition Agreement
or to the conduct by any Credit Party of its business thereafter. To the best
of each Credit Party's knowledge, none of the Sellers' representations or
warranties in the Acquisition Agreement contain any untrue statement of a
material fact or omit any fact necessary to make the statements therein not
misleading. Each of the representations and warranties given by each applicable
Credit Party in the Acquisition Agreement is true and correct in all material
respects. Notwithstanding anything contained in the Acquisition Agreement to
the contrary, such representations and warranties of the Credit Parties are
incorporated into this Agreement by this Section 3.25 and shall, solely for
purposes of this Agreement and the benefit of Agent and Lenders, survive the
consummation of the Acquisition.
3.26 OFAC. No Credit Party (i) is a person whose property or interest in
property is blocked or subject to blocking pursuant to Section 1 of Executive
Order 13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism
(66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or transactions
prohibited by Section 2 of such executive order, or is otherwise associated
with any such person in any manner violative of Section 2, or (iii) is a person
on the list of Specially Designated Nationals and Blocked Persons or subject to
the limitations or prohibitions under any other U.S. Department of Treasury's
Office of Foreign Assets Control regulation or executive order.
3.27 Patriot Act. Each Credit Party is in compliance, in all material
respects, with the (i) the Trading with the Enemy Act, as amended, and each of
the foreign assets control regulations of the United States Treasury Department
(31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation
or executive order relating thereto, and (ii) the Uniting And Strengthening
America By Providing Appropriate Tools Required To Intercept And Obstruct
Terrorism (USA Patriot Act of 2001). No part of the proceeds of the Loans will
be used, directly or indirectly, for any payments to any governmental official
or employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in
violation of the United States Foreign Corrupt Practices Act of 1977, as
amended.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices.
(a) Each Credit Party executing this Agreement hereby agrees that from
and after the Closing Date and until the Termination Date, it shall deliver
to Agent or to Agent and Lenders, as required, the Financial Statements,
notices, Projections and other information at the times, to the Persons and
in the manner set forth in Annex D.
39
(b) Each Credit Party executing this Agreement hereby agrees that, from
and after the Closing Date and until the Termination Date, it shall deliver
to Agent or to Agent and Lenders, as required, the various Collateral
Reports (including Borrowing Base Certificates in the form of Exhibit
4.1(b)) at the times, to the Persons and in the manner set forth in Annex
E.
4.2 Communication with Accountants. Each Credit Party executing this
Agreement authorizes (a) Agent and (b) so long as an Event of Default has
occurred and is continuing, each Lender, to communicate directly with its
independent certified public accountants, including ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, and
authorizes and, at Agent's request, shall instruct those accountants and
advisors to disclose and make available to Agent and each Lender any and all
Financial Statements and other supporting financial documents, schedules and
information relating to any Credit Party (including copies of any issued
management letters) with respect to the business, financial condition and other
affairs of any Credit Party.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Credit Agreement jointly and severally
agrees as to all Credit Parties that from and after the date hereof and until
the Termination Date:
5.1 Maintenance of Existence and Conduct of Business. Each Credit Party
shall: do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and its rights and franchises;
continue to conduct its business substantially as now conducted or as otherwise
permitted hereunder; at all times maintain, preserve and protect all of its
assets and properties used or useful in the conduct of its business, and keep
the same in good repair, working order and condition in all material respects
(taking into consideration ordinary wear and tear) and from time to time make,
or cause to be made, all necessary or appropriate repairs, replacements and
improvements thereto consistent with industry practices; and transact business
only in such corporate and trade names as are set forth in Disclosure Schedule
(5.1).
5.2 Payment of Charges.
(a) Subject to Section 5.2(b), each Credit Party shall pay and discharge
or cause to be paid and discharged promptly all Charges payable by it,
including (i) Charges imposed upon it, its income and profits, or any of
its property (real, personal or mixed) and all Charges with respect to tax,
social security and unemployment withholding with respect to its employees,
(ii) lawful claims for labor, materials, supplies and services or
otherwise, and (iii) all storage or rental charges payable to warehousemen
and bailees, in each case, before any thereof shall become past due.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges, Taxes or claims
described in Section 5.2(a); provided, that (i) adequate reserves with
respect to such contest are maintained on the books of such Credit Party,
in accordance with GAAP; (ii) no Lien shall be imposed to secure payment of
such Charges (other than payments to warehousemen and/or bailees) that is
40
superior to any of the Liens securing the payment of Obligations and such
contest is maintained and prosecuted continuously and with diligence and
operates to suspend collection or enforcement of such Charges; (iii) none
of the Collateral becomes subject to forfeiture or loss as a result of such
contest; (iv) such Credit Party shall promptly pay or discharge such
contested Charges, Taxes or claims and all additional charges, interest,
penalties and expenses, if any, and shall deliver to Agent evidence
reasonably acceptable to Agent of such compliance, payment or discharge, if
such contest is terminated or discontinued adversely to such Credit Party
or the conditions set forth in this Section 5.2(b) are no longer met; and
(v) Agent has not advised Borrower in writing that Agent reasonably
believes that nonpayment or nondischarge thereof could have or result in a
Material Adverse Effect.
5.3 Books and Records. Each Credit Party shall keep adequate books and
records with respect to its business activities in which proper entries,
reflecting all financial transactions, are made in accordance with GAAP and on
a basis consistent with the Financial Statements attached as Disclosure
Schedule (3.4(a)).
5.4 Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and expense, maintain
the policies of insurance described on Disclosure Schedule (3.18) as in
effect on the date hereof or otherwise in form and amounts and with
insurers reasonably acceptable to Agent. Such policies of insurance (or the
loss payable and additional insured endorsements delivered to Agent) shall
contain provisions pursuant to which the insurer agrees to provide thirty
(30) days prior written notice to Agent in the event of any non-renewal,
cancellation or amendment of any such insurance policy. If any Credit Party
at any time or times hereafter shall fail to obtain or maintain any of the
policies of insurance required above, or to pay all premiums relating
thereto, Agent may at any time or times thereafter obtain and maintain such
policies of insurance and pay such premiums and take any other action with
respect thereto that Agent deems advisable. Agent shall have no obligation
to obtain insurance for any Credit Party or pay any premiums therefor. By
doing so, Agent shall not be deemed to have waived any Default or Event of
Default arising from any Credit Party's failure to maintain such insurance
or pay any premiums therefor. All sums so disbursed, including reasonable
attorneys' fees, court costs and other charges related thereto, shall be
payable on demand by Borrower to Agent and shall be additional Obligations
hereunder secured by the Collateral.
(b) Agent reserves the right at any time upon any change in any Credit
Party's risk profile (including any change in the product mix maintained by
any Credit Party or any laws affecting the potential liability of such
Credit Party) to require additional forms and limits of insurance to, in
Agent's opinion, adequately protect both Agent's and Lenders' interests in
all or any portion of the Collateral and to ensure that each Credit Party
is protected by insurance in amounts and with coverage customary for its
industry. If reasonably requested by Agent, each Credit Party shall deliver
to Agent from time to time a report of a reputable insurance broker,
reasonably satisfactory to Agent, with respect to its insurance policies.
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(c) Each Credit Party shall deliver to Agent, in form and substance
reasonably satisfactory to Agent, endorsements to (i) all "All Risk" and
business interruption insurance naming Agent, on behalf of itself and
Lenders, as loss payee, and (ii) all general liability and other liability
policies naming Agent, on behalf of itself and Lenders, as additional
insured. Each Credit Party irrevocably makes, constitutes and appoints
Agent (and all officers, employees or agents designated by Agent), so long
as any Default or Event of Default has occurred and is continuing or the
anticipated insurance proceeds exceed $500,000, as such Credit Party's true
and lawful agent and attorney-in-fact for the purpose of making, settling
and adjusting claims under such "All Risk" policies of insurance, endorsing
the name of such Credit Party on any check or other item of payment for the
proceeds of such "All Risk" policies of insurance and for making all
determinations and decisions with respect to such "All Risk" policies of
insurance. Agent shall have no duty to exercise any rights or powers
granted to it pursuant to the foregoing power-of-attorney. Borrower shall
promptly notify Agent of any loss, damage, or destruction to the Collateral
in the amount of $250,000 or more, whether or not covered by insurance.
After deducting from such proceeds the expenses, if any, incurred by Agent
in the collection or handling thereof, Agent may, at its option, apply such
proceeds to the reduction of the Obligations in accordance with Section
1.3(d), provided that in the case of insurance proceeds pertaining to any
Credit Party other than Borrower, such insurance proceeds shall be applied
to the Loans owing by Borrower; or permit or require the applicable Credit
Party to use such money, or any part thereof, to replace, repair, restore
or rebuild the Collateral in a diligent and expeditious manner with
materials and workmanship of substantially the same quality as existed
before the loss, damage or destruction. Notwithstanding the foregoing, if
the casualty giving rise to such insurance proceeds could not reasonably be
expected to have a Material Adverse Effect and such insurance proceeds do
not exceed $500,000 in the aggregate, Agent shall permit the applicable
Credit Party to replace, restore, repair or rebuild the property; provided
that if such Credit Party shall not have completed or entered into binding
agreements to complete such replacement, restoration, repair or rebuilding
within one hundred eighty (180) days of such casualty, Agent may apply such
insurance proceeds to the Obligations in accordance with Section 1.3(d),
provided that in the case of insurance proceeds pertaining to any Credit
Party other than Borrower, such insurance proceeds shall be applied to the
Loans owing by Borrower. All insurance proceeds that are to be made
available to Borrower to replace, repair, restore or rebuild the Collateral
shall be applied by Agent to reduce the outstanding principal balance of
the Revolving Loan (which application shall not result in a permanent
reduction of the Revolving Loan Commitment) and upon such application,
Agent shall establish a Reserve against the Borrowing Base in an amount
equal to the amount of such proceeds so applied. All insurance proceeds
made available to any Credit Party that is not a Borrower to replace,
repair, restore or rebuild Collateral shall be deposited in a cash
collateral account. Thereafter, such funds shall be made available to such
Credit Party to provide funds to replace, repair, restore or rebuild the
Collateral as follows: (i) Borrower shall request a Revolving Credit
Advance or a release from the cash collateral account be made to such
Credit Party in the amount requested to be released; (ii) so long as the
conditions set forth in Section 2.2 have been met, Revolving Lenders shall
make such Revolving Credit Advance or Agent shall release funds from the
cash collateral account; and (iii) in the case of insurance proceeds
applied against the Revolving Loan, the Reserve established with respect to
such
42
insurance proceeds shall be reduced by the amount of such Revolving Credit
Advance. To the extent not used to replace, repair, restore or rebuild the
Collateral, such insurance proceeds shall be applied in accordance with
Section 1.3(d).
(d) The Credit Parties shall, at their sole cost and expense, maintain
(i) key-man life insurance policies in the aggregate amount of $1.0 million
on the life of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, all in form and with insurers reasonably
acceptable to Agent and (ii) assignments of such key-man life insurance
policies to Agent, duly executed by Borrower and the insurer issuing such
policies, all in form acceptable to Agent.
5.5 Compliance with Laws. Each Credit Party shall comply with all federal,
state, local and foreign laws and regulations applicable to it, including those
relating to ERISA and labor matters and Environmental Laws and Environmental
Permits, except to the extent that the failure to comply, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
5.6 Supplemental Disclosure. From time to time as may be reasonably
requested by Agent (which request will not be made more frequently than once
each year absent the occurrence and continuance of a Default or an Event of
Default), the Credit Parties shall supplement each Disclosure Schedule hereto,
or any representation herein or in any other Loan Document, with respect to any
matter hereafter arising that, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in such
Disclosure Schedule or as an exception to such representation or that is
necessary to correct any information in such Disclosure Schedule or
representation which has been rendered inaccurate thereby (and, in the case of
any supplements to any Disclosure Schedule, such Disclosure Schedule shall be
appropriately marked to show the changes made therein); provided that (a) no
such supplement to any such Disclosure Schedule or representation shall amend,
supplement or otherwise modify any Disclosure Schedule or representation, or be
or be deemed a waiver of any Default or Event of Default resulting from the
matters disclosed therein, except as consented to by Agent and Requisite
Lenders in writing, and (b) no supplement shall be required or permitted as to
representations and warranties that relate solely to the Closing Date.
5.7 Intellectual Property. Each Credit Party will conduct its business and
affairs without infringement of or interference with any Intellectual Property
of any other Person in any material respect and shall comply in all material
respects with the terms of its material Licenses.
5.8 Environmental Matters. Each Credit Party shall and shall cause each
Person within its control to: (a) conduct its operations and keep and maintain
its Real Estate in compliance with all Environmental Laws and Environmental
Permits other than noncompliance 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 appropriate or necessary to
maintain the value and marketability of the Real Estate or to otherwise comply
with Environmental Laws and Environmental Permits pertaining to the presence,
generation, treatment, storage, use, disposal, transportation or Release of any
Hazardous Material on, at, in, under, above, to, from or about any of its Real
Estate; (c) notify Agent promptly after such
43
Credit Party becomes aware of any violation of Environmental Laws or
Environmental Permits or any Release on, at, in, under, above, to, from or
about any Real Estate that is reasonably likely to result in Environmental
Liabilities in excess of $25,000; 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 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 $25,000, 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
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 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.
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters. As of the
Closing Date, except to the extent permitted to be delivered after the Closing
Date pursuant to Section 5.13, each Credit Party shall 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 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 otherwise
be reasonably satisfactory in form and substance to Agent. After the Closing
Date, no real property or warehouse space shall be leased by any Credit Party
and no Inventory shall be shipped to a processor or converter under
arrangements established after the Closing Date without the prior written
consent of Agent or, unless and until a landlord agreement or bailee letter, as
appropriate, reasonably satisfactory to Agent shall first have been obtained
with respect to such location. Each Credit Party shall timely and fully pay and
perform its obligations under all leases and other agreements with respect to
each leased location or public warehouse where any Collateral is or may be
located.
5.10 Mortgages. At the request of Agent, each Credit Party executing this
Agreement agrees that it shall and shall cause each other Credit Party to, at
such Credit Party's expense and upon request of Agent, to provide to Agent a
mortgage or deed of trust granting Agent a First Priority Lien on all now owned
or hereafter acquired Real Estate of any Credit Party, together with
environmental audits, mortgage title insurance commitment and policy, real
property survey, local counsel opinion(s), and, if required by Agent,
supplemental casualty
44
insurance and flood insurance, and such other documents, instruments or
agreements reasonably requested by Agent, in each case, in form and substance
reasonably satisfactory to Agent. To the extent otherwise permitted hereunder,
if any Credit Party proposes to acquire a fee ownership interest in Real Estate
after Agent has requested that the Credit Parties deliver a mortgage or deed of
trust pursuant to the foregoing sentence, it shall notify Agent, and if the
Agent requests, provide to Agent a mortgage or deed of trust granting Agent a
First Priority Lien on such Real Estate, together with environmental audits,
mortgage title insurance commitment, real property survey, local counsel
opinion(s), and, if required by Agent, supplemental casualty insurance and
flood insurance, and such other documents, instruments or agreements reasonably
requested by Agent, in each case, in form and substance reasonably satisfactory
to Agent.
5.11 Further Assurances. Each Credit Party executing this Agreement agrees
that it shall and shall cause each other Credit Party to, at such Credit
Party's expense and upon request of Agent, duly execute and deliver, or cause
to be duly executed and delivered, to Agent such further instruments and do and
cause to be done such further acts as may be necessary or proper in the
reasonable opinion of Agent to carry out more effectively the provisions and
purposes of this Agreement and each other Loan Document.
5.12 Certificates of Title. As of the Closing Date, Borrower shall have
delivered to the Agent applications for new certificates of title for all
Equipment of the Credit Parties that can be titled evidencing the Lien granted
to Agent under the Loan Documents in such Equipment, and as of one (1) Business
Day immediately following the Closing Date, Borrower shall have caused all
existing certificates of title for all Equipment of the Credit Parties that can
be titled to be delivered to Agent, with any Liens noted thereon released by
the holder of such Lien. If any Credit Party acquires any Equipment after the
Closing Date that can be titled, Borrower shall cause a certificate of title to
be issued for such Equipment, with the Lien of the Agent noted thereon, and
shall cause such certificate to be delivered to the Agent or its designee
directly.
5.13 Post Closing Covenant.
(a) No later than one (1) Business Day after the Closing Date, evidence
that all litigation related to the Acquisition has been dismissed without
prejudice in accordance with the terms of the Settlement Agreement.
(b) No later than seven (7) Business Days after the Closing Date, Agent
shall have received Phase I Environmental Site Assessment Reports,
consistent with American Society of Testing and Materials (ASTM) Standard E
1527 00 (or the current ASTM standard for Phase I environmental site
assessment reports), and applicable state requirements, on all of the Real
Estate of the Credit Parties, prepared by environmental engineers
reasonably satisfactory to Agent, all in form and substance satisfactory to
Agent in its sole discretion; and Agent shall have further received such
environmental review and audit reports, including Phase II reports, with
respect to the Real Estate of any Credit Party as Agent shall have
requested, and Agent shall be satisfied, in its sole discretion, with the
contents of all such environmental reports. Agent shall have received
letters executed by the environmental firms preparing such
45
environmental reports, in form and substance reasonably satisfactory to Agent,
authorizing Agent and Lenders to rely on such reports.
(c) No later than thirty (30) days after the Closing Date, Agent shall have
received satisfactory evidence that the insurance policies of Bobcat and BJCC
required by Section 5.4 are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured clauses or
endorsements, as requested by Agent, in favor of Agent, on behalf of Lenders.
(d) No later than January 31, 2006, Bobcat and BJCC, shall each have been
merged into Borrower, with Borrower being the surviving corporation, in
accordance with the provisions of Section 6.1(b)(ii), and the filed certificate
of mergers evidencing such mergers shall have been delivered to Agent.
(e) No later than 60 days after the Closing Date, Borrower shall and shall
cause each other Credit Party to use its commercially reasonable efforts to
deliver to the Agent a reasonably satisfactory landlord agreement from the
lessor of the leased properties located at (i) ▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, (ii) Windwalker, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
(iii) ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇, (iv) ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇ and (v) ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, which agreement or letter
shall contain a waiver or subordination of all Liens or claims that the
landlord may assert against the Collateral at that location, and shall
otherwise be reasonably satisfactory in form and substance to Agent.
(f) No later than 60 days after the Closing Date, Borrower shall and shall
cause each other Credit Party to use its commercially reasonable efforts to
deliver to the Agent a reasonably satisfactory blocked account agreement with
Legends Bank, Second Lien Agent, Agent, for the benefit of itself and Lenders,
and Borrower and Subsidiaries thereof, as applicable, in form and substance
reasonably acceptable to Agent. Such blocked account agreement shall provide,
among other things, that (i) all items of payment deposited in each account
held with Legends Bank are held by such bank as agent or bailee-in-possession
for Agent, on behalf of itself and Lenders, (ii) Legends Bank executing such
agreement has no rights of setoff or recoupment or any other claim against each
such account, as the case may be, other than for payment of its service fees
and other charges directly related to the administration of such account and
for returned checks or other items of payment, and (iii) from and after the
effective date thereof, Legends Bank agrees to forward immediately all amounts
in each such account to the Concentration Account Bank and to commence the
process of daily sweeps from such account into the Concentration Account.
(g) No later than 60 days after the Closing Date, Borrower shall deliver an
assignment of a key-man life insurance policy in the aggregate amount of $1.0
million on the life of ▇▇▇ ▇▇▇▇▇▇▇ to Agent, duly executed by Borrower and the
insurer issuing such policies, all in form acceptable to Agent.
(h) Not later than 45 days after the Closing Date, the Borrower shall prepay
in full the aggregate outstanding principal amount of the Excluded Subordinated
Note, together
46
with all accrued and unpaid interest thereof, and provide satisfactory evidence
of such prepayment to the First Lien Agent.
(i) Not later than 45 days after the prepayment of any Subordinated Note in
accordance with Section 6.3(b)(iv), Borrower shall obtain from the holder of
such Subordinated Note, in writing, (i) confirmation that all amounts owing
under such Subordinated Note have been paid in full by Borrower and that the
Liens on the Collateral granted to such holder by Borrower as security for the
repayment of such Subordinated Note have been terminated, (ii) authorization
for each of Borrower and the Agent (and their respective counsel) to file all
termination statements and releases necessary or appropriate (in Borrower's or
Agent's reasonable judgment) to terminate or release such holder's Liens on the
Collateral, and (iii) an agreement to execute and deliver to Borrower or First
Lien Agent, upon its request therefor from time to time, such other instruments
or other documents necessary or appropriate (in Borrower's or Agent's
reasonable judgment) to terminate or release such holder's Liens on the
Collateral.
