Exhibit 4.1
CREDIT AGREEMENT
$90,000,000
among
WEIDER NUTRITION GROUP, INC.,
AS BORROWER
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THEIR RESPECTIVE
ASSIGNEES PURSUANT TO SECTION 11.6 HEREOF,
AS THE LENDERS,
and
BANKERS TRUST COMPANY,
AS AGENT
Dated as of June 30, 2000
TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS
1.1 General Definitions..............................................1
1.2 Accounting Terms and Determinations.............................26
1.3 Other Interpretive Provisions...................................26
ARTICLE 2
LOANS
2.1 Commitments; Delivery of Notes..................................27
2.2 Borrowing Mechanics.............................................28
2.3 Settlements Among Agents and the Lenders........................30
2.4 Mandatory Payments; Mandatory Reduction of Aggregate
Commitments...................................................32
2.5 Payments and Computations; Maintenance of Account...............34
2.6 Statement of Account............................................36
2.7 Withholding and Other Taxes.....................................36
2.8 Affected Lenders................................................39
2.9 Sharing of Payments.............................................40
ARTICLE 3
LETTERS OF CREDIT
3.1 Letters of Credit...............................................41
3.2 Maximum Letter of Credit Outstandings; Final Maturities.........42
3.3 Letter of Credit Requests; Minimum Stated Amount................42
3.4 Letter of Credit Participations.................................43
3.5 Agreement to Repay Letter of Credit Drawings....................45
ARTICLE 4
INTEREST, FEES AND EXPENSES
4.1 Interest on LIBOR Rate Loans....................................46
4.2 Interest on Prime Rate Loans....................................47
4.3 Notice of Continuation and Notice of Conversion.................47
4.4 Interest After Event of Default.................................49
4.5 Unused Line Fee.................................................49
4.6 Letter of Credit Fees...........................................50
4.7 Reimbursement of Expenses.......................................50
4.8 Authorization to Charge Borrower's Account......................51
4.9 Indemnification in Certain Events...............................51
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ARTICLE 5
CONDITIONS PRECEDENT
5.1 Conditions to Initial Credit Event..............................52
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
6.1 Organization and Qualification..................................54
6.2 Solvency........................................................54
6.3 Rights in Collateral; Priority of Liens.........................54
6.4 No Conflict.....................................................54
6.5 Enforceability..................................................55
6.6 Consents........................................................55
6.7 Financial Data..................................................55
6.8 Locations of Officers, Records and Inventory....................55
6.9 Fictitious Business Names.......................................56
6.10 Subsidiaries....................................................56
6.11 No Judgments or Litigation......................................56
6.12 No Defaults.....................................................56
6.13 Labor Matters...................................................56
6.14 Compliance with Law.............................................57
6.15 ERISA...........................................................57
6.16 Intellectual Property...........................................58
6.17 Licenses and Permits............................................58
6.18 Title to Property...............................................58
6.20 Borrower Taxes and Tax Returns..................................58
6.21 Status of Accounts..............................................59
6.22 Material Contracts..............................................60
6.23 Affiliate Transactions..........................................60
6.24 Accuracy and Completeness of Information........................60
6.25 Recording Taxes.................................................60
6.26 No Adverse Change or Event......................................60
6.27 Additional Adverse Facts........................................60
ARTICLE 7
AFFIRMATIVE COVENANTS
7.1 Financial Information...........................................61
7.2 Inventory.......................................................63
7.3 Corporate Existence.............................................64
7.4 ERISA...........................................................64
7.5 Books and Records...............................................65
7.6 Collateral Records..............................................65
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7.7 Security Interests..............................................65
7.8 Insurance; Casualty Loss........................................66
7.9 Borrower Taxes..................................................67
7.10 Compliance With Laws............................................67
7.11 Use of Proceeds.................................................67
7.12 Fiscal Year.....................................................68
7.13 Notification of Certain Events..................................68
7.14 Intellectual Property...........................................68
7.15 Maintenance of Property.........................................68
7.16 Further Assurances..............................................69
7.17 Changes in Market...............................................69
ARTICLE 8
NEGATIVE COVENANTS
8.1 Certain Financial Covenants.....................................69
8.2 Capital Expenditures............................................73
8.3 No Additional Indebtedness......................................73
8.4 No Liens; Judgments.............................................74
8.5 No Sale of Assets...............................................75
8.6 No Corporate Changes............................................75
8.7 No Guaranties...................................................75
8.8 No Restricted Payments..........................................76
8.9 No Investments..................................................77
8.10 No Affiliate Transactions.......................................78
8.11 Limitation on Transactions Under ERISA..........................78
8.12 No Additional Bank Accounts.....................................78
8.13 Material Amendments of Material Contracts.......................78
8.14 Additional Restrictive Covenants................................78
8.15 No Additional Subsidiaries......................................79
8.16 Limitation on Derivative Transactions...........................79
ARTICLE 9
EVENTS OF DEFAULT AND REMEDIES
9.1 Events of Default...............................................79
9.2 Acceleration and Cash Collateralization.........................81
9.3 Remedies........................................................82
ARTICLE 10
AGENT
10.1 Appointment of Agent............................................83
10.2 Nature of Duties of Agent.......................................83
10.3 Lack of Reliance on Agent.......................................84
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10.4 Certain Rights of Agent.........................................84
10.5 Reliance by Agent...............................................84
10.6 Indemnification of Agent........................................85
10.7 Agent in its Individual Capacity................................85
10.8 Holders of Notes................................................85
10.9 Successor Agent.................................................85
10.10 Collateral Matters..............................................86
10.11 Actions with Respect to Defaults................................87
10.12 Delivery of Information.........................................88
ARTICLE 11
MISCELLANEOUS
11.1 SUBMISSION TO JURISDICTION; WAIVERS.............................88
11.2 JURY TRIAL......................................................89
11.3 GOVERNING LAW...................................................89
11.4 Delays; Partial Exercise of Remedies............................89
11.5 Notices.........................................................89
11.6 Assignability...................................................90
11.7 Confidentiality.................................................93
11.8 Indemnification.................................................93
11.9 Entire Agreement; Successors and Assigns........................94
11.10 Amendments, Etc.................................................94
11.11 Nonliability of Agent and Lenders...............................95
11.12 Counterparts....................................................95
11.13 Effectiveness...................................................95
11.14 Severability....................................................96
11.15 Headings Descriptive............................................96
11.16 Maximum Rate....................................................96
11.17 Right of Setoff.................................................96
11.18 Defaulting Lender...............................................97
11.19 Rights Cumulative...............................................98
11.20 Third Party Beneficiaries.......................................98
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ANNEXES
ANNEX I Lenders; Commitments; Lending Offices
ANNEX II Closing Document List
EXHIBITS
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EXHIBIT A Form of Assignment and Assumption Agreement
EXHIBIT B Form of Revolving Loan Note
EXHIBIT B-1 Form of Term Loan Note
EXHIBIT C Form of Notice of Borrowing
EXHIBIT C-1 Form of Notice of Continuation
EXHIBIT C-2 Form of Notice of Conversion
EXHIBIT D Form of Compliance Certificate
EXHIBIT E Form of Letter of Request
SCHEDULES
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SCHEDULE 6.1 Jurisdictions Qualified to Do Business
SCHEDULE 6.8 Principal Places of Business; Chief Executive
Offices; Locations of Books and Records; Other
Locations of Collateral
SCHEDULE 6.9 Fictitious Business Names
SCHEDULE 6.10 Subsidiaries
SCHEDULE 6.11 Outstanding Judgments; Orders; Waivers
SCHEDULE 6.14 Violations and Failures to Comply with
Requirements of Law; Environmental Matters
SCHEDULE 6.15 ERISA Matters
SCHEDULE 6.18 Real Estate
SCHEDULE 6.20 Tax Matters
SCHEDULE 6.22 Material Contracts
SCHEDULE 6.23 Affiliate Transactions
SCHEDULE 6.27 Additional Adverse Facts
SCHEDULE 8.3(D) Existing Indebtedness
SCHEDULE 8.4(B) Existing Liens
SCHEDULE 8.9 Existing Investments
SCHEDULE 8.12 Payroll and ▇▇▇▇▇ Cash Accounts
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CREDIT AGREEMENT
DATED AS OF JUNE 30, 2000
Borrower, the Lenders and Bankers Trust Company, as Agent, agree as
follows (with certain terms used herein being defined in ARTICLE 1):
ARTICLE 1
DEFINITIONS
1.1 GENERAL DEFINITIONS.
As used herein, the following terms shall have the meanings herein specified:
"ACCOUNTS" shall mean, with respect to any Person, all of such Person's
accounts, whether now existing or existing in the future, including, without
limitation, (I) all accounts receivable of such Person, including, without
limitation, all accounts of such Person created by or arising from the sales of
goods or rendition of services made by such Person under any of its trade names,
or through any of its divisions, (II) all unpaid seller's rights of such Person
(including rescission, replevin, reclamation and stoppage in transit) relating
to the foregoing or arising therefrom, (III) all rights of such Person to any
goods represented by any of the foregoing, including returned or repossessed
goods, (IV) all reserves and credit balances held by such Person with respect to
any such accounts receivable or account debtors and (V) all Guarantees or
collateral for any of the foregoing.
"ACCUMULATED FUNDING DEFICIENCY" shall have the meaning ascribed to that
term in Section 302 of ERISA.
"ADJUSTED LIBOR RATE" shall mean, for any Interest Period, the rate
obtained by dividing (A) the LIBOR Rate for such Interest Period by (B) a
percentage equal to 1 MINUS the stated maximum rate (stated as a decimal) of all
reserves, if any, required to be maintained against "Eurocurrency liabilities"
as specified in Regulation D (or against any other category of liabilities which
includes deposits by reference to which the interest rate on LIBOR Rate Loans is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any Lender to United States
residents).
"AFFILIATE" shall mean, with respect to any Person, any Person which
directly or indirectly through one or more intermediaries Controls, is
Controlled by, or is under common Control with, such Person, or any Person who
is a director or officer of such Person or any Subsidiary of such Person.
"AGENT" shall mean BTCo, acting in its capacity as contractual
representative for the Lenders hereunder and any successor Agent appointed
pursuant to SECTION 10.9.
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"AGGREGATE COMMITMENT" of any Lender shall, subject to SECTION
11.18(C)(II), mean the amount set forth opposite such Lender's name on ANNEX I,
under the heading "Aggregate Commitment," as such amount may be reduced from
time to time or terminated pursuant to the terms of this Credit Agreement.
"APPLICABLE LENDING OFFICE" shall mean, with respect to each Lender, such
Lender's LIBOR Lending Office in the case of a LIBOR Rate Loan, and such
Lender's Domestic Lending Office in the case of a Prime Rate Loan.
"APPLICABLE MARGIN" shall mean, at any time with respect to any LIBOR Rate
Loan or Prime Rate Loan, as the case may be, a percentage per annum equal to the
applicable percentage amount set forth below for such Loan with respect to LEVEL
I, PROVIDED that from and after any Start Date to and including the
corresponding End Date, the Applicable Margin with respect to LIBOR Rate Loans
and Prime Rate Loans, respectively, shall be a percentage per annum equal to the
applicable percentage per annum set forth below if, but only if, as of the Test
Date for such Start Date, Borrower shall have the Senior Leverage Ratio
indicated below:
===============================================================================
SENIOR LEVERAGE APPLICABLE
RATIO MARGIN
------------------------------------------
REVOLVING LOANS TERM LOANS
------------------------------------------
LIBOR PRIME
PRIME RATE RATE RATE LIBOR
LOANS LOANS LOANS RATE LOANS
===============================================================================
I Greater than 2.00 to 1.00 1.50% 3.00% 3.00% 4.00%
-------------------------------------------------------------------------------
II Equal to or less than
2.00 to 1.00 but greater
than 1.50 to 1.00 1.50% 2.75% 3.00% 3.75%
-------------------------------------------------------------------------------
III Equal to or less than
1.50 to 1.00 1.50% 2.50% 3.00% 3.50%
===============================================================================
PROVIDED, that, notwithstanding the foregoing, if Borrower fails to deliver the
financial statements that are required to be delivered pursuant to SECTION
7.1(B), from the date which is three Business Days after the date on which such
financial statements were so required to be delivered until the date of actual
delivery thereof, the Applicable Margin shall be a percentage per annum equal to
the applicable percentage amount set forth above with respect to LEVEL I.
"APPLICABLE MARGIN PERIOD" shall mean each period which shall commence on
a date on which the financial statements are delivered pursuant to SECTION
7.1(B) and which shall end on the earlier of (I) the date of actual delivery of
the next financial statements pursuant to SECTION 7.1(B) and (II) the latest
date on which the next financial statements are required to be delivered
pursuant to SECTION 7.1(B), PROVIDED that the first Applicable Margin Period
shall commence with the delivery of the financial statements in respect of the
Test Period ending on May 31, 2001.
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"ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean an assignment and
assumption agreement entered into by an assigning Lender and an assignee Lender,
and accepted by Agent, in accordance with SECTION 11.6, substantially in the
form of EXHIBIT A.
"AUDITORS" shall mean a nationally-recognized firm of independent
certified public accountants selected by Borrower and reasonably satisfactory to
Agent. For purposes of this Credit Agreement, Borrower's current firm of
independent certified public accountants, Deloitte & Touche LLP, shall be deemed
to be satisfactory to Agent.
"BT ACCOUNT" shall have the meaning ascribed to that term in SECTION
2.5(B)(II).
"BTCO" shall mean Bankers Trust Company, a New York banking corporation,
in its individual capacity.
"BANKRUPTCY DEFAULT" shall mean a Default which is such by virtue of
SECTION 9.1(E)(II).
"BENEFIT PLAN" shall mean an employee pension benefit plan as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan) for which the funding
requirements under Section 412 of the Code or Section 302 of ERISA is, or within
the immediately preceding six (6) years was, in whole or in part, the
responsibility of Borrower, any Subsidiary of Borrower or any ERISA Affiliate.
"BORROWER" shall mean Weider Nutrition Group, Inc., a Utah corporation.
"BORROWER'S ACCOUNT" shall have the meaning ascribed to that term in
SECTION 2.6.
"BORROWER CONSOLIDATED ENTITY" shall mean Borrower and each of its
Subsidiaries which are such by virtue of CLAUSE (A) of the definition of the
term "Subsidiary" hereunder.
"BORROWER TAXES" shall have the meaning ascribed to that term in SECTION
6.20(B).
"BORROWING" shall mean a borrowing consisting of Loans of the same Type
made on the same day by the Lenders.
"BORROWING BASE" shall mean:
(A) Subject to CLAUSE (B) below, at any time, the amount equal at
such time to:
(I) eighty-five percent (85%) of the face amount of Eligible
Accounts Receivable, PLUS
(II) the lesser of $30,000,000 or sixty-five percent (65%) of
the Eligible Inventory, MINUS
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(III) the amount of any reserves established by Agent pursuant
to CLAUSE (B) below.
(B) Agent at any time (upon one (1) Business Days' notice to
Borrower) in the exercise of its Permitted Discretion shall be entitled to (I)
establish and increase or decrease reserves against Eligible Accounts Receivable
and Eligible Inventory, (II) reduce the advance rates under CLAUSES (A)(I) AND
(II) above or (following any such reduction) restore such advance rates to any
level equal to or below the advance rates stated in CLAUSES (A)(I) and (II)
above, (III) impose additional restrictions (or eliminate the same) to the
standards of eligibility set forth in the respective definitions of "Eligible
Accounts Receivable"and "Eligible Inventory" and (IV) establish and increase or
decrease a reserve in the amount of interest payable by Borrower hereunder,
including interest on Loans and Unpaid Drawings.
"BORROWING BASE CERTIFICATE" shall have the meaning ascribed to that term
in SECTION 7.1(F).
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or legal
holiday on which commercial banks in Chicago, Illinois, or New York, New York
are generally closed. When used in connection with LIBOR Rate Loans, this
definition will also exclude any day on which commercial banks are not open for
dealing in Dollar deposits in the London (England, U.K.) interbank market. When
used in connection with any Letter of Credit, the term "BUSINESS DAY" shall mean
any day other than a Saturday, Sunday or legal holiday on which commercial banks
in the domicility of the Issuing Lender are generally closed or authorized to
close.
"CAPITAL EXPENDITURES" shall mean, of any Person for any period, the sum
of (A) all expenditures capitalized by such Person for financial statement
purposes in accordance with GAAP. For purposes of SECTION 8.2 only, insurance
proceeds and any other payments received on account of any Casualty Loss applied
to the repair or replacement of the property affected by such Casualty Loss
shall not constitute Capital Expenditures.
"CAPITAL LEASE" shall mean, with respect to any Person, any lease that is
capitalized by such Person for financial statement purposes in accordance with
GAAP.
"CAPITAL SECURITY" shall mean, with respect to any Person, (A) any share
of capital stock of or other unit of ownership interest in such Person and (B)
any security convertible into, or any option, warrant or other right to acquire,
any share of capital stock of or other unit of ownership interest in such
Person.
"CASH EQUIVALENTS" shall mean (A) securities issued, guarantied or insured
by the United States or any of its agencies with maturities of not more than one
year from the date acquired, (B) certificates of deposit with maturities of not
more than one year from the date acquired issued by a U.S. federal or state
chartered commercial bank of recognized standing, which has capital and
unimpaired surplus in excess of $200,000,000 and which bank or its holding
company has a short-term commercial paper rating of at least A-1 or the
equivalent by
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Standard & Poor's Corporation and at least P-1 or the equivalent by ▇▇▇▇▇'▇
Investors Services, Inc., (C) reverse repurchase agreements with terms of not
more than seven days from the date acquired, for securities of the type
described in CLAUSE (A) above and entered into only with commercial banks having
the qualifications described in CLAUSE (B) above, (D) commercial paper, other
than commercial paper issued by Borrower or any Affiliate of Borrower, issued by
any Person incorporated under the laws of the United States or any state thereof
and rated at least A-1 or the equivalent thereof by Standard & Poor's
Corporation or at least P-1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors
Services, Inc., in each case with maturities of not more than one year from the
date acquired, and (E) investments in money market funds which have net assets
of at least $200,000,000 and at least eighty-five percent (85%) of whose assets
consist of securities and other obligations of the type described in CLAUSES (A)
THROUGH (D) above.
"CASUALTY LOSS" shall mean the theft, loss, physical destruction, damage,
taking or any other similar event with respect to any property or assets of
Borrower or any of its Subsidiaries (other than Inventory), to the extent that
the proceeds thereof, when added to the aggregate proceeds of all other Casualty
Losses occurring in the same fiscal year of Borrower exceed $1,000,000.
"CHANGE OF CONTROL" shall mean one or more of the following events:
(A) less than a majority of the members of PARENT'S Board of
Directors shall be persons who either (I) were serving as directors on the
Closing Date or (II) were nominated as directors and approved by the vote
of the majority of the directors who are directors referred to in CLAUSE
(I) above or this CLAUSE (II); or
(B) the stockholders of PARENT shall approve any plan or proposal
for the liquidation or dissolution of Parent; or
(C) a Person or group of Persons acting in concert (other than the
direct or indirect beneficial owners of the Capital Securities of PARENT
as of the Closing Date) shall, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases or otherwise, have
become the direct or indirect beneficial owner (within the meaning of Rule
13d-3 under the Securities Exchange Act of 1934, as amended from time to
time) of Capital Securities of PARENT representing more than thirty-five
percent (35%) of the combined voting power of the outstanding voting
Capital Securities or other ownership interests for the election of
directors or shall have the right to elect a majority of the Board of
Directors of PARENT; or
(D) Parent shall cease for any reason to own beneficially and of
record one hundred percent of the issued and outstanding Capital
Securities of Borrower; or
(E) Borrower shall cease for any reason to own beneficially and of
record one hundred percent of the issued and outstanding Capital
Securities of the Subsidiary Guarantor; or
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(F) a "Change of Control" (as such term is defined in the
Subordinated Loan Agreement.