5.14 Non-Consolidation Unless otherwise consented to by Agent or Requisite
Lenders, Borrower will and will cause each of its Subsidiaries to: (i) maintain
entity records and books of account separate from those of any other entity
which is an Affiliate of such entity; (ii) keep its funds and assets separate
from those of any other entity which is an Affiliate of such entity; and (iii)
provide that its board of directors or other analogous governing body will hold
all appropriate meetings to authorize and approve such entity's actions, which
meetings will be separate from those of other entities.
6. 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:
6.1 Mergers, Subsidiaries, Etc. No Credit Party shall directly or
indirectly, by operation of law or otherwise, (a) form or acquire any
Subsidiary, or (b) merge with, consolidate with, acquire all or substantially
all of the assets or Stock of, or otherwise combine with or acquire, any
Person, except (i) on the Closing Date, the Borrower may consummate the
Acquisition on the terms set forth in the Acquisition Agreement, (ii) the
mergers contemplated in Section 5.13(d) may be consummated and (iii) any Credit
Party may merge with another Credit Party (so long as the Borrower, if a party
to such merger, is the surviving corporation) so long as after giving effect to
such merger, no Default or Event of Default would have occurred and be
continuing and the representations and warranties contained in the Loan
Documents would be true and correct in all material respects.
6.2 Investments; Loans and Advances. Except as otherwise expressly
permitted by this Section 6, no Credit Party shall make or permit to exist any
investment in, or make, accrue or permit to exist loans or advances of money
to, any Person, through the direct or indirect lending of money, holding of
securities or otherwise, except that the Credit Parties may (a) hold
investments comprised of notes payable, or stock or other securities issued by
Account Debtors to Borrower pursuant to negotiated agreements with respect to
settlement of such Account Debtor's Accounts in the ordinary course of
business, so long as the aggregate amount
47
of such Accounts so settled by Borrower does not exceed $250,000; (b) maintain
their investments in other Credit Parties to the extent outstanding on the
Closing Date; (c) hold other investments not exceeding $5,000,000 in the
aggregate at any time outstanding; (d) enter into interest rate protections or
hedging agreements or transactions (including, but not limited to, interest
rate swaps, caps, collars, floors and similar transactions) designed to protect
or manage exposure to the fluctuations in the interest rates applicable to any
of the Loans and Second Lien Loans and (e) so long as there are no Revolving
Loans outstanding at the time of such investments, Credit Parties may make
investments, subject to Control Letters in favor of Agent for the benefit of
Lenders, in (i) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof maturing
within one year from the date of acquisition thereof, (ii) commercial paper
maturing no more than one year from the date of creation thereof and currently
having the highest rating obtainable from either Standard & Poor's Ratings
Group or ▇▇▇▇▇'▇ Investors Service, Inc., (iii) certificates of deposit
maturing no more than one year from the date of creation thereof issued by
commercial banks incorporated under the laws of the United States of America,
each having combined capital, surplus and undivided profits of not less than
$300,000,000 and having a senior unsecured rating of "A" or better by a
nationally recognized rating agency (an "A Rated Bank"), (iv) time deposits
maturing no more than thirty (30) days from the date of creation thereof with A
Rated Banks and (v) mutual funds that invest solely in one or more of the
investments described in clauses (i) through (iv) above.
6.3 Indebtedness.
(a) No Credit Party shall create, incur, assume or permit to exist any
Indebtedness, except (without duplication) (i) Indebtedness secured by
purchase money security interests and Capital Leases permitted in Section
6.7(c), (ii) the Loans and the other Obligations, (iii) unfunded pension
fund and other employee benefit plan obligations and liabilities to the
extent they are permitted to remain unfunded under applicable law, (iv)
existing Indebtedness described in Disclosure Schedule (6.3) and
refinancings thereof or amendments or modifications thereof that do not have
the effect of increasing the principal amount thereof or changing the
amortization thereof (other than to extend the same) and that are otherwise
on terms and conditions no less favorable to any Credit Party, Agent or any
Lender, as determined by Agent, than the terms of the Indebtedness being
refinanced, amended or modified, (v) Permitted Insurance Premium
Indebtedness in an aggregate amount not to exceed $3,500,000 at any one time
outstanding, (vi) Indebtedness specifically permitted under Section 6.17,
(vii) the Second Lien Loan in an aggregate principal amount not to exceed
the limitations thereon set forth in Section 5.3(b) of the Intercreditor
Agreement, and (viii) Indebtedness under interest rate protection or hedging
agreement or transaction (including, but not limited to, interest rate
swaps, caps, collars, floors and similar transactions) designed to protect
or manage exposure to the fluctuations in the interest rates applicable to
any of the Loans and Second Lien Loans.
(b) No Credit Party shall, directly or indirectly, voluntarily purchase,
redeem, defease or prepay any principal of, premium, if any, interest or
other amount payable in respect of any Indebtedness prior to its scheduled
maturity, other than (i) the Obligations;
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(ii) Indebtedness secured by a Permitted Encumbrance if the asset securing
such Indebtedness has been sold or otherwise disposed of in accordance with
Sections 6.8(b) or (c); (iii) Indebtedness permitted by Section 6.3(a)(iv)
upon any refinancing thereof in accordance with Section 6.3(a)(iv); (iv) to
the extent approved in writing by the Agent, prepayment of Subordinated Notes
on or before December 31, 2006 with proceeds of the Loans in an aggregate
amount not to exceed $2,144,889; (v) mandatory prepayments of the Second Lien
Loan and Junior Capital required under Section 1.3(b)(v) and Section 1.3(c);
and (vi) if no Loans are outstanding hereunder, prepayments of the Second Lien
Loan.
6.4 Employee Loans and Affiliate Transactions.
(a) No Credit Party shall enter into or be a party to any transaction
with any other Credit Party or any Affiliate thereof except in the ordinary
course of and pursuant to the reasonable requirements of such Credit Party's
business and upon fair and reasonable terms that are no less favorable to
such Credit Party than would be obtained in a comparable arm's length
transaction with a Person not an Affiliate of such Credit Party. All such
transactions existing as of the date hereof are described in Disclosure
Schedule (6.4(a)).
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except loans to its
respective employees in the ordinary course of business consistent with past
practices for travel and entertainment expenses, relocation costs and
similar purposes up to a maximum of $50,000 to any employee and up to a
maximum of $250,000 in the aggregate at any one time outstanding.
6.5 Capital Structure and Business. If all or any part of any Credit Party's
Stock is pledged to Agent, such Credit Party shall not issue additional Stock.
No Credit Party shall (a) make any changes in any of its business objectives,
purposes or operations that could in any way adversely affect the repayment of
the Loans or any of the other Obligations or could reasonably be expected to
have or result in a Material Adverse Effect, (b) make any change in its capital
structure as described in Disclosure Schedule (3.8), including the issuance or
sale of any shares of Stock, warrants or other securities convertible into
Stock or any revision of the terms of its outstanding Stock, except for
payments to holders of Subordinated Debt permitted by Section 1.4 and the
issuance of options granted under existing or future employee incentive stock
option plans; or (c) amend its charter or bylaws in a manner that would
adversely affect Agent or Lenders or such Credit Party's duty or ability to
repay the Obligations. No Credit Party shall engage in any business other than
the businesses currently engaged in by it.
6.6 Guaranteed Indebtedness. No Credit Party shall create, incur, assume or
permit to exist any Guaranteed Indebtedness except (a) by endorsement of
instruments or items of payment for deposit to the general account of any
Credit Party, (b) for Guaranteed Indebtedness incurred for the benefit of any
other Credit Party if the primary obligation is expressly permitted by this
Agreement and (c) guarantees of the Second Lien Loans by any Credit Party that
has guaranteed the Obligations hereunder.
6.7 Liens. No Credit Party shall create, incur, assume or permit to exist
any Lien on or with respect to its Accounts or any of its other properties or
assets (whether now
49
owned or hereafter acquired) except for (a) Permitted Encumbrances; (b) Liens
in existence on the date hereof and summarized on Disclosure Schedule (6.7)
securing the Indebtedness described on Disclosure Schedule (6.3) and permitted
refinancings, extensions and renewals thereof, including extensions or renewals
of any such Liens; provided that the principal amount of the Indebtedness so
secured is not increased and the Lien does not attach to any other property;
(c) Liens created after the date hereof by conditional sale or other title
retention agreements (including Capital Leases) or in connection with purchase
money Indebtedness with respect to Equipment and Fixtures acquired by any
Credit Party in the ordinary course of business, involving the incurrence of an
aggregate amount of purchase money Indebtedness and Capital Lease Obligations
of not more than $2,000,000 outstanding at any one time for all such Liens
(provided that such Liens attach only to the assets subject to such purchase
money debt and such Indebtedness is incurred within twenty (20) days following
such purchase and does not exceed 100% of the purchase price of the subject
assets); (d) Liens securing the Second Lien Loan, subject to the terms of the
Intercreditor Agreement and (e) Liens securing the Subordinated Debt, subject
to the terms of the Subordination Agreements (provided that Liens securing the
Excluded Subordinated Note shall be permitted hereunder for 45 days after the
Closing Date notwithstanding that such Liens are not subject to a Subordination
Agreement). In addition, no Credit Party shall become a party to any agreement,
note, indenture or instrument, or take any other action, that would prohibit
the creation of a Lien on any of its properties or other assets in favor of
Agent, on behalf of itself and Lenders, as additional collateral for the
Obligations, except the Second Lien Loan Documents, operating leases, Capital
Leases or Licenses which prohibit Liens upon the assets that are subject
thereto.
6.8 Sale of Stock and Assets. No Credit Party shall sell, transfer, convey,
assign or otherwise dispose of any of its properties or other assets, including
the Stock of any of its Subsidiaries (whether in a public or a private offering
or otherwise) or any of its Accounts, other than (a) the sale of Inventory in
the ordinary course of business, and (b) the sale, transfer, conveyance or
other disposition by a Credit Party of Equipment or Fixtures that are obsolete
or no longer used or useful in such Credit Party's business and having an
appraised value not exceeding $200,000 in any single transaction or $500,000 in
the aggregate in any Fiscal Year; and (c) the sale, transfer, conveyance or
other disposition of other Equipment and Fixtures having a book value not
exceeding $200,000 in any single transaction or $500,000 in the aggregate in
any Fiscal Year. With respect to any disposition of assets or other properties
permitted pursuant to clauses (b) and (c) above, subject to Section 1.3(b),
promptly after receipt by the Borrower of notice of such disposition and a
certificate of a Responsible Officer certifying that such disposition is
permitted under clause (b) or (c) of this Section 6.8, Agent agrees to release
its Lien on such assets or other properties in order to permit the applicable
Credit Party to effect such disposition, and to execute and deliver to Borrower
(or authorize Borrower to file), at Borrower's expense, appropriate UCC
termination statements and other releases as reasonably requested by Borrower,
all without recourse or warranty to Agent.
6.9 ERISA. No Credit Party shall, or shall cause or permit any ERISA
Affiliate to, cause or permit to occur (i) an event that could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or (ii) an ERISA Event to the extent such ERISA Event could reasonably be
expected to have a Material Adverse Effect.
50
6.10 Financial Covenants. Borrower shall not breach or fail to comply with
any of the Financial Covenants.
6.11 Hazardous Materials. No Credit Party shall cause or permit a Release of
any Hazardous Material on, at, in, under, above, to, from or about any of the
Real Estate where such Release would (a) violate in any respect, or form the
basis for any Environmental Liabilities under, any Environmental Laws or
Environmental Permits or (b) otherwise adversely impact the value or
marketability of any of the Real Estate or any of the Collateral, other than
such violations or Environmental Liabilities that could not reasonably be
expected to have a Material Adverse Effect.
6.12 Sale-Leasebacks. No Credit Party shall engage in any sale-leaseback,
synthetic lease or similar transaction involving any of its assets.
6.13 Cancellation of Indebtedness. No Credit Party shall cancel any claim or
debt owing to it, except for reasonable consideration negotiated on an arm's
length basis and in the ordinary course of its business consistent with past
practices.
6.14 Restricted Payments. No Credit Party shall make any Restricted Payment,
except (a) dividends and distributions by Subsidiaries of Borrower paid to any
Credit Party that is a wholly owned Subsidiary of Borrower and the parent of
the Subsidiary paying such dividend or distribution; (b) prepayments of
Subordinated Notes permitted under Section 6.3(b)(iv) and employee loans
permitted under Section 6.4(b); (c) subject to the terms of the Intercreditor
Agreement and any subordination provisions applicable thereto, regularly
scheduled payments of interest, and prepayments of principal with the proceeds
of Net Equity Proceeds to the extent contemplated by Section 1.3(b), in respect
of the Second Lien Loan; (d) repayment or redemptions of the Junior Capital
using Net Equity Proceeds to the extent contemplated by Section 1.3(b); (e)
reasonable and customary fees paid to non-employee directors of the Borrower;
(e) reimbursement of reasonable expenses of St. ▇▇▇▇▇ in an amount not to
exceed $60,000 per year, (f) a fee to SJMB, L.P. in an amount not to exceed
$274,000 payable on the date (after the Closing Date but on or prior to
December 31, 2006) that the Borrower completes the first public offering of its
Stock after the Closing Date; and (g) Change of Control Payments paid in cash
(1) on or after the Closing Date, but before December 31, 2005, in an aggregate
amount not to exceed $1,097,020, and (2) in connection with the issuance of
Stock of Borrower in the public offering contemplated pursuant to Section
1.3(b)(v) in an aggregate amount not to exceed $2,735,388.
6.15 Change of Corporate Name or Location; Change of Fiscal Year. No Credit
Party shall (a) change its name as it appears in official filings in the state
of its incorporation or other organization, (b) change its chief executive
office, principal place of business, corporate offices or warehouses or
locations at which Collateral is held or stored, or the location of its records
concerning the Collateral, (c) change the type of entity that it is, (d) change
its organization identification number, if any, issued by its state of
incorporation or other organization, or (e) change its state of incorporation
or organization, in each case without at least thirty (30) days prior written
notice to Agent and after Agent's written acknowledgment that any reasonable
action requested by Agent in connection therewith, including to continue the
51
perfection of any Liens in favor of Agent, on behalf of Lenders, in any
Collateral, has been completed or taken, and provided that any such new
location shall be in the continental United States. Without limiting the
foregoing, no Credit Party shall change its name, identity or corporate
structure in any manner that might make any financing or continuation statement
filed in connection herewith seriously misleading within the meaning of each
applicable provision of the Code except upon prior written notice to Agent and
Lenders and after Agent's written acknowledgment that any reasonable action
requested by Agent in connection therewith, including to continue the
perfection of any Liens in favor of Agent, on behalf of Lenders, in any
Collateral, has been completed or taken. No Credit Party shall change its
Fiscal Year.
6.16 No Impairment of Intercompany Transfers. No Credit Party shall directly
or indirectly enter into or become bound by any agreement, instrument,
indenture or other obligation (other than this Agreement, the other Loan
Documents and the Second Lien Loan Documents) that could directly or indirectly
restrict, prohibit or require the consent of any Person with respect to the
payment of dividends or distributions or the making or repayment of
intercompany loans by a Subsidiary of Borrower to Borrower.
6.17 No Speculative Transactions. No Credit Party shall engage in any
transaction involving commodity options, futures contracts or similar
transactions, except solely to hedge against fluctuations in the prices of
commodities owned or purchased by it and the values of foreign currencies
receivable or payable by it and interest swaps, caps or collars.
6.18 Real Estate Purchases. No Credit Party shall purchase a fee simple
ownership interest in Real Estate with an aggregate purchase price in excess of
$250,000.
6.19 Changes Relating to Subordinated Debt; Second Lien Loan; Material
Contracts. (A) No Credit Party shall change or amend the terms of any
Subordinated Debt (or any indenture or agreement in connection therewith) if
the effect of such amendment is to: (a) increase the interest rate on such
Subordinated Debt; (b) change the dates upon which payments of principal or
interest are due on such Subordinated Debt other than to extend such dates; (c)
change any default or event of default other than to delete or make less
restrictive any default provision therein, or add any covenant with respect to
such Subordinated Debt; (d) change the redemption or prepayment provisions of
such Subordinated Debt other than to extend the dates therefor or to reduce the
premiums payable in connection therewith; (e) grant any security or collateral
to secure payment of such Subordinated Debt; or (f) change or amend any other
term if such change or amendment would materially increase the obligations of
the Credit Party thereunder or confer additional material rights on the holder
of such Subordinated Debt in a manner adverse to any Credit Party, Agent or any
Lender.
(B) No Credit Party shall change or amend the terms of any Second Lien
Credit Agreement (or any agreement in connection therewith) except to the
extent permitted under the Intercreditor Agreement.
(C) No Credit Party shall change or amend the terms of the Acquisition
Agreement (or any agreement or contract executed or delivered in connection
therewith) or the Centre Partners Settlement Documents.
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6.20 Location of Equipment. No Credit Party shall permit any of its
Equipment or Inventory to be located outside the United States or United States
waters at any time.
7. TERM
7.1 Termination. The financing arrangements contemplated hereby shall be in
effect until the Commitment Termination Date, and the Loans and all other
Obligations shall be automatically due and payable in full on such date.
7.2 Survival of Obligations Upon Termination of Financing Arrangements.
Except as otherwise expressly provided for in the Loan Documents, no
termination or cancellation (regardless of cause or procedure) of any financing
arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Credit Parties or the rights of
Agent and Lenders relating to any unpaid portion of the Loans or any other
Obligations, due or not due, liquidated, contingent or unliquidated, or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Commitment Termination
Date. Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Credit Parties, and all rights of Agent
and each Lender, all as contained in the Loan Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date; provided, that
the provisions of Section 11, the payment obligations under Sections 1.15 and
1.16, and the indemnities contained in the Loan Documents shall survive the
Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an "Event of
Default" hereunder:
(a) Borrower (i) fails to make any payment of principal of, or interest
on, or Fees owing in respect of, the Loans or any of the other Obligations
when due and payable, or (ii) fails to pay or reimburse Agent or Lenders for
any expense reimbursable hereunder or under any other Loan Document within
ten (10) days following Agent's demand for such reimbursement or payment of
expenses.
(b) Any Credit Party fails or neglects to perform, keep or observe any
of the provisions of Sections 1.4, 1.8, 5.4(a), 5.12, 5.13 or 6, or any of
the provisions set forth in Annexes B or F, respectively.
(c) Borrower fails or neglects to perform, keep or observe any of the
provisions of Section 4 or any provisions set forth in Annexes D or E,
respectively, and the same shall remain unremedied for (i) three (3) days or
more with respect to any report, certificate or other information required
to be delivered weekly and (i) five (5) days or more with respect to all
other reports, certificates and information.
53
(d) Any Credit Party fails or neglects to perform, keep or observe any
other provision of this Agreement or of any of the other Loan Documents
(other than any provision embodied in or covered by any other clause of this
Section 8.1) and the same shall remain unremedied for twenty (20) days or
more.
(e) A default or breach occurs under any other agreement, document or
instrument to which any Credit Party is a party that is not cured within any
applicable grace period therefor, and such default or breach (i) involves
the failure to make any payment when due in respect of any Indebtedness or
Guaranteed Indebtedness (other than the Obligations) of any Credit Party in
excess of $250,000 in the aggregate (including (x) undrawn committed or
available amounts and (y) amounts owing to all creditors under any combined
or syndicated credit arrangements), or (ii) causes, or permits any holder of
such Indebtedness or Guaranteed Indebtedness or a trustee to cause,
Indebtedness or Guaranteed Indebtedness or a portion thereof in excess of
$250,000 in the aggregate to become due prior to its stated maturity or
prior to its regularly scheduled dates of payment, or cash collateral in
respect thereof to be demanded, in each case, regardless of whether such
default is waived, or such right is exercised, by such holder or trustee.
(f) Any information contained in any Borrowing Base Certificate is
untrue or incorrect in any respect in any Borrowing Base Certificate), or
any representation or warranty herein or in any Loan Document or in any
written statement, report, financial statement or certificate (other than a
Borrowing Base Certificate) made or delivered to Agent or any Lender by any
Credit Party is untrue or incorrect in any material respect as of the date
when made or deemed made.
(g) Assets of any Credit Party are attached, seized, levied upon or
subjected to a writ or distress warrant, or come within the possession of
any receiver, trustee, custodian or assignee for the benefit of creditors of
any Credit Party and such condition continues for thirty (30) days or more.
(h) A case or proceeding is commenced against any Credit Party seeking a
decree or order in respect of such Credit Party (i) under the Bankruptcy
Code, or any other applicable federal, state or foreign bankruptcy or other
similar law, (ii) appointing a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for such Credit Party or for
any substantial part of any such Credit Party's assets, or (iii) ordering
the winding-up or liquidation of the affairs of such Credit Party, and such
case or proceeding shall remain undismissed or unstayed for sixty (60) days
or more or a decree or order granting the relief sought in such case or
proceeding is granted by a court of competent jurisdiction.
(i) Any Credit Party (i) files a petition seeking relief under the
Bankruptcy Code, or any other applicable federal, state or foreign
bankruptcy or other similar law, (ii) consents to or fails to contest in a
timely and appropriate manner to the institution of proceedings thereunder
or to the filing of any such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for such Credit Party or for any
substantial part of any such Credit Party's assets, (iii) makes an
assignment for the benefit of creditors, (iv) takes any action in
furtherance of any of
54
the foregoing; or (v) admits in writing its inability to, or is generally
unable to, pay its debts as such debts become due.
(j) A final judgment or judgments for the payment of money in excess of
$250,000 in the aggregate at any time are outstanding against one or more of
the Credit Parties and the same are not, within thirty (30) days after the
entry thereof, discharged or execution thereof stayed or bonded pending
appeal, or such judgments are not discharged prior to the expiration of any
such stay.
(k) Any material provision of any Loan Document for any reason ceases to
be valid, binding and enforceable in accordance with its terms (or any
Credit Party shall challenge the enforceability of any Loan Document or
shall assert in writing, or engage in any action or inaction based on any
such assertion, that any provision of any of the Loan Documents has ceased
to be or otherwise is not valid, binding and enforceable in accordance with
its terms), or any Lien created under any Loan Document ceases to be a valid
and perfected First Priority Lien (except as otherwise permitted herein or
therein) in any of the Collateral purported to be covered thereby.
(l) Any Change of Control occurs.
(m) Any Material Adverse Effect occurs.
(n) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ceases to serve as, or to perform the duties and
functions of the office of, the chief executive officer of Borrower, unless
otherwise agreed to by the Agent.
(o) The failure of any Credit Party or any creditor of any Borrower or
any of its Subsidiaries (other than a Lender) to comply with the terms of
the Intercreditor Agreement, any Subordination Agreement, any other
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.
8.2 Remedies.
(a) If any Default or Event of Default has occurred and is continuing,
Agent may (and at the written request of the Requisite Revolving Lenders
shall), without notice, suspend the Revolving Loan Commitments with respect
to additional Revolving Advances, whereupon any additional Revolving
Advances shall be made or incurred in Agent's sole discretion (or in the
sole discretion of the Requisite Revolving Lenders, if such suspension
occurred at their direction)so long as such Default or Event of Default
is continuing. If any Default or Event of Default has occurred and is
continuing, Agent may (and at the written request of the Requisite CapEx
Lenders shall), without notice, suspend the CapEx Loan Commitment with
respect to additional CapEx Advances, whereupon any additional CapEx
Advances shall be made or incurred in Agent's sole discretion (or in the
sole discretion of the Requisite CapEx Lenders, if such suspension occurred
at their direction)
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so long as such Default or Event of Default is continuing. If any Default or
Event of Default has occurred and is continuing, Agent may (and at the
written request of Requisite Lenders shall), without notice except as
otherwise expressly provided herein, increase the rate of interest
applicable to the Loans to the Default Rate.
(b) If any Event of Default has occurred and is continuing, Agent may
(and at the written request of the Requisite Lenders shall), without notice:
(i) terminate the Revolving Loan Commitments and CapEx Loan Commitments with
respect to further Advances; (ii) declare all or any portion of the
Obligations, including all or any portion of any Loan to be forthwith due
and payable, all without presentment, demand, protest or further notice of
any kind, all of which are expressly waived by Borrower and each other
Credit Party; or (iii) exercise any rights and remedies provided to Agent
under the Loan Documents or at law or equity, including all remedies
provided under the Code; provided, that upon the occurrence of an Event of
Default specified in Sections 8.1(h) or (i), the Commitments shall be
immediately terminated and all of the Obligations, including the aggregate
Revolving Loan, Term Loan, Swing Line Loan and CapEx Loan, shall become
immediately due and payable without declaration, notice or demand by any
Person.
8.3 Waivers by Credit Parties. Except as otherwise provided for in this
Agreement or by applicable law, each Credit Party waives: (a) presentment,
demand and protest and notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default, nonpayment, maturity,
release, compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights, documents, instruments, chattel paper and
guaranties at any time held by Agent on which any Credit Party may in any way
be liable, and hereby ratifies and confirms whatever Agent may do in this
regard, (b) all rights to notice and a hearing prior to Agent's taking
possession or control of, or to Agent's replevy, attachment or levy upon, the
Collateral or any bond or security that might be required by any court prior to
allowing Agent to exercise any of its remedies, and (c) the benefit of all
valuation, appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1 Assignment and Participations.
(a) Each Lender may sell, transfer, negotiate or assign all or a portion
of its rights and obligations hereunder (including all or a portion of its
Commitments and its rights and obligations with respect to Loans) to (i) any
existing Lender, (ii) any Affiliate or Approved Fund of any existing Lender
or (iii) any other Person acceptable (which acceptance shall not be
unreasonably withheld or delayed) to the Agent and, as long as no Event of
Default is continuing, the Borrower; provided, however, that (x) such
assignments do not have to be ratable between the Commitments but must be
ratable among the obligations owing to and owed by such Lender with respect
to a Commitment and (y) for each Commitment, the aggregate outstanding
principal amount (determined as of the effective date of the applicable
assignment) of the Loans and Commitments subject to any such assignment
shall be an integral multiple of $1,000,000, unless such assignment is made
to an existing Lender or an Affiliate or Approved Fund of any existing
Lender, is of the assignor's (together with its
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Affiliates and Approved Funds) entire interest in such Commitment or is made
with the prior consent of the Borrower and the Agent.
(b) The parties to each assignment made in reliance on clause (a) above
(other than those described in clause (d) or (e) below) shall execute and
deliver to the Agent (which shall keep a copy thereof) an Assignment
Agreement substantially in the form attached hereto as Exhibit 9.1(b) and
otherwise in form and substance reasonably satisfactory to, and acknowledged
by, Agent, together with any existing Note subject to such assignment (or
any affidavit of loss therefor acceptable to the Agent), any tax forms
required to be delivered pursuant to Section 1.15(c) and payment by the
assignee of an assignment fee in the amount of $3,500. Upon receipt of all
the foregoing, and conditioned upon such receipt and upon the Agent
consenting to such assignment, from and after the effective date specified
in such Assignment, the Agent shall record or cause to be recorded in the
Register the information contained in such assignment.
(c) Effective upon the entry of such record in the Register, (i) such
assignee shall become a party hereto and, to the extent that rights and
obligations under the Loan Documents have been assigned to such assignee
pursuant to such assignment, shall have the rights and obligations of a
Lender, (ii) any applicable Note shall be transferred to such assignee
through such entry and (iii) the assignor thereunder shall, to the extent
that rights and obligations under this Agreement have been assigned by it
pursuant to such assignment, relinquish its rights (except for those
surviving the termination of the Commitments and the payment in full of the
Obligations) and be released from its obligations under the Loan Documents,
other than those relating to events or circumstances occurring prior to such
assignment (and, in the case of an assignment covering all or the remaining
portion of an assigning Lender's rights and obligations under the Loan
Documents, such Lender shall cease to be a party hereto except that each
Lender agrees to remain bound by Section 9.
(d) In addition to the other rights provided in this Section 9.1, each
Lender may grant a security interest in, or otherwise assign as collateral,
any of its rights under this Agreement, whether now owned or hereafter
acquired (including rights to payments of principal or interest on the
Loans), to (A) any federal reserve bank (pursuant to Regulation A of the
Federal Reserve Board), without notice to the Agent or (B) any holder of, or
trustee for the benefit of the holders of, such Lender's Lender Securities
by notice to the Agent; provided, however, that no such holder or trustee,
whether because of such grant or assignment or any foreclosure thereon
(unless such foreclosure is made through an assignment in accordance with
clause (b) above), shall be entitled to any rights of such Lender hereunder
and no such Lender shall be relieved of any of its obligations hereunder.
(e) In addition to the other rights provided in this Section 9.1, each
Lender may, (x) with notice to the Agent, grant to an SPV the option to make
all or any part of any Loan that such Lender would otherwise be required to
make hereunder (and the exercise of such option by such SPV and the making
of Loans pursuant thereto shall satisfy the obligation of such Lender to
make such Loans hereunder) and such SPV may assign to such Lender the right
to receive payment with respect to any Obligation and (y) without notice to
or consent
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from the Agent or the Borrower, sell participations to one or more Persons
in or to all or a portion of its rights and obligations under the Loan
Documents (including all its rights and obligations with respect to the Term
Loans and Revolving Loan); provided, however, that, whether as a result of
any term of any Loan Document or of such grant or participation, (i) no such
SPV or participant shall have a commitment, or be deemed to have made an
offer to commit, to make Loans hereunder, and, except as provided in the
applicable option agreement, none shall be liable for any obligation of such
Lender hereunder, (ii) such Lender's rights and obligations, and the rights
and obligations of the Credit Parties, the Agent and the Lenders towards
such Lender, under any Loan Document shall remain unchanged and each other
party hereto shall continue to deal solely with such Lender, which shall
remain the holder of the Obligations in the Register, except that (A) each
such participant and SPV shall be entitled to the benefit of Sections 1.13,
1.15, 1.16, and 2.17, but only to the extent such participant or SPV
delivers any tax forms such Lender is required to collect pursuant to
Section 1.15(c) and then only to the extent of any amount to which such
Lender would be entitled in the absence of any such grant or participation
and (B) each such SPV may receive other payments that would otherwise be
made to such Lender with respect to Loans funded by such SPV to the extent
provided in the applicable option agreement and set forth in a notice
provided to the Agent by such SPV and such Lender, provided, however, that
in no case (including pursuant to clause (A) or (B) above) shall an SPV or
participant have the right to enforce any of the terms of any Loan Document,
and (iii) the consent of such SPV or participant shall not be required
(either directly, as a restraint on such Lender's ability to consent
hereunder or otherwise) for any amendments, waivers or consents with respect
to any Loan Document or to exercise or refrain from exercising any powers or
rights such Lender may have under or in respect of the Loan Documents
(including the right to enforce or direct enforcement of the Obligations),
except for those described in clauses (ii), (iii) and (iv) of Section
11.2(c) with respect to amounts, or dates fixed for payment of amounts, to
which such participant or SPV would otherwise be entitled and, in the case
of participants, except for those described in Section 11.2(c)(v). No party
hereto shall institute against any SPV grantee of an option pursuant to this
clause (e) any bankruptcy, reorganization, insolvency, liquidation or
similar proceeding, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper of such SPV; provided,
however, that each Lender having designated an SPV as such agrees to
indemnify each Indemnified Person against any Liability that may be incurred
by, or asserted against, such Indemnified Person as a result of failing to
institute such proceeding (including a failure to get reimbursed by such SPV
for any such Liability). The agreement in the preceding sentence shall
survive the termination of the Commitments and the payment in full of the
Obligations.
(f) Nothing contained in this Section 9 shall require the consent of any
party for GE Capital to assign any of its rights in respect of any Swap
Related Reimbursement Obligation.
9.2 Appointment of Agent. GE Capital is hereby appointed to act on behalf of
all Lenders as Agent under this Agreement and the other Loan Documents. The
provisions of this Section 9.2 are solely for the benefit of Agent and Lenders
and no Credit Party nor any other Person shall have any rights as a third party
beneficiary of any of the provisions hereof. In
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performing its functions and duties under this Agreement and the other Loan
Documents, Agent shall act solely as an 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 any Credit Party or any other Person. Agent
shall have no duties or responsibilities except for those expressly set forth
in this Agreement and the other Loan Documents. The duties of Agent shall be
mechanical and administrative in nature and Agent shall not have, or be deemed
to have, by reason of this Agreement, any other Loan Document or otherwise a
fiduciary relationship in respect of any Lender. Except as expressly set forth
in this Agreement and the other Loan Documents, Agent shall not have any duty
to disclose, and shall not be liable for failure to disclose, any information
relating to any Credit Party or any of their respective Subsidiaries or any
Account Debtor that is communicated to or obtained by GE Capital or any of its
Affiliates in any capacity. Neither Agent nor any of its Affiliates nor any of
their respective officers, directors, employees, agents or representatives
shall be liable to any Lender for any action taken or omitted to be taken by it
hereunder or under any other Loan Document, or in connection herewith or
therewith, except for damages caused by its or their own gross negligence or
willful misconduct.
If Agent shall request instructions from Requisite Lenders, Requisite
Revolving Lenders, or all affected Lenders with respect to any act or action
(including failure to act) in connection with this Agreement or any other Loan
Document, then Agent shall be entitled to refrain from such act or taking such
action unless and until Agent shall have received instructions from Requisite
Lenders, Requisite Revolving Lenders, or all affected Lenders, as the case may
be, and Agent shall not incur liability to any Person by reason of so
refraining. Agent shall be fully justified in failing or refusing to take any
action hereunder or under any other Loan Document (a) if such action would, in
the opinion of Agent, be contrary to law or the terms of this Agreement or any
other Loan Document, (b) if such action would, in the opinion of Agent, expose
Agent to Environmental Liabilities or (c) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against Agent as a result of Agent acting or refraining from
acting hereunder or under any other Loan Document in accordance with the
instructions of Requisite Lenders, Requisite Revolving Lenders, or all affected
Lenders, as applicable.
9.3 Agent's Reliance, Etc. Neither Agent nor any of its Affiliates nor any
of their respective directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the other Loan Documents, except for damages
caused by its or their own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, Agent: (a) may treat the payee of any
Note as the holder thereof until Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form reasonably
satisfactory to Agent; (b) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of
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the terms, covenants or conditions of this Agreement or the other Loan
Documents on the part of any Credit Party or to inspect the Collateral
(including the books and records) of any Credit Party; (e) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; and (f) shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy, telegram,
cable or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
9.4 GE Capital and Affiliates. With respect to its Commitments hereunder, GE
Capital shall have the same rights and powers under this Agreement and the
other Loan Documents as any other Lender and may exercise the same as though it
were not Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include GE Capital in its individual capacity. GE Capital
and its Affiliates may lend money to, invest in, and generally engage in any
kind of business with, any Credit Party, any of their Affiliates and any Person
who may do business with or own securities of any Credit Party or any such
Affiliate, all as if GE Capital were not Agent and without any duty to account
therefor to Lenders. GE Capital and its Affiliates may accept fees and other
consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. Each
Lender acknowledges that GE Capital may be a lender providing all or a portion
of the Second Lien Loan, and may be agent for all lenders under the Second Lien
Credit Agreement and all related documents; each Lender acknowledges and
consents to the potential conflict of interest of GE Capital as Agent and a
Lender holding disproportionate interests in the Loans hereunder and as a
lender and agent under the Second Lien Credit Agreement.
9.5 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the Financial Statements referred to in Section 3.4(a) and such other documents
and information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as
a result of Lenders holding disproportionate interests in the Loans, and
expressly consents to, and waives any claim based upon, such conflict of
interest.
9.6 Indemnification. Lenders agree to indemnify Agent (to the extent not
reimbursed by Credit Parties and without limiting the obligations of the Credit
Parties hereunder), ratably according to their respective Pro Rata Shares, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted to be taken by Agent in connection
therewith; provided, that no Lender shall be liable for any portion of such
liabilities, obligations, losses,
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damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Agent's gross negligence or willful misconduct. Without limiting
the foregoing, each Lender agrees to reimburse Agent promptly upon demand for
its ratable share of any out-of-pocket expenses (including reasonable counsel
fees) incurred by Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement and each other Loan
Document, to the extent that Agent is not reimbursed for such expenses by
Credit Parties.
9.7 Successor Agent. Agent may resign at any time by giving not less than
thirty (30) days' prior written notice thereof to Lenders and Borrower. Upon
any such resignation, the Requisite Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Requisite Lenders and shall have accepted such appointment within thirty (30)
days after the resigning Agent's giving notice of resignation, then the
resigning Agent may, on behalf of Lenders, appoint a successor Agent, which
shall be a Lender, if a Lender is willing to accept such appointment, or
otherwise shall be a commercial bank or financial institution or a subsidiary
of a commercial bank or financial institution if such commercial bank or
financial institution is organized under the laws of the United States of
America or of any State thereof and has a combined capital and surplus of at
least $300,000,000. If no successor Agent has been appointed pursuant to the
foregoing, within thirty (30) days after the date such notice of resignation
was given by the resigning Agent, such resignation shall become effective and
the Requisite Lenders shall thereafter perform all the duties of Agent
hereunder until such time, if any, as the Requisite Lenders appoint a successor
Agent as provided above. Any successor Agent appointed by Requisite Lenders
hereunder shall be subject to the approval of Borrower, such approval not to be
unreasonably withheld or delayed; provided that such approval shall not be
required if a Default or an Event of Default has occurred and is continuing.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall succeed to and become vested with all the rights,
powers, privileges and duties of the resigning Agent. Upon the earlier of the
acceptance of any appointment as Agent hereunder by a successor Agent or the
effective date of the resigning Agent's resignation, the resigning Agent shall
be discharged from its duties and obligations under this Agreement and the
other Loan Documents, except that any indemnity rights or other rights in favor
of such resigning Agent shall continue. After any resigning Agent's resignation
hereunder, the provisions of this Section 9 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was acting as Agent
under this Agreement and the other Loan Documents.
9.8 Setoff and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default
and subject to Section 9.9(f), each Lender is hereby authorized at any time or
from time to time, without prior notice to any Credit Party or to any Person
other than Agent, any such notice being hereby expressly waived, to offset and
to appropriate and to apply any and all balances held by it at any of its
offices for the account of Borrower or any Credit Party (regardless of whether
such balances are then due to such Borrower or Credit Party) and any other
properties or assets at any time held or owing by that Lender or that holder to
or for the credit or for the account of Borrower or any Credit Party
61
against and on account of any of the Obligations that are not paid when due.
Any Lender exercising a right of setoff or otherwise receiving any payment on
account of the Obligations in excess of its Pro Rata Share thereof shall
purchase for cash (and the other Lenders or holders shall sell) such
participations in each such other Lender's or holder's Pro Rata Share of the
Obligations as would be necessary to cause such Lender to share the amount so
offset or otherwise received with each other Lender or holder in accordance
with their respective Pro Rata Shares (other than offset rights exercised by
any Lender with respect to Sections 1.13, 1.15 or 1.16). Each Lender's
obligation under this Section 9.8 shall be in addition to and not in limitation
of its obligations to purchase a participation in an amount equal to its Pro
Rata Share of the Swing Line Loans under Section 1.1. Each Credit Party agrees,
to the fullest extent permitted by law, that (a) any Lender may exercise its
right to offset with respect to amounts in excess of its Pro Rata Share of the
Obligations and may sell participations in such amounts so offset to other
Lenders and holders and (b) any Lender so purchasing a participation in the
Loans made or other Obligations held by other Lenders or holders may exercise
all rights of offset, bankers' lien, counterclaim or similar rights with
respect to such participation as fully as if such Lender or holder were a
direct holder of the Loans and the other Obligations in the amount of such
participation. Notwithstanding the foregoing, if all or any portion of the
offset amount or payment otherwise received is thereafter recovered from the
Lender that has exercised the right of offset, the purchase of participations
by that Lender shall be rescinded and the purchase price restored without
interest.
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in
Concert.
(a) Advances; Payments.