"CLOSING DATE" shall mean the date on which the initial Credit Event
occurs.
"CLOSING DOCUMENT LIST" shall mean the Closing Document List attached
hereto as ANNEX II.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COLLATERAL" shall mean any and all assets and rights and interests in or
to property of Borrower and each of the other Credit Parties, whether real or
personal, tangible or intangible, on which a Lien is granted or purported to be
granted pursuant to the Collateral Documents.
"COLLATERAL ACCESS AGREEMENTS" shall mean any landlord waivers, mortgagee
waivers, bailee letters and any similar acknowledgment agreements of any Person,
such as a warehouseman or processor, in possession of Inventory of Borrower, in
each case in form and substance satisfactory to Agent.
"COLLATERAL DOCUMENTS" shall mean Borrower Security Agreement, Subsidiary
Guarantor Security Agreement and all other contracts, instruments and other
documents now or hereafter executed and delivered in connection with this Credit
Agreement, pursuant to which Liens are granted or are purported to be granted to
Agent in the Collateral for the benefit of some or all of Agent, the Lenders and
the Issuing Lenders.
"CONSOLIDATED NET INCOME" shall mean for any period the consolidated net
income of the Borrower Consolidated Entity for such period.
"CONTINUATION" shall have the meaning ascribed to that term in SECTION
4.3.
"CONTROL" shall mean, with respect to any Person, the possession, directly
or indirectly, of the power to (A) vote five percent (5%) or more of the
securities having ordinary voting power for the election of directors of such
Person or (B) direct or cause the direction of management and policies of a
business, whether through the ownership of voting securities, by contract or
otherwise either alone or in conjunction with others or any group. The words
"CONTROLLING" and "CONTROLLED" have correlative meanings.
"CONVERT," "CONVERSION" and "CONVERTED" each shall refer to a conversion
of Loans of one Type into Loans of another Type pursuant to SECTION 4.3.
"COVERED TAXES" shall have the meaning ascribed to that term in SECTION
2.7(A).
"CREDIT AGREEMENT" shall mean this credit agreement, dated as of the date
hereof, as the same may be modified, amended, extended, restated, amended and
restated or supplemented from time to time.
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"CREDIT DOCUMENTS" shall mean, collectively, this Credit Agreement, the
Notes, the Letters of Credit, the Parent Guaranty, the Subsidiary Guaranty, each
of the Collateral Documents and all other documents, agreements, instruments,
opinions and certificates now or hereafter executed and delivered in connection
herewith or therewith, as the same may be modified, amended, extended, restated,
amended and restated or supplemented from time to time.
"CREDIT EVENT" shall mean (A) the making of a Loan and (B) the issuance of
any Letter of Credit.
"CREDIT PARTIES" shall mean, collectively, the Parent, Borrower, the
Subsidiary Guarantor and all other Persons (other than the Lenders, Agent and
the Issuing Lenders) parties to the Credit Documents (other than the Collateral
Access Agreements and any opinions of counsel delivered to Agent, any Lender or
any Issuing Lender in connection with any Credit Document).
"DEFAULT" shall mean an event, condition or default which with the giving
of notice, the passage of time, or both would be an Event of Default.
"DEFAULTING LENDER" shall have the meaning ascribed to that term in
SECTION 11.18(B).
"DERIVATIVE CONTRACT" shall mean an agreement, whether or not in writing
and including any master agreement, documenting, evidencing or relating to any
Derivative Transaction between Borrower, or any Subsidiary of Borrower, and
another Person.
"DERIVATIVE TRANSACTION" shall mean (A) an interest-rate transaction,
including an interest-rate swap, basis swap, forward rate agreement, interest
rate option (including a cap, collar, and floor), and any other instrument
linked to interest rates that gives rise to similar credit risks (including
when-issued securities and forward deposits accepted), (B) an exchange-rate
transaction, including a cross-currency interest-rate swap, a forward
foreign-exchange contract, a currency option, and any other instrument linked to
exchange rates that gives rise to similar credit risks, (C) an equity derivative
transaction, including an equity-linked swap, an equity-linked option, a forward
equity-linked contract, and any other instrument linked to equities that gives
rise to similar credit risk and (D) a commodity (including precious metal)
derivative transaction, including a commodity-linked swap, a commodity-linked
option, a forward commodity-linked contract, and any other instrument linked to
commodities that gives rise to similar credit risks.
"DOL" shall mean the United States Department of Labor and any successor
department or agency.
"DOLLARS" and the sign "$" shall each mean freely transferable lawful
money of the United States of America.
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"DOMESTIC LENDING OFFICE" shall mean, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on ANNEX I, as such annex may be amended from time to time.
"DRAWING" shall have the meaning ascribed to that term in SECTION 3.5(B).
"EBITDA" shall mean, for any fiscal period, (A) Consolidated Net Income
(other than extraordinary items) for such period, PLUS (B) the amount of all
Interest Expense, income tax expense, depreciation and amortization, including
amortization of any goodwill or other intangibles, for such period, to the
extent deducted in calculating Consolidated Net Income for such period, and PLUS
or MINUS (as the case may be) (C) (I) any other non-cash charges, (II) any gains
and losses attributable to any fixed asset sales and (III) certain specific "add
backs" with respect to Consolidated Net Income for the fiscal year of Borrower
ending as of May 31, 2000, not exceeding the respective amounts thereof
disclosed in writing to Agent prior to the Closing Date which have been, in the
case of CLAUSES (I), (II) OR (III), subtracted or added, as the case may be, in
calculating Consolidated Net Income for such period, all determined in
accordance with GAAP.
"ELIGIBLE ACCOUNTS RECEIVABLE" shall mean all Accounts of Borrower payable
in Dollars and deemed by Agent in its Permitted Discretion to be eligible for
inclusion in the calculation of the Borrowing Base. In determining the amount to
be so included, the face amount of such Accounts shall be reduced by the amount
of all returns, discounts, claims, credits, charges, or other allowances and by
the aggregate amount of all reserves, limits and deductions provided for in this
definition and elsewhere in this Credit Agreement, including any reserves
established by Agent pursuant to the definition of the term "Borrowing Base" set
forth herein, and there shall be excluded any such Accounts that Agent
determines to be ineligible pursuant to the definition of the term "Borrowing
Base" set forth herein. Unless otherwise approved in writing by Agent, no
Account of Borrower shall be deemed to be an Eligible Account Receivable if:
(A) it arises out of a sale made by Borrower to an Affiliate of
Borrower; or
(B) the Account is unpaid more than 90 days after the date of the
original invoice with respect thereto; or
(C) it is from the same account debtor (or any Affiliate thereof)
and fifty percent (50%) or more, in face amount, of all Accounts from such
account debtor (or any Affiliate thereof) are ineligible pursuant to CLAUSE (B)
above; or
(D) if such Account is an Account other than a Walmart/Costco
Account, such Account, when aggregated with all other Accounts of such account
debtor, exceeds fifteen percent (15%) in face value of all Accounts of Borrower
combined then outstanding, to the extent of such excess; PROVIDED that Accounts
supported or secured by an irrevocable letter of credit in form and substance
satisfactory to Agent, issued by a financial institution satisfactory to Agent,
and duly transferred to Agent (together with sufficient documentation to permit
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direct draws by Agent) shall be excluded to the extent of the face amount of
such letter of credit for the purposes of such calculation; or
(E) (I) the account debtor is also a creditor of Borrower, (II) the
account debtor has disputed its liability on, or the account debtor has made any
claim with respect to, such Account or any other Account due from such account
debtor to Borrower, which has not been resolved or (III) the Account otherwise
is subject to any right of setoff by the account debtor; PROVIDED that any
Account deemed ineligible pursuant to this CLAUSE (F) shall only be ineligible
to the extent of the amount owed by Borrower to the account debtor, the amount
of such dispute or claim, or the amount of such setoff, as applicable; or
(F) to the actual knowledge of Borrower or Agent, the account debtor
has commenced a voluntary case under the federal bankruptcy laws, as now
constituted or hereafter amended, or made an assignment for the benefit of
creditors, or if a decree or order for relief has been entered by a court having
jurisdiction over the account debtor in an involuntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or if any other
petition or other application for relief under the federal bankruptcy laws has
been filed by or against the account debtor, or if the account debtor has filed
a certificate of dissolution under applicable state law or shall be liquidated,
dissolved or wound-up, or shall authorize or commence any action or proceeding
for dissolution, winding-up or liquidation, or if the account debtor has failed,
suspended business, declared itself to be insolvent, is generally not paying its
debts as they become due or has consented to or suffered a receiver, trustee,
liquidator or custodian to be appointed for it or for all or a significant
portion of its assets or affairs (any such act or event an "ACT OF BANKRUPTCY"),
unless the payment of Accounts from such account debtor is secured by assets of,
or guaranteed by, in either case in a manner satisfactory to Agent, a Person
with respect to which an Act of Bankruptcy has not occurred and that is
acceptable to Agent or, if the Account from such account debtor arises
subsequent to a decree or order for relief with respect to such account debtor
under the federal bankruptcy laws, as now or hereafter in effect, Agent shall
have determined that the timely payment and collection of such Account will not
be impaired; or
(G) the sale is to an account debtor outside of the continental
United States or Canada (other than the Northwest Territories and the Provinces
of Newfoundland and Quebec), unless such account debtor has supplied Borrower
with an irrevocable letter of credit in form and substance satisfactory to
Agent, issued by a financial institution satisfactory to Agent and which has
been duly transferred to Agent (together with sufficient documentation to permit
direct draws by Agent); or
(H) the sale to the account debtor is on a ▇▇▇▇-and-hold, guarantied
sale, sale- and-return, sale on approval or consignment basis or made pursuant
to any other written agreement providing for repurchase or return; or
(I) Agent determines in its Permitted Discretion that collection of
such Account is insecure or that such Account may not be paid by reason of the
account debtor's financial inability to pay; or
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(J) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless Borrower duly assigns its
rights to payment of such Account to Agent pursuant to the Assignment of Claims
Act of 1940 (31 U.S.C.ss.3727 et seq.); or
(K) the goods giving rise to such Account have not been shipped and
delivered to and accepted by the account debtor or the services giving rise to
such Account have not been performed by Borrower and accepted by the account
debtor or the Account otherwise does not represent a final sale; or
(L) the Account does not comply with all applicable legal
requirements, including, where applicable, the Federal Consumer Credit
Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board
of Governors of the Federal Reserve System; or
(M) Agent does not have a valid and perfected first priority
(subject to Permitted Liens) security interest in such Account or the Account
does not otherwise conform to the representations and warranties contained in
the Credit Agreement, any Security Agreement or any of the other Collateral
Documents; or
(N) the Accounts are subject to any adverse security deposit,
progress payment or other similar advance made by or for the benefit of the
applicable account debtor.
"ELIGIBLE INVENTORY" shall mean all Inventory of Borrower that consists of
raw materials, work in progress and finished goods deemed by Agent in its
Permitted Discretion to be eligible for inclusion in the calculation of the
Borrowing Base. In determining the amount to be so included, the amount of such
Inventory shall be valued at the lower of cost or market on a basis consistent
with Borrower's current and historical accounting practice, and shall exclude
(A) any goods returned or rejected by Borrower's customers (other than first
quality goods which may be re-sold as new to other customers of Borrower in the
ordinary course of Borrower's business) and goods in transit to third parties
(other than to Borrower's agents and warehouses that are not excluded pursuant
to CLAUSE (II)(B) of the next succeeding sentence), (B) any Inventory that Agent
determines to be ineligible pursuant to the definition of the term "Borrowing
Base" set forth herein, and (C) any reserves established by Agent pursuant to
the definition of the term "Borrowing Base" set forth herein. Unless otherwise
approved in writing by Agent, no Inventory of Borrower shall be deemed Eligible
Inventory if:
(I) the Inventory is not owned solely by Borrower or Borrower does
not have good, valid and marketable title thereto; or
(II) the Inventory is not stored on property that is either (A)
owned or leased by Borrower, or (B) owned or leased by a warehouseman that has
contracted with Borrower to store Inventory on such warehouseman's property, or
a Person which has contracted with Borrower to package Borrower's Inventory on
such Person's property (PROVIDED that, (1)with respect to Inventory of Borrower
stored on property leased by Borrower, Borrower shall have delivered to Agent a
Collateral Access Agreement executed by the lessor of such property or
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(2) with respect to Inventory of Borrower stored on property owned or leased by
a warehouseman, or Inventory of Borrower on property owned or leased by a Person
which has contracted to package Borrower's Inventory, Borrower shall have
delivered to Agent a Collateral Access Agreement executed by such Person); or
(III) the Inventory is not subject to a valid and perfected first
priority security interest in favor of Agent except, with respect to Eligible
Inventory stored at sites described in CLAUSE (II)(B) of this sentence, for
Liens for normal and customary warehousing charges; or
(IV) the Inventory is obsolete or slow moving (in each case as
determined by Agent in the exercise of its Permitted Discretion) or the
Inventory does not otherwise conform to the representations and warranties
contained in the Credit Agreement, the Security Agreement or any of the other
Collateral Documents; or
(V) the Inventory was not manufactured in accordance with and does
not meet all standards imposed by all Requirements of Law or by any government
agency, or department or division thereof, having regulatory authority over such
goods or their manufacture, use or sale.
"END DATE" shall mean, for any Applicable Margin Period, the last day of
such Applicable Margin Period.
"EQUIPMENT" shall mean, with respect to any Person, all of such Person's
equipment, including machinery, equipment, office equipment and supplies,
computers and related equipment, furniture, furnishings, tools, tooling, jigs,
dies, fixtures, manufacturing implements, fork lifts, trucks, trailers, motor
vehicles, and other equipment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
and all final or temporary regulations promulgated thereunder and published,
generally applicable rulings entitled to precedential effect.
"ERISA AFFILIATE" shall mean any Person required at any relevant time to
be aggregated with Borrower or any Subsidiary of Borrower under Sections 414(b),
(c), (m) or (o) of the Code.
"EVENT(S) OF DEFAULT" shall have the meaning ascribed to that term in
ARTICLE 9 of this Credit Agreement.
"EXCESS CASH FLOW" shall mean, with respect to any fiscal year of the
Borrower Consolidated Entity, the following, in each case determined in
accordance with GAAP for such fiscal year: (A) EBITDA; MINUS (B) the sum of (I)
cash Interest Expense, (II) income taxes paid in cash, (III) principal payments
on or mandatory redemptions of Indebtedness (other than repayments of Revolving
Loans in the ordinary course of business which do not permanently reduce the
Revolving Loan Commitments), to the extent permitted hereunder, (IV) Capital
Expenditures, to the extent permitted hereunder, and (V) dividends on Capital
Securities of
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Borrower, and Required Earn-Out Payments, in each case to the extent paid in
cash and permitted hereunder.
"EXCESS CASH FLOW PAYMENT" means, with respect to any fiscal year of
Borrower, (A) Excess Cash Flow MULTIPLIED BY (B) the applicable Excess Cash Flow
Percentage, in each case, with respect to such fiscal year.
"EXCESS CASH FLOW PERCENTAGE" shall mean, with respect to any fiscal year
of Borrower pursuant to SECTION 2.4(G)(IV), (A) seventy-five percent (75%), if
the Total Leverage Ratio, as determined as of the last day of such fiscal year
for the twelve-month period ending on such date, is equal to or greater than 3.5
to 1.0, (B) fifty percent (50%), if the Total Leverage Ratio, as determined as
of the last day of such fiscal year for the twelve-month period ending on such
date, is less than 3.5 to 1.0 but equal to or greater than 2.5 to 1.0 and (C)
zero percent (-0-%), if (I) the Total Leverage Ratio, as determined as of the
last day of such fiscal year for the twelve-month period ending on such date is
less than 2.5 to 1.0 and (II) the aggregate face amount of the Accounts owed by
Borrower's top two (2) customers is less than thirty-five percent (35%)of the
aggregate face amount of all Accounts of Borrower.
"EXPENSES" shall mean all present and future out-of-pocket expenses
incurred by or on behalf of Agent, in its capacity as Agent, in connection with
the Credit Agreement, any other Credit Document or otherwise, whether incurred
heretofore or hereafter, which expenses shall include, without being limited to,
the cost of record searches, the reasonable fees and expenses of attorneys and
paralegals, all costs and expenses incurred by Agent in opening bank accounts
and lockboxes, depositing checks, receiving and transferring funds, and any
charges imposed on Agent due to insufficient funds of deposited checks and
Agent's standard fee relating thereto, collateral examination fees and expenses,
reasonable fees and expenses of accountants, appraisers, field examiners or
other consultants, experts or advisors employed or retained by Agent, reasonable
fees and expenses incurred by Agent in connection with assignments of or sales
of participations in the Loans consummated in connection with the initial
syndication thereof, title insurance premiums, real estate survey costs, fees
and taxes relative to the filing of financing statements, costs of preparing and
recording any Mortgages or any other Collateral Documents, all expenses and
costs referred to in ARTICLE 4 of this Credit Agreement, all other fees and
expenses required to be paid pursuant to the Fee Letter and all fees and
expenses incurred in connection with releasing Collateral and the amendment or
termination of any of the Credit Documents.
"EXPIRATION DATE" shall mean the earlier of (A) March 31, 2005 and (B) the
termination or reduction to zero (0) of the Aggregate Commitment of each Lender.
"FEDERAL FUNDS RATE" shall mean, for any period, a fluctuating interest
rate per annum equal, for each day during such period, to the weighted average
of the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on
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such transactions received by Agent from three Federal Funds brokers of
recognized standing selected by it.
"FEE LETTER" shall mean that certain letter agreement of even date
herewith between Agent and Borrower providing for the payment of certain fees in
connection with this Credit Agreement.
"FEES" shall mean the Unused Line Fee, the Letter of Credit Fee and the
Issuing Lender Fees, and, without duplication, all fees payable by Borrower
under the Fee Letter.
"FINANCIAL STATEMENTS" shall mean, of any Person, the consolidated and,
unless otherwise specified, consolidating balance sheets, statements of
operations, statements of cash flows and statements of changes in shareholder's
equity of such Person and its consolidated subsidiaries for the period
specified.
"FIXED CHARGE COVERAGE RATIO" shall mean, as determined as of any date for
any period ending on such date, the ratio of (A) EBITDA for such period to (B)
the sum of the following, in each case of the Borrower Consolidated Entity as
determined in accordance with GAAP for such period, (I) cash income tax expense,
(II) cash Interest Expense, (III) Capital Expenditures of the Borrower
Consolidated Entity (except for such Capital Expenditures financed with the
proceeds of Indebtedness other than the Loans, (IV) distributions to Parent in
respect of dividend payments on or mandatory redemptions of Capital Securities
of Parent, (V) Required Earn-Out Payments and (VI) regularly scheduled principal
payments on the Term Loans and other Indebtedness (other than repayments in the
ordinary course of the Revolving Loans which do not permanently reduce the
aggregate Revolving Loan Commitments).
"FOREIGN LENDER" shall mean any Lender or Serving Affiliate organized
under the laws of a jurisdiction outside of the United States.
"FUNDING BANK" shall have the meaning ascribed to that term in SECTION
4.9.
"GAAP" shall mean generally accepted accounting principles in the United
States as in effect from time to time.
"GOVERNING DOCUMENTS" shall mean, as to any Person, the certificate or
articles of incorporation and by-laws or other organizational or governing
documents of such Person.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GUARANTY" of any Person shall mean any Liability, contingent or
otherwise, of such Person (other than an endorsement for collection or deposit
in the ordinary course of business) (A) to pay any Liability of any other Person
or to otherwise protect, or having the practical effect of protecting, the
holder of any such Liability against loss (whether such obligation
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arises by virtue of such Person being a partner of a partnership or participant
in a joint venture or by agreement to pay, to keep well, to maintain solvency,
assets, level of income or other financial condition, to purchase assets, goods,
securities or services or to take or pay, or otherwise) or (B) incurred in
connection with the issuance by a third Person of a Guaranty of any Liability of
any other Person (whether such obligation arises by agreement to reimburse or
indemnify such third Person or otherwise). The word "GUARANTEE" when used as a
verb has the correlative meaning.
"HIGHEST LAWFUL RATE" shall mean, at any time when any Obligations shall
be outstanding hereunder, the maximum nonusurious interest rate, that then may
be contracted for, taken, reserved, charged or received on the Obligations owing
under this Credit Agreement or any of the other Credit Documents, under (A) the
laws of the State of ILLINOIS (or the law of any other jurisdiction whose laws
may be mandatorily applicable notwithstanding other provisions of this Credit
Agreement and the other Credit Documents) or (B) if higher, applicable federal
laws, in any case after taking into account, to the extent permitted by
applicable law, any and all relevant payments or charges under this Credit
Agreement and any other Credit Documents executed in connection herewith, and
any available exemptions, exceptions and exclusions.
"INDEBTEDNESS" of any Person shall mean (in each case, whether such
obligation is with full or limited recourse) (A) any obligation of such Person
for borrowed money, (B) any obligation of such Person evidenced by a bond,
debenture, note or other similar instrument, (C) any obligation of such Person
to pay the deferred purchase price of property or services, except a trade
account payable that arises in the ordinary course of business but only if and
so long as the same is payable on customary trade terms, (D) any obligation of
such Person as lessee under a Capital Lease, (E) any Mandatorily Redeemable
Obligation of such Person owned by any Person other than such Person or a
Subsidiary of such Person (the amount of such Mandatorily Redeemable Obligation
to be determined for this purpose as the higher of the liquidation preference of
and the amount payable upon redemption of such Mandatorily Redeemable
Obligation), (F) any obligation of such Person to purchase securities or other
property that arises out of or in connection with the sale of the same or
substantially similar securities or property, (G) any non-contingent obligation
of such Person to reimburse any other Person in respect of amounts paid under a
letter of credit or other Guaranty issued by such other Person to the extent
that such reimbursement obligation remains outstanding after it becomes
non-contingent, (H) any Derivative Contract or similar obligation obligating
such Person to make payments, whether periodically or upon the happening of a
contingency, except that if any agreement relating to such obligation provides
for the netting of amounts payable by and to such Person thereunder or if any
such agreement provides for the simultaneous payment of amounts by and to such
Person, then in each such case, the amount of such obligation shall be the net
amount thereof, (I) any Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) a Lien on any asset of such Person (PROVIDED, that, if such
Person has not assumed or otherwise become liable in respect of such
Indebtedness, such Indebtedness shall be deemed to be in an amount equal to the
lesser of (A) the amount of such Indebtedness and (B) the fair
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market value of the assets subject to such Lien, as determined in good faith by
such Person) and (J) any Indebtedness of others Guaranteed by such Person.
"INTEREST COVERAGE RATIO" shall mean, as determined as of any date for any
period ending on such date, the ratio of (A) EBITDA to (B) cash Interest
Expense, in each case for such period.
"INTEREST EXPENSE" shall mean the aggregate consolidated interest expense
of the Borrower Consolidated Entity in respect of Indebtedness determined on a
consolidated basis in accordance with GAAP, including amortization of original
issue discount on any Indebtedness and of all fees payable in connection with
the incurrence of such Indebtedness (to the extent included in interest
expense), the interest portion of any deferred payment obligation and the
interest component of any Capital Lease obligations.
"INTEREST PERIOD" shall mean a period, commencing, in the case of the
first Interest Period applicable to a LIBOR Rate Loan, on the date of the making
of, or conversion into, such Loan, and, in the case of each subsequent,
successive Interest Period applicable thereto, on the last day of the
immediately preceding Interest Period. The duration of each such Interest Period
shall be one, two, three or six months, in each case as Borrower may, in an
appropriate Notice of Borrowing, Notice of Continuation of Notice of Conversion,
select; PROVIDED that Borrower may not select any Interest Period that ends
after the Expiration Date. Whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business Day,
PROVIDED that if such extension would cause the last day of such Interest Period
to occur in the next following calendar month, the last day of such Interest
Period shall occur on the next preceding Business Day.
"INTERIM ADVANCE" shall mean a Loan made by Agent to Borrower pursuant to
SECTION 2.2(B)(I).
"INTERIM ADVANCE PERIOD" shall have the meaning ascribed to that term in
SECTION 2.2(B)(I).
"INTERNAL REVENUE SERVICE" or "IRS" shall mean the United States Internal
Revenue Service and any successor agency.
"INVENTORY" shall mean, with respect to Borrower, all of Borrower's
inventory, including: (A) all raw materials, work in process, parts, components,
assemblies, supplies and materials used or consumed in Borrower's business; (B)
all goods, wares and merchandise, finished or unfinished, held for sale or lease
or leased or furnished or to be furnished under contracts of service; and (C)
all goods returned or repossessed by Borrower.
"INVESTMENT" shall mean, as applied to an Investment of or by any Person,
all Guaranties by such Person of any Liabilities of another Person, all
expenditures made and all Liabilities incurred (contingently or otherwise) for
or in connection with the acquisition of
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stock or other ownership interests or Indebtedness of, or for loans, advances,
capital contributions or transfers of property to, another Person. In
determining the aggregate amount of Investments outstanding at any particular
time, (A) the amount of any Investment represented by a Guaranty shall be taken
at not less than the principal amount of the Liabilities to which such Guaranty
is applicable and still outstanding; (B) there shall be deducted in respect of
each such Investment any amount received as a return of capital (but only by
sale, repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (C) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise; and (D) there shall not be deducted from the
original amount of any Investment, and such Investment shall be deemed to
continue to be "outstanding" in such original amount notwithstanding, any (I)
decrease in the market value thereof or (II) amount thereof that may have been
forgiven, released, cancelled or otherwise nullified or held to be invalid.
"ISSUING LENDER" shall mean BTCo (which, for purposes of this definition,
also shall include any banking affiliate of BTCo, including but not limited to
Deutsche Bank AG, New York Branch, which has agreed to issue Letters of Credit
under this Agreement) or any other Lender acceptable to Agent.
"ISSUING LENDER FEES" shall have the meaning ascribed to that term in
SECTION 4.6(B).
"LC INTEREST RATE" shall mean a rate per annum equal to the rate per annum
applicable to Prime Rate Loans comprised of Revolving Loans set forth in SECTION
4.2.
"LC SUPPORTABLE OBLIGATIONS" shall mean (A) obligations of Borrower or any
of its Subsidiaries with respect to workers compensation, surety bonds and other
similar statutory obligations and (B) such other obligations of Borrower or any
of its Subsidiaries as are reason ably acceptable to Agent.
"LENDER" shall, subject to SECTION 11.18(C)(II), mean (A) each Person
listed as a "Lender" on the signature pages hereof and (B) each Person that has
been assigned any or all of the rights and obligations of a Lender pursuant to
SECTION 11.6.
"LETTER OF CREDIT" shall have the meaning ascribed to that term in SECTION
3.1(A).
"LETTER OF CREDIT FEE" shall have the ascribed to that term in SECTION
4.6(A).
"LETTER OF CREDIT OUTSTANDINGS" shall mean, at any time, the sum of (A)
the Stated Amount of all outstanding Letters of Credit and (B) the aggregate
amount of all Unpaid Drawings in respect of all Letters of Credit.
"LETTER OF CREDIT REQUEST" shall have the meaning ascribed to that term in
SECTION 3.3(A).
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"LIABILITY" of any Person shall mean (in each case, whether with full or
limited recourse) any indebtedness, liability, obligation, covenant or duty of
or binding upon, or any term or condition to be observed by or binding upon,
such Person or any of its assets, of any kind, nature or description, direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, whether arising under contract, Requirement of Law,
or otherwise, whether now existing or hereafter arising, and whether for the
payment of money or the performance or non-performance of any act.
"LIBOR LENDING OFFICE" shall mean, with respect to any Lender, the office
of such Lender specified as its "LIBOR Lending Office" opposite its name on
Annex I (or, if no such office is specified, its Domestic Lending Office), or
such other office or Affiliate of such Lender as such Lender may from time to
time specify to Borrower.
"LIBOR RATE" shall mean, with respect to any Interest Period, (A) the rate
per annum for Dollar deposits approximately equal to the principal amount of the
LIBOR Rate Loans for which the LIBOR Rate is being determined and with
maturities comparable to the Interest Period for which such LIBOR Rate would
apply, which appears on the Telerate Page 3750 at approximately 11:00 A.M.,
London time, on the day that is two (2) Business Days prior to the first day of
such Interest Period and (B) if no such rate so appears on the Telerate Page
3750, an interest rate per annum equal to the rate (rounded upward to the
nearest whole multiple of one-sixteenth (1/16) of one percent (1.00%) per annum,
if such rate is not such a multiple) of the offered quotation, if any, to first
class banks in the London (U.K.) interbank market by Deutsche Bank for Dollar
deposits of amounts in immediately available funds comparable to the principal
amount of the LIBOR Rate Loans for which the LIBOR Rate is being determined with
maturities comparable to the Interest Period for which such LIBOR Rate will
apply as of approximately 10:00 A.M. two (2) Business Days prior to the
commencement of such Interest Period. The term "TELERATE PAGE 3750" shall mean
the display designated as Page 3750 on the Telerate Services (or such other page
as may replace such page on such service for the purpose of displaying a
comparable rate).
"LIBOR RATE LOAN" shall mean a Loan that bears, or is to bear, interest by
reference to the LIBOR Rate.
"LIEN(S)" shall mean (A) any lien, claim, charge, pledge, security
interest, deed of trust, mortgage, other encumbrance or other arrangement having
the practical effect of the foregoing and shall include the interest of a vendor
or lessor under any conditional sale agreement, Capital Lease or other title
retention agreement and (B) in addition, in the case of any investment property,
any contract or other arrangement, express or implied, under which any Person
has the right to control such investment property.
"LINE OF CREDIT" shall mean, at any time, an amount equal to the aggregate
amount, at such time, of the Aggregate Commitments of the Lenders.
"LOAN" shall mean a Revolving Loan or a Term Loan.
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"LOCKBOX" shall have the meaning ascribed to that term in SECTION
2.5(B)(I).
"LOCKBOX ACCOUNT" shall have the meaning ascribed to that term in SECTION
2.5(B)(I).
"LOCKBOX ACCOUNT AGREEMENT" shall have the meaning ascribed to that term
in SECTION 2.5(B(II).
"LOCKBOX ACCOUNT BANK" shall have the meaning ascribed to that term in
SECTION 2.5(B(I).
"MAJORITY LENDERS" shall mean, at any time, those Lenders having more than
50% of the aggregate amount of the Aggregate Commitments or, if the Aggregate
Commitments shall have expired or been terminated, Lenders having more than 50%
of the aggregate amount of the outstanding Total Exposures.
"MANAGEMENT NOTES" shall mean those certain promissory notes set forth in
PART 2 of SCHEDULE 8.9, in the respective original principal amounts and payable
to Borrower by the respective payors, in each case indicated therein.
"MANDATORILY REDEEMABLE OBLIGATION" shall mean a Liability of Borrower or
any Subsidiary of Borrower, or a Liability of another Person Guaranteed by
Borrower or any Subsidiary of Borrower, to the extent that, in either case, it
is redeemable, payable or required to be purchased or otherwise retired or
extinguished (A) at a fixed or determinable date, whether by operation of
sinking fund or otherwise, (B) at the option of any Person other than Borrower
or such Subsidiary or (C) upon the occurrence of a condition not solely within
the control of Borrower or such Subsidiary, such as a redemption required to be
made out of future earnings.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (A) the
business, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Credit Parties taken as a whole, (B) the value
of Collateral or the amount which Agent, the Lenders or any Issuing Lender would
be likely to receive (after giving consideration to delays in payment and costs
of enforcement) in the liquidation of such Collateral, (C) any Credit Party's
ability to perform its obligations under the Credit Documents to which it is a
party or (D) the rights and remedies of Agent, the Lenders or any Issuing Lender
under any Credit Document.
"MATERIAL CONTRACT" shall mean any contract or other arrangement (other
than the Credit Documents), whether written or oral, to which Borrower or any
Subsidiary of Borrower is a party with respect to which breaches,
nonperformances, cancellations or failures to renew by any party thereto singly
or in the aggregate could reasonably be expected to have a Material Adverse
Effect.
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"MORTGAGES" shall mean all mortgages, deeds of trust, leasehold mortgages
and leasehold deeds of trust granted by Borrower to or for the benefit of Agent,
as the case may be.
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA and (A) which is, or within the immediately
preceding six (6) years was, contributed to by Borrower, any Subsidiary of
Borrower or any ERISA Affiliate or (B) with respect to which Borrower or any
Subsidiary of Borrower may incur any liability.
"NOTE" shall mean a Revolving Loan Note or a Term Loan Note.
"NOTICE OF BORROWING" shall have the meaning ascribed to that term in
SECTION 2.2(A)(I).
"NOTICE OF CONTINUATION" shall have the meaning ascribed to that term in
SECTION 4.3(A).
"NOTICE OF CONVERSION" shall have the meaning ascribed to that term in
SECTION 4.3(B).
"OBLIGATIONS" shall mean (A) the unpaid principal of and interest on the
Loans and the Notes, (B) the obligation of Borrower to pay to an Issuing Lender
the amounts of all Unpaid Drawings, together with interest accrued thereon at
the LC Interest Rate, made under Letters of Credit of such Issuing Lender, (C)
the Fees, (D) the Expenses, (E) all other Liabilities of Borrower to Agent and
any Lender (in its capacity as such and not in its capacity as an Issuing
Lender), which may arise under, out of, or in connection with, the Credit
Agreement, the Notes, any other Credit Document or any other document made,
delivered or given in connection herewith or therewith, and (F) all other
Liabilities of Borrower to an Issuing Lender in respect of its Letters of
Credit. As used in CLAUSES (A), (B) AND (C) and wherever else the determination
of the amount of "interest" is relevant, "interest" shall include interest
accruing on or after the filing of, or what would have accrued but for the
filing of, any petition in bankruptcy, or the commencement of any insolvency,
reorganization, or like proceeding, relating to Borrower, whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding.
"OTHER TAXES" shall have the meaning ascribed to that term in SECTION
2.7(B).
"PARENT" shall mean Weider Nutrition International, Inc., a Utah
corporation.
"PARENT GUARANTY" shall mean the Guaranty of even date herewith executed
by Parent in favor of Agent, as the same may be modified, amended, extended,
exchanged, substituted, restated, amended and restated or supplemented from time
to time.
"PAYMENT" shall have the meaning ascribed to that term in SECTION 2.9.
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"PAYMENT OFFICE" shall mean the office of Agent located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other office of Agent as shall be
specified by Agent from time to time in a notice to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.
"PERMITTED DISCRETION" shall mean Agent's judgment exercised in good faith
based upon its consideration of any factor which Agent believes in good faith:
(A) will or could adversely affect the value of any Collateral, the
enforceability or priority of Agent's Liens thereon or the amount which Agent,
the Lenders or any Issuing Lender would be likely to receive (after giving
consideration to delays in payment and costs of enforcement) in the liquidation
of such Collateral; (B) suggests that any collateral report or financial
information delivered to Agent by any Person on behalf of Borrower is
incomplete, inaccurate or misleading in any material respect; (C) materially
increases the likelihood of a bankruptcy, reorganization or other insolvency
proceeding involving Borrower or any Subsidiary of Borrower or any of the
Collateral; or (D) creates or reasonably could be expected to create a Default
or Event of Default. In exercising such judgment, Agent may consider such
factors already included in or tested by the definition of Eligible Accounts
Receivable or Eligible Inventory, as well as any of the following: (I) the
changes in collection history and dilution with respect to the Accounts; (II)
changes in demand for, and pricing of, Inventory; (III) changes in any
concentration of risk with respect to Borrower's Accounts and Inventory; and
(IV) any other factors that change the credit risk of lending to Borrower on the
security of Borrower's Accounts and Inventory. The burden of establishing lack
of good faith hereunder shall be on Borrower.
"PERMITTED LIENS" shall have the meaning ascribed to that term in SECTION
8.4.
"PERMITTED RESTRICTIVE COVENANT" shall mean (A) any covenant or
restriction contained in any Credit Document, (B) any covenant or restriction
binding upon any Person at the time such Person becomes a Subsidiary of Borrower
if the same is not created in contemplation thereof, (C) any covenant or
restriction of the type contained in SECTION 8.4 that is contained in any
contract evidencing or providing for the creation of or concerning Indebtedness
secured by any Purchase Money Lien so long as such covenant or restriction is
limited to the property purchased therewith, the contracts related thereto and
the proceeds thereof, or (D) any covenant or restriction that (I) is not more
burdensome than an existing Permitted Restrictive Covenant that is such by
virtue of clause (B) or (C) is contained in a contract constituting a renewal,
extension or replacement of the Contract in which such existing Permitted
Restrictive Covenant is contained; and (III) is binding only on the Person or
Persons bound by such existing Permitted Restrictive Covenant.
"PERSON" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, entity, party or government (including
any division, agency or department thereof), and, as applicable, the successors,
heirs and assigns of each.
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"PLAN" shall mean any employee benefit plan, program or arrangement,
whether oral or written, maintained or contributed to by Borrower, any
Subsidiary of Borrower or any ERISA Affiliate, or with respect to which
Borrower, any Subsidiary of Borrower or any ERISA Affiliate, may incur
liability.
"PRIME LENDING RATE" shall mean the rate that Deutsche Bank announces from
time to time in New York, New York as its prime lending rate in the United
States, as in effect from time to time. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. Deutsche Bank, BTCo and each of the other Lenders may make
commercial loans or other loans at rates of interest at, above or below the
Prime Lending Rate.
"PRIME RATE LOAN" shall mean a Loan that bears, or is to bear, interest by
reference to the Prime Lending Rate.
"PROHIBITED TRANSACTION" shall mean any transaction that is prohibited
under Code Section 4975 or ERISA Section 406 and not exempt under Code Section
4975 or ERISA Section 408.
"PROPORTIONATE SHARE" shall, subject to SECTION 11.18(C)(II), mean, with
respect to any Lender, a fraction (expressed as a percentage), the numerator of
which shall be the amount of such Lender's Aggregate Commitment and the
denominator of which shall be the Total Commitments or, if the Aggregate
Commitments have been terminated, a fraction the numerator of which shall be the
principal amount of such Lender's Total Exposure and the denominator of which
shall be the aggregate amount of all Total Exposures of all Lenders then
outstanding.
"PURCHASE MONEY LIENS" shall mean Liens on any item of Equipment acquired
by Borrower securing the purchase price thereof, PROVIDED that each such Lien
shall attach only to the Equipment so acquired, the contracts related thereto
and the proceeds thereof.
"REAL ESTATE" shall mean all real property owned or leased by Borrower or
any Subsidiary of Borrower, together with all fixtures, improvements and other
structures thereon.
"REDUCED RATE" shall have the meaning ascribed to that term in SECTION
2.7(E), relating to backup withholding tax.