(i) Revolving Lenders shall refund or participate in the Swing Line
Loan in accordance with clauses (iii) and (iv) of Section 1.1(d). 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 Advance and in any event prior to 1:00 p.m. (New York time) on the
date such Notice of Revolving Advance is received, by telecopy, telephone or
other similar form of transmission. Each Revolving Lender shall make the amount
of such Lender's Pro Rata Share of such Revolving Credit Advance available to
Agent in same day funds by wire transfer to Agent's account as set forth in
Annex G not later than 3:00 p.m. (New York time) on the requested funding date,
in the case of an Index Rate Loan, 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 the Borrower. All payments by each Revolving Lender
shall be made without setoff, counterclaim or deduction of any kind.
(ii) On the second Business Day of each calendar week or more
frequently at Agent's election (each, a "Settlement Date"), Agent shall advise
each Lender by telephone, or telecopy of the amount of such Lender's Pro Rata
Share of principal, interest and Fees paid for the benefit of Lenders with
respect to each applicable Loan. Provided that each
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Lender has funded all payments and Advances required to be made by it and has
purchased all participations required to be purchased by it under this
Agreement and the other Loan Documents as of such Settlement Date, 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. 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. Such payments shall be made by wire transfer
to such Lender's account (as specified by such Lender in Annex G or the
applicable Assignment Agreement) not later than 2:00 p.m. (New York time) on
the next Business Day following each Settlement Date.
(b) Availability of Lender's Pro Rata Share. 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 9.9(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",
a "Revolving Lender" or a "CapEx Lender" (or be included in the calculation
of "Requisite Lenders", "Requisite Revolving Lenders" or "Requisite CapEx
Lenders" hereunder) for any voting or consent rights under or with respect
to any Loan Document. 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 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
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.
(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, except to
the extent that such failure is attributable to Agent's gross negligence or
willful misconduct. Lenders acknowledge that Borrower is required to provide
Financial Statements and Collateral Reports to Lenders in accordance with
Annexes D and E hereto and agree that Agent shall have no duty to provide
the same to Lenders.
(f) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no
Lender shall take any action to protect or enforce its rights arising out of
this Agreement or the Notes (including exercising any rights of 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.
9.10 Authorization to Execute Loan Documents. Each Lender, by delivering its
signature page to this Agreement or an Assignment Agreement, shall be deemed to
have acknowledged receipt of, consented to, approved and agreed to be bound by
each Loan Document, the Intercreditor Agreement and each other document
required to be approved by Agent, Requisite Lenders or all Lenders, as
applicable, on the Closing Date.
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9.11 Collateral Documents and Guaranty.
(a) Agent under Security Documents, Intercreditor Agreement and
Guaranty. Each Lender hereby further authorizes Agent, on behalf of and for
the benefit of Lenders, (i) to enter into and to be the agent for and
representative of Lenders with respect to the Subsidiary Guaranty, the
Collateral and the Security Documents and (ii) to enter into and perform its
obligations under the Intercreditor Agreement and the Subordination
Agreements, and each Lender agrees to be bound by the terms of the
Intercreditor Agreement and Subordination Agreements. Subject to Section
11.2, without further written consent or authorization from Lenders, Agent
may execute any documents or instruments necessary to release any Lien
encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted hereby or to which Requisite Lenders (or
such other Lenders as may be required to give such consent under Section
11.2) have otherwise consented.
(b) Right to Realize on Collateral and Enforce Guaranty. Anything
contained in any of the Loan Documents to the contrary notwithstanding, the
Credit Parties, Agent and each Lender hereby agree that (i) no Lender shall
have any right individually to realize upon any of the Collateral or to
enforce the Subsidiary Guaranty, it being understood and agreed that all
powers, rights and remedies hereunder may be exercised solely by Agent, on
behalf of Lenders in accordance with the terms hereof and all powers, rights
and remedies under the Collateral Documents may be exercised solely by
Agent, and (ii) in the event of a foreclosure by Agent on any of the
Collateral pursuant to a public or private sale, Agent or any Lender may be
the purchaser of any or all of such Collateral at any such sale and Agent,
as agent for and representative of the Lenders (but not any Lender or
Lenders in its or their respective individual capacities unless Requisite
Lenders shall otherwise agree in writing) shall be entitled, for the purpose
of bidding and making settlement or payment of the purchase price for all or
any portion of the Collateral sold at any such public sale, to use and apply
any of the Obligations as a credit on account of the purchase price for any
collateral payable by Agent at such sale.
10. SUCCESSORS AND ASSIGNS
10.1 Successors and Assigns. This Agreement and the other Loan Documents
shall be binding on and shall inure to the benefit of each Credit Party, Agent,
Lenders and their respective successors and assigns (including, in the case of
any Credit Party, a debtor-in-possession on behalf of such Credit Party),
except as otherwise provided herein or therein. No Credit Party may assign,
transfer, hypothecate or otherwise convey its rights, benefits, obligations or
duties hereunder or under any of the other Loan Documents without the prior
express written consent of Agent and Lenders. Any such purported assignment,
transfer, hypothecation or other conveyance by any Credit Party without the
prior express written consent of Agent and Lenders shall be void. The terms and
provisions of this Agreement are for the purpose of defining the relative
rights and obligations of each Credit Party, Agent and Lenders with respect to
the transactions contemplated hereby and no Person shall be a third party
65
beneficiary of any of the terms and provisions of this Agreement or any of the
other Loan Documents.
11. MISCELLANEOUS
11.1 Complete Agreement; Modification of Agreement. The Loan Documents
constitute the complete agreement between the parties with respect to the
subject matter thereof and may not be modified, altered or amended except as
set forth in Section 11.2. Any letter of interest, commitment letter or fee
letter (other than the GE Capital Fee Letter) or confidentiality agreement, if
any, between any Credit Party and Agent or any Lender or any of their
respective Affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement. Notwithstanding the foregoing, the GE Capital Fee Letter and any
market flex provisions contained in the final commitment letter between Agent
and Borrower shall survive the execution and delivery of this Agreement and
shall continue to be binding obligations of the parties.
11.2 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 Agent and 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 increases the percentage
advance rates set forth in the definition of the Borrowing Base, or that
makes less restrictive the nondiscretionary criteria for exclusion from
Eligible Accounts set forth in Section 1.6, shall be effective unless the
same shall be in writing and signed by Agent, Requisite Revolving Lenders
and Borrower. 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 2.2 to the
making of any Loan 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
set forth in Section 2.2 and Section 2.3 unless the same shall be in writing
and signed by Agent, Requisite Revolving Lenders and Borrower. No amendment,
modification, termination or waiver of or consent with respect to any
provision of this Agreement that adversely affects the Revolving Lenders,
the Term Lenders or the CapEx Lenders, as the case may be, shall be
effective unless the same shall be in writing and signed by Agent, Borrower
and the Requisite Revolving Lenders, Requisite Term Lenders or Requisite
CapEx Lenders, respectively.
66
(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 to directly affect all Lenders; (ii) reduce the principal of, rate
of interest on or Fees payable with respect to any Loan of any affected
Lender; (iii) extend any scheduled payment date (other than payment dates of
mandatory prepayments under Section 1.3(b)(i)-(vi)) 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; (v) release any Guaranty or, except as otherwise permitted
herein or in the other Loan Documents, release, or permit any Credit Party
to sell or otherwise dispose of, any Collateral with a value exceeding
$5,000,000 in the aggregate (which action shall be deemed to directly affect
all Lenders); (vi) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans that shall be required for
Lenders or any of them to take any action hereunder; and (vii) amend or
waive this Section 11.2 or the definitions of the terms "Requisite Lenders",
"Requisite Revolving Lenders" or "Requisite CapEx Lenders" insofar as such
definitions affect the substance of this Section 11.2. Furthermore, no
amendment, modification, termination or waiver affecting the rights or
duties of Agent, or of GE Capital in respect of any Swap Related
Reimbursement Obligations, under this Agreement or any other Loan Document,
including any release of any Guaranty or Collateral requiring a writing
signed by all Lenders, shall be effective unless in writing and signed by
Agent or GE Capital, 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 any case shall entitle such Credit Party or
any other Credit Party to any other or further notice or demand in similar
or other circumstances. Any amendment, modification, termination, waiver or
consent effected in accordance with this Section 11.2 shall be binding upon
each holder of the Notes at the time outstanding and each future holder of
the Notes.
(d) If, in connection with any proposed amendment, modification, waiver
or termination (a "Proposed Change"):
(i) requiring the consent of all affected Lenders, the consent of
Requisite Lenders is obtained, but the consent of other Lenders whose consent is
required is not obtained (any such Lender whose consent is not obtained as
described 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 more than 50% of the aggregate Revolving
Loan Commitments is obtained, but the consent of Requisite Revolving Lenders is
not obtained, or
67
(iii) requiring the consent of Requisite Lenders, the consent of
Lenders holding more than 50% 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 Commitments of such Non-Consenting Lenders for 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.
(e) 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 Indemnified Person asserting any damages, losses or liabilities
that are Indemnified Liabilities, 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.
11.3 Fees and Expenses. Borrower shall reimburse (i) Agent for all fees,
costs and expenses (including the reasonable fees and expenses of all of its
counsel, advisors, consultants and auditors) and (ii) Agent (and, with respect
to clauses (c) and (d) below, all Lenders) for all fees, costs and expenses,
including the reasonable fees, costs and expenses of counsel or other advisors
(including environmental and management consultants and appraisers), incurred
in connection with the negotiation, preparation and filing and/or recordation
of the Loan Documents and incurred in connection with:
(a) the forwarding to Borrower or any other Person on behalf of Borrower
by Agent of the proceeds of any Loan (including a wire transfer fee of $25
per wire transfer);
(b) any amendment of, modification or waiver of, consent with respect
to, or termination of, any of the Loan Documents or Related Transactions
Documents or advice in connection with the syndication and administration of
the Loans made pursuant hereto or its rights hereunder or thereunder;
(c) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, any Credit Party or any other
Person and whether as a party, witness or otherwise) in any way relating to
the Collateral, any of the Loan Documents or any other agreement to be
executed or delivered in connection herewith or therewith, including any
litigation, contest, dispute, suit, case, proceeding or action, and any
appeal or review thereof, in connection with a case commenced by or against
any or all of the Credit Parties or any other Person that may be obligated
to Agent by virtue of the Loan Documents, including any such litigation,
contest, dispute, suit, proceeding or action arising in connection with any
work-out or restructuring of the Loans during the pendency of one or more
Events of Default;
68
provided that in the case of reimbursement of counsel for Lenders other than
Agent and any Significant Lender, such reimbursement shall be limited to one
counsel for all such Lenders; provided, further, that no Person shall be
entitled to reimbursement under this clause (c) in respect of any
litigation, contest, dispute, suit, proceeding or action to the extent any
of the foregoing results from such Person's gross negligence or willful
misconduct;
(d) any attempt to enforce any remedies of Agent or any Lender against
any or all of the Credit Parties or any other Person that may be obligated
to Agent or any Lender by virtue of any of the Loan Documents, including any
such attempt to enforce any such remedies in the course of any work-out or
restructuring of the Loans during the pendency of one or more Events of
Default; provided, that in the case of reimbursement of counsel for Lenders
other than Agent and any Significant Lender, such reimbursement shall be
limited to one counsel for all such Lenders;
(e) any workout or restructuring of the Loans during the pendency of one
or more Events of Default;
(f) efforts to (i) monitor the Loans or any of the other Obligations,
(ii) evaluate, observe or assess any of the Credit Parties or their
respective affairs, and (iii) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Collateral; and
(g) field audits performed by Agent, the charges therefore to be equal
to the greater of (i) $800 per diem per auditor and (ii) the then prevailing
rate charged by Agent, plus in each case actual out-of-pocket expenses in
connection with field audits; provided that so long as no Default or Event
of Default has occurred and is continuing, Borrower's reimbursement
obligation under this Section 11.3(g) shall be limited to two field audits
per year;
including, as to each of clauses (a) through (f) above, all reasonable
attorneys' and other professional and service providers' fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all expenses, costs, charges
and other fees incurred by such counsel and others in connection with or
relating to any of the events or actions described in this Section 11.3, all of
which shall be payable, on demand, by Borrower to Agent. Without limiting the
generality of the foregoing, such expenses, costs, charges and fees may
include: fees, costs and expenses of accountants, environmental advisors,
appraisers, investment bankers, management and other consultants and
paralegals; court costs and expenses; photocopying and duplication expenses;
court reporter fees, costs and expenses; long distance telephone charges; air
express charges; telegram or telecopy charges; secretarial overtime charges;
and expenses for travel, lodging and food paid or incurred in connection with
the performance of such legal or other advisory services.
11.4 No Waiver. Agent's or any Lender's failure, at any time or times, to
require strict performance by the Credit Parties of any provision of this
Agreement or any other Loan Document shall not waive, affect or diminish any
right of Agent or such Lender thereafter to demand strict compliance and
performance herewith or therewith. Any suspension or waiver
69
of an Event of Default shall not suspend, waive or affect any other Event of
Default whether the same is prior or subsequent thereto and whether the same or
of a different type. Subject to the provisions of Section 11.2, none of the
undertakings, agreements, warranties, covenants and representations of any
Credit Party contained in this Agreement or any of the other Loan Documents and
no Default or Event of Default by any Credit Party shall be deemed to have been
suspended or waived by Agent or any Lender, unless such waiver or suspension is
by an instrument in writing signed by an officer of or other authorized
employee of Agent and the applicable requisite Lenders, and directed to
Borrower specifying such suspension or waiver.
11.5 Remedies. Agent's and Lenders' rights and remedies under this Agreement
shall be cumulative and nonexclusive of any other rights and remedies that
Agent or any Lender may have under any other agreement, including the other
Loan Documents, by operation of law or otherwise. Recourse to the Collateral
shall not be required.
11.6 Severability. Wherever possible, each provision of this Agreement and
the other Loan Documents shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this
Agreement or any other Loan Document shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement or such other Loan Document.
11.7 Conflict of Terms. Except as otherwise provided in this Agreement or
any of the other Loan Documents by specific reference to the applicable
provisions of this Agreement, if any provision contained in this Agreement
conflicts with any provision in any of the other Loan Documents, the provision
contained in this Agreement shall govern and control.
11.8 Confidentiality. Agent and each Lender agree to use commercially
reasonable efforts (equivalent to the efforts Agent or such Lender applies to
maintaining the confidentiality of its own confidential information) to
maintain as confidential all confidential information provided to them by the
Credit Parties and designated as confidential for a period of 2 years following
receipt thereof, except that Agent and each Lender may disclose such
information (a) to Persons employed or engaged by Agent or such Lender; (b) to
any bona fide assignee or participant or potential assignee or participant that
has agreed to comply with the covenant contained in this Section 11.8 (and any
such bona fide assignee or participant or potential assignee or participant may
disclose such information to Persons employed or engaged by them as described
in clause (a) above); (c) as required or requested by any Governmental
Authority or reasonably believed by Agent or such Lender to be compelled by any
court decree, subpoena or legal or administrative order or process; (d) as, on
the advice of Agent's or such Lender's counsel, is required by law; (e) in
connection with the exercise of any right or remedy under the Loan Documents or
in connection with any Litigation to which Agent or such Lender is a party; or
(f) that ceases to be confidential through no fault of Agent or any Lender.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE
LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE
GOVERNED BY, AND
70
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR
AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND
LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO
ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS; PROVIDED, THAT AGENT, LENDERS AND THE CREDIT PARTIES
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY ▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇; PROVIDED FURTHER, THAT NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER IN FAVOR OF AGENT. EACH CREDIT PARTY EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND EACH CREDIT PARTY HEREBY WAIVES ANY OBJECTION THAT SUCH CREDIT
PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH CREDIT PARTY
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN ANNEX H OF THIS
AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER
OF SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT
IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
11.10 (a) Notices. All notices, demands, requests, directions and other
communications required or expressly authorized to be made by this Agreement
shall, whether or not specified to be in writing but unless otherwise expressly
specified to be given by any other means, be given in writing and (i) addressed
to (A) the party to be notified and sent to the address or facsimile number
indicated in Annex H, or (B) otherwise to the party to be notified at its
address specified on the signature page of any applicable Assignment Agreement,
(ii) posted to IntralinksU (to the extent such system is available and set up
by or at the direction of Agent prior to posting) in an appropriate location by
uploading such notice, demand, request, direction or other communication to
▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇, faxing it to ▇▇▇-▇▇▇-▇▇▇▇ with an appropriate bar-coded fax
coversheet or using such other means of posting to IntralinksU as may be
available and reasonably acceptable to Agent prior to such posting, (iii)
posted to any other E-System set up by or at the direction of Agent in an
appropriate location or (iv) addressed to such other
71
address as shall be notified in writing (A) in the case of Borrower, Agent and
Swing Line Lender, to the other parties hereto and (B) in the case of all other
parties, to Borrower and Agent. Transmission by electronic mail (including E-
Fax, even if transmitted to the fax numbers set forth in clause (i) above)
shall not be sufficient or effective to transmit any such notice under this
clause (a) unless such transmission is an available means to post to any E-
System.
(b) Effectiveness. All communications described in clause (a) above and all
other notices, demands, requests and other communications made in connection
with this Agreement shall be effective and be deemed to have been received (i)
if delivered by hand, upon personal delivery, (ii) if delivered by overnight
courier service, one Business Day after delivery to such courier service, (iii)
if delivered by mail, when deposited in the mails, (iv) if delivered by
facsimile (other than to post to an E-System pursuant to clause (a)(ii) or
(a)(iii) above), upon sender's receipt of confirmation of proper transmission,
and (v) if delivered by posting to any E-System, on the later of the date of
such posting in an appropriate location and the date access to such posting is
given to the recipient thereof in accordance with the standard procedures
applicable to such E-System. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to any Person (other than Borrower or Agent) designated in Annex H to receive
copies shall in no way adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication. The
giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice.
11.11 Section Titles. The Section titles and Table of Contents contained in
this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreement between the parties hereto.
11.12 Counterparts. This Agreement may be executed in any number of separate
counterparts, each of which shall collectively and separately constitute one
agreement.
11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
11.14 Press Releases and Related Matters. Each Credit Party executing this
Agreement agrees that neither it nor its Affiliates will in the future issue
any press releases or
72
other public disclosure 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 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 using Borrower's name, product photographs, logo
or trademark. Agent reserves the right to provide to industry trade
organizations information necessary and customary for inclusion in league table
measurements.
11.15 Reinstatement. This Agreement shall remain in full force and effect
and continue to be effective should any petition be filed by or against any
Credit Party for liquidation or reorganization, should any Credit Party become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of
any Credit Party's assets, and shall continue to be effective or to be
reinstated, as the case may be, if at any time payment and performance of the
Obligations, or any part thereof, is, pursuant to applicable law, rescinded or
reduced in amount, or must otherwise be restored or returned by any obligee of
the Obligations, whether as a "voidable preference," "fraudulent conveyance,"
or otherwise, all as though such payment or performance had not been made. In
the event that any payment, or any part thereof, is rescinded, reduced,
restored or returned, the Obligations shall be reinstated and deemed reduced
only by such amount paid and not so rescinded, reduced, restored or returned.
11.16 Advice of Counsel. Each of the parties represents to each other party
hereto that it has discussed this Agreement and, specifically, the provisions
of Sections 11.9 and 11.13, with its counsel.
11.17 No Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.
BLACK WARRIOR WIRELINE CORP., as
Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT]
GENERAL ELECTRIC CAPITAL
CORPORATION, as Administrative Agent,
Agent, Swing Line Lender and Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Duly Authorized Signatory
[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT]
CIT BUSINESS CREDIT, INC., as a Lender
By:
-------------------------
Name:
Title:
[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT]
LASALLE BUSINESS CREDIT, LLC, as a
Lender
By:
-------------------------
Name:
Title:
[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT]
The following Persons are signatories to this Agreement in their capacities
as Credit Parties and not as Borrowers.
BOBCAT PRESSURE CONTROL, INC., as a
Credit Party
By:
-------------------------
Name:
Title:
▇▇▇▇▇ ▇▇▇ ▇▇▇▇ COMPANY, as a Credit
Party
By:
-------------------------
Name:
Title:
[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT]
ANNEX A (RECITALS)
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
this Agreement:
"A Rated Bank" has the meaning ascribed thereto in Section 6.2.
"Acceptable Appraiser" shall mean Superior Auctioneers & Marketing, Inc.