"REFINANCED INDEBTEDNESS" shall mean all Indebtedness of Borrower and the
other Credit Parties under that certain Third Amended and Restated Credit
Agreement dated as of May 6, 1997, as amended, among Borrower, Parent,
Subsidiary Guarantor and certain of their Affiliates, General Electric Capital
Corporation, as Agent, and the financial institutions parties thereto as
lenders.
"REGULATION D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto.
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"REPORTABLE EVENT" shall mean any of the events described in Section 4043
of ERISA and the regulations thereunder.
"REQUIRED EARN-OUT PAYMENTS" shall mean payments by Borrower required
pursuant to Section 2 of that certain Stock Purchase Agreement dated July 9,
1998, among Borrower and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ Schlurter, each an
individual, without giving effect any amendments or supplements to such Stock
Purchase Agreement, or restatements or other modifications thereof, except for
any of the foregoing previously consented to in writing by Agent.
"REQUIREMENT OF LAW" shall mean, as to any Person, the Governing Documents
of such Person, and any law, treaty, rule, regulation, direction, ordinance,
criterion or guideline or determination of a court or other Governmental
Authority or determination of an arbitrator, in each case applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject.
"RESTRICTED PAYMENT" shall mean, with respect to any Person, (A) any
payment with respect to or on account of any of the Capital Securities of such
Person, including any dividend or other distribution on, any payment of interest
on or principal of, and any payment on account of any purchase, redemption,
retirement, exchange, defeasance or conversion of, or on account of any claim
relating to or arising out of the offer, sale or purchase of, any such Capital
Securities and (B) any optional payment or prepayment on or redemption
retirement, (including by making payments to a sinking or analogous fund),
repurchase, defeasance or other acquisition of, any Indebtedness (other than
Indebtedness pursuant to this Credit Agreement). For the purposes of this
definition, a "payment" shall include the transfer of any asset or the
incurrence of any Indebtedness or other Liability (the amount of any such
payment to be the fair market value of such asset or the amount of such
obligation, respectively) but shall not include the issuance by such Person to
the holders of a class or series of a class of its Capital Securities of the
same class and, if applicable, series, other than, in the case of Borrower or
any Subsidiary of Borrower, Mandatorily Redeemable Obligations.
"REVOLVING EXPOSURE" shall mean, with respect to any Lender, the aggregate
amount of such Lender's outstanding Revolving Loans PLUS such Lender's
Proportionate Share of all Letter of Credit Outstandings.
"REVOLVING LOAN" shall mean, with respect to any Lender, any amount
advanced by such Lender pursuant to SECTION 2.1(A), 2.2(B), 2.2(C) or any other
provision of this Credit Agreement (other than SECTION 2.1(B)).
"REVOLVING LOAN COMMITMENT" of any Lender shall, subject to SECTION
11.18(C)(II), mean the amount set forth opposite such Lender's name on ANNEX I,
under the heading "Revolving Loan Commitment," as such amount may be reduced
from time to time or terminated pursuant to the terms of this Credit Agreement.
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"REVOLVING LOAN NOTE" shall mean a promissory note of Borrower payable to
the order of any Lender, substantially in the form of EXHIBIT B, evidencing the
Indebtedness of Borrower to such Lender resulting from the Revolving Loans made
by such Lender or acquired by such Lender pursuant to SECTION 11.6.
"▇▇▇▇▇▇▇▇ AGREEMENT" shall mean that certain Separation Agreement dated
July 15, 1999 among Parent and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, an individual, without giving
effect to any amendments or supplements thereto or restatements or other
modifications thereof, except for any of the foregoing previously consent to in
writing by Agent.
"SECURITY AGREEMENT" shall mean the Security Agreement, of even date
herewith, among Agent and Borrower.
"SENIOR LEVERAGE RATIO" shall mean, as of any date of determination
thereof, the ratio of (A) all Indebtedness of the Borrower Consolidated Entity
(other than the Subordinated Debt and any other unsecured Indebtedness) as of
such date, to (B) EBITDA as determined as of such date for the twelve-month
period ending on such date.
"SERVING AFFILIATE" shall mean an Affiliate of any Lender that is an
Issuing Lender.
"SETTLEMENT DATE" shall have the meaning ascribed to that term in SECTION
2.3(B)(I).
"START DATE" shall mean, with respect to any Applicable Margin Period, the
first day of such Applicable Margin Period.
"STATED AMOUNT" of each Letter of Credit shall mean, at any time, the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met).
"SUBORDINATED DEBT" shall mean the Indebtedness of Borrower evidenced by
the Subordinated Notes.
"SUBORDINATED DEBT DOCUMENTS" shall mean, collectively, the Subordinated
Notes, the Subordinated Loan Agreement, the Subordination Agreement and all
other documents, agreements, instruments, opinions and certificates now or
hereafter executed and delivered in connection therewith, in each case, as the
same may be modified, amended, extended, exchanged, substituted, restated,
amended and restated or supplemented from time to time, in each case to the
extent permitted hereunder and under the Subordination Agreement.
"SUBORDINATED LENDERS" shall mean (A) Wynnchurch Capital Partners, L.P., a
Delaware limited partnership, and (B) Wynnchurch Capital Partners Canada, L.P.,
a limited partnership organized under the laws of the Province of Alberta.
"SUBORDINATED LOAN AGREEMENT" shall mean that certain Senior Subordinated
Loan Agreement of even date herewith among Borrower and the Subordinated
Lenders, as the same
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may be modified, amended, extended, exchanged, substituted, restated, amended
and restated or supplemented from time to time, in each case to the extent
permitted hereunder and under the Subordination Agreement.
"SUBORDINATED NOTES" shall mean those certain Senior Subordinated Notes of
even date herewith in the aggregate original principal amount of $10,000,000,
executed by Borrower and payable to the Subordinated Lenders, as the same may be
modified, amended, extended, exchanged, substituted, restated, amended and
restated or supplemented from time to time, in each case to the extent permitted
hereunder and under the Subordination Agreement, together with all promissory
notes and other similar instruments delivered in substitution or exchange
therefor or replacement thereof.
"SUBSIDIARY" shall mean, with respect to any Person at any time (A) any
other Person the accounts of which would be consolidated with those of such
first Person in its consolidated financial statements as of such time, and (B)
any other Person (I) that is, at such time, Controlled by, or (II) securities of
which having ordinary voting power to elect a majority of the board of directors
(or other persons having similar functions), or other ownership interests of
which ordinarily constituting a majority voting interest, are at such time,
directly or indirectly, owned or Controlled by such first Person, or by one or
more of its Subsidiaries, or by such first Person and one or more of its
Subsidiaries; provided, that, for purposes of determining compliance with
ARTICLES 6, 7 and 8, respectively, the defined term "SUBSIDIARY" shall mean and
include only those Subsidiaries of Borrower incorporated or otherwise organized
in the United States and any state or territory thereof.
"SUBSIDIARY GUARANTOR" shall mean WNG Holdings (International) Ltd., a
Nevada corporation.
"SUBSIDIARY GUARANTY" shall mean the Guaranty of even date herewith
executed by Subsidiary Guarantor in favor of Agent, as the same may be modified,
amended, extended, exchanged, substituted, restated, amended and restated or
supplemented from time to time.
"SUBSIDIARY SECURITY AGREEMENT" shall mean the General Security Agreement
of even date herewith between Agent and Subsidiary Guarantor, as the same may be
modified, amended, extended, exchanged, substituted, restated, amended and
restated or supplemented from time to time.
"SUPER MAJORITY LENDERS" shall mean, at any time, those Lenders having
more than 66-2/3% of the aggregate amount of the Total Commitments or, if the
Aggregate Commitments of the Lenders shall have expired or been terminated,
Lenders having more than 66-2/3% of the aggregate amount of the outstanding
Total Exposures of the Lenders.
"TAX TRANSFEREE" shall have the meaning ascribed to that term in SECTION
2.7(A).
"TAXES" shall have the meaning ascribed to that term in SECTION 2.7(A).
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"TERM LOAN" shall have the meaning ascribed to that term in SECTION
2.1(B).
"TERM LOAN COMMITMENT" of any Lender shall, subject to SECTION
11.18(C)(II), mean the amount set forth opposite such Lender's name on ANNEX I,
under the heading "Term Loan Commitment," as such amount may be reduced from
time to time or terminated pursuant to the terms of this Credit Agreement.
"TERM LOAN NOTE" shall mean a promissory note of Borrower payable to the
order of any Lender, substantially in the form of EXHIBIT B-1, evidencing the
Indebtedness of Borrower to such Lender resulting from the Term Loan made by
such Lender or acquired by such Lender pursuant to SECTION 11.6.
"TERMINATION EVENT" shall mean (A) a Reportable Event with respect to any
Benefit Plan or Multiemployer Plan; (B) the withdrawal of Borrower, any
Subsidiary of Borrower or any ERISA Affiliate from a Benefit Plan during a plan
year in which such entity was a "substantial employer" as defined in Section
4001(a) (2) of ERISA; (C) the providing of notice of intent to terminate a
Benefit Plan in a distress termination described in Section 4041(c) of ERISA or
the treatment of any amendment as a termination under Section 4041(e) of ERISA;
(D) the institution by the PBGC of proceedings to terminate a Benefit Plan or
Multiemployer Plan; (E) any event or condition (I) that might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Benefit Plan or Multiemployer Plan, or (II) that may
result in termination of a Multiemployer Plan pursuant to Section 4041A of
ERISA; or (F) the partial or complete withdrawal within the meaning of Sections
4203 and 4205 of ERISA, of Borrower, any Subsidiary of Borrower or any ERISA
Affiliate from a Multiemployer Plan.
"TEST DATE" shall mean, with respect to any Start Date, the last day of
the most recent fiscal quarter of Borrower ended immediately prior to such Start
Date.
"TOTAL COMMITMENTS" shall mean the aggregate of the Aggregate Commitments
of all the Lenders, which in the aggregate shall not exceed $90,000,000.
"TOTAL EXPOSURE" shall mean, with respect to any Lender, the aggregate
principal amount of such Lender's Loans PLUS such Lender's Proportionate Share
of all Letter of Credit Outstandings.
"TOTAL LEVERAGE RATIO" shall mean, as of any date of determination
thereof, the ratio of (A) all Indebtedness of the Borrower Consolidated Entity
as of such date, to (B) EBITDA as determined as of such date for the
twelve-month period ending on such date.
"TYPE" shall mean, with respect to any Loan, whether such Loan is a LIBOR
Rate Loan or a Prime Rate Loan.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of Illinois; PROVIDED that if, with respect to any financing
statement or by reason of any
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provisions of law, the perfection or the effect of perfection or non-perfection
of the Liens granted to Agent pursuant to the applicable Credit Document is
governed by the Uniform Commercial Code as in effect in a jurisdiction of the
United States other than the State of ILLINOIS. "UCC" shall mean the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for
purposes of the provisions of this Agreement, each Credit Document and any
financing statement relating to such perfection or effect of perfection or non-
perfection.
"UNPAID DRAWING" shall have the meaning ascribed to that term in SECTION
3.5(A).
"UNUSED LINE FEE" shall have the meaning ascribed to that term in SECTION
4.5.
"WALMART/COSTCO ACCOUNT" shall mean an Account with respect to which the
account debtor is (A) Wal-Mart Stores or (B) Costco Wholesale Corporation.
"WHOLLY OWNED SUBSIDIARY" shall mean, with respect to any Person, any
Subsidiary of such Person all of the Capital Securities of which (except
directors' qualifying shares) are, directly or indirectly, owned or Controlled
by such Person or one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more of such Subsidiaries.
1.2 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise defined or
specified herein, all accounting terms used herein shall have the meanings
customarily given in accordance with GAAP, and all financial computations to be
made under this Credit Agreement shall, unless otherwise specifically provided
herein, be made in accordance with GAAP applied on a basis consistent in all
material respects with the financial statements referred to in SECTION 6.7. All
accounting determinations for purposes of determining compliance with SECTION
8.1 shall be made in accordance with GAAP as in effect on the Closing Date and
applied on a basis consistent in all material respects with the financial
statements referred to in SECTION 6.7 and the financial statements required to
be delivered hereunder from and after the Closing Date and all financial records
shall be maintained in accordance with GAAP as in effect as of the date of the
financial statements referred to in SECTION 6.7 or, if GAAP shall change from
the basis used in preparing such financial statements, the certificates required
to be delivered pursuant to SECTION 7.1 demonstrating compliance with the
covenants contained herein shall include calculations setting forth the
adjustments necessary to demonstrate how Borrower is in compliance with the
financial covenants based upon GAAP as in effect on the Closing Date. If
Borrower shall change its method of inventory accounting from the
first-in-first-out method to the last-in-last-out method, all calculations
necessary to determine compliance with the covenants contained herein shall be
made as if such method of inventory accounting had not been so changed.
1.3 OTHER INTERPRETIVE PROVISIONS. Terms not otherwise defined herein
which are defined in the UCC shall have the meanings given them in the UCC. The
words "hereof," "herein" and "hereunder" and words of similar import when used
in this Credit Agreement shall refer to this Credit Agreement as a whole and not
to any particular provision of this Credit Agreement, and references to Article,
Section, Annex, Schedule, Exhibit and like
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references are references to this Credit Agreement unless otherwise specified.
Any item or list of items set forth following the word "including," "include" or
"includes" is set forth only for the purpose of indicating that, regardless of
whatever other items are in the category in which such item or items are
"included," such item or items are in such category, and shall not be construed
as indicating that the items in the category are limited to such items or to
items similar to such items. An Event of Default shall "continue" or be
"continuing" until such Event of Default has been waived in accordance with
SECTION 11.10. Except as otherwise specified herein, all references herein (A)
to any Person shall be deemed to include such Person's successors and assigns,
(B) to any Requirement of Law defined or referred to herein shall be deemed
references to such Requirement of Law or any successor Requirement of Law as the
same may have been or may be amended or supplemented from time to time and (C)
to any Credit Document or Collateral Document defined or referred to herein
shall be deemed references to such Credit Document or Collateral Document (and,
in the case of any Note or any other instrument, any instrument issued in
substitution therefor) as the terms thereof may have been or may be amended,
supplemented, waived or otherwise modified from time to time, PROVIDED that, in
the case of any Letter of Credit, any such amendment, supplement, waiver or
other modification shall have been approved in writing by Agent. Whenever the
context so requires, the neuter gender includes the masculine or feminine, the
masculine gender includes the feminine, and the singular number includes the
plural, and vice versa. Except as otherwise specified herein, all references to
the time of day shall be deemed to be to Chicago time as then in effect.
ARTICLE 2
LOANS
2.1 COMMITMENTS; DELIVERY OF NOTES. (A) Subject to the terms and
conditions set forth in this Credit Agreement, on and after the Closing Date and
to and excluding the Expiration Date, each of the Lenders severally agrees to
make from time to time loans and advances to Borrower hereunder (each a
"REVOLVING LOAN"); PROVIDED that no Revolving Loan shall be made if, after
giving effect to the making of such Revolving Loan and the simultaneous
application of the proceeds thereof, (I) the aggregate amount of the Revolving
Exposure of such Lender would exceed the Revolving Loan Commitment of such
Lender, (II) the aggregate amount of the Revolving Exposure of all Lenders would
exceed the lesser of (A) the aggregate Revolving Loan Commitments of all Lenders
and (B) subject to SECTION 2.2(B), the Borrowing Base or (III) the aggregate
amount of the Total Exposure of all Lenders would exceed the Aggregate
Commitments of all Lenders.
(B) Subject to the terms and conditions set forth in this Credit
Agreement, each of the Lenders severally agrees to make a term loan (each a
"TERM LOAN") in an amount equal to such Lender's Term Loan Commitment. Each Term
Loan shall be funded in a single drawing on the Closing Date. Amounts borrowed
under this SECTION 2.1(B) and repaid may not be reborrowed thereafter, and shall
be repaid in accordance with SECTION 2.4 and all other applicable terms of this
Credit Agreement.
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(C) Subject to the terms and conditions set forth in this Credit
Agreement, on and after the Closing Date, Borrower hereby agrees to execute and
deliver to each Lender (I) a Revolving Loan Note to evidence the Revolving Loans
made to Borrower by such Lender and (II) a Term Loan Note to evidence the Term
Loans made to Borrower by such Lender.
2.2 BORROWING MECHANICS.
(A) Except as provided in SECTIONS 2.2(B), 2.3(B) AND 3.5(A),
Borrowings shall be made on notice from Borrower to Agent, given not later than
1:00 P.M. on the Business Day on which a proposed Borrowing consisting of Prime
Rate Loans is requested to be made and on the third Business Day prior to the
date of any proposed Borrowing consisting of LIBOR Rate Loans is requested to be
made.
(I) Each Notice of Borrowing shall be given by, alternatively,
telephone, facsimile or electronic E-mail transmission, and, if by
telephone or electronic E-mail transmission, confirmed in writing,
substantially in the form of EXHIBIT C (the "NOTICE OF BORROWING"). Each
Notice of Borrowing shall be irrevocable by and binding on Borrower.
(II) Borrower shall notify Agent in writing of the names of
the officers of Borrower authorized to request Loans on behalf of Borrower
and specifying which of those officers are also, or, if none are, the
officers that are, authorized to direct the disbursement of Loans in a
manner contrary to standing disbursement instructions, and shall provide
Agent with a specimen signature of each such officer. In the absence of a
specification of those officers who are authorized to vary standing
disbursement instructions, Agent may assume that each officer authorized
to request Loans also has such authority. Agent shall be entitled to rely
conclusively on the authority of such officers' of Borrower to request
Loans on behalf of Borrower, or to vary standing disbursement
instructions, until Agent receives written notice to the contrary. Agent
shall have no duty to verify the authenticity of the signature appearing
on any Notice of Borrowing or other writing delivered pursuant to this
SECTION 2.2(A) and, with respect to an oral or electronic E-mail request
for Loans, Agent shall have no duty to verify the identity of any
individual representing himself as one of the officers of Borrower
authorized to make such request on behalf of Borrower. Neither Agent nor
any of the Lenders shall incur any liability to Borrower as a result of
(A) acting upon any telephonic or electronic E-mail notice referred to in
this SECTION 2.2(A) if Agent believes in good faith such notice to have
been given by a duly authorized officer of Borrower or other individual
authorized to request Loans on behalf of Borrower or to direct the
disbursement thereof in a manner contrary to standing disbursement
instructions, or (B) otherwise acting in good faith under this SECTION
2.2(A) and an advance made and disbursed pursuant to any such telephonic
or electronic E-mail notice shall be deemed to be a Loan for all purposes
of this Credit Agreement.
(III) In its Notice of Borrowing, Borrower may request one or more
Borrowings on a single day. Each such Borrowing shall, unless otherwise
specifically
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provided herein, consist entirely of Loans of the same Type and shall, in
the case of a Borrowing of LIBOR Rate Loans, be in an aggregate amount for
all Lenders of not less than $5,000,000 or an integral multiple of
$1,000,000 in excess thereof. The right of Borrower to choose LIBOR Rate
Loans is subject to the provisions of SECTION 4.3(C).
(B) (I) In the event Borrower is unable to comply with (A) the
Borrowing Base limitation set forth in CLAUSE (II)(B) of the PROVISO to SECTION
2.1(A) or (B) the conditions precedent set forth in SECTION 5.2 to a Credit
Event, the Lenders authorize Agent, in its sole discretion, to make Revolving
Loans ("INTERIM ADVANCES") to Borrower during the period commencing on the date
Agent first receives a Notice of Borrowing requesting an Interim Advance until
the earliest of (1) the twentieth (20th) Business Day after such date, (2) the
date Borrower is again able to comply with such Borrowing Base limitation and
conditions precedent, or obtains an amendment or waiver with respect thereto and
(3) the date the Majority Lenders instruct Agent, or Agent determines, to cease
making Interim Advances (in each case, the "INTERIM ADVANCE PERIOD").
(II) Agent shall not, in any event, (A) make any Interim
Advance during any Interim Advance Period if, after giving effect to such
Interim Advance, the aggregate Revolving Exposure of all Lenders would exceed
one hundred ten percent (110%) of the aggregate Revolving Exposure of all
Lender's on the first day of such Interim Advance Period (calculated without
giving effect to Interim Advances made on such day) and (B) make any Interim
Advance if, after giving effect to such Interim Advance, (1) the Revolving
Exposure of any Lender would exceed such Lender's Revolving Loan Commitment or
(2) the aggregate Total Exposures of all Lenders would exceed the Line of
Credit.
(III) All amounts received by Agent during an Interim Advance
Period on account of the Obligations, whether in the form of payments from
Borrower, collections on the Collateral or otherwise, shall, so long as any
Interim Advances made during such Interim Advance Period are outstanding, be
applied by Agent, FIRST, to the repayment of such Interim Advances and, SECOND,
in accordance with SECTION 2.5(C).
(C) The failure of any Lender to make the Loan to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Loan on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on the date of any Borrowing.
(D) In addition to being evidenced, as provided in SECTION 2.6, by
Borrower's Account, each Lender's Loans and Borrower's obligations to repay such
Loans with interest in accordance with the terms of this Credit Agreement shall
be evidenced by this Credit Agreement, the records of such Lender and such
Lender's Note. The records of each Lender shall be rebuttably presumptive
evidence of such Lender's Loans and accrued interest thereon and of all payments
made in respect thereof.
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(E) Each Lender shall be entitled to earn interest at the then
applicable rate of interest, calculated in accordance with Article 4, on
outstanding Loans which it has funded to Agent; PROVIDED that in the case of
interest accrued but unpaid at the time of a Bankruptcy Default and interest
accruing thereafter and during a Bankruptcy Default, such Lender shall be
entitled to receive only its Proportionate Share of amounts actually received by
Agent in respect of such interest; FURTHER PROVIDED that if any amount received
by Agent in respect of such interest and distributed by it is thereafter
recovered from Agent, such Lender shall, upon request, repay to Agent its
Proportionate Share of the amount so recovered to the extent received by it, but
without interest (unless Agent is required to pay interest on the amount
recovered, in which case such Lender shall be required to pay interest at a like
rate).
(F) Notwithstanding the obligation of Borrower to send written
confirmation of a Notice of Borrowing made by telephone or electronic E-mail
transmission if and when requested by Agent, in the event that Agent agrees to
accept a Notice of Borrowing made by telephone or electronic E-mail
transmission, such Notice of Borrowing shall be binding on Borrower whether or
not written confirmation is requested by Agent. Agent may act prior to the
receipt of any requested written confirmation, without any liability whatsoever,
based upon telephonic or electronic E-mail notice believed by Agent in good
faith to be from Borrower or its agents. Agent's records of the terms of any
telephonic or electronic E-mail transmission Notices of Borrowing shall be
conclusive on Borrower and the Lenders in the absence of gross negligence or
willful misconduct on the part of Agent in connection therewith.
2.3 SETTLEMENTS AMONG AGENTS AND THE LENDERS.
(A) Except as provided in SECTION 2.3(B), Agent shall give to each
Lender prompt notice of each Notice of Borrowing by telecopy or facsimile
transmission. No later than 3:00 P.M. on the date of receipt of each Notice of
Borrowing (unless such Notice of Borrowing specifies the Closing Date as the
date of Borrowing, in which case no later than 11:00 A.M. on the Closing Date),
each Lender will make available for the account of its Applicable Lending
Office, to Agent at the address of Agent set forth on ANNEX I, in immediately
available funds, its Proportionate Share of such Borrowing requested to be made.
Unless Agent shall have been notified by any Lender prior to the date of
Borrowing that such Lender does not intend to make available to Agent its
portion of the Borrowing to be made on such date, Agent may assume that such
Lender will make such amount available to Agent on the Settlement Date and
Agent, in reliance upon such assumption, may but shall not be obligated to make
available the amount of the Borrowing to be provided by such Lender. If and to
the extent such Lender shall not have so made available to Agent its
Proportionate Share on such date and Agent shall have so made available to
Borrower a corresponding amount on behalf of such Lender, Agent may recover such
amount on demand from such Lender in accordance with SECTION 11.18. If such
Lender does not pay such corresponding amount promptly upon Agent's demand
therefor, Agent may promptly notify Borrower and Borrower shall immediately
repay such corresponding amount to Agent together with accrued interest thereon
at the applicable rate or rates provided in SECTIONS 4.1, 4.2, AND 4.4.
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(B) Unless the Majority Lenders have instructed Agent to the
contrary, Agent on behalf of the Lenders may but shall not be obligated to make
Revolving Loan consisting of Prime Rate Loans under SECTION 2.2 without prior
notice of the proposed Borrowing to the Lenders, subject to the following
settlement arrangements:
(I) The amount of each Lender's Proportionate Share of Loans
shall be computed weekly (or more frequently in Agent's discretion) and
shall be adjusted upward or downward on the basis of the amount of
outstanding Loans as of 5:00 P.M. on the last Business Day of the period
specified by Agent (such date, the "SETTLEMENT DATE"). Agent shall deliver
to each of the Lenders promptly after the Settlement Date a summary
statement of the amount of outstanding Loans for such period. The Lenders
shall transfer to Agent, or, subject to SECTION 11.18(C)(I), Agent shall
transfer to the Lenders, such amounts as are necessary so that (after
giving effect to all such transfers) the amount of Loans made by each
Lender shall be equal to such Lender's Proportionate Share of the
aggregate amount of Loans outstanding as of such Settlement Date. During a
Bankruptcy Default, amounts required to be transferred by the Lenders to
Agent shall, instead of constituting Loans to Borrower, be in the form of
participations purchased by the Lenders in the outstanding Loans of BTCo.
If the summary statement is received by the Lenders prior to 12:00 noon on
any Business Day, each Lender shall make the transfers described above in
immediately available funds no later than 3:00 P.M. on the day such
summary statement was received; and if such summary statement is received
by the Lenders after 12:00 noon on such day, each Lender shall make such
transfers no later than 3:00 P.M. on the next succeeding Business Day. The
obligation of each of the Lenders to transfer such funds shall be
irrevocable and unconditional and without recourse to or warranty by
Agent. Each of Agent and the Lenders agrees to ▇▇▇▇ its books and records
on the Settlement Date to show at all times the dollar amount of its
Proportionate Share of the outstanding Revolving Loans.
(II) To the extent that the settlement described above shall
not yet have occurred, upon repayment of Revolving Loans by Borrower,
Agent may first apply such amounts repaid directly to the amounts made
available by Agent pursuant to this SECTION 2.3(B).
(III) Because Agent on behalf of the Lenders may be advancing
and/or may be repaid Revolving Loans prior to the time when the Lenders
will actually advance and/or be repaid Loans, interest with respect to
Revolving Loans shall be allocated by Agent to each Lender and Agent in
accordance with the amount of Revolving Loans actually advanced by and
repaid to each Lender and Agent and shall accrue from and including the
date such Revolving Loans are so advanced to but excluding the date such
Revolving Loans are either repaid by Borrower in accordance with SECTION
2.4 or actually settled by the applicable Lender as described in this
SECTION 2.3(B).
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2.4 MANDATORY PAYMENTS; MANDATORY REDUCTION OF AGGREGATE COMMITMENTS.
(A) On the Expiration Date, the Aggregate Commitment of each Lender
shall automatically reduce to zero and may not be reinstated and all outstanding
Loans of such Lender shall be immediately due and payable, without the necessity
of any notice or demand.
(B) Borrower may reduce or terminate the Revolving Loan Commitments
of the respective Lenders at any time and from time to time in whole or in part,
any such reduction or termination to be pro rata on the amounts at the time of
the Revolving Loan Commitments; PROVIDED that each such reduction must be in an
amount not less than $10,000,000 (and in increments of $1,000,000); and PROVIDED
FURTHER that (A) if Borrower seeks to reduce the Revolving Loan Commitments of
the Lenders and after giving effect to such reduction the aggregate outstanding
principal balance of the Terms Loans PLUS the aggregate Revolving Commitments of
the Lenders shall be less than $10,000,000, then the Revolving Loan Commitments
of the Lenders shall automatically reduce to zero, the Credit Agreement shall
automatically terminate and all outstanding Loans of such Lender shall be
immediately due and payable, without the necessity of any notice or demand, and
(B) once reduced, the amount of any such reductions in the Revolving Loan
Commitment may not be reinstated.
(C) The amount by which the aggregate Total Exposures of all Lenders
exceeds the aggregate amount of the Aggregate Commitments at any time shall be
immediately due and payable without the necessity of any notice or demand.
Repayments of such excess amounts shall be applied, FIRST, to the repayment of
the Revolving Loans, SECOND, to the payment of outstanding reimbursement
obligations with respect Letters of Credit, THIRD, to the then remaining
scheduled installments of principal on the Term Loans in the inverse order of
their maturity and, FOURTH, to the securing, with cash or Cash Equivalents as
provided in the second paragraph of SECTION 9.2 (but without the requirement of
any demand provided for in such paragraph), of the Letter of Credit Outstandings
(in each case to the extent the same are such by virtue of CLAUSE (A) of the
definition thereof).
(D) Except during an Interim Advance Period, the amount by which the
aggregate Revolving Exposures of all Lenders exceeds the Borrowing Base at any
time shall be immediately due and payable without the necessity of any notice or
demand. Repayments of such excess amounts shall be applied, FIRST, to the
repayment of Revolving Loans, SECOND, to the payment of outstanding
reimbursement obligations with respect to Letters of Credit, and, THIRD, to the
securing, with cash or Cash Equivalents as provided in the second paragraph of
SECTION 9.2 (but without the requirement of any demand provided for in such
paragraph), of the Letter of Credit Outstandings (in each case to the extent the
same are such by virtue of CLAUSE (A) of the definition thereof).
(E) In addition to any other mandatory repayments of the Term Loans
pursuant to this SECTION 2.4, on the last day of each fiscal quarter of Borrower
ending during each period set forth below, Borrower shall be required to repay
that principal amount of the Term Loans, to the extent then outstanding, as is
set forth opposite such period below:
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TERM LOAN
SCHEDULED REPAYMENT PERIOD AMOUNT
---------------------------------- ----------
July 1, 2000 through and including $ 250,000
June 30, 2001
July 1, 2001 through and including $ 750,000
June 30, 2002
July 1, 2002 through and including $1,500,000
June 30, 2003
July 1, 2003 through and including $1,500,000
June 30, 2004
July 1, 2004 through and including $3,500,000
June 30, 2005
The then remaining principal balance of the Term Loans, if any, and
any interest thereon, and any other amounts and sums which then are due
and payable in respect of the Term Loans, shall be due and payable on June
30, 2005.
(F) (I) In addition to any other mandatory repayments pursuant to
this SECTION 2.4, on each date on or after the Closing Date upon which
Borrower or any Subsidiary of Borrower receives any net cash proceeds from
any sale or other disposition of any assets (other than dispositions
permitted by CLAUSES (A), (B), (E) and (F) of SECTION 8.5, an amount equal
to 100% of such net cash proceeds shall in each case be applied as a
mandatory repayment of principal of the Term Loans in accordance with the
requirements of CLAUSE (V) below.
(II) In addition to any other mandatory repayments pursuant to
this SECTION 2.4, on each date after the Closing Date upon which Borrower
or any of Subsidiary of Borrower receives any net cash proceeds from any
Casualty Loss, an amount equal to 100% of such net cash proceeds shall be
applied as a mandatory repayment of principal of the Term Loans in
accordance with the requirements of CLAUSE (V) below; PROVIDED that with
respect to no more than $5,000,000 in the aggregate of such net cash
proceeds in any fiscal year of Borrower, such proceeds shall not be
required to be so applied on such date so long as (I) no Default or Event
of Default then exists, (II) Borrower has delivered a certificate to Agent
on or prior to the fifth Business Day after receipt of such cash proceeds
stating that within 180 days following the date of Borrower's receipt of
such proceeds, Borrower intends to use such proceeds to repair, replace or
restore any properties or assets in respect of which such proceeds were
paid (which certificate shall set forth in reasonable detail a description
of such repairs, replacements and restorations and the estimates of the
proceeds to be so expended) and (III) until such time as such proceeds are
so used to repair, replace or restore such properties or assets or applied
as a mandatory
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prepayment of principal of the outstanding Term Loans as provided below,
such proceeds shall be applied by Agent to reduce the outstanding
principal balance of the Revolving Loans (and Agent shall concurrently
therewith establish a reserve against unused availability under the
Borrowing Base in the amount thereof), such proceeds to be made available
to Borrower by Agent (so long as at such time no Event of Default shall
have occurred and continuing) upon Agent's receipt from time to time of
Borrower's request therefor to so repair, replace or restore such
properties or assets (with a concurrent reduction being made in such
reserve equal to any amount so made available by Agent); and PROVIDED,
FURTHER, that if within 180 days after the date of Borrower's receipt of
such proceeds, Borrower has not so used all or any portion of such
proceeds, such remaining portion shall be applied on the last day of such
180 day period as a mandatory repayment of principal of outstanding Term
Loans as provided above in this SECTION 2.4(F)(II) without regard to the
preceding proviso.
(III) In addition to any other mandatory repayments pursuant
to this SECTION 2.4, on each date after the Closing Date upon which
Borrower or any Subsidiary of Borrower receives net cash proceeds from any
return to Borrower or such Subsidiary of any surplus assets of any Pension
Plan, an amount equal to one hundred percent (100%) of such net cash
proceeds shall be applied as a mandatory repayment of principal of the
Term Loans in accordance with the requirements of CLAUSE (V) below.
(IV) In addition to any other mandatory repayments pursuant to
this SECTION 2.4, on the date which is ninety (90) days after the end of
each fiscal year of Borrower (commencing with such fiscal year ending May
31,2001), an amount equal to the Excess Cash Flow Payment for such fiscal
year shall be applied as a mandatory repayment of principal of the
outstanding Term Loans in accordance with the requirements of CLAUSE (V)
below.
(V) The amount of each principal repayment of Term Loans made
as required by CLAUSES (I), (II), (III) and (IV) above shall be applied to
reduce the then remaining scheduled installments of principal on the Term
Loans in the inverse order of their maturity.
2.5 PAYMENTS AND COMPUTATIONS; MAINTENANCE OF ACCOUNT.
(A) (I) Borrower shall, subject, in the case of payments in respect
of Letters of Credit, to SECTION 3.5, make each payment under the Credit
Documents and under the Notes not later than 2:00 P.M. on the day when due
in Dollars to Agent at the Payment Office in immediately available funds.
The obligations of Borrower to the Lenders with respect to such payments
shall be discharged by making such payments to Agent pursuant to this
SECTION 2.5 or by Agent, in its discretion, adding such payments to the
principal amount of the Revolving Loans outstanding by charging such
payments to Borrower's Account pursuant to SECTION 2.6.
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(B) (I) On or prior to the Closing Date, Borrower shall have
established and shall thereafter maintain one or more lockboxes (each
"LOCKBOXES") with one or more financial institutions selected by Borrower
and reasonably acceptable to Agent (each a "LOCKBOX ACCOUNT BANK") and
shall instruct all account debtors on Borrower's Accounts to remit all
payments to a Lockbox. All payments remitted by account debtors of the
Borrower to any Lockbox, all other amounts received by Borrower from any
account debtor and all other cash received by Borrower from any other
source, shall in each case upon receipt thereof be deposited into an
account (each a "LOCKBOX ACCOUNT") maintained with a Lockbox Account Bank.
(II) On or prior to the Closing Date, Borrower, Agent and the
applicable Lockbox Account Bank or Banks shall have entered into
agreements in form and substance satisfactory to Agent (each a "LOCKBOX
ACCOUNT AGREEMENT"), providing, among other things, that, all available
amounts held in each Lockbox Account maintained at such Lockbox Account
Bank shall be wired on each Business Day into an account (the "BT
ACCOUNT") maintained by Agent at BTCo.
(III) The closing of any Lockbox or Lockbox Account and the
termination of any Lockbox Account Agreement shall require in each case
the prior written consent of Agent.
(C) (I) All amounts received by Agent for distribution hereunder or
under any other Credit Document shall, subject to SECTION 2.2(B)(III), be
distributed in the following order:
FIRST, to the payment of any Fees, Expenses or other Obligations due
and payable to Agent under any of the Credit Documents, including
amounts advanced by Agent on behalf of the Lenders pursuant to
SECTION 2.3(B);
SECOND, during a Bankruptcy Default, to the payment of the unpaid
principal amounts of all Unpaid Drawings payable to each Issuing
Lender, together with accrued but unpaid interest thereon at the LC
Interest Rate;
THIRD, to the ratable payment of any Fees and other Obligations due
and payable to the Lenders under any of the Credit Documents, other
than to a Lender in its capacity as an Issuing Lender and other than
those Obligations specifically referred to in this SECTION
2.5(C)(I).
FOURTH, to the ratable payment of interest due and payable on the
Loans;
FIFTH, to the ratable payment of installments of principal due and
payable on the Term Loans;
SIXTH, to the ratable payment of principal due on the Revolving
Loans;
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SEVENTH, to the ratable payment of other Liabilities not
specifically referred to in this SECTION 2.5(C)(I) due and payable
to the Lenders (in their capacities as such, and not in their
capacity as an Issuing Lender) under the Credit Documents; and
EIGHTH, to the ratable payment of other Liabilities not specifically
referred to in this SECTION 2.5(C)(I) due and payable to the Issuing
Lenders with respect to Letters of Credit.
(II) Each Person receiving a payment from Agent pursuant to
SECTION 2.5(C)(I) shall, for all purposes of this Credit Agreement and
other Credit Documents, be deemed to have applied that payment in the
order specified in SECTION 2.5(C)(I).
2.6 STATEMENT OF ACCOUNT. After the end of each month, Agent shall send
Borrower a statement accounting for the charges, loans, advances and other
transactions occurring among and between Agent, the Lenders and Borrower during
that month. In the event that Borrower does not object in writing to any
information reflected in any such monthly statement within thirty (30) days of
its receipt thereof, such statement shall, absent manifest error, be an account
stated, which is final, conclusive and binding on Borrower.