(unless Agent has notified Borrower in writing that Superior Auctioneers &
Marketing, Inc. shall no longer constitute an acceptable appraiser to Agent)
and each other appraisal firm approved by the Agent in its sole discretion.
"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" has the meaning ascribed thereto in Annex F.
"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 owned or hereafter in existence,
given by any Account Debtor or any other Person with respect to any of the
foregoing.
"Acquisition" means the acquisition of 100% of the Stock, and all warrants
and options therefore, of Bobcat by Borrower on the Closing Date pursuant to
the terms of the Acquisition Agreement.
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"Acquisition Agreement" means that certain Purchase Agreement, dated as of
the date hereof, by and among Borrower, the Sellers, Bobcat and BJCC.
"Advance" means any Revolving Credit Advance, Swing Line Advance or CapEx
Advance, as the context may require.
"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, 5% 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 9.7.
"Agreement" means the Credit Agreement by and among Borrower, the other
Credit Parties party thereto, GE Capital, as Agent and Lender and the other
Lenders from time to time party thereto, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Appendices" has the meaning ascribed to it in the recitals to this
Agreement.
"Applicable CapEx Loan Index Margin" means the per annum interest rate
margin from time to time in effect and payable in addition to the Index Rate
applicable to the CapEx Loan, as determined by reference to Section 1.5(a).
"Applicable CapEx Loan LIBOR Margin" means the per annum interest rate
margin from time to time in effect and payable in addition to the LIBOR Rate
applicable to the CapEx Loan, as determined by reference to Section 1.5(a).
"Applicable Margins" means collectively the Applicable Unused Line Fee
Margin, the Applicable Revolver Index Margin, the Applicable CapEx Index
Margin, the Applicable Term Loan Index Margin, the Applicable Revolver LIBOR
Margin, the Applicable CapEx LIBOR Margin and the Applicable Term Loan LIBOR
Margin.
"Applicable Percentage" has the meaning ascribed to it in Section 1.9(d).
"Applicable Revolver Index Margin" means the per annum interest rate margin
from time to time in effect and payable in addition to the Index Rate
applicable to the Revolving Loan, as determined by reference to Section 1.5(a).
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"Applicable Revolver LIBOR Margin" means the per annum interest rate margin
from time to time in effect and payable in addition to the LIBOR Rate
applicable to the Revolving Loan, as determined by reference to Section 1.5(a).
"Applicable Term Loan Index Margin" means the per annum interest rate margin
from time to time in effect and payable in addition to the Index Rate
applicable to the Term Loan, as determined by reference to Section 1.5(a).
"Applicable Term Loan LIBOR Margin" means the per annum interest rate margin
from time to time in effect and payable in addition to the LIBOR Rate
applicable to the Term Loan, as determined by reference to Section 1.5(a).
"Applicable Unused Line Fee Margin" means the per annum fee, from time to
time in effect, payable in respect of Borrower's non-use of committed funds
pursuant to Section 1.9(b), which fee is determined by reference to Section
1.5(a).
"Approved Fund" means, with respect to any Lender, any Person (other than a
natural Person) that (a) is or will be engaged in making, purchasing, holding
or otherwise investing in commercial loans and similar extensions of credit in
the ordinary course of its business and (b) is advised or managed by (i) such
Lender, (ii) any Affiliate of such Lender or (iii) any Person (other than an
individual) or any Affiliate of any Person (other than an individual) that
administers or manages such Lender.
"Assignment Agreement" has the meaning ascribed to it in Section 9.1(a).
"Bankruptcy Code" means the provisions of Title 11 of the United States
Code, 11 U.S.C. ss.ss.101 et seq.
"BJCC" means ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ Company, an Oklahoma corporation and wholly
owned subsidiary of Bobcat.
"Blocked Accounts" has the meaning ascribed to it in Annex B.
"Bobcat" means Bobcat Pressure Control, Inc.
"Borrower" has the meaning ascribed thereto in the preamble to this
Agreement.
"Borrowing Availability" means as of any date of determination the lesser of
(i) the Maximum Revolver Amount and (ii) the Borrowing Base, in each case, less
the aggregate Revolving Loan and Swing Line Loan then outstanding.
"Borrowing Base" means, as of any date of determination by Agent, from time
to time, an amount up to 85% of the book value of Eligible Accounts, less any
Reserves established by Agent at such time.
"Borrowing Base Certificate" means a certificate to be executed and
delivered from time to time by Borrower in the form attached to this Agreement
as Exhibit 4.1(b).
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"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 and
in reference to LIBOR Loans shall mean any such day that is also a LIBOR
Business Day.
"CapEx Advance" has the meaning ascribed to it in Section 1.1(c)(i).
"CapEx Borrowing Availability" means as of any date of determination the
lesser of (i) the Maximum CapEx Amount and (ii) the CapEx Borrowing Base, in
each case, less the aggregate CapEx Loan then outstanding.
"CapEx Borrowing Base" means, as of any date of determination by Agent, from
time to time, an amount equal to the lesser of (i) up to 80% of the arms-length
"hard" costs (excluding taxes, transportation, installation, licensing, labor
and other "soft" costs) of all Eligible CapEx Equipment and (ii) to the extent
Agent has requested an appraisal, up to 75% of the Forced Liquidation Value of
all Eligible CapEx Equipment. The Agent retains the right from time to time to
reduce the advance rates for the CapEx Borrowing Base in its sole discretion.
"CapEx Commitment Termination Date" means the earliest of (a) the first
anniversary of the Closing Date, (b) the date of termination of Lenders'
obligations to make Advances or permit existing Loans to remain outstanding
pursuant to Section 8.2(b), and (c) the date of indefeasible prepayment in full
by Borrower of the Loans, and the permanent reduction of all Commitments to
zero dollars ($0).
"CapEx Lenders" means, as of any date of determination, Lenders having CapEx
Loan Commitments.
"CapEx Loan" means, at any time, the aggregate amount of CapEx Advances
outstanding to Borrower.
"CapEx Loan Commitment" means (a) as to any Lender, the aggregate commitment
of such Lender to make CapEx Advances as set forth on Annex I to this Agreement
or in the most recent Assignment Agreement executed by such Lender, as such
amount may be adjusted, if at all, from time to time in accordance with this
Agreement, and (b) as to all Lenders, the aggregate commitment of all Lenders
to make CapEx Advances, which aggregate commitment shall be Five Million
($5,000,000) on the Closing Date, as such amount may be adjusted, if at all,
from time to time in accordance with this Agreement.
"CapEx Note" has the meaning ascribed to it in Section 1.1(c)(ii).
"Capital Expenditures" means, with respect to any Person, all expenditures
(by the expenditure of cash or the incurrence of Indebtedness) by such Person
during any measuring period for any fixed assets or improvements or for
replacements, substitutions or additions
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thereto that have a useful life of more than one year and that are required to
be capitalized under GAAP.
"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 Management Systems" has the meaning ascribed to it in Section 1.8.
"Centre Partners" means collectively, Centre Southwest Partners LLC, Centre
Partners Management LLC and their affiliates.
"Centre Partners Settlement Documents" means, collectively, all documents,
agreements, releases and other instruments executed by, or by and among, Centre
Partners and the Credit Parties in connection with resolving and releasing any
claims that any such parties may have against any other of such parties.
"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, after the Closing Date, 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 capital 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 two-thirds 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 and control all of the economic and voting rights
associated with all of the outstanding capital Stock of any of its
Subsidiaries.
"Change of Control Payments" means payments made or accrued by Borrower
pursuant to the Employment Agreements as a result of the occurrence of a
"change of control" (as defined in any such Employment Agreement) or sale of
the stock or assets of the Borrower.
"Charges" means all federal, state, county, city, municipal, local, foreign
or other governmental taxes (including taxes owed to the PBGC at the time due
and payable), levies, assessments, charges, liens, claims or encumbrances upon
or relating to (a) the Collateral, (b) the Obligations, (c) the employees,
payroll, income or gross receipts of any Credit Party, (d) any
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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.
"Closing Checklist" means the schedule, including all appendices, exhibits
or schedules thereto, listing certain documents and information to be delivered
in connection with this Agreement, the other Loan Documents and the
transactions contemplated thereunder, substantially in the form attached hereto
as Annex B.
"Closing Date" means December 16, 2005.
"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
Pledge Agreements, the Guaranties, any Mortgages 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.
"Collateral Documents" means the Security Agreement, the Patent Security
Agreement, the Trademark Security Agreement, the Copyright Security Agreement,
the Subsidiary Guaranty, the Pledge Agreement and all similar agreements
entered into guaranteeing payment of, or granting a Lien upon property as
security for payment of, the Obligations.
"Collateral Reports" means the reports with respect to the Collateral
referred to in Annex D.
"Collection Account" means that certain account of Agent, account number
▇▇▇-▇▇▇-▇▇ in the name of Agent at DeutscheBank Trust Company Americas in New
York, New York ABA No. 021 001 033, or such other account as may be specified
in writing by Agent as the "Collection Account".
"Commitment Termination Date" means the earliest of (a) December 16, 2008,
(b) the date of termination of Lenders' obligations to make Advances or permit
existing Loans to
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remain outstanding pursuant to Section 8.2(b), and (c) the date of indefeasible
prepayment in full by Borrower of the Loans, and the permanent reduction of all
Commitments to zero dollars ($0).
"Commitments" means (a) as to any Lender, the aggregate of such Lender's
Revolving Loan Commitment (including without duplication the Swing Line
Lender's Swing Line Commitment as a subset of its Revolving Loan Commitment),
Term Loan Commitment and CapEx Loan Commitment as set forth on Annex 1 to this
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 (including without duplication the Swing Line Lender's Swing Line
Commitment as a subset of the Revolving Loan Commitment), Term Loan Commitments
and CapEx Loan Commitments, which aggregate commitment shall be Fifty Million
Dollars ($50,000,000) on the Closing Date, as to each of clauses (a) and (b),
as such Commitments may be reduced, amortized or adjusted from time to time in
accordance with this Agreement.
"Compliance Certificate" has the meaning ascribed to it in Annex C.
"Concentration Accounts" has the meaning ascribed to it in Annex B.
"Contracts" means all "contracts," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, in any event, including all
contracts, undertakings, or agreements (other than rights evidenced by Chattel
Paper, Documents or Instruments) in or under which any Credit Party may now or
hereafter have any right, title or interest, including any agreement relating
to the terms of payment or the terms of performance of any Account.
"Control Letter" means a letter agreement between Agent and (i) the issuer
of uncertificated securities with respect to uncertificated securities in the
name of any Credit Party, (ii) a securities intermediary with respect to
securities, whether certificated or uncertificated, securities entitlements and
other financial assets held in a securities account in the name of any Credit
Party, (iii) a futures commission merchant or clearing house, as applicable,
with respect to commodity accounts and commodity contracts held by any Credit
Party, whereby, among other things, the issuer, securities intermediary or
futures commission merchant disclaims any security interest in the applicable
financial assets, acknowledges the Lien of Agent, on behalf of itself and
Lenders, on such financial assets, and agrees to follow the instructions or
entitlement orders of Agent without further consent by the affected Credit
Party.
"Copyright License" means any and all rights now owned or hereafter acquired
by any Credit Party under any written agreement granting any right to use any
Copyright or Copyright registration.
"Copyright Security Agreements" means the Copyright Security Agreements made
in favor of Agent, on behalf of itself and Lenders, by each applicable Credit
Party.
"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
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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.
"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 1.5(d).
"Deposit Accounts" means all "deposit accounts" as such term is defined in
the Code, now or hereafter held in the name of any Credit Party.
"Disbursement Accounts" has the meaning ascribed to it in Annex B.
"Disclosure Schedules" means the Schedules prepared by Borrower and
denominated as Disclosure Schedules (1.4) through (6.7) in the Index to this
Agreement.
"Documents" means any "documents," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located.
"Dollars" or "$" means lawful currency of the United States of America.
"E-Fax" means any system used to receive or transmit faxes electronically.
"E-System" means any electronic system, including Intralinks(R) and any
other Internet or extranet-based site, whether such electronic system is owned,
operated or hosted by Agent, any of its Affiliates, or any of such Person's
respective officers, directors, employees, attorneys, agents and
representatives or any other Person, providing for access to data protected by
passcodes or other security system.
"EBITDA" means, with respect to any Person for any fiscal period, without
duplication, an amount equal to (a) consolidated net income of such Person for
such period determined in accordance with GAAP, minus (b) the sum of (i) income
tax benefits, (ii) interest income, (iii) gain from extraordinary items for
such period, (iv) any aggregate net gain (but not any aggregate net loss)
during such period arising from the sale, exchange or other disposition of
capital assets by such Person (including any fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the disposition of fixed
assets and all securities), and (v) any other non-cash gains that have been
added in determining consolidated net income, in each case to the extent
included in the calculation of consolidated net income of such Person for such
period in accordance with GAAP, but without duplication, plus (c) the sum of
(i) any provision for income taxes, (ii) Interest Expense, (iii) loss from
extraordinary items for such period to the extent approved by Agent and Second
Lien Agent (without contrary instructions from the
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"Requisite Lenders" under the Second Lien Credit Agreement), (iv) depreciation
and amortization for such period, (v) amortized debt discount for such period,
(vi) the amount of any deduction to consolidated net income as the result of
any grant to any members of the management of such Person of any Stock and
(vii) Change of Control Payments in an aggregate amount not to exceed
$2,632,408 over the term of this Agreement, in each case to the extent included
in the calculation of consolidated net income of such Person for such period in
accordance with GAAP, but without duplication. For purposes of this definition,
the following items shall be excluded in determining consolidated net income of
a Person: (1) the income (or deficit) of any other Person accrued prior to the
date it became a Subsidiary of, or was merged or consolidated into, such Person
or any of such Person's Subsidiaries; (2) the income (or deficit) of any other
Person (other than a Subsidiary) in which such Person has an ownership
interest, except to the extent any such income has actually been received by
such Person in the form of cash dividends or distributions; (3) the
undistributed earnings of any Subsidiary of such Person to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of any contractual obligation or
requirement of law applicable to such Subsidiary; (4) any restoration to income
of any contingency reserve, except to the extent that provision for such
reserve was made out of income accrued during such period; (5) any write-up of
any asset; (6) any net gain from the collection of the proceeds of life
insurance policies; (7) any net gain arising from the acquisition of any
securities, or the extinguishment, under GAAP, of any Indebtedness, of such
Person, (8) in the case of a successor to such Person by consolidation or
merger or as a transferee of its assets, any earnings of such successor prior
to such consolidation, merger or transfer of assets, and (9) any deferred
credit representing the excess of equity in any Subsidiary of such Person at
the date of acquisition of such Subsidiary over the cost to such Person of the
investment in such Subsidiary; provided, however, that the income (or deficit)
of Bobcat and its Subsidiaries accrued prior to the date they became
Subsidiaries of Black Warrior and prior to any date in which they were merged
into Borrower shall be included in determining consolidated net income of
Borrower.
"Eligible Accounts" has the meaning ascribed to it in Section 1.6.
"Eligible CapEx Equipment" means Equipment that the Credit Parties proposes
to acquire or acquires after the Closing Date with the proceeds of a CapEx
Advance, to the extent designated as "Eligible CapEx Equipment" by Agent in its
sole discretion after review of all relevant information and documents
requested by Agent with respect to such Equipment. The Agent retains the right
to adjust the standards of eligibility after any CapEx Advance is made in its
sole discretion.
"Eligible Term Equipment" means all Equipment of the Credit Parties and
Inventory of the Credit Parties consisting of tools and parts for Equipment
existing on the Closing Date and subject to the appraisal performed on
September 30, 2005 by Superior Asset Appraisals, Inc. on behalf of the Agent
(with respect to all Eligible Term Equipment owned by Borrower) and by the
appraisal performed on August 11, 2005 by Superior Asset Appraisals, Inc. on
behalf of the Agent (with respect to all Eligible Term Equipment owned by
Bobcat and its Subsidiaries).
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"Employment Agreements" means the employment agreements to which Borrower is
a party.
"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.
▇▇.▇▇. 9601 et seq.) ("CERCLA"); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. ss.ss.5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. ss.ss.136 et seq.); the
Solid Waste Disposal Act (42 U.S.C. ss.ss.6901 et seq.); the Toxic Substance
Control Act (15 U.S.C. ▇▇.▇▇. 2601 et seq.); the Clean Air Act (42 U.S.C.
ss.ss.7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C.
ss.ss.1251 et seq.); the Occupational Safety and Health Act (29 U.S.C. ss.ss.651
et seq.); and the Safe Drinking Water Act (42 U.S.C. ▇▇.▇▇. 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
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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, 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 thirty (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 8.1.
"Excess Cash Flow" means, without duplication, with respect to any Fiscal
Year of Borrower and its Subsidiaries, consolidated net income plus (a)
depreciation, amortization and Interest Expense to the extent deducted in
determining consolidated net income, minus (c) Capital Expenditures during such
Fiscal Year (excluding the financed portion thereof), minus (d) Interest
Expense paid or accrued (excluding any original issue discount, interest paid
in kind or amortized debt discount, to the extent included in determining
Interest Expense) and scheduled principal payments paid or payable in respect
of Funded Debt, plus or minus (as the case may be), (e) extraordinary gains or
losses which are cash items not included in the calculation of net income, plus
(f) taxes deducted in determining consolidated net income to the extent not
paid for in cash.
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"Excluded Subordinated Note" means that certain Subordinated Note dated
December 17, 1999, made by the Borrower to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Declaration Trust
in the original principal amount of $100,000.
"Fair Labor Standards Act" means the Fair Labor Standards Act, 29 U.S.C.
ss.201 et seq.
"Fair Salable Balance Sheet" means a balance sheet of Borrower prepared in
accordance with Section 3.4(d).
"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.
"Fees" means any and all fees payable to Agent or any Lender pursuant to
this Agreement or any of the other Loan Documents.
"Financial Covenants" means the financial covenants set forth in Annex F.
"Financial Statements" means the consolidated and consolidating income
statements, statements of cash flows and balance sheets of Borrower delivered
in accordance with Section 3.4 and Annex C.
"First Lien Agent" has the meaning ascribed thereto in the preamble to this
Agreement.
"First Priority" means, with respect to any Lien purported to be created
pursuant to any Collateral Documents, that such Lien is the only Lien to which
the underlying property or assets is subject, other than (i) any Permitted
Encumbrances, (ii) subject to the Intercreditor Agreement, the Liens securing
the Second Lien Loan; and (iii) subject to the Subordination Agreements, the
Liens securing the Subordinated Debt.
"First Tier Leverage Ratio" means, as of any date of determination, the
ratio of (a) the outstanding Loans as of such date of determination to (b)
EBITDA for the trailing twelve consecutive months ending on or immediately
prior to such date of determination.
"Fiscal Month" means any of the monthly accounting periods of Borrower.
"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.
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"Fixed Charges" means, with respect to any Person for any fiscal period, (a)
the aggregate of all Interest Expense paid in cash during such period, plus (b)
scheduled payments of principal with respect to Indebtedness (other than
Permitted Insurance Premium Indebtedness to the extent that such payments are
characterized as operating expenses of the Borrower and payments made to
holders of Subordinated Debt to the extent permitted under Section 1.4) during
such period.
"Fixed Charge Coverage Ratio" means, with respect to any Person for any
fiscal period, the ratio of (x) (i) EBITDA minus (ii) Capital Expenditures paid
in cash during such period (excluding Capital Expenditures made by the Borrower
during such period that are financed entirely with the proceeds of CapEx Loans)
minus (iii) income taxes paid in cash during such period to (y) Fixed Charges.
"Fixtures" means all "fixtures" as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party.
"Forced Liquidation Value" means, with respect to any Equipment, the "forced
liquidation value" of such Equipment as determined by the most recent appraisal
performed by or at the request of the Agent, by an Acceptable Appraiser.
"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 Obligations and, without duplication, Guaranteed
Indebtedness consisting of guaranties of Funded Debt of other Persons.
"GAAP" means generally accepted accounting principles in the United States
of America consistently applied, as such term is further defined in Annex F to
this Agreement.
"GE Capital" means General Electric Capital Corporation, a Delaware
corporation.
"GE Capital Fee Letter" means that certain letter, dated as of the Closing
Date, between GE Capital and Borrower with respect to certain Fees to be paid
from time to time by Borrower to GE Capital.