2.7 WITHHOLDING AND OTHER TAXES.
(A) Any and all payments by Borrower hereunder, under the Notes or
in respect of Letters of Credit which are made to or for the benefit of any
Lender (whether in its capacity as a Lender or an Issuing Lender, and as used in
SECTION 2.7, the term "LENDER" shall mean a Lender in each such capacity, and
shall also include each Serving Affiliate of such Lender) or Agent shall be
made, free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings and penalties,
interests and all other liabilities with respect thereto ("TAXES"), excluding,
(I) in the case of each such Lender, or Agent, Taxes imposed on its net income
(including any Taxes imposed on branch profits) and franchise taxes imposed on
it by the jurisdiction under the laws of which such Lender, or Agent (as the
case may be) is organized or any political subdivision thereof, (II) in the case
of each such Lender, Taxes imposed on its net income (including any Taxes
imposed on branch profits), and franchise Taxes imposed on it, by the
jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof, (III) in the case of each such Lender, and Agent, any Taxes
that are in effect and that would apply to a payment of such Lender, or Agent,
as applicable, as of the Closing Date, and (IV) if any Person acquires any
interest in this Credit Agreement, any Note or any participation interest in any
Letter of Credit pursuant to the provisions hereof, or a Foreign Lender or Agent
changes the office in which any Loan or any participation interest in any Letter
of Credit is made, accounted for or booked, or a Foreign Lender if an Issuing
Lender, changes the office at which any Letter of Credit is maintained (any such
Person, or such Foreign Lender or Agent in that event, being referred to as a
"TAX TRANSFEREE"), any Taxes to the extent that they are in effect and would
apply to a payment to such Tax Transferee as of the date of the acquisition of
such interest or changes in office, as the case may be (all such nonexcluded
Taxes being hereinafter referred to as "COVERED TAXES"). If Borrower shall be
required by law to deduct any Covered Taxes
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from or in respect of any sum payable hereunder, under any Note or in respect of
any Letter of Credit to or for the benefit of any Lender, Agent or any Tax
Transferee, (A) the sum payable shall be increased as may be necessary so that
after making all required deductions of Covered Taxes (including deductions of
Covered Taxes applicable to additional sums payable under this SECTION 2.7) such
Lender, Agent or such Tax Transferee, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been made, (B)
Borrower shall make such deductions and (C) Borrower shall pay the full amount
so deducted to the relevant taxation authority or other authority in accordance
with applicable law.
(B) In addition, Borrower agrees to pay any present or future stamp,
documentary, excise, privilege, intangible or similar levies that arise at any
time or from time to time (I) from any payment made under any and all Credit
Documents or (II) from the execution or delivery by Borrower of, or from the
filing or recording or maintenance of, or otherwise with respect to the exercise
by Agent or the Lenders of their rights under, any and all Credit Documents
(hereinafter referred to as "OTHER TAXES").
(C) Borrower will indemnify each Lender, Agent, and any Tax
Transferee for the full amount of (I) Covered Taxes imposed on or with respect
to amounts payable hereunder, under any Note or in respect of any Letter of
Credit, (II) Other Taxes and (III) any Taxes other than Covered Taxes imposed by
any jurisdiction on amounts payable under this SECTION 2.7 paid by such Lender,
Agent or such Tax Transferee, as the case may be, and any liability (including
penalties, interest and expenses) arising solely therefrom or with respect
thereto whether or not such Taxes were correctly or legally asserted by the
relevant governmental taxing authority. Payment of this indemnification shall be
made within thirty (30) days from the date such Lender, Agent or such Tax
Transferee certifying and setting forth in reasonable detail the calculation
thereof as to the amount and type of such Taxes. Any such certificate submitted
by such Lender, Agent or such Tax Transferee in good faith to Borrower shall,
absent manifest error, be final, conclusive and binding on all parties.
(D) Within 30 days after having received a receipt for Covered Taxes
or Other Taxes, Borrower will furnish to Agent, at its address referred to in
SECTION 11.5, the original or a certified copy of a receipt evidencing payment
thereof.
(E) On or before the Closing Date, each Foreign Lender shall deliver
to Agent and Borrower (I) two valid, duly completed copies of IRS Form W-8ECI or
W-8BEN or successor applicable form, as the case may be, and any other required
form, certifying in each case that such Foreign Lender is entitled to receive
payments under this Credit Agreement, the Notes, each Letter of Credit and all
other Credit Documents payable to it without deduction or withholding of any
United States federal income taxes and (II) a valid, duly completed IRS Form W-8
or W-9 or successor applicable form, as the case may be, to establish an
exemption from United States backup withholding tax. Each such Foreign Lender
shall also deliver to Agent and Borrower two further copies of said Form W-8ECI
or W-8BEN and W-8 or W-9, or successor applicable forms, or other manner of
required certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or otherwise is required to be resubmitted as a
condition to obtaining an exemption from a required withholding of
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United States federal income tax or entitlement to having such withholding
imposed at the Reduced Rate or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to Borrower and Agent,
and such extensions or renewals thereof as may reasonably be requested by the
Borrower and Agent, certifying (A) in the case of a Form W-8ECI or W-8BEN, that
such Foreign Lender is entitled to receive payments under this Credit Agreement,
the Notes, each Letter of Credit and all other Credit Documents payable to it
without deduction or withholding of any United States federal income taxes,
unless in any such case any change in a tax treaty to which the United States is
a party, or any change in law or regulation of the United States or official
interpretation thereof has occurred after the Closing Date and prior to the date
on which any such delivery would otherwise be required that renders all such
forms inapplicable or that would prevent such Foreign Lender from duly
completing and delivering any such form with respect to it, and such Foreign
Lender advises Borrower and Agent that it is not capable of receiving payments
without any deduction or withholding of United States federal income tax, or (B)
in the case of a Form W-8 or W-9, establishing an exemption from United States
backup withholding tax.
(F) If a Tax Transferee that is organized under the laws of a
jurisdiction outside of the United States acquires an interest in this Credit
Agreement, any Note, any participation interest in any Letter of Credit, or any
of the other Credit Agreements or a Foreign Lender changes the office through
which Loans or any other Obligations are made, accounted for or booked, or a
Foreign Lender if an Issuing Lender, changes the office at which any Letter of
Credit is maintained, the transferor, or the applicable Foreign Lender, in the
case of a change of office, shall cause such Tax Transferee to agree that, on or
prior to the effective date of such acquisition or change, as the case may be,
it will deliver to Borrower and Agent (I) two valid, duly completed copies of
IRS Form W-8ECI or W-8BEN or successor applicable form, as the case may be, and
any other required form, certifying in each case that such Tax Transferee is
entitled to receive payments under this Credit Agreement, the Notes, each Letter
of Credit and each of the other Credit Documents payable to it without deduction
or withholding of United States federal income tax and (II) a valid, duly
completed IRS Form W-8 or W-9 or successor applicable form, as the case may be,
to establish an exemption from United States backup withholding tax. Each Tax
Transferee that delivers to Borrower and Agent a Form W-8ECI or W-8BEN, and Form
W-8 or W-9 and any other required form, pursuant to the next preceding sentence,
further undertakes to deliver two further copies of the said Form W-8ECI or
W-8BEN and Form W-8 or W-9, or successor applicable forms, or other manner of
required certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or otherwise is required to be resubmitted as a
condition to obtaining an exemption from a required withholding of United States
federal income tax or after the occurrence of any event requiring a change in
the most recent form previously delivered by it to Borrower and Agent, and such
extensions or renewals thereof as may reasonably be requested by Borrower and
Agent, certifying (A) in the case of a Form W-8ECI or W-8BEN, that such Tax
Transferee is entitled to receive payments under this Credit Agreement, the
Notes, each Letter of Credit and each of the other Credit Documents without
deduction or withholding of any United States federal income taxes, unless any
change in treaty, law or regulation or official interpretation thereof has
occurred after the effective date of such acquisition or change and prior to the
date on which any such delivery would otherwise
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be required that renders all such forms inapplicable or that would prevent such
Tax Transferee from duly completing and delivering any such form with respect to
it, and such Tax Transferee advises Borrower and Agent that it is not capable of
receiving payments without any deduction or withholding of United States federal
income tax, or (B) in the case of a Form W-8 or W-9, establishing an exemption
from United States backup withholding tax.
(G) If any Taxes for which Borrower would be required to make
payment under this SECTION 2.7 are imposed, the applicable Lender or Agent, as
the case may be, shall use its best efforts to avoid or reduce such Taxes by
taking any appropriate action (including assigning its rights hereunder to a
related entity or a different office) which would not in the sole opinion of
such Lender or Agent be otherwise disadvantageous to such Lender or Agent, as
the case may be.
(H) Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements and obligations of Borrower contained in this
SECTION 2.7 shall survive the payment in full of the Obligations.
(I) Each Lender shall cause each of its Serving Affiliates that is a
Foreign Lender to take the actions required to be taken by such Serving
Affiliate as a Foreign Lender under SECTION 2.7(E), (F) AND (G).
Notwithstanding anything to the contrary set forth herein, Borrower
shall have no obligation to make any payment to any Person pursuant to this
SECTION 2.7, to the extent such payment would not have been necessary if such
Person had complied with the respective provisions of SECTIONS 2.7(E) and (F).
2.8 AFFECTED LENDERS. If Borrower is obligated to pay to any Lender
(whether in its capacity as a Lender or an Issuing Lender) or any Serving
Affiliate of such Lender any amount under SECTIONS 2.7 OR 4.7, or if any Lender
is a Defaulting Lender, Borrower may, if no Default or Event of Default then
exists, replace such Lender or Serving Affiliate with another lender reasonably
acceptable to Agent, and such Lender hereby agrees to be so replaced or to cause
such Serving Affiliate to be replaced, subject to the following:
(A) (I) The obligations of Borrower hereunder to the Lender to be
replaced (in its capacity as a Lender, and including such increased or
additional costs incurred from the date of notice to Borrower of such
increase or additional costs through the date such Lender is replaced
hereunder) shall be paid in full to such Lender concurrently with such
replacement; and
(II) the Obligations of Borrower hereunder to the Lender to be
replaced in its capacity as an Issuing Lender, or to its Serving Affiliate
in such capacity, shall continue until (A) each Letter of Credit issued by
that Person has expired or been drawn in full, (B) all outstanding
reimbursement obligations with respect to Letters of Credit, together with
interest thereon at the LC Interest Rate, shall have been paid in full,
and (C) all Liabilities in respect of Letters of Credit, to the
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extent due, have been paid in full and, to the extent not due, been
secured to the satisfaction of such Person, to the extent due, have been
paid in full and, to the extent not due, been secured to the satisfaction
of such Person.
(B) If such replacement is a result of increased costs under
SECTIONS 2.7 OR 4.9, the replacement Lender shall be a bank or other
financial institution that is not subject to such increased costs which
caused Borrower's election to replace any Lender hereunder, and each such
replacement Lender shall execute and deliver to Agent such documentation
satisfactory to Agent pursuant to which such replacement Lender is to
become a party hereto, conforming to the provisions of SECTION 11.6, with
an Aggregate Commitment equal to that of the Lender being replaced and
shall make Loans in the aggregate principal amount equal to the aggregate
outstanding principal amount of the Loans of the Lender being replaced;
(C) Upon such execution of such documents referred to in CLAUSE (B)
and repayment of the amounts referred to in CLAUSE (A), the replacement
lender shall be a "Lender" with an Aggregate Commitment as specified
herein above and the Lender being replaced shall cease to be a "Lender"
hereunder, except with respect to indemnification provisions under this
Credit Agreement, which shall survive as to such replaced Lender and
except to the extent such Lender continues to be an Issuing Lender
pursuant to SECTION 2.8(A)(II);
(D) Agent shall reasonably cooperate in effectuating the replacement
of any Lender under this SECTION 2.8, but at no time shall Agent be
obligated to initiate any such replacement;
(E) Any Lender replaced under this SECTION 2.8 shall be replaced at
Borrower's sole cost and expense and at no cost or expense to Agent or any
of the Lenders; and
(F) If Borrower proposes to replace any Lender pursuant to this
SECTION 2.8 because the Lender seeks reimbursement under either SECTION
2.7 OR 4.7, then it must also replace any other Lender who seeks similar
levels of reimbursement (as a percentage of such Lender's Aggregate
Commitment) under such Sections.
2.9 SHARING OF PAYMENTS. (A) (I) If any Lender (including a Lender in its
capacity as an Issuing Lender) shall obtain any payment (whether voluntary,
involuntary, and whether through the exercise of any right of set-off by virtue
of its claim in any applicable bankruptcy, insolvency or other similar
proceeding being deemed secured by a Liability owed by it to any Credit Party,
including a claim deemed secured under Section 506 of the Bankruptcy Code, or
otherwise) (each a "PAYMENT"), on account of (A) the Loans made by it, (B) its
participation interests in Letters of Credit or (C) any of the other Obligations
due and payable to it in excess of its Proportionate Share of payments on
account of the Loans or participation interests in Letters of Credit or such
other Obligations obtained by all the Lenders, such Lender shall forthwith
purchase from the other Lenders such participations in the Loans made by them,
in
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their participation in Letters of Credit or their other such Obligations as
shall be then due and payable as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; however, PROVIDED
that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, such purchase from each Lender shall be rescinded and
each such Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery together with an amount equal to such Lender's ratable
share (according to the proportion of (1) the amount of such Lender's required
repayment to (2) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
to the total amount so recovered. Borrower agrees that any Lender so purchasing
a participation from another Lender pursuant to this SECTION 2.9 may, to the
fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of Borrower in the amount of such
participation.
(II) For purposes of this SECTION 2.9, all Unpaid Drawings shall be deemed
to constitute "Loans" made by such Issuing Lender, and such Issuing Lender
agrees that it shall apply all Payments received by it in its capacity as an
Issuing Lender to the payment or the collateralization of the Liabilities of
Borrower to it that constitute Unpaid Drawings payable to such Issuing Lender
before applying them to any other Liabilities due it.
(B) If an Issuing Lender is an Affiliate of a Lender, such Lender
shall cause such Affiliate to comply with the provisions of SUBSECTION (A) of
SECTION 2.9 as fully as though such Affiliate were a Lender subject to such
subsection.
ARTICLE 3
LETTERS OF CREDIT
3.1 LETTERS OF CREDIT. (A) Subject to and upon the terms and conditions
set forth herein, Borrower may request Agent to direct the Issuing Lender to
issue, at any time and from time to time on and after the Closing Date and prior
to the 10th day prior to the Expiration Date, for the account of Borrower and
for the benefit of any holder (or any trustee, agent or other similar
representative for any such holders) of LC Supportable Obligations of Borrower
or any of its Subsidiaries, an irrevocable standby letter of credit, in a form
customarily used by the Issuing Lender or in such other form as has been
approved by the Issuing Lender (each such letter of credit, a "LETTER OF CREDIT"
and, collectively, the "LETTERS OF CREDIT"). All Letters of Credit shall be
denominated in Dollars and shall be issued on a sight basis only.
(B) Subject to and upon the terms and conditions set forth herein,
Agent agrees that it will, at any time and from time to time on and after the
Closing Date and prior to the 10th day prior to the Expiration Date, following
its receipt of the respective Letter of Credit Request, direct the Issuing
Lender to issue for the account of Borrower, one or more Letters of Credit as
are permitted to remain outstanding hereunder without giving rise to a Default
or an Event of Default, PROVIDED that Agent shall not be under any obligation to
direct the Issuing
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Lender to issue any Letter of Credit if at the time of such issuance any order,
judgment or decree of any governmental authority or arbitrator shall purport by
its terms to enjoin or restrain the Issuing Lender from issuing such Letter of
Credit or any requirement of law applicable to the Issuing Lender or any request
or directive (whether or not having the force of law) from any governmental
authority with jurisdiction over the Issuing Lender shall prohibit, or request
that the Issuing Lender refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the
Issuing Lender with respect to such Letter of Credit any restriction or reserve
or capital requirement (for which the Issuing Lender is not otherwise
compensated hereunder) not in effect with respect to the Issuing Lender on the
date hereof, or any unreimbursed loss, cost or expense which was not applicable
or in effect with respect to the Issuing Lender as of the date hereof and which
the Issuing Lender reasonably and in good ▇▇▇▇▇ ▇▇▇▇▇ material to it. The
transmittal by Borrower of each Letter of Credit Request shall be deemed to be a
representation and warranty made by Borrower, both at the time of such
transmittal and at the time of the issuance of the requested Letter of Credit,
that the Letter of Credit may be issued in accordance with and will not violate
any of the requirements of this ARTICLE 3.
3.2 MAXIMUM LETTER OF CREDIT OUTSTANDINGS; FINAL MATURITIES.
Notwithstanding anything to the contrary contained in this Agreement, (A) no
Letter of Credit shall be issued if (X) the Stated Amount thereof, when added to
the Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid
on the date of, and prior to the issuance of, the respective Letter of Credit)
at such time would exceed $10,000, 000 or (Y) after giving effect to such
issuance, the Revolving Exposure of all Lenders would exceed the lesser of (I)
the aggregate amount of the Revolving Loan Commitments of all Lenders and (II)
the Borrowing Base; and (B) each Letter of Credit shall by its terms terminate
on or before the earlier of (A) the date which occurs 12 months after the date
of the issuance thereof (although any Letter of Credit may be extendible for
successive periods of up to 12 months, but, in each case, not beyond the tenth
Business Day prior to the Expiration Date, on terms acceptable to Agent and the
Issuing Lender) and (B) ten Business Days prior to the Expiration Date.
3.3 LETTER OF CREDIT REQUESTS; MINIMUM STATED AMOUNT (A) Whenever Borrower
desires Agent to direct the issuance of a Letter of Credit for its account (or
to amend or modify any existing Letter of Credit), Borrower shall give Agent at
least three Business Days' (or such shorter period as is acceptable to Agent)
written notice thereof (including by way of facsimile). Each notice shall be in
the form of EXHIBIT E, appropriately completed (each a "LETTER OF CREDIT
REQUEST").
(B) The making of each Letter of Credit Request shall be deemed to
be a representation and warranty by Borrower to Agent and the Lenders that such
Letter of Credit may be issued in accordance with, and will not violate the
requirements of, SECTION 3.2. Upon receipt by Agent of a Letter of Credit
Request, then Agent shall, subject to the terms and conditions of this
Agreement, direct the Issuing Lender to issue (or amend or modify, as the case
may be), the requested Letter of Credit for the account of Borrower in
accordance with the Issuing Lender's usual and customary practices. Upon the
issuance or modification of, or amendment to, any Letter of Credit, the Issuing
Lender shall promptly provide written
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confirmation of such issuance, amendment or modification, as the case may be, to
Borrower and Agent, and such notice shall be accompanied by a copy of such
issuance, modification or amendment, as the case may be. Promptly after receipt
of such notice, Agent shall notify the Participants, in writing, of such
issuance, modification or amendment. Notwithstanding anything to the contrary
contained in this Agreement, in the event that any Lender is a Defaulting
Lender, the Issuing Lender shall not be required to issue any Letter of Credit
unless the Issuing Lender has entered into arrangements satisfactory to it and
Borrower to eliminate the Issuing Lender's risk with respect to the
participation in Letters of Credit by such Defaulting Lender, including by cash
collateralizing such Defaulting Lender's Proportionate Share of the Letter of
Credit Outstandings.
(C) The initial Stated Amount of each Letter of Credit shall not be
less than $50,000 or such lesser amount as is acceptable to the Issuing Lender.
3.4 LETTER OF CREDIT PARTICIPATIONS. (A) Immediately upon the issuance by
the Issuing Lender of any Letter of Credit, the Issuing Lender shall be deemed
to have sold and transferred to each Lender (other than the Issuing Lender in
its capacity (if any) as a Lender) and each such Lender (in its capacity under
this SECTION 3.4, a "PARTICIPANT"), and each such Participant shall be deemed
irrevocably and unconditionally to have purchased and received from the Issuing
Lender, without recourse or warranty, an undivided interest and participation,
to the extent of such Participant's Pro Rata Share, in such Letter of Credit,
each drawing or payment made thereunder and the obligations of Borrower under
this Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto. Upon any change in the Revolving Loan Commitments of the
Lenders or Pro Rata Shares of the Lenders pursuant to SECTION 2.9 or SECTION
11.6, it is hereby agreed that, with respect to all outstanding Letters of
Credit and Unpaid Drawings relating thereto, there shall be an automatic
adjustment to the participations pursuant to this SECTION 3.4 to reflect the new
Pro Rata Shares of the assignor and assignee Lender, as the case may be.
(B) In determining whether to pay under any Letter of Credit, the
Issuing Lender shall not have any obligation relative to the other Lenders other
than to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to substantially
comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by the Issuing Lender under or in connection with
any Letter of Credit issued by it shall not create for the Issuing Lender any
resulting liability to Borrower, any other Credit Party, any Lender or any other
Person unless such action is taken or omitted to be taken with gross negligence
or willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision).
(C) In the event that the Issuing Lender makes any payment under any
Letter of Credit issued by it and Borrower shall not have reimbursed such amount
in full to the Issuing Lender pursuant to Section 3.5(A), the Issuing Lender
shall promptly notify Agent, which shall promptly notify each Participant of
such failure, and each Participant shall promptly and unconditionally pay to the
Issuing Lender the amount of such Participant's Pro Rata Share of such
unreimbursed payment in Dollars and in same day funds. If Agent so
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notifies, prior to 12:00 noon on any Business Day, any Participant required to
fund a payment under a Letter of Credit, such Participant shall make available
to the Issuing Lender in Dollars such Participant's Pro Rata Share of the amount
of such payment on such Business Day in same day funds. If and to the extent
such Participant shall not have so made its Pro Rata Share of the amount of such
payment available to the Issuing Lender, such Participant agrees to pay to the
Issuing Lender, forthwith on demand such amount, together with interest thereon,
for each day from such date until the date such amount is paid to the Issuing
Lender at the overnight Federal Funds Rate for the first three days and at the
interest rate applicable to Revolving Loans that are maintained as Prime Rate
Loans for each day thereafter. The failure of any Participant to make available
to the Issuing Lender its Pro Rata Share of any payment under any Letter of
Credit shall not relieve any other Participant of its obligation hereunder to
make available to the Issuing Lender its Pro Rata Share of any payment under any
Letter of Credit on the date required, as specified above, but no Participant
shall be responsible for the failure of any other Participant to make available
to the Issuing Lender such other Participant's Pro Rata Share of any such
payment.
(D) Whenever the Issuing Lender receives a payment of a
reimbursement obligation as to which it has received any payments from the
Participants pursuant to CLAUSE (C) above, the Issuing Lender shall pay to each
such Participant which has paid its Pro Rata Share thereof, in Dollars and in
same day funds, an amount equal to such Participant's share (based upon the
proportionate aggregate amount originally funded by such Participant to the
aggregate amount funded by all Participants) of the principal amount of such
reimbursement obligation and interest thereon accruing after the purchase of the
respective participations.
(E) Upon the request of any Participant, the Issuing Lender shall
furnish to such Participant copies of any Letter of Credit issued by it and such
other documentation as may reasonably be requested by such Participant.
(F) The obligations of the Participants to make payments to the
Issuing Lender with respect to Letters of Credit shall be irrevocable and not
subject to any qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(I) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(II) the existence of any claim, setoff, defense or other right
which any Credit Party or any Subsidiary of any Credit Party may have at
any time against a beneficiary named in a Letter of Credit, any transferee
of any Letter of Credit (or any Person for whom any such transferee may be
acting), Agent, any Participant, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any
underlying transaction between any Credit Party or any Subsidiary of any
Credit Party and the beneficiary named in any such Letter of Credit);
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(III) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(IV) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(V) the occurrence of any Default or Event of Default.
3.5 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (A) Borrower agrees to
reimburse the Issuing Lender, by making payment to Agent in immediately
available funds at the Payment Office, for any payment or disbursement made by
the Issuing Lender under any Letter of Credit issued by it (each such amount, so
paid until reimbursed, an "UNPAID DRAWING"), not later than one Business Day
following receipt by Borrower of notice of such payment or disbursement
(provided that no such notice shall be required to be given if an Event of
Default under SECTION 9.1(E) shall have occurred and be continuing, in which
case the Unpaid Drawing shall be due and payable immediately without
presentment, demand, protest or notice of any kind (all of which are hereby
waived by Borrower)), with interest on the amount so paid or disbursed by the
Issuing Lender, to the extent not reimbursed prior to 12:00 noon on the date of
such payment or disbursement, from and including the date paid or disbursed to
but excluding the date such Issuing Lender was reimbursed by Borrower therefor
at a rate per annum equal to the Prime Lending Rate in effect from time to time
plus the Applicable Margin as in effect from time to time for Revolving Loans
that are maintained as Prime Rate Loans; PROVIDED, that, to the extent such
amounts are not reimbursed prior to 12:00 noon on the third Business Day
following the receipt by Borrower of notice of such payment or disbursement or
following the occurrence and during the continuance of an Event of Default under
SECTION 9.1(E), upon notice to Borrower from Agent, interest shall thereafter
accrue on the amounts so paid or disbursed by the Issuing Lender (and until
reimbursed by Borrower) at a rate per annum equal to the Prime Rate in effect
from time to time plus the Applicable Margin for Revolving Loans that are
maintained as Prime Rate Loans as in effect from time to time PLUS 2%, with such
interest to be payable on demand. The Issuing Lender shall give Borrower prompt
written notice of each Drawing under any Letter of Credit issued by it, PROVIDED
that the failure to give any such notice shall in no way affect, impair or
diminish Borrower's obligations hereunder.
(B) The obligations of Borrower under this SECTION 3.5 to reimburse
the Issuing Lender with respect to Drawings under Letters of Credit issued by it
(each a "DRAWING") (including, in each case, interest thereon) shall be absolute
and unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment which Holdings or any Subsidiary of
Holdings may have or have had against any Lender (including in its capacity as
the Issuing Lender or as a Participant), including, without limitation, any
defense based upon the failure of any Drawing under a Letter of Credit to
conform to the terms of the Letter of Credit or any nonapplication or
misapplication by the beneficiary of the proceeds of such Drawing; PROVIDED,
HOWEVER, that Borrower shall not be obligated to reimburse the Issuing Lender
for any wrongful payment made by the Issuing
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Lender under a Letter of Credit issued by it as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of the Issuing
Lender (as determined by a court of competent jurisdiction in a final and
non-appealable decision).
3.6 INCREASED COSTS. If at any time after the Closing Date, the
introduction after the Closing Date of or any change after the Closing Date in
any applicable law, rule, regulation, order, guideline or request or in the
interpretation or administration thereof by the NAIC or any governmental
authority charged with the interpretation or administration thereof, or
compliance by the Issuing Lender or any Participant with any request or
directive by the NAIC or by any such governmental authority (whether or not
having the force of law), shall either (I) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against letters of
credit issued by the Issuing Lender or participated in by any Participant, or
(II) impose on the Issuing Lender or any Participant any other conditions
relating, directly or indirectly, to this Agreement or any Letter of Credit; and
the result of any of the foregoing is to increase the cost to the Issuing Lender
or any Participant of issuing, maintaining or participating in any Letter of
Credit, or reduce the amount of any sum received or receivable by the Issuing
Lender or any Participant hereunder or reduce the rate of return on its capital
with respect to Letters of Credit (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of the Issuing Lender or
such Participant pursuant to the laws of the jurisdiction in which it is
organized or in which its principal office or applicable lending office is
located or any subdivision thereof or therein), then, upon the delivery of the
certificate referred to below to Borrower by the Issuing Lender or any
Participant (a copy of which certificate shall be sent by the Issuing Lender or
such Participant to the Administrative Agent), Borrower agrees to pay to the
Issuing Lender or such Participant such additional amount or amounts as will
compensate the Issuing Lender or such Participant for such increased cost or
reduction in the amount receivable or reduction on the rate of return on its
capital. The Issuing Lender or any Participant, upon determining that any
additional amounts will be payable pursuant to this SECTION 3.6, will give
prompt written notice thereof to Borrower, which notice shall include a
certificate submitted to Borrower by the Issuing Lender or such Participant (a
copy of which certificate shall be sent by the Issuing Lender or such
Participant to Agent), setting forth in reasonable detail the basis for the
calculation of such additional amount or amounts necessary to compensate the
Issuing Lender or such Participant. The certificate required to be delivered
pursuant to this SECTION 3.6 shall, absent manifest error, be final and
conclusive and binding on Borrower.
ARTICLE 4
INTEREST, FEES AND EXPENSES
4.1 INTEREST ON LIBOR RATE LOANS. Subject to the provisions of SECTION
4.4, each LIBOR Rate Loan shall bear interest on its unpaid principal amount at
a rate per annum equal to the applicable Adjusted LIBOR Rate PLUS the Applicable
Margin, as the same may be adjusted pursuant to the provisions of the definition
of Applicable Margin. Such interest shall be payable on the last day of each
Interest Period with respect to such LIBOR Rate Loan (or,
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in the case of any Interest Period in excess of three months in length, on the
date which is three months from the first day of such Interest Period and on
each successive three month anniversary of such date occurring during the
remainder of such Interest Period), at the date of Conversion of such LIBOR Rate
Loan (or a portion thereof) to a Prime Rate Loan and at maturity of such LIBOR
Rate Loan, and after maturity of such LIBOR Rate Loan (whether by acceleration
or otherwise), upon demand. Agent upon determining the Adjusted LIBOR Rate for
any Interest Period shall promptly notify Borrower and the Lenders by telephone
(confirmed promptly in writing) or in writing thereof. Each determination by
Agent of an interest rate hereunder shall be conclusive and binding for all
purposes, absent manifest error.
4.2 INTEREST ON PRIME RATE LOANS. Subject to the provisions of SECTION
4.4, each Prime Rate Loan shall bear interest on its unpaid principal amount at
a rate per annum equal to the Prime Lending Rate PLUS the Applicable Margin, as
the same may be adjusted pursuant to the provisions of the definition of
Applicable Margin. Such interest shall be payable monthly in arrears on the
first day of each calendar month and at maturity of such Prime Rate Loan, and
after maturity of such Prime Rate Loan (whether by acceleration or otherwise),
upon demand. In the event of any change in said Prime Lending Rate, the rate
hereunder shall change, effective as of the day the Prime Lending Rate changes.
Each determination by Agent of any interest rate hereunder shall be conclusive
and binding for all purposes, absent manifest error.
4.3 NOTICE OF CONTINUATION AND NOTICE OF CONVERSION.
(A) With respect to any Borrowing consisting of LIBOR Rate Loans,
Borrower may (so long as no Default or Event of Default has occurred and is
continuing, subject to the provisions of SECTION 4.3(C)), elect to maintain such
Borrowing or any portion thereof as consisting of LIBOR Rate Loans by selecting
a new Interest Period for such Borrowing, which new Interest Period shall
commence on the last day of the immediately preceding Interest Period. Each
selection of a new Interest Period (a "CONTINUATION") shall be made by notice
given not later than 1:00 P.M. on the third Business Day prior to the date of
any such Continuation relating to LIBOR Rate Loans, by Borrower to Agent. Such
notice by Borrower of a Continuation (a "NOTICE OF CONTINUATION") shall be in
substantially the form of EXHIBIT C-1, specifying (I) the date of such
Continuation, (II) the type of Loans subject to such Continuation, (III) the
aggregate amount of Loans subject to such Continuation and (IV) the duration of
the selected Interest Period, all of which shall be specified in such manner as
is necessary to comply with all limitations on Loans outstanding hereunder.
Borrower may elect to maintain more than one Borrowing consisting of LIBOR Rate
Loans by combining such Borrowings into one Borrowing and selecting a new
Interest Period pursuant to this SECTION 4.3(A); PROVIDED that each of the
Borrowings so combined shall consist of Loans having Interest Periods ending on
the same date. If Borrower fails to select a new Interest Period for any
Borrowing consisting of LIBOR Rate Loans in accordance with this SECTION 4.3(A),
such Loans will automatically, on the last day of the then existing Interest
Period therefor, Convert into Prime Rate Loans.
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(B) Borrower may on any Business Day (so long as no Event of Default
has occurred and is continuing), upon notice (each such notice, a "NOTICE OF
CONVERSION") given to Agent, and subject to the provisions of SECTION 4.3(C),
Convert the entire amount of or a portion of all Loans of one type comprising
the same Borrowing into Loans of another Type; however, PROVIDED that any
Conversion of any LIBOR Rate Loans into Loans of another Type shall be made on,
and only on, the last day of an Interest Period for such LIBOR Rate Loans and,
upon Conversion of any Loans into Loans of another Type, Borrower shall pay
accrued interest to the date of Conversion on the principal amount Converted.
Each such Notice of Conversion shall be given not later than 1:00 P.M. on the
Business Day prior to the date of any proposed Conversion into Prime Rate Loans
and on the third Business Day prior to the date of any proposed Conversion into
LIBOR Rate Loans. Subject to the restrictions specified above, each Notice of
Conversion shall be in substantially the form of EXHIBIT C-2 hereto specifying
(I) the requested date of such Conversion, (II) the Type of Loans to be
Converted, (III) the portion of such Type of Loan to be Converted, (IV) the Type
of Loan such Loans are to be Converted into and (V) if such Conversion is into
LIBOR Rate Loans, the duration of the Interest Period of such Loan. Each
Conversion shall be in an aggregate amount for the Loans of all Lenders of not
less than $5,000,000 or any integral multiple of $1,000,000 in excess thereof.
Borrower may elect to Convert the entire amount of or a portion of all Loans of
one Type comprising more than one Borrowing into Loans of another Type by
combining such Borrowings into one Borrowing consisting of Loans of another
Type; PROVIDED that if the Borrowings so combined consist of LIBOR Rate Loans,
such Loans shall have Interest Periods ending on the same date.
(C) Notwithstanding anything contained in SUBSECTIONS (A) AND (B)
above or elsewhere in this Credit Agreement to the contrary,
(I) (A) if Agent is unable to determine the LIBOR Rate for
LIBOR Rate Loans comprising any requested Borrowing, Continuation or
Conversion, the right of Borrower to select or maintain LIBOR Rate Loans
for such Borrowing or any subsequent Borrowing shall be suspended until
Agent shall notify Borrower and the Lenders that the circumstances causing
such suspension no longer exist, and each Loan comprising such Borrowing
shall be a loan of a Type that is unaffected by such circumstances, as
selected by Borrower pursuant to this Credit Agreement;
(B) if a Lender shall, at any time, notify Agent that, because
of a change in applicable law after the date such Lender became a Lender,
it has become unlawful for such Lender to participate in any requested
Borrowing, Continuation or Conversion of LIBOR Rate Loans, to continue its
LIBOR Rate Loans, or to comply with its obligations hereunder in respect
thereof, that Lender's obligation to participate in any such requested
Borrowing, Continuation or Conversion shall be discharged by such Lender's
making its participation therein in the form of a Prime Rate Loan, and any
of such Lender's LIBOR Rate Loans not otherwise being converted shall be
converted into Prime Rate Loans on the earlier of (1) the last day of the
applicable Interest Period and (2) the last day such Lender may lawfully
continue to maintain LIBOR Rate Loans, PROVIDED that any Prime Rate Loan
that, but for this CLAUSE (B),
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would have been a LIBOR Rate Loan shall constitute part of the Borrowing
of which any such LIBOR Rate Loan was or would have been a part;
(II) if the Majority Lenders shall, at least one Business Day
before the date of any requested Borrowing, Continuation or Conversion,
notify Agent that the LIBOR Rate for Loans comprising such Borrowing will
not adequately reflect the cost to such Lenders of making or funding their
respective Loans for such Borrowing, the right of Borrower to select LIBOR
Rate Loans for such Borrowing shall be suspended until Agent shall notify
Borrower and the Lenders that the circumstances causing such suspension no
longer exist, and each Loan comprising such Borrowing shall be a Loan of a
Type that is unaffected by such circumstances, as selected by Borrower
pursuant to this Credit Agreement;
(III) Borrower shall borrow, prepay, convert and continue
Loans in a manner such that (A) the aggregate principal amount of LIBOR
Rate Loans having the same Interest Period shall at all times be not less
than $5,000,000, (B) there shall not be, at any one time, more than five
(5) Interest Periods in effect with respect to LIBOR Rate Loans and (C) no
payment of LIBOR Rate Loans will have to be made prior to the last day of
an applicable Interest Period in order to repay the Loans in the amounts
and on the date specified in SECTION 2.4(B); and
(IV) no Interest Period in respect of any Borrowing of Term
Loans shall be selected which extends beyond any date upon which a
mandatory repayment of the Term Loans will be required to be made
hereunder, if the aggregate principal amount of Term Loans which have
Interest Periods which will expire after such date will be in excess of
the aggregate principal amount of Term Loans then outstanding less the
aggregate amount of such required repayment.
(D) Each Notice of Continuation and Notice of Conversion shall be
irrevocable by and binding on Borrower.
4.4 INTEREST AFTER EVENT OF DEFAULT. Upon notice from Agent, interest on
any amount of overdue interest on or overdue principal of the Loans, and
interest on the amount of principal under the Loans outstanding as of the date
an Event of Default occurs, and at all times thereafter until the earlier of the
date upon which (A) all Obligations have been paid and satisfied in full or (B)
such Event of Default shall not be continuing, shall be payable on demand at a
rate per annum equal to the rate at which the Loans are bearing interest
pursuant to SECTIONS 4.1 AND 4.2 above, PLUS two percent (2.0%). In the event of
any change in said applicable interest rate, the rate hereunder shall change,
effective as of the day the applicable interest rate changes, so as to remain
two percent (2.0%) per annum above the then applicable interest rate.
4.5 UNUSED LINE FEE. Borrower shall pay to Agent, for the ratable benefit
of the Lenders, a non-refundable fee (the "UNUSED LINE FEE") equal to one-half
of one percent (0.50%) per annum of the unused portion of the Line of Credit
(with any outstanding Letters of
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Credit constituting usage of the Line of Credit). The Unused Line Fee shall
accrue daily from the Closing Date until the Expiration Date, and shall be due
and payable monthly in arrears, on the first Business Day of each month and on
the Expiration Date.
4.6 LETTER OF CREDIT FEES. (A) Agent shall be entitled to charge for the
account of Borrower, on the first Business Day of each month, a fee for the
ratable benefit of the Lenders, in an amount equal to the Applicable Margin for
LIBOR Rate Loans consisting of Revolving Loans per annum of the Stated Amount of
all Letters of Credit, if any, outstanding during the immediately preceding
month (the foregoing fee hereinafter referred to as the "LETTER OF CREDIT FEE").
(B) Agent shall also be entitled to charge to the account of
Borrower as and when incurred by Agent or any Lender, the customary charges,
fees, costs and expenses charged to Agent or any Lender for Borrower's account
by any Issuing Lender (the "ISSUING LENDER FEES") in connection with the
issuance, transfer, payment or amendment of any Letters of Credit by the Issuing
Lender. Each determination by Agent of Letter of Credit Fees and Issuing Lender
Fees shall be conclusive and binding for all purposes, absent manifest error.
(C) Agent shall also be entitled to charge to the account of
Borrower the applicable fee with respect to each Letter of Credit set forth in
the Fee Letter.
(D) Upon notice from Agent, after the occurrence of an Event of
Default until the earlier of the date upon which (I) all Obligations shall have
been paid and satisfied in full or (II) such Event of Default shall not be
continuing, the Letter of Credit Fee payable with respect to Letters of Credit
shall be payable on demand at a rate per annum equal to the Letter of Credit Fee
then in effect pursuant to CLAUSE (A) above PLUS two percent (2.0%). In the
event of any change in such Letter of Credit Fee, the Letter of Credit Fee
hereunder shall change, effective as of the date of such change so as to remain
two percent (2.0%) per annum above the then applicable Letter of Credit Fee.
4.7 REIMBURSEMENT OF EXPENSES.
(A) From and after the Closing Date, Borrower shall promptly
reimburse Agent for all Expenses of Agent as the same are incurred by Agent and
upon receipt of invoices therefor and, if requested by Borrower, such reasonable
backup materials and information as Borrower shall reasonably request.