"General Intangibles" means all "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 Contract, 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
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secrets, proprietary or confidential information, inventions (whether or not
patented or patentable), technical information, procedures, designs, knowledge,
know-how, software, data bases, data, skill, expertise, experience, processes,
models, drawings, materials and records, goodwill (including the goodwill
associated with any Trademark or Trademark License), all rights and claims in
or under insurance policies (including insurance for fire, damage, loss and
casualty, whether covering personal property, real property, tangible rights or
intangible rights, all liability, life, key man and business interruption
insurance, and all unearned premiums), uncertificated securities, choses in
action, deposit, checking and other bank accounts, rights to receive tax
refunds and other payments, rights 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 without
limitation all tapes, cards, computer runs and other papers and documents in
the possession or under the control of such Credit Party or any computer bureau
or service company from time to time acting for such Credit Party.
"Goods" means any "goods" as 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 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 guaranty executed by any Guarantor in
favor of Agent and Lenders in respect of the Obligations.
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"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 this 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 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 6 months unless being contested in
good faith, (b) all reimbursement and other obligations with respect to letters
of credit, bankers' acceptances and surety bonds, whether or not matured, (c)
all obligations evidenced by notes, bonds, debentures or similar instruments,
(d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all Capital Lease Obligations and the present value (discounted
at the Index Rate as in effect on the Closing Date) of future rental payments
under all synthetic leases, (f) all obligations of such Person under commodity
purchase or option agreements or other commodity price hedging arrangements, in
each case whether contingent or matured, (g) all obligations of such Person
under any foreign exchange contract, currency swap agreement, interest rate
swap, cap or collar agreement or other similar agreement or arrangement
designed to alter the risks of that Person arising from fluctuations in
currency values or interest rates, in each case whether contingent or matured,
(h) all Indebtedness referred to above secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien upon or in property or other assets (including accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness, and (i) the Obligations.
"Indemnified Liabilities" has the meaning ascribed to it in Section 1.13.
"Indemnified Person" has the meaning ascribed to it in Section 1.13.
"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
"prime rate" (or, if The Wall Street Journal ceases quoting a prime rate, the
highest per annum rate of interest published by the Federal Reserve Board in
Federal Reserve statistical release H.15 (519) entitled "Selected Interest
Rates" as the Bank prime loan rate or its equivalent), and (ii) the Federal
Funds Rate plus fifty (50) basis points per annum. Each change in any interest
rate provided for
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in this 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.
"Intercreditor Agreement" means the Intercreditor Agreement, dated as of the
Closing Date, between Agent and the Second Lien Agent, and acknowledged and
agreed to by the Credit Parties.
"Interest Expense" means, with respect to any Person for any fiscal period,
interest expense (whether or not paid in cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date, including,
interest expense with respect to any Funded Debt of such Person but excluding
interest expense with respect to any Permitted Insurance Premium Indebtedness
of such Person and interest expense for the relevant period that has been
capitalized on the consolidated balance sheet of Borrower.
"Interest Payment Date" means (a) as to any Index Rate Loan, the first
Business Day of each month 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 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 this Agreement.
"Inventory" means any "inventory," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located, and in any
event 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, or materials or
supplies 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 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)
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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.
"Junior Capital" means (i) all Subordinated Notes and all Stock of the
Borrower owned by St. ▇▇▇▇▇ and the other Subordinated Noteholders as of the
Closing Date,(ii) the Stock of the Borrower issued in exchange for warrants,
Subordinated Notes and other convertible securities pursuant to those certain
Recapitalization Agreements, dated October 2005 and November 2005, between the
Borrower and the other parties thereto, and (iii) for purposes of Section
1.3(b)(v), (A) the fee referred to in Section 6.14(f) and (B) the Change of
Control Payments referred to in Section 6.14(g)(2).
"Lenders" means GE Capital, the other Lenders named on the signature pages
of this 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.
"Lender Securities" means all Stock, Stock Equivalents, voting trust
certificates, bonds, debentures, instruments and other evidence of
Indebtedness, whether or not secured, convertible or subordinated, all
certificates of interest, share or participation in, all certificates for the
acquisition of, and all warrants, options and other rights to acquire, any
Lender Securities.
"Letter-of-Credit Rights" means "letter-of-credit rights" as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
including rights to payment or performance under a letter of credit, whether or
not such Credit Party, as beneficiary, has demanded or is entitled to demand
payment or performance.
"Leverage Ratio" means, with respect to Borrower, on a consolidated basis,
the ratio of (a) Funded Debt (excluding the Subordinated Debt) as of any date
of determination to (b) the sum of EBITDA for the twelve months ending on that
date of determination.
"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 Loan" means a Loan or any portion thereof bearing interest by
reference to the LIBOR Rate.
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"LIBOR Period" means, with respect to any LIBOR Loan, each period commencing
on a LIBOR Business Day selected by Borrower pursuant to this Agreement and
ending one, two, three or six months thereafter, as selected by Borrower's
irrevocable notice to Agent as set forth in Section 1.5(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
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 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; and
(e) Borrower shall select LIBOR Periods so that there shall be no more than
3 separate LIBOR Loans in existence at any one time.
"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.
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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 mutually acceptable to Agent and
Borrower.
"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 3.13.
"Loan Account" has the meaning ascribed to it in Section 1.12.
"Loan Documents" means this Agreement, the Notes, the Collateral Documents,
the GE Capital Fee Letter and all other agreements, instruments, documents and
certificates identified in the Closing Checklist (excluding Second Lien Loan
Documents) 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 this
Agreement or the transactions contemplated thereby. Any reference in this
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 this 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, the CapEx Loan and
the Term Loan.
"Lock Boxes" has the meaning ascribed to it in Annex B.
"Margin Stock" has the meaning ascribed to in Section 3.10.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of any
Credit Party, (b) any Credit Party's ability to pay any of the Loans or any of
the other Obligations in accordance with the terms of this Agreement or any
other Loan Document, (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 this Agreement and the other Loan
Documents. Without limiting the generality of the foregoing, it shall also
constitute a Material Adverse Effect if at any
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time the "Average Rig Count" for the United States (excluding Canada and
International rigs) published from time to time by ▇▇▇▇▇ ▇▇▇▇▇▇, Inc. falls
below 800 for 12 consecutive weeks.
"Maximum CapEx Amount" means, as of any date of determination, an amount
equal to the CapEx Loan Commitment of all Lenders as of that date.
"Maximum Revolver Amount" means, as of any date of determination, an amount
equal to the Revolving Loan Commitment of all Lenders as of that date.
"Mortgaged Properties" has the meaning assigned to it in Annex C.
"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 delivered by any Credit Party to Agent on behalf
of itself and Lenders with respect to the Mortgaged Properties, all in form and
substance reasonably satisfactory to Agent.
"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 Equity Proceeds" has the meaning ascribed to it in Section 1.3(b)(v).
"Non-Funding Lender" has the meaning ascribed to it in Section 9.9(a)(ii).
"Notes" means, collectively, the Revolving Notes, the Swing Line Note, the
CapEx Notes and the Term Notes.
"Notice of CapEx Credit Advance" has the meaning ascribed to it in Section
1.1(c).
"Notice of Conversion/Continuation" has the meaning ascribed to it in
Section 1.5(e).
"Notice of Revolving Credit Advance" has the meaning ascribed to it in
Section 1.1(a).
"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) owing by any Credit Party to Agent
or any Lender, and all covenants and duties regarding such amounts, of any kind
or nature, present or future, whether or not evidenced by any note, agreement
or other instrument, arising under this 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, Swap Related Reimbursement
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Obligations, expenses, attorneys' fees and any other sum chargeable to any
Credit Party under this Agreement or any of the other Loan Documents.
"Original Credit Agreement" has the meaning assigned to such term in the
recitals of this Agreement.
"Overadvance" has the meaning ascribed to it in Section 1.1(a)(iii).
"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.
"Patent Security Agreements" means the Patent Security Agreements made in
favor of Agent, on behalf of itself and Lenders, by each applicable Credit
Party.
"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
of 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 or
which are being contested in accordance with Section 5.2(b); (b) pledges or
deposits of money securing statutory obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers', mechanics'
or similar liens arising in the ordinary course of business, so long as such
Liens attach only to Equipment, Fixtures and/or Real Estate; (e) carriers',
warehousemen's, suppliers' or other similar possessory liens arising in the
ordinary course of business and securing liabilities in an outstanding
aggregate amount not in excess of $50,000 at any time, so long as such Liens
attach only to Inventory; (f) deposits securing, or in lieu of, surety, appeal
or customs bonds in proceedings to which any Credit Party is a party; (g) any
attachment or judgment lien not constituting an Event of Default under Section
8.1(j); (h) zoning restrictions, easements, licenses, or other restrictions on
the use of any Real Estate or other minor irregularities in title (including
leasehold title) thereto, so long as the same do not materially impair the use,
value, or marketability of such Real Estate; (i) presently existing or
hereafter created Liens in favor of Agent, on behalf of Lenders; (j) Liens
expressly permitted under clauses (b) and (c) of Section 6.7 of this Agreement.
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"Permitted Insurance Premium Indebtedness" shall mean Indebtedness of the
Borrower incurred to finance insurance premiums of the Borrower in the ordinary
course of business.
"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, 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 or has maintained, contributed to or
had an obligation to contribute to at any time within the past 7 years on
behalf of participants who are or were employed by any Credit Party or ERISA
Affiliate.
"Pledge Agreement" means the Pledge Agreement of even date herewith executed
by certain of the Credit Parties in favor of Agent, on behalf of itself and
Lenders, pledging all Stock of Subsidiaries of the Borrower.
"Proceeds" means "proceeds," as such term is defined in the Code, including
(a) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to any Credit Party from time to time with respect to any of the
Collateral, (b) any and all payments (in any form whatsoever) made or due and
payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting
under color of governmental authority), (c) any claim of any Credit Party
against third parties (i) for past, present or future infringement of any
Patent or Patent License, or (ii) for past, present or future infringement or
dilution of any Copyright, Copyright License, Trademark or Trademark License,
or for injury to the goodwill associated with any Trademark or Trademark
License, (d) any recoveries by any Credit Party against third parties with
respect to any litigation or dispute concerning any of the Collateral including
claims arising out of the loss or nonconformity of, interference with the use
of, defects in, or infringement of rights in, or damage to, Collateral, (e) all
amounts collected on, or distributed on account of, other Collateral, including
dividends, interest, distributions and Instruments with respect to Investment
Property and pledged Stock, and (f) any and all other amounts, rights to
payment or other property acquired upon the sale, lease, license, exchange or
other disposition of Collateral and all rights arising out of Collateral.
"Pro Forma" means the unaudited consolidated and consolidating balance sheet
of Borrower and its Subsidiaries as of October 31, 2005 after giving pro forma
effect to the Related Transactions.
"Projections" means Borrower's forecasted consolidated and consolidating:
(a) balance sheets; (b) profit and loss statements; (c) cash flow statements;
and (d) capitalization statements, all prepared on a Subsidiary-by-Subsidiary
or division-by-division basis, if
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applicable, and otherwise consistent with the historical Financial Statements
of Borrower, together with appropriate supporting details and a statement of
underlying assumptions.
"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(s), the
percentage obtained by dividing (i) the Term Loan Commitment of that Lender by
(ii) the aggregate Term Loan Commitments of all Lenders, as any such
percentages may be adjusted by assignments permitted pursuant to Section 9.1,
(c) with respect to the CapEx Loan(s), the percentage obtained by dividing (i)
the CapEx Loan Commitment of that Lender by (ii) the aggregate CapEx Loan
Commitments of all Lenders, as any such percentages may be adjusted by
assignments permitted pursuant to Section 9.1, (d) 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 (e) 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.
"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 3.6.
"Refunded Swing Line Loan" has the meaning ascribed to it in Section
1.1(d)(iii).
"Register" means a record of ownership in which the Agent agrees to register
by book entry the interests (including any rights to receive payment hereunder)
of the Agent and each Lender in the Term Loans and the Revolving Credit
Outstandings, each of their obligations under this Agreement to participate in
each Loan and any assignment of any such interest, obligation or right.
"Related Transactions" means the initial borrowing under the Revolving
Credit Loan and the funding of the Term Loan on the Closing Date, the
consummation of the Acquisition, the extension of the maturity date of the
Subordinated Notes to a date no earlier than ninety (90) days after the Second
Lien Maturity Date and the effectiveness of all other amendments thereto
contemplated hereby, the funding of the Second Lien Loan, 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, the Subordination
Agreements, Subordinated Notes, the Acquisition Agreement (and all documents
and agreements executed or delivered in connection therewith), the Second Lien
Credit Documents, the Intercreditor Agreement, the Centre Partner Settlement
Documents and all other agreements or instruments executed in connection with
the Related Transactions.
A-23
"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.
"Requisite CapEx Lenders" means Lenders having (a) more than 66 2/3% of the
CapEx Loan Commitments of all Lenders, or (b) if the CapEx Loan Commitments
have been terminated, more than 66 2/3% of the aggregate outstanding amount of
the CapEx Loan; provided however that so long as there is more than one CapEx
Lender, in no event shall Requisite CapEx Lenders be less than two Lenders.
"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 all Loans; provided
however that so long as there is more than one Lender, in no event shall
Requisite Lenders be less than two Lenders.
"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; provided however that so long as
there is more than one Revolving Lender, in no event shall Requisite Revolving
Lenders be less than two Lenders.
"Requisite Term Lenders" means Lenders having more than 66 2/3% of the
aggregate outstanding amount of the Term Loan; provided however that so long as
there is more than one Term Lender, in no event shall Requisite Term Lenders be
less than two Lenders.
"Reserves" means, with respect to the Borrowing Base of Borrower, (a)
reserves established pursuant to Section 5.4(c), (b) reserves in amount equal
to (i) the Swap Related Reimbursement Obligations, less (ii) if no Event of
Default has occurred and is continuing, $300,000, and (c) such other reserves
against Eligible Accounts or Borrowing Availability of Borrower that Agent may,
in its reasonable credit judgment, establish from time to time. Without
limiting the generality of the foregoing, Reserves established to ensure the
payment of accrued Interest Expense or Indebtedness shall be deemed to be a
reasonable exercise of Agent's credit judgment.
"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 or the Second Lien Loan;
(d) any payment made to redeem, purchase, repurchase or retire, or to obtain
A-24
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 payment of compensation in the ordinary course
of business to Stockholders who are employees of such Credit Party; (g) any
payment of management fees (or other fees of a similar nature) by such Credit
Party to any Stockholder of such Credit Party or its Affiliates; and (h) any
Change of Control Payments paid in cash.
"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(a)(i).
"Revolving Lenders" means, as of any date of determination, Lenders having a
Revolving Loan Commitment.
"Revolving Loan" means, at any time, the aggregate amount of Revolving
Credit Advances outstanding to Borrower.
"Revolving Loan Commitment" means (a) as to any Revolving Lender, the
aggregate commitment of such Revolving Lender to make Revolving Credit Advances
as set forth on Annex 1 to this Agreement or in the most recent Assignment
Agreement executed by such Revolving Lender and (b) as to all Revolving
Lenders, the aggregate commitment of all Revolving Lenders to make Revolving
Credit Advances, which aggregate commitment shall be Fifteen Million
($15,000,000) on the Closing Date, as such amount may be adjusted, if at all,
from time to time in accordance with this Agreement.
"Revolving Note" has the meaning ascribed to it in Section 1.1(a)(ii).
"Second Lien Agent" means General Electric Capital Corporation, in its
capacity as agent for the lenders providing the Second Lien Loan, together with
all successors and replacements thereof.
"Second Lien Credit Agreement" means that certain Second Lien Credit
Agreement, dated as of the Closing Date, among Borrower, the lenders from time
to time parties thereto and the Second Lien Agent, as originally in effect or
as amended, modified or supplemented in accordance with the terms of the
Intercreditor Agreement.
"Second Lien Loan" means the term loan in the principal amount of
$25,000,000 made to Borrower on the Closing Date by lenders party to the Second
Lien Credit Agreement.
A-25
"Second Lien Loan Documents" means all "Loan Documents" as defined in the
Second Lien Credit Agreement.
"Second Lien Maturity Date" means the "Maturity Date", as such term is
defined in the Second Lien Credit Agreement.
"Security Agreement" means the Amended and Restated Security Agreement,
dated as of the Closing Date entered into by and among Agent, on behalf of
itself and Lenders, and each Credit Party.
"Sellers" mean, collectively, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇
and ▇▇▇▇▇ Capital I, L.P., a Texas limited partnership.
"Significant Lender" shall mean any Lender that, together with all of its
Affiliates and Approved Funds, holds at least 50% of the outstanding Loans.
"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 contingent liabilities, of such Person;
(b) the present fair salable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature; and
(d) such Person is not engaged in a business or transaction, and is not about
to engage in a business or transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent liabilities
(such as litigation, 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.
"SPV" means any special purpose funding vehicle identified as such in a
writing by any Lender to the Agent.
"St. ▇▇▇▇▇" means, collectively, St. ▇▇▇▇▇ Capital Corp., a Delaware
corporation, St. ▇▇▇▇▇ Capital Partners, L.P., a Delaware limited partnership,
SJMB, LP, a Delaware limited partnership, and SJMB, LLC, a Delaware limited
liability company.
"Stock" means all shares, options, warrants, Stock Equivalents, 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
A-26
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).
"Stock Equivalents" means all securities convertible into or exchangeable
for Stock or any other Stock Equivalent and all warrants, options or other
rights to purchase, subscribe for or otherwise acquire any Stock or any other
Stock Equivalent, whether or not presently convertible, exchangeable or
exercisable.
"Stockholder" means, with respect to any Person, each holder of Stock of
such Person.
"Subordinated Debt" means the Indebtedness of Borrower evidenced by the
Subordinated Notes and any other Indebtedness of any Credit Party subordinated
to the Obligations in a manner and form satisfactory to Agent and Lenders in
their sole discretion, as to right and time of payment and as to any other
rights and remedies thereunder.
"Subordinated Note Holders" shall mean each of the Persons listed on
Disclosure Schedule 3.24.
"Subordinated Notes" means those certain promissory notes issued by Borrower
and described on Disclosure Schedule 3.24.
"Subordination Agreement" shall mean those certain Amended and Restated
Subordination Agreements, dated as of the Closing Date, by and among the
Subordinated Note Holders, the Agent, the Second Lien Agent and Borrower, as
amended, restated, reaffirmed or otherwise modified from time to time with the
consent of the Agent.
"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 each Subsidiary of Borrower in favor of Agent, on behalf of itself
and Lenders.
A-27
"Supporting Obligations" means all "supporting obligations" as such term is
defined in the Code, including letters of credit and guaranties issued in
support of Accounts, Chattel Paper, Documents, General Intangibles,
Instruments, or Investment Property.
"Swap Related L/C" means a letter of credit or other credit enhancement
provided by GE Capital to the extent supporting the payment obligations by
Borrower under an interest rate protection or hedging agreement or transaction
(including, but not limited to, interest rate swaps, caps, collars, floors and
similar transactions) designed to protect or manage exposure to the
fluctuations in the interest rates applicable to any of the Loans, and which
agreement or transaction Borrower entered into as the result of a specific
referral pursuant to which GE Capital, GE Corporate Financial Services, Inc. or
any other Affiliate of GE Capital had arranged for Borrower to enter into such
agreement or transaction. The term includes a Swap Related L/C as it may be
increased from time to time fully to support Borrower's payment obligations
under any and all such interest rate protection or hedging agreements or
transactions.
"Swap Related Reimbursement Obligation" has the meaning ascribed to it in
Section 1.2.
"Swing Line Advance" has the meaning ascribed to it in Section 1.1(d)(i).
"Swing Line Availability" has the meaning ascribed to it in Section
1.1(d)(i).
"Swing Line Commitment" means, as to the Swing Line Lender, the commitment
of the Swing Line Lender to make Swing Line Advances as set forth on Annex 1 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(d)(ii).
"Taxes" means taxes, levies, imposts, deductions, Charges or withholdings,
and all liabilities with respect thereto, excluding taxes imposed on or
measured by the net income of Agent or a Lender by the jurisdictions under the
laws of which Agent and Lenders are organized or conduct business or any
political subdivision thereof.
"Termination Date" means the date on which (a) the Loans have been
indefeasibly repaid in full, (b) all other Obligations under this Agreement and
the other Loan Documents have been completely discharged, and (c) Borrower
shall not have any further right to borrow any monies under this Agreement.
"Term Lenders" means those Lenders having Term Loan Commitments.
"Term Loan" has the meaning assigned to it in Section 1.1(b)(i).
A-28
"Term Loan Commitment" means (a) as to any Lender with a Term Loan
Commitment, the commitment of such Lender to make its Pro Rata Share of the
Term Loan as set forth on Annex 1 to this Agreement or in the most recent
Assignment Agreement executed by such Lender, and (b) as to all Lenders with a
Term Loan Commitment, the aggregate commitment of all Lenders to make the Term
Loan, which aggregate commitment shall be Thirty Million ($30,000,000) on the
Closing Date. After advancing the Term Loan, each reference to a Lender's Term
Loan Commitment shall refer to that Lender's Pro Rata Share of the outstanding
Term Loan.
"Term Note" has the meaning assigned to it in Section 1.1(b)(i).
"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 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 existing or
adopted or acquired by any Credit Party: (a) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature
(whether registered or unregistered), 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.
"Waived Prepayment" has the meaning assigned to it in Section 1.3(c).
"Welfare Plan" means a Plan described in Section 3(i) of ERISA.
A-29
Rules of construction with respect to accounting terms used in this
Agreement or the other Loan Documents shall be as set forth in Annex F. 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 this Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained
in this Agreement. The words "herein," "hereof" and "hereunder" and other words
of similar import refer to this 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 this 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 fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
A-30
ANNEX B (SECTION 1.8)
TO
CREDIT AGREEMENT
CASH MANAGEMENT SYSTEM
Borrower shall, and shall cause its Subsidiaries to, establish and maintain
the Cash Management Systems described below:
(a) On or before the Closing Date and until the Termination Date, Borrower
shall (i) establish lock boxes ("Lock Boxes") or at Agent's discretion, blocked
accounts ("Blocked Accounts") at one or more of the banks set forth in
Disclosure Schedule (3.19), and shall request in writing and otherwise take
such reasonable steps to ensure that all Account Debtors forward payment
directly to such Lock Boxes, and (ii) deposit and cause its Subsidiaries to
deposit or cause to be deposited promptly, and in any event no later than the
first Business Day after the date of receipt thereof, all cash, checks, drafts
or other similar items of payment relating to or constituting payments made in
respect of any and all Collateral (whether or not otherwise delivered to a Lock
Box) into one or more Blocked Accounts in Borrower's name or any such
Subsidiary's name and at a bank identified in Disclosure Schedule (3.19) (each,
a "Relationship Bank"). On or before the Closing Date, Borrower shall have
established a concentration account in its name (the "Concentration Account")
at the bank that shall be designated as the Concentration Account bank in
Disclosure Schedule (3.19) (the "Concentration Account Bank") which bank shall
be reasonably satisfactory to Agent.
(b) Borrower may maintain, in its name, an account (each a "Disbursement
Account" and collectively, the "Disbursement Accounts") at a bank reasonably
acceptable to Agent into which Agent shall, from time to time, deposit proceeds
of Revolving Credit Advances, Swing Line Advances and CapEx Advances made to
Borrower pursuant to Section 1.1 for use by Borrower solely in accordance with
the provisions of Section 1.4.
(c) On or before the Closing Date (or such later date as Agent shall consent
to in writing), the Concentration Account Bank, each bank where a Disbursement
Account is maintained and all other Relationship Banks, shall have entered into
tri-party blocked account agreements with Agent, for the benefit of itself and
Lenders, and Borrower and Subsidiaries thereof, as applicable, in form and
substance reasonably acceptable to Agent, which shall become operative on or
prior to the Closing Date. Each such blocked account agreement shall provide,
among other things, that (i) all items of payment deposited in such account and
proceeds thereof deposited in the Concentration Account are held by such bank
as agent or bailee-in-possession for Agent, on behalf of itself and Lenders,
(ii) the bank executing such agreement has no rights of setoff or recoupment or
any other claim against such account, as the case may be, other than for
payment of its service fees and other charges directly related to the
administration of such account and for returned checks or other items of
payment, and (iii) from and after the Closing Date (A) with respect to banks at
which a Blocked Account is maintained, such bank agrees to forward immediately
all amounts in each Blocked Account to the
B-1
Concentration Account Bank and to commence the process of daily sweeps from
such Blocked Account into the Concentration Account and (B) with respect to the
Concentration Account Bank, such bank agrees to immediately forward all amounts
received in the Concentration Account to the Collection Account through daily
sweeps from the Concentration Account into the Collection Account. Borrower
shall not cause or permit any of its Subsidiaries to, accumulate or maintain
cash in Disbursement Accounts or payroll accounts as of any date of
determination in excess of checks outstanding against such accounts as of that
date and amounts necessary to meet minimum balance requirements.
(d) So long as no Default or Event of Default has occurred and is
continuing, Borrower may amend Disclosure Schedule (3.19) to add or replace a
Relationship Bank, Lock Box or Blocked Account or to replace the Concentration
Account or any Disbursement Account; provided, that (i) Agent shall have
consented in writing in advance to the opening of such account or Lock Box with
the relevant bank and (ii) prior to the time of the opening of such account or
Lock Box, Borrower or its Subsidiaries, as applicable, and such bank shall have
executed and delivered to Agent a tri-party blocked account agreement, in form
and substance reasonably satisfactory to Agent. Borrower shall close any of its
accounts (and establish replacement accounts in accordance with the foregoing
sentence) promptly and in any event within thirty (30) days following notice
from Agent that the creditworthiness of any bank holding an account is no
longer acceptable in Agent's reasonable judgment, or as promptly as practicable
and in any event within sixty (60) days following notice from Agent that the
operating performance, funds transfer or availability procedures or performance
with respect to accounts or Lock Boxes of the bank holding such accounts or
Agent's liability under any tri-party blocked account agreement with such bank
is no longer acceptable in Agent's reasonable judgment.
(e) The Lock Boxes, Blocked Accounts, Disbursement Accounts and the
Concentration Account shall be cash collateral accounts, with all cash, checks
and other similar items of payment in such accounts securing payment of the
Loans and all other Obligations, and in which Borrower and each of its
Subsidiaries shall have granted a Lien to Agent, on behalf of itself and
Lenders, pursuant to the Security Agreement.
(f) All amounts deposited in the Collection Account shall be deemed received
by Agent in accordance with Section 1.10 and shall be applied (and allocated)
by Agent in accordance with Section 1.11. In no event shall any amount be so
applied unless and until such amount shall have been credited in immediately
available funds to the Collection Account.
(g) Borrower shall and shall cause its Affiliates, officers, employees,
agents, directors or other Persons acting for or in concert with Borrower (each
a "Related Person") to (i) hold in trust for Agent, for the benefit of itself
and Lenders, all checks, cash and other items of payment received by Borrower
or any such Related Person, and (ii) within one (1) Business Day after receipt
by Borrower or any such Related Person of any checks, cash or other items of
payment, deposit the same into a Blocked Account. Borrower on behalf of itself
and each Related Person acknowledges and agrees that all cash, checks or other
items of payment
B-2
constituting proceeds of Collateral are part of the Collateral. All proceeds of
the sale or other disposition of any Collateral, shall be deposited directly
into the applicable Blocked Accounts.
B-3
ANNEX C (SECTION 2.1(A))
TO
CREDIT AGREEMENT
CLOSING CHECKLIST
In addition to, and not in limitation of, the conditions described in
Section 2.1 of this Agreement, pursuant to Section 2.1(a), the following items
must be received by Agent in form and substance satisfactory to Agent on or
prior to the Closing Date (each capitalized term used but not otherwise defined
herein shall have the meaning ascribed thereto in Annex A to this Agreement):
A. Appendices. All Appendices to this Agreement, in form and substance
satisfactory to Agent.
B. Revolving Notes, Swing Line Note, CapEx Notes and Term Notes. Duly
executed originals of the Revolving Notes, Swing Line Note, CapEx Notes and
Term Notes for each applicable Lender, dated the Closing Date.
C. Security Agreement. Duly executed originals of the Security Agreement,
dated the Closing Date, from each Credit Party, and all instruments, documents
and agreed executed pursuant thereto, including without limitation the powers
of attorney contemplated thereby.
D. Insurance. Satisfactory evidence that (i) the insurance policies required
by Section 5.4 are in full force and effect (except to the extent permitted to
be delivered after the Closing Date pursuant to Section 5.13), together with
appropriate evidence showing loss payable and/or additional insured clauses or
endorsements, as requested by Agent, in favor of Agent, on behalf of Lenders,
and (ii) all key-man life insurance policies required under Section 5.4(d) have
been assigned to Agent, with the written consent and acknowledgment of the
Borrower and the insurer issuing such policies, all in form and substance
satisfactory to Agent.
E. Security Interests and Code Filings.
(1) Evidence satisfactory to Agent that Agent (for the benefit of itself
and Lenders) has a valid and perfected First Priority Lien in the Collateral
subject, as to priority, only to Permitted Encumbrances (and not to Liens
securing the Second Lien Loan or any Subordinated Debt), including (i) such
documents duly executed or authorized (with respect to UCC financing statements)
by each Credit Party (including UCC financing statements under the Code and
other applicable documents under the laws of any jurisdiction with respect to
the perfection of Liens) as Agent may request in order to perfect its security
interests in the Collateral, and (ii) copies of Code search reports listing all
effective financing statements that name any Credit Party as debtor, together
with copies of such financing statements, none of which shall cover the
Collateral, except for (i) Permitted Encumbrances, (ii) subject to the
Intercreditor Agreement, the Liens securing the Second Lien Loan and (iii)
subject to the Subordination Agreements, the Liens securing the Subordinated
Debt.
C-1
(b) Evidence satisfactory to Agent, including copies, of all UCC and
other financing statements filed in favor of any Credit Party with respect to
each location, if any, at which Inventory may be consigned.
(c) Control Letters from (i) all issuers of uncertificated securities and
financial assets held by any Credit Party, (ii) all securities intermediaries
with respect to all securities accounts and securities entitlements of any
Credit Party, and (iii) all futures commission agents and clearing houses with
respect to all commodities contracts and commodities accounts held by any
Credit Party.
F. Payoff Letter; Termination Statements. Copies of duly executed payoff
letters, in form and substance satisfactory to Agent, from each of Comerica
Bank, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and Superior Snubbing Services, Inc. evidencing the
repayment in full of all Indebtedness and related obligations owed by Bobcat
and its Subsidiaries to such parties, together with (a) authorization for
Borrower or Agent to file such UCC termination statements, in form and
substance satisfactory to Agent, releasing all Liens of such lenders on any
property of any Credit Party, (b) such other releases and other termination
statements, requested by and in form and substance satisfactory to Agent,
manually executed by such lenders and (c) termination of all blocked account
agreements, bank agency agreements or other similar agreements or arrangements
in favor of such lenders or relating to the Indebtedness owed to such lenders.
G. Intellectual Property Security Agreements. Duly executed originals of
Trademark Security Agreements, Copyright Security Agreements and Patent
Security Agreements, each dated the Closing Date and signed by each Credit
Party that owns Trademarks, Copyrights and/or Patents, as applicable, all in
form and substance satisfactory to Agent, together with all instruments,
documents and agreements executed pursuant thereto.
H. Subsidiary Guaranty Agreement. Duly executed originals of the Subsidiary
Guaranty, executed by and each direct and indirect Subsidiary of Borrower in
favor of Agent, for the benefit of Lenders.
I. Initial Borrowing Base Certificate. Duly executed originals of an initial
Borrowing Base Certificate from Borrower, dated the Closing Date, reflecting
information concerning Eligible Accounts of Borrower as of a date not more than
seven (7) days prior to the Closing Date.
J. Initial Notice of Revolving Credit Advance. Duly executed originals of a
Notice of Revolving Credit Advance, dated the Closing Date, with respect to the
initial Revolving Credit Advance to be requested by Borrower on the Closing
Date.
K. Letter of Direction. Duly executed originals of a letter of direction
from Borrower addressed to Agent, on behalf of itself and Lenders, with respect
to the disbursement on the Closing Date of the proceeds of the Term Loan and
the initial Revolving Credit Advance.
L. Cash Management System; Blocked Account Agreements. Evidence satisfactory
to Agent that, as of the Closing Date, Cash Management Systems complying with
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Annex B to this Agreement have been established and are currently being
maintained in the manner set forth in such Annex B, together with copies of
duly executed tri-party blocked account and lock box agreements, reasonably
satisfactory to Agent, with the banks as required by Annex B.
M. Charter and Good Standing. For each Credit Party, such Person's (a)
charter and all amendments thereto, (b) good standing certificates (including
verification of tax status) in its state of incorporation and (c) good standing
certificates (including verification of tax status) and certificates of
qualification to conduct business in each jurisdiction where its ownership or
lease of property or the conduct of its business requires such qualification,
each dated a recent date prior to the Closing Date and certified by the
applicable Secretary of State or other authorized Governmental Authority.
N. Bylaws and Resolutions. For each Credit Party, (a) such Person's bylaws,
together with all amendments thereto and (b) resolutions of such Person's board
of directors approving and authorizing the execution, delivery and performance
of the Loan Documents to which such Person is a party and the transactions to
be consummated in connection therewith, each certified as of the Closing Date
by such Person's corporate secretary or an assistant secretary as being in full
force and effect without any modification or amendment.
O. Incumbency Certificates. For each Credit Party, signature and incumbency
certificates of the officers of each such Person executing any of the Loan
Documents, certified as of the Closing Date by such Person's corporate
secretary or an assistant secretary as being true, accurate, correct and
complete.
P. Opinions of Counsel. Duly executed originals of opinions of Rosen, Cook,
Sledge, Davis, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A., counsel for the Credit Parties, together
with any local counsel opinions reasonably requested by Agent, each in form and
substance reasonably satisfactory to Agent and its counsel, dated the Closing
Date, and each accompanied by a letter addressed to such counsel from the
Credit Parties, authorizing and directing such counsel to address its opinion
to Agent, on behalf of Lenders, and to include in such opinion an express
statement to the effect that Agent and Lenders are authorized to rely on such
opinion.
Q. Pledge Agreement. Duly executed originals of the Pledge Agreement
accompanied by (a) share certificates representing all of the outstanding Stock
being pledged pursuant to such Pledge Agreement and stock powers for such share
certificates executed in blank and (b) the original instruments evidencing
Indebtedness being pledged pursuant to the Pledge Agreement, duly endorsed in
blank.
R. Intentionally Omitted.
S. Appointment of Agent for Service. An appointment of CT Corporation as
each Credit Party's agent for service of process.
T. Fee Letter. Duly executed originals of the GE Capital Fee Letter.
C-3
U. Officer's Certificate. Duly executed originals of a certificate of the
Chief Executive Officer and Chief Financial Officer of Borrower, dated the
Closing Date, stating that (a) after giving effect to the transactions
contemplated hereby (i) the Leverage Ratio does not exceed 2.5:1.0 and (ii) the
First Tier Leverage Ratio does not exceed 1.5:1.0, and (b) since December 31,
2004 (i) no event or condition has occurred or is existing which could
reasonably be expected to have a Material Adverse Effect; (ii) there has been
no material adverse change in the industry in which Borrower operates; (iii) no
Litigation has been commenced which, if successful, would have a Material
Adverse Effect or could challenge any of the transactions contemplated by this
Agreement and the other Loan Documents; (iv) there have been no Restricted
Payments made by any Credit Party; (v) before and after giving effect to the
transactions contemplated by the Credit Agreement, each Credit Party will be
Solvent; and (vi) there has been no material increase in liabilities,
liquidated or contingent, and no material decrease in assets of Borrower or any
of its Subsidiaries.
V. Waivers. Duly executed landlord waivers and consents, bailee letters and
mortgagee agreements in form and substance reasonably satisfactory to Agent, in
each case as required pursuant to Section 5.9.
W. Subordination and Intercreditor Agreements. Agent and Lenders shall have
received all subordination and/or intercreditor agreements, all in form and
substance satisfactory to Agent, in its sole discretion, as Agent shall have
deemed necessary or appropriate with respect to any Indebtedness of any Credit
Party, including without limitation the Intercreditor Agreement and the
Subordination Agreements, duly executed by all parties thereto. Agent and
Lenders shall have received certified copies of amendments to the Subordinated
Notes extending the maturity date of the Subordinated Notes to no earlier than
ninety one (91) days after the Second Lien Maturity Date and consenting to the
Borrower incurring the Indebtedness and granting the Liens contemplated under
the Loan Documents and the Second Lien Loan Documents, such amendments to be in
form and substance satisfactory to Agent in its sole discretion and executed by
all holders of the Subordinated Notes.
X. Employment Agreements. Agent shall have received certified copies of the
Employment Agreements and any other employment agreements with key employees
identified by Agent, in each case in form and substance satisfactory to Agent.
Y. Appraisals. Agent shall have received appraisals as to all Eligible Term
Equipment, each of which shall be in form and substance reasonably satisfactory
to Agent.
Z. Financials; Financial Condition. Agent shall have received a copy of
Borrower's Form 10-Q/A filed with the Securities and Exchange Commission for
the Fiscal Quarter ending September 30, 2005, the Financial Statements,
Projections and other materials set forth in Section 3.4, all certified by
Borrower's Chief Financial Officer, in each case in form and substance
reasonably satisfactory to Agent, and Agent shall be satisfied, in its sole
discretion, with all of the foregoing. Agent shall have further received a
certificate of the Chief Executive Officer and/or the Chief Financial Officer
of Borrower, based on such Pro Forma and Projections, to the effect that (a)
Borrower will be Solvent upon the consummation of the transactions contemplated
herein; (b) the Pro Forma fairly presents the financial condition of
C-4
Borrower as of the date thereof after giving effect to the transactions
contemplated by the Loan Documents; (c) the Projections are based upon
estimates and assumptions stated therein, all of which Borrower believes to be
reasonable and fair in light of current conditions and current facts known to
Borrower and, as of the Closing Date, reflect Borrower's good faith and
reasonable estimates of its future financial performance and of the other
information projected therein for the period set forth therein; (d) the Fair
Salable Balance Sheet was prepared on the same basis as the Pro Forma, except
that Borrower's assets are set forth therein at their fair salable values on a
going concern basis and the liabilities set forth therein include all
contingent liabilities of Borrower stated at the reasonably estimated present
values thereof; and (e) containing such other statements with respect to the
solvency of Borrower and matters related thereto as Agent shall request.
AA. Mortgages and Amendments Thereto. If requested by Agent, Mortgages
covering all of the Real Estate owned by the Credit Parties (the "Mortgaged
Properties"), including without limitation amendment to all Mortgages granted
to the Agent prior to the Closing Date pursuant to the Original Credit
Agreement, reflecting the restructuring of the Commitments under this
Agreement, to the extent necessary or desirable, together with: (a)
endorsements to title insurance policies issued to the Agent prior to the
Closing Date, in satisfactory in form and substance to Agent, in its sole
discretion; (b) evidence that counterparts of the Mortgages and amendments
thereto have been recorded in all places to the extent necessary or desirable,
in the judgment of Agent, to create a valid and enforceable First Priority Lien
(subject as to priority only to Permitted Encumbrances and not to the Lien
securing the Second Lien Loan or any Subordinated Debt) on each parcel of such
Real Estate in favor of Agent for the benefit of itself and Lenders (or in
favor of such other trustee as may be required or desired under local law)
securing the Commitments and Obligations; and (c) an opinion of counsel in each
state in which any such Real Estate is located in form and substance and from
counsel reasonably satisfactory to Agent.
BB. Assignment of Representations, Warranties, Covenants, Indemnities and
Rights. Agent shall have received a duly executed copy of an Assignment of
Representations, Warranties, Covenants, Indemnities and Rights in respect of
Borrower's rights under the Acquisition Agreement, which assignment shall be
expressly permitted under the Acquisition Agreement or shall have been
consented to by the Sellers in writing.
CC. Related Transactions. Agent shall have received certified copies of all
Related Transaction Documents, including without limitation the Acquisition
Agreement and related documents, the Second Lien Loan Documents and the Centre
Partners Settlement Documents, all in form and substance satisfactory to Agent.
DD. Other Documents. Such other certificates, documents and agreements
respecting any Credit Party as Agent may, in its sole discretion, request.
C-5
ANNEX D (SECTION 4.1(A))
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
Borrower shall deliver or cause to be delivered to Agent or to Agent and
Lenders, as indicated, the following:
(a) Monthly Financials. To Agent and Lenders, within thirty (30) days after
the end of each Fiscal Month, financial information regarding Borrower and its
Subsidiaries, certified by the Chief Financial Officer of Borrower, consisting
of consolidated and consolidating (i) unaudited balance sheets as of the close
of such Fiscal Month and the related statements of income and cash flows for
that portion of the Fiscal Year ending as of the close of such Fiscal Month;
and (ii) unaudited statements of income and cash flows for such Fiscal Month,
setting forth in comparative form the figures for the corresponding period in
the prior year and the figures contained in the Projections for such Fiscal
Year, all prepared in accordance with GAAP (subject to normal year-end
adjustments, and without footnotes or disclosures required by GAAP). Such
financial information shall be accompanied by (A) a statement in reasonable
detail (each, a "Compliance Certificate") showing the calculations used in
determining compliance with each Financial Covenant that is tested on a monthly
basis, and (B) the certification of the Chief Financial Officer of Borrower
that (i) such financial information presents fairly in accordance with GAAP
(subject to normal year-end adjustments) the financial position and results of
operations of Borrower and its Subsidiaries, on a consolidated and
consolidating basis, in each case as at the end of such Fiscal Month and for
that portion of the Fiscal Year then ended and (ii) any other information
presented is true, correct and complete in all material respects and that there
was no Default or Event of Default in existence as of such time or, if a
Default or Event of Default shall have occurred and be continuing, describing
the nature thereof and all efforts undertaken to cure such Default or Event of
Default.
(b) Quarterly Financials. To Agent and Lenders, within forty-five (45) days
after the end of each Fiscal Quarter, consolidated and consolidating financial
information regarding Borrower and its Subsidiaries, certified by the Chief
Financial Officer of Borrower, including (i) unaudited balance sheets as of the
close of such Fiscal Quarter and the related statements of income and cash
flows for that portion of the Fiscal Year ending as of the close of such Fiscal
Quarter; and (ii) unaudited statements of income and cash flows for such Fiscal
Quarter, setting forth in comparative form the figures for the corresponding
period in the prior year and the figures contained in the Projections for such
Fiscal Year, all prepared in accordance with GAAP (subject to normal year-end
adjustments, and without footnotes or disclosures required by GAAP). Such
financial information shall be accompanied by (A) a Compliance Certificate
showing the calculations used in determining compliance with each Financial
Covenant, and (B) the certification of the Chief Financial Officer of Borrower
that (i) such financial information presents fairly in accordance with GAAP
(subject to normal year-end adjustments) the financial position and results of
operations of Borrower and its Subsidiaries, on a consolidated and
consolidating basis, in each case as at the end of such Fiscal Quarter and for
D-1
that portion of the Fiscal Year then ended and (ii) any other information
presented is true, correct and complete in all material respects and that there
was no Default or Event of Default in existence as of such time or, if a
Default or Event of Default shall have occurred and be continuing, describing
the nature thereof and all efforts undertaken to cure such Default or Event of
Default. In addition, Borrower shall deliver to Agent and Lenders, within
forty-five (45) days after the end of each Fiscal Quarter, a management
discussion and analysis that includes a comparison to budget for that Fiscal
Quarter and a comparison of performance for that Fiscal Quarter to the
corresponding period in the prior year.
(c) Operating Plan. To Agent and Lenders, as soon as available, but not
later than thirty (30) days after the end of each Fiscal Year, an annual
operating plan for Borrower, on a consolidated and consolidating basis,
approved by the board of directors 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 monthly balance sheets, income statements and
statements of cash flows for the following year and (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 personnel, Capital Expenditures and facilities.
(d) Annual Audited Financials. To Agent and Lenders, within ninety (90) days
after the end of each Fiscal Year, audited Financial Statements for Borrower
and its Subsidiaries on a consolidated and (unaudited) consolidating basis,
consisting of balance sheets and statements of income and retained earnings and
cash flows, setting forth in comparative form in each case the figures for the
previous Fiscal Year, which Financial Statements shall be prepared in
accordance with GAAP and certified without qualification, by an independent
certified public accounting firm of national standing or otherwise acceptable
to Agent. Such Financial Statements shall be accompanied by (i) a statement
prepared in reasonable detail showing the calculations used in determining
compliance with each of the Financial Covenants, (ii) a report from such
accounting firm to the effect that, in connection with their audit examination,
nothing has come to their attention to cause them to believe that a Default or
Event of Default has occurred (or specifying those Defaults and Events of
Default that they became aware of), it being understood that such audit
examination extended only to accounting matters and that no special
investigation was made with respect to the existence of Defaults or Events of
Default, (iii) a letter addressed to Agent, on behalf of itself and Lenders, in
substantially the form of Disclosure Schedule (4.1(a)) signed by such
accounting firm, (iv) the annual letters to such accountants in connection with
their audit examination detailing contingent liabilities and material
litigation matters, and (v) the certification of the Chief Executive Officer or
Chief Financial Officer of Borrower that all such Financial Statements present
fairly in accordance with GAAP the financial position, results of operations
and statements of cash flows of Borrower and its Subsidiaries on a consolidated
and consolidating basis, as at the end of such Fiscal Year and for the period
then ended, and that there was no Default or Event of Default in existence as
of such time or, if a Default or Event of Default shall have occurred and be
continuing, describing the nature thereof and all efforts undertaken to cure
such Default or Event of Default.
D-2
(e) Management Letters. To Agent and Lenders, within five (5) Business Days
after receipt thereof by any Credit Party, copies of all management letters,
exception reports or similar letters or reports received by such Credit Party
from its independent certified public accountants.
(f) Default Notices. To Agent and Lenders, as soon as practicable, and in
any event within five (5) Business Days after an executive officer of Borrower
has actual knowledge of the existence of any Default, Event of Default or other
event that has had a Material Adverse Effect, telephonic or telecopied notice
specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given
telephonically, shall be promptly confirmed in writing on the next Business
Day.
(g) SEC Filings and Press Releases. To Agent and Lenders, promptly upon
their becoming available, copies of: (i) all Financial Statements, reports,
notices and proxy statements made publicly available by any Credit Party to its
security holders; (ii) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any Credit Party with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority; and (iii) all press releases and
other statements made available by any Credit Party to the public concerning
material changes or developments in the business of any such Person.
(h) Subordinated Debt and Equity Notices. To Agent, as soon as practicable,
copies of all material written notices given or received by any Credit Party
with respect to any Subordinated Debt or Stock of such Person, and, within two
(2) Business Days after any Credit Party obtains knowledge of any matured or
unmatured event of default with respect to any Subordinated Debt, notice of
such event of default.
(i) Supplemental Schedules. To Agent, supplemental disclosures, if any,
required by Section 5.6.
(j) Litigation. To Agent in writing, promptly upon learning thereof, notice
of any Litigation commenced or threatened against any Credit Party that (i)
seeks damages in excess of $100,000, (ii) seeks injunctive relief, (iii) is
asserted or instituted against any Plan, its fiduciaries or its assets or
against any Credit Party or ERISA Affiliate in connection with any Plan, (iv)
alleges criminal misconduct by any Credit Party, (v) alleges the violation of
any law regarding, or seeks remedies in connection with, any Environmental
Liabilities or (vi) involves any product recall.
(k) Insurance Notices. To Agent, disclosure of losses or casualties required
by Section 5.4.
(l) Lease Default Notices. To Agent, within two (2) Business Days after
receipt thereof, copies of (i) any and all default notices received under or
with respect to any leased location or public warehouse where Collateral is
located, and (ii) such other notices or documents as Agent may reasonably
request.
D-3
(m) Lease Amendments. To Agent, within two (2) Business Days after receipt
thereof, copies of all material amendments to real estate leases.
(n) Hedge Agreements. To Agent, within two (2) Business Days after entering
into such agreement or amendment, copies of all interest rate, commodity or
currency hedging agreements or amendments thereto.
(o) Other Documents. To Agent and Lenders, such other financial and other
information respecting any Credit Party's business or financial condition as
Agent or any Lender shall from time to time reasonably request.
(p) Weekly Accounts Payable Reports. To Agent and Lenders, as soon as
available, but not later than three (3) Business Days after the end of each
week, a report setting forth an aging of accounts payable.
(q) Cash Budgets. To Agent and Lenders, as soon as available, but not later
than three (3) Business Days after the end of each week, a weekly cash budget
for the immediately following thirteen (13) week period, in form an substance
satisfactory to the Agent in its sole discretion.
D-4
ANNEX E (SECTION 4.1(B))
TO
CREDIT AGREEMENT
COLLATERAL REPORTS
Borrower shall deliver or cause to be delivered the following:
(a) To Agent, upon its request, and in any event no less frequently than (i)
15 days after the end of each fiscal month of the Borrower, if no Default has
occurred and is continuing and (ii) 12:00 p.m. (New York time) on Wednesday of
each week if a Default has occurred and is continuing, (together with a copy of
all or any part of the following reports requested by any Lender in writing
after the Closing Date), each of the following reports, each of which shall be
prepared by Borrower as of the last day of the immediately preceding month or
week, as the case may be:
(i) a Borrowing Base Certificate with respect to all Credit Parties,
accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion;
(ii) a monthly trial balance showing outstanding Accounts of the Credit
Parties aged from invoice date as follows: 1 to 30 days, 31 to 60 days, 61
to 90 days and 91 days or more, accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable discretion.
(b) To Agent, on a monthly basis if no Default has occurred and is
continuing, on a weekly basis if a Default has occurred and is continuing, or
at such more frequent intervals as Agent may request from time to time
(together with a copy of all or any part of such delivery requested by any
Lender in writing after the Closing Date), collateral reports with respect to
the Credit Parties, including all additions and reductions (cash and non-cash)
with respect to Accounts of the Credit Parties, in each case accompanied by
such supporting detail and documentation as shall be requested by Agent in its
reasonable discretion each of which shall be prepared by the Credit Parties as
of the last day of the immediately preceding month or week, as the case may be,
or the date two (2) days prior to the date of any such request;
(c) To Agent, at the time of delivery of each of the monthly Financial
Statements delivered pursuant to Annex D:
(i) a reconciliation of the Accounts trial balance of the Credit Parties
to the most recent Borrowing Base Certificate, general ledger and monthly
Financial Statements delivered pursuant to Annex D, in each case
accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion;
E-1
(ii) an aging of accounts payable and a reconciliation of that accounts
payable aging to the general ledger of the Credit Parties and monthly
Financial Statements delivered pursuant to Annex D, in each case
accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion;
(iii) a reconciliation of the outstanding Loans as set forth in the
monthly Loan Account statement provided by Agent to the general ledger of
the Credit Parties and monthly Financial Statements delivered pursuant to
Annex D, in each case accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable discretion;
(e) To Agent, within thirty (30) days after the end of each Fiscal Quarter,
a detailed list of all Equipment of the Credit Parties, setting forth additions
and deletions of Equipment since the end of the previous Fiscal Quarter;
(f) To Agent, at the time of delivery of each of the annual Financial
Statements delivered pursuant to Annex D, (i) a listing of government contracts
of the Credit Parties subject to the Federal Assignment of Claims Act of 1940;
and (ii) a list of any applications for the registration of any Patent,
Trademark or Copyright filed by any Credit Party with the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in the prior Fiscal Quarter;
(g) Borrower, at its own expense, shall deliver to Agent the results of each
physical verification, if any, that Borrower or any of its Subsidiaries may in
their discretion have made, or caused any other Person to have made on their
behalf, of all or any portion of their Inventory (including all Inventory
consisting of tools), which the Credit Parties shall conduct no less frequently
than semi-annually (and, if a Default or an Event of Default has occurred and
is continuing, the Credit Parties shall, upon the request of Agent, conduct,
and deliver the results of, such physical verifications as Agent may require);
(h) Borrower, at its own expense, shall deliver to Agent such appraisals of
the Forced Liquidation Value (and other values if requested by Agent) of the
Eligible Term Equipment and Eligible CapEx Equipment performed by Acceptable
Appraisers, promptly upon Agent's request, such appraisals to be conducted no
more frequently than once per year, unless a Default or Event of Default has
occurred and is continuing, and then as frequently as Agent may request, such
appraisals to be in form and substance reasonably satisfactory to Agent;
Borrower, at its own expense, shall also deliver such appraisals of its other
assets to Agent after the occurrence and during the continuance of a Default or
an Event of Default promptly upon Agent's request, such appraisals to be
conducted by an appraiser, and in form and substance, reasonably satisfactory
to Agent; and
(i) Such other reports, statements and reconciliations with respect to the
Borrowing Base, Collateral or Obligations of any or all Credit Parties as Agent
shall from time to time request in its reasonable discretion.
E-2
All reports, statements and reconciliations described in this Annex E shall
be delivered to Agent at its address set forth on Annex H, with no copies to
its outside or internal counsel, but with copies to:
General Electric Capital Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Operations Department
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
E-3
ANNEX F (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrower shall not breach or fail to comply with any of the following
financial covenants, each of which shall be calculated in accordance with GAAP
consistently applied:
(a) Maximum Capital Expenditures. Commencing with Fiscal Year 2006, Borrower
and its Subsidiaries on a consolidated basis shall not make Capital
Expenditures (other than Capital Expenditures made by the Borrower that are
financed entirely with the proceeds of CapEx Loans) in excess of $6,500,000 in
any Fiscal Year; provided, however, that the foregoing amount of permitted
Capital Expenditures will be increased in any period by the positive amount (if
any) equal to $6,500,000 minus the actual amount of any Capital Expenditures
expended during such prior period (the "Carry Over Amount"), and for purposes
of measuring compliance herewith, the Carry Over Amount shall be deemed to be
the last amount spent on Capital Expenditures in that succeeding year.
(b) Minimum Fixed Charge Coverage Ratio. Borrower and its Subsidiaries shall
have, on a consolidated basis at the end of each Fiscal Quarter, commencing
with the Fiscal Quarter ending March 31, 2006, a Fixed Charge Coverage Ratio
for the 12-month period then ended of not less than 1.5:1.0; provided, however,
that for the purpose of calculating the Fixed Charge Coverage Ratio for the
Fiscal Quarters ending March 31, 2006, June 30, 2006 and September 30, 2006,
EBITDA and Fixed Charges shall be measured for the period commencing on January
1, 2006 and ending on the last day of such Fiscal Quarter.
(c) Maximum Leverage Ratio. Borrower and its Subsidiaries on a consolidated
basis shall have, at the end of each Fiscal Month set forth below, a Leverage
Ratio as of the last day of such Fiscal Month and for the 12-month period then
ended of not more than the following
2.25:1.00 for the Fiscal Months ending on January 31, 2006 through
March 31, 2006;
2.25:1.00 for the Fiscal Months ending on April 30, 2006 through
June 30, 2006;
2.00:1.00 for the Fiscal Months ending on July 31, 2006 through
September 30, 2006;
2.00:1.00 for the Fiscal Months ending on October 30, 2006 through
December 31, 2006;
2.00:1.00 for the Fiscal Months ending on January 31, 2007 through
March 31, 2007; and
1.75:1.00 for each Fiscal Month ending thereafter.
(d) Maximum First Tier Leverage Ratio. Borrower and its Subsidiaries shall
have on a consolidated basis at the end of each Fiscal Quarter, commencing with
the Fiscal Quarter
F-1
ending March 31, 2006, a First Tier Leverage Ratio for the 12-month period then
ended of not more than 1.5:1.0.
(e) Minimum Borrowing Availability. Borrower shall at all times maintain
Borrowing Availability (on a pro forma basis, with trade payables being paid
consistently with Borrower's historical practice, and expenses and liabilities
being paid in the ordinary course of business and without acceleration of sales
and without any deterioration of working capital) of at least $1,000,000.
(f) Minimum EBITDA. Borrower and its Subsidiaries on a consolidated basis
shall have, at the end of each Fiscal Month set forth below, EBITDA for the 12-
month period then ended of not less than the following:
$33,000,000 for the Fiscal Months ending on January 31, 2006 through
March 31, 2006;
$33,000,000 for the Fiscal Months ending on April 30, 2006 through
June 30, 2006;
$34,000,000 for the Fiscal Months ending on July 31, 2006 through
September 30, 2006;
$34,000,000 for the Fiscal Months ending on October 30, 2006 through
December 31, 2006; and
$35,000,000 for each Fiscal Months ending thereafter.
Unless otherwise specifically provided herein, any accounting term used in
this Agreement shall have the meaning customarily given such term in accordance
with GAAP, and all financial computations hereunder shall be computed in
accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in this Agreement or any other
Loan Document, then Borrower, Agent and Lenders agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating Borrower's and its Subsidiaries' financial condition
shall be the same after such Accounting Changes as if such Accounting Changes
had not been made; provided, however, that the agreement of Requisite Lenders
to any required amendments of such provisions shall be sufficient to bind all
Lenders. "Accounting Changes" means (i) changes in accounting principles
required by the promulgation of any rule, regulation, pronouncement or opinion
by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants (or successor thereto or any agency with similar
functions), (ii) changes in accounting principles concurred in by Borrower's
certified public accountants; (iii) purchase accounting adjustments under
A.P.B. 16 or 17 and EITF 88-16, and the application of the accounting
principles set forth in FASB 109, including the establishment of reserves
pursuant thereto and any subsequent reversal (in whole or in part) of such
reserves; and (iv) the reversal of any reserves established as a result of
purchase accounting adjustments. All such adjustments resulting from
expenditures made subsequent to the Closing Date (including capitalization of
F-2
costs and expenses or payment of pre-Closing Date liabilities) shall be treated
as expenses in the period the expenditures are made and deducted as part of the
calculation of EBITDA in such period. If Agent, Borrower and Requisite Lenders
agree upon the required amendments, then after appropriate amendments have been
executed and the underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained in this Agreement or in any other
Loan Document shall, only to the extent of such Accounting Change, refer to
GAAP, consistently applied after giving effect to the implementation of such
Accounting Change. If Agent, Borrower and Requisite Lenders cannot agree upon
the required amendments within thirty (30) days following the date of
implementation of any Accounting Change, then all Financial Statements
delivered and all calculations of financial covenants and other standards and
terms in accordance with this Agreement and the other Loan Documents shall be
prepared, delivered and made without regard to the underlying Accounting
Change. For purposes of Section 8.1, a breach of a Financial Covenant contained
in this Annex F shall be deemed to have occurred as of any date of
determination by Agent or as of the last day of any specified measurement
period, regardless of when the Financial Statements reflecting such breach are
delivered to Agent.
F-3
ANNEX G (SECTION 9.9(A))
TO
CREDIT AGREEMENT
WIRE TRANSFER INFORMATION
Name: General Electric Capital Corporation
Bank: DeutscheBank Trust Company Americas
New York, New York
ABA #: ▇▇▇▇▇▇▇▇▇
Account #: ▇▇▇▇▇▇▇▇
Account Name: GECC/CAF Depository
Reference: CFA6078
G-1
ANNEX H (SECTION 11.10)
TO
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Agent or GE Capital, at
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Black Warrior Wireline Corp. Account Manager
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
King & Spalding LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
General Electric Capital Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Counsel
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
(B) If to Borrower, at
Black Warrior Wireline Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
with copies to:
▇-▇
▇▇▇▇▇, ▇▇▇▇, Sledge, Davis, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
▇-▇
▇▇▇▇▇ ▇ (▇▇▇▇ ▇▇▇▇▇ A - COMMITMENTS DEFINITION)
TO
CREDIT AGREEMENT
Commitments Lender
--------------------------------- ------------------------------------
Revolving Loan Commitment
$6,000,000 General Electric Capital Corporation
including a Swing Line Commitment
of $3,000,000)
Term Loan Commitment:
$12,000,000 General Electric Capital Corporation
CapEx Loan Commitment:
$2,000,000 General Electric Capital Corporation
Revolving Loan Commitment
$4,500,000 LaSalle Business Credit, LLC
Term Loan Commitment:
$9,000,000 LaSalle Business Credit, LLC
CapEx Loan Commitment:
$1,500,000 LaSalle Business Credit, LLC
Revolving Loan Commitment
$4,500,000 CIT Business Credit, Inc.
Term Loan Commitment:
$9,000,000 CIT Business Credit, Inc.
CapEx Loan Commitment:
$1,500,000 CIT Business Credit, Inc.
Annex 1 - 1