(B) Borrower shall pay to each Lender, upon request, such amount or
amounts as such Lender determines in good faith are necessary to compensate it
for any loss, cost or expense incurred by it as a result of (I) any payment,
prepayment or conversion of a LIBOR Rate Loan on a date other than the last day
of an Interest Period for such LIBOR Rate Loan or (II) a LIBOR Rate Loan for any
reason not being made or converted, or any payment of principal thereof or
interest thereon not being made, on the date therefor determined in accordance
with the applicable provisions of this Credit Agreement. At the election of such
Lender, and without limiting the generality of the foregoing, but without
duplication, such
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compensation on account of losses may include an amount equal to the excess of
(A) the interest that would have been received from Borrower under and in
accordance with the terms of this Credit Agreement on any amounts to be
reemployed during an Interest Period or its remaining portion over (B) the
interest component of the return that such Lender determines it could have
obtained had it placed such amount on deposit in the interbank Dollar market
selected by it for a period equal to such Interest Period or its remaining
portion.
4.8 AUTHORIZATION TO CHARGE BORROWER'S ACCOUNT. Borrower hereby authorizes
Agent to charge Borrower's Account with the amount of all Fees, Expenses and
other payments to be paid hereunder, under the Fee Letter and under the other
Credit Documents as and when such payments become due, including, without
limitation, installments of principal on the Term Loans and all Unpaid Drawings;
PROVIDED, that, so long as an Event of Default shall not have occurred and be
continuing, Agent shall give Borrower thirty (30) days prior notice before
making any such charge in respect of out-of-pocket expenses and shall provide
Borrower with such supporting detail with respect thereto as Borrower shall
reasonably request. Borrower confirms that any charges which Agent may so make
to Borrower's Account as herein provided will be made as an accommodation to
Borrower and solely at Agent's discretion.
4.9 INDEMNIFICATION IN CERTAIN EVENTS. If after the Closing Date, either
(A) any change in or in the interpretation of any law or regulation is
introduced, including with respect to reserve requirements, applicable to BTCo,
Deutsche Bank or any other banking or financial institution from whom any of the
Lenders borrows funds or obtains credit (a "FUNDING BANK"), Agent or any of the
Lenders, or (B) Agent, a Funding Bank or any of the Lenders complies with any
future guideline or request from any central bank or other Governmental
Authority or (C) Agent, a Funding Bank or any of the Lenders determines that the
adoption after the Closing Date of any applicable law, rule or regulation
regarding capital adequacy, or any change after the Closing Date therein, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof has or would have the effect described below, or Agent, a
Funding Bank or any of the Lenders complies with any request or directive issued
after the Closing Date regarding capital adequacy (whether of not having the
force of law) of any such authority, central bank or comparable agency, and in
the case of any event set forth in this CLAUSE (C), such adoption, change or
compliance has or would have the direct or indirect effect of reducing the rate
of return on any of the Lenders' capital as a consequence of its obligations
hereunder or in respect of any participation interests in Letters of Credit to a
level below that which such Lender could have achieved but for such adoption,
change or compliance (taking into consideration Agent's or such Funding Bank's
or Lender's policies as the case may be with respect to capital adequacy) by an
amount deemed by such Lender to be material, or any of the foregoing events
described in CLAUSES (A), (B) OR (C) increases the cost to Agent, or any of the
Lenders of (I) funding or maintaining the Line of Credit; or (II) acquiring or
maintaining any participation interest in any Letter of Credit, or reduces the
amount receivable in respect thereof, or in respect of such Letter of Credit, by
Agent, the Issuing Lender of such Letter of Credit or any Lender, then Borrower
shall upon demand by Agent, pay to Agent, for the account of each applicable
Lender or, as applicable, an Issuing
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Lender or a Funding Bank, additional amounts sufficient to indemnify such Person
against such increase in cost or reduction in amount receivable. A certificate
as to the amount of such increased cost and setting forth in reasonable detail
the calculation thereof shall, if requested by Borrower, be submitted to
Borrower by the Person making such claim, and shall be conclusive absent
manifest error.
4.10 CALCULATIONS AND DETERMINATIONS. (A) All calculations of (I) interest
hereunder and (II) Fees, shall be made by Agent, on the basis of a year of 360
days, or, if such computation would cause the interest and fees chargeable
hereunder to exceed the Highest Lawful Rate, 365/366 days, in each case to the
extent applicable for the actual number of days elapsed (including the first day
but excluding the last day) occurring in the period for which such interest or
fees are payable.
(B) In making the determinations contemplated by Article 4, Agent
and each Lender may make such estimates, assumptions, allocations and the like
that such Person in good faith determines to be appropriate.
(C) Each determination by Agent of an interest rate or payment
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
ARTICLE 5
CONDITIONS PRECEDENT
5.1 CONDITIONS TO INITIAL CREDIT EVENT. The initial Credit Event is
subject to the satisfaction or waiver, immediately prior thereto or concurrently
therewith, of the following conditions precedent:
(A) CLOSING DOCUMENT LIST. Agent and the Lenders shall have received
each of the agreements, opinions, reports, approvals, consents, certificates and
other documents set forth on the Closing Document List attached hereto as
SCHEDULE II.
(B) FEES AND EXPENSES. Agent and each of the Lenders shall have
received payment in full of those Fees and Expenses referred to in the Fee
Letter and in ARTICLE 4 payable to them on or before the initial Credit Event
(or an irrevocable authorization to pay such Fees or Expenses out of the
proceeds of the Loans).
(C) CHANGES IN MARKET. There shall not have occurred and be
continuing a material adverse change in the market for syndicated bank credit
facilities, or a material disruption of, or material adverse change in,
financial, banking or capital market conditions, in each case since the date
hereof, as reasonably determined by Agent.
(D) BORROWING BASE; UNUSED AVAILABILITY. After giving pro forma
effect to the funding of the initial Loans, the issuance of the initial Letters
of Credit, if any, and the payment of all costs, fees and expenses incurred by
or for the account of Borrower in
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connection with the execution and delivery of this Credit Agreement and the
other Credit Documents, there shall be unused availability under the Borrowing
Base of at least $10,000,000.
(E) SUBORDINATION AGREEMENT. (I) The Subordinated Lender shall have
duly executed and delivered the Subordination Agreement, in form and substance
satisfactory to Agent and (II) Agent shall have received evidence reasonably
satisfactory to Agent that Borrower shall have received in immediately available
funds proceeds of the Indebtedness incurred under the Subordinated Debt
Documents in aggregate amount not less than $10,000,000.
(F) ADDITIONAL DOCUMENTS. Borrower shall have executed and delivered
to Agent and the Lenders all documents which Agent or any Lender determines are
reasonably necessary to consummate the transactions contemplated hereby.
5.2 CONDITIONS TO EACH CREDIT EVENT. On the date of each Credit Event
(including the initial Credit Event), both immediately before and immediately
after giving effect thereto and to the application of the proceeds therefrom,
the following statements shall be true to the satisfaction of Agent (and each
request for a Credit Event, shall constitute a representation and warranty by
Borrower that on the date of such Credit Event, immediately before and
immediately after giving effect thereto and to the application of the proceeds
therefrom, such statements are true):
(A) The representations and warranties contained in this Credit
Agreement and in each other Credit Document are true and correct in all
material respects on and as of the date of such Credit Event as though
made on and as of such date, except to the extent that such
representations and warranties expressly relate solely to an earlier date
(in which case such representations and warranties shall have been true
and correct in all material respects on and as of such earlier date);
(B) No event has occurred and is continuing, or could reasonably be
expected to result from such Credit Event or the application of the
proceeds thereof, which would constitute a Default or an Event of Default;
and
(C) In the case of the issuance of any Letter of Credit, none of the
events set forth in SECTION 3.1 has occurred and is continuing or would
result from the issuance of such Letter of Credit.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
To induce Agent and the Lenders to enter into this Credit Agreement and
each Issuing Lender to issue Letters of Credit, Borrower, with respect to itself
and each of its Subsidiaries, hereby represents and warrants to Agent, the
Lenders and each Issuing Lender:
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6.1 ORGANIZATION AND QUALIFICATION. Borrower and each Subsidiary of
Borrower (A) is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation, (B) has the power and
authority to own its properties and assets and to transact the businesses in
which it presently is, or proposes to be, engaged and (C) is duly qualified and
is authorized to do business and is in good standing in each jurisdiction where
it presently is, or proposes to be, engaged in business, except for any failures
to be so qualified, authorized or in good standing which singly or in the
aggregate could not reasonably be expected to have a Material Adverse Effect. As
of the Closing Date, SCHEDULE 6.1 lists all jurisdictions in which Borrower and
each Subsidiary of Borrower are qualified to do business as foreign
corporations.
6.2 SOLVENCY. The fair saleable value of the assets of Borrower and each
Subsidiary of Borrower exceeds all its probable liabilities, including those to
be incurred pursuant to this Credit Agreement and the other Credit Documents.
Borrower and each Subsidiary of Borrower (A) does not have unreasonably small
capital in relation to the business in which it is, or proposes to be, engaged
and (B) has not incurred, and does not believe that it will incur after giving
effect to the transactions contemplated by this Credit Agreement and the other
Credit Documents, debts beyond its ability to pay such debts as they become due.
6.3 RIGHTS IN COLLATERAL; PRIORITY OF LIENS. Borrower and each Subsidiary
of Borrower owns the property granted by it as Collateral under the Credit
Documents, free and clear of any and all Liens in favor of third parties, except
for Permitted Liens. The provisions of the Credit Documents are effective to
create in favor of the Agent for the benefit of the Agent and the Lenders a
legal, valid and enforceable Lien on all right, title and interest of Borrower
in the Collateral described therein, and upon the proper filing of the Form
UCC-1 financing statements listed in the Closing Document List, the Agent shall
have, for the benefit of the Agent and the Lenders, subject to no other Liens
other than Permitted Liens, a perfected Lien on all right, title and interest of
Borrower in all of the Collateral described therein, to the extent such a Lien
can be perfected by the filing of such UCC financing statements. After the
execution and delivery thereof pursuant to the terms of the Credit Documents,
the recordation of the Trademark Security Agreement and Patent Security
Agreement, in each case listed on the Closing Document List, in the United
States Patent and Trademark Office, together with the filings on Form UCC-1
described above, will create, as can be perfected by such filings and
recordation, a perfected Lien in the United States trademarks (if any) and
patents (if any) covered thereby..
6.4 NO CONFLICT. The execution, delivery and performance by Borrower and
each Subsidiary of Borrower of each Credit Document to which it is a party: (A)
are within its corporate power; (B) are duly authorized by all necessary
corporate action; (C) are not in contravention of any Requirement of Law or any
indenture, contract, lease, agreement, instrument or other commitment to which
it is a party or by which it or any of its properties are bound; (D) do not
require the consent, registration or approval of any Governmental Authority or
any other Person (except such as have been duly obtained, made or given, and are
in full force and effect); and (E) will not, except as contemplated herein,
result in the imposition of any Liens upon any of its properties.
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6.5 ENFORCEABILITY. The Credit Agreement and all of the other Credit
Documents to which Borrower or any Subsidiary of Borrower is a party are the
legal, valid and binding obligations of Borrower and such Subsidiary, and are
enforceable against each of them, as the case may be, in accordance with their
terms, except as such enforceability may be limited by (A) the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and (B) general principles of equity.
6.6 CONSENTS. No consent or authorization of, filing with or other act by
or in respect of, any Governmental Authority or any other Person is required in
connection with any Credit Event hereunder, the grant of the Liens pursuant to
the Credit Documents, or the execution, delivery, performance, validity or
enforceability of this Credit Agreement, the Notes or the other Credit
Documents, except for the filing of the UCC financing statements and consents or
authorizations which have been obtained or filings which have been made and
which, in each case, are in full force and effect. No consent or authorization
of, filing with or other act by or in respect of any Governmental Authority or
any other Person is required in connection with the continuing operations of
Borrower or any Subsidiary of Borrower, except for any of the foregoing which
failures to obtain and maintain in full force and effect singly or in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
6.7 FINANCIAL DATA. Borrower has furnished or caused to be furnished to
the Lenders the following financial statements with respect to the Parent and
its consolidated Subsidiaries, which have been prepared in accordance with GAAP
consistently applied throughout the periods involved: (A) a balance sheet as of,
and statements of operations, shareholder's equity and cash flows for the fiscal
year ended May 31, 1999, audited by independent certified public accountants and
accompanied by an unqualified opinion thereof; and (B) an unaudited balance
sheet as of, and unaudited statements of operations, shareholder's equity and
cash flows for the period ending May 31, 2000 (subject to year end audit
adjustments and the absence of footnotes). Borrower has further furnished or
caused to be furnished to the Lenders the following financial statements with
respect to the Borrower Consolidated Entity, which have been prepared in
accordance with GAAP consistently applied throughout the periods involved: (A)
an unaudited balance sheet as of, and unaudited statements of operations,
shareholders equity and cash flows for the fiscal year ended May 31, 1999 and
(B) an unaudited balance sheet as of, and unaudited statements of operations,
shareholders equity and cash flows for the period ending May 31, 2000 (in each
case subject to year-end audit adjustments and the absence of footnote).
6.8 LOCATIONS OF OFFICERS, RECORDS AND INVENTORY. As of the Closing Date,
the address of the principal place of business and chief executive office of
Borrower and each Subsidiary of Borrower is set forth on SCHEDULE 6.8. As of the
Closing Date, the books and records of Borrower and each Subsidiary of Borrower,
and all of their respective chattel paper and records of Accounts, are
maintained exclusively at such locations. As of the Closing Date, there is no
location at which Borrower or any Subsidiary of Borrower has any Collateral
(except for vehicles and Inventory in transit for processing in the ordinary
course of business) other than those locations identified on SCHEDULE 6.8.
SCHEDULE 6.8 also contains a complete list of the legal names and addresses of
each warehouse at which Inventory is stored as of the
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Closing Date. None of the receipts received by Borrower from any warehouseman
states that the goods covered thereby are to be delivered to bearer or to the
order of a named person or to a named person and such named person's assigns.
6.9 FICTITIOUS BUSINESS NAMES. Except as set forth on SCHEDULE 6.9,
neither Borrower nor any of its Subsidiaries has used any corporate or
fictitious name (including d/b/a's or the like) during the five (5) years
preceding the date hereof, other than the corporate name under which it has
executed this Credit Agreement.
6.10 SUBSIDIARIES. As of the Closing Date, the only Subsidiaries of
Borrower are those listed on SCHEDULE 6.10. Borrower or a wholly-owned
Subsidiary of Borrower is the record and beneficial owner of all of the issued
and outstanding Capital Securities of each of the Subsidiaries listed on
SCHEDULE 6.10. There are no proxies, irrevocable or otherwise, with respect to
such Capital Securities, and no Capital Securities of any Subsidiary of Borrower
are or may become required to be issued by reason of any options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for,
Capital Securities of any Subsidiary of Borrower, and there are no contracts,
commitments, understandings or arrangements by which any Subsidiary of Borrower
is or may become bound to issue additional Capital Securities convertible into
or exchangeable for such Capital Securities. All of such shares listed on
SCHEDULE 6.10 are owned by Borrower or a Subsidiary of Borrower free and clear
of any Liens. As of the Closing Date, SCHEDULE 6.10 contains a true, correct and
complete list, as to each Subsidiary of Borrower, of all jurisdictions in which
such Subsidiary is qualified to do business as a foreign corporation.
6.11 NO JUDGMENTS OR LITIGATION. Except (A) for those matters set forth on
SCHEDULE 6.11 (which matters singly or in the aggregate could not reasonably be
expected to have a Material Adverse Effect) or (B) with respect to any other
matters not set forth on SCHEDULE 6.11 that singly or in the aggregate could not
reasonably be expected to have a Material Adverse Effect, no judgments, orders,
writs or decrees are outstanding against Borrower or any Subsidiary of Borrower
nor is there now pending or, to the best of Borrower's knowledge after diligent
inquiry, threatened any litigation, contested claim, investigation, arbitration,
or governmental proceeding by or against Borrower or any Subsidiary of Borrower.
6.12 NO DEFAULTS. Neither Borrower nor any of its Subsidiaries is in
default in any material respect under any term of any material indenture,
contract, lease, agreement, instrument or other commitment to which Borrower or
any Subsidiary of Borrower is a party or by which Borrower or any Subsidiary of
Borrower is bound. Borrower does not know of any disputes regarding any such
indenture, contract, lease, agreement, instrument or other commitment which
singly or in the aggregate could reasonably be expected to have a Material
Adverse Effect.
6.13 LABOR MATTERS.
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(A) There are no labor controversies pending or, to the best
knowledge of Borrower after diligent inquiry, threatened between Borrower or any
Subsidiary of Borrower and any of their respective employees, except for any of
the foregoing which singly or in the aggregate could not reasonably be expected
to have a Material Adverse Effect.
(B) Neither Borrower nor any of its Subsidiaries is engaged in any
unfair labor practices which singly or in the aggregate could reasonably be
expected to have a Material Adverse Effect. Except for any of the following
which singly or in the aggregate could not reasonably be expected to have a
Material Adverse Effect, there is (I) no unfair labor practice complaint pending
against Borrower or any of its Subsidiaries or, to the best knowledge of
Borrower, threatened against any of them, before the National Labor Relations
Board, and no grievance or significant arbitration proceeding arising out of or
under collective bargaining agreements is so pending against Borrower or any of
its Subsidiaries or, to the best knowledge of Borrower, threatened against any
of them, (II) no strike, labor dispute, slowdown or stoppage pending against
Borrower or any of its Subsidiaries or, to the best knowledge of Borrower,
threatened against any of them and (III) no union representation question with
respect to the employees of Borrower or any of its Subsidiaries and no union
organizing activities.
6.14 COMPLIANCE WITH LAW. (A) Except as disclosed on SCHEDULE 6.14 and for
such of the following as could not singly or in the aggregate reasonably be
expected to have a Material Adverse Effect, neither Borrower nor any of its
Subsidiaries has (I) violated or failed to comply with any Requirement of Law or
any requirement of any self-regulatory organization or (II) any Liability of
which Borrower has knowledge or reasonably should have knowledge in connection
with any release, generation, storage, use, transportation, disposal or other
handling of any hazardous or toxic waste, substance or constituent, or other
substance into the environment, or (III) received any notice, letter or other
indication of potential Liability arising from the release, generation, storage,
use, transportation, disposal or other handling of any hazardous or toxic waste,
substance or constituent or other substance into the environment.
(B) Except as disclosed on SCHEDULE 6.14 and for such of the
following as could not singly or in the aggregate reasonably be expected to have
a Material Adverse Effect, to Borrower's knowledge, none of the operations of
Borrower or any Subsidiary of Borrower is the subject of any federal or state
investigation evaluating whether Borrower or such Subsidiary disposed of any
hazardous or toxic waste, substance or constituent or other substance at any
site that may require remedial action, or any federal or state investigation
evaluating whether any remedial action is needed to respond to a release of any
hazardous or toxic waste, substance or constituent, or other substance into the
environment.
6.15 ERISA. Neither Borrower nor any of its Subsidiaries thereof,
maintains or contributes to any Plan other than those listed on SCHEDULE 6.15.
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6.16 INTELLECTUAL PROPERTY. Borrower and each of its Subsidiaries
possesses such assets, licenses, patents, patent applications, copyrights,
service marks, trademarks and trade names as are necessary to continue to
conduct its present business activities.
6.17 LICENSES AND PERMITS. Borrower and each of its Subsidiaries has
obtained and holds in full force and effect, all franchises, licenses, leases,
permits, certificates, authorizations, qualifications, easements, rights of way
and other rights and approvals which are necessary or advisable for the
operation of its respective businesses as presently conducted and as proposed to
be conducted, except for any such failures to obtain or hold in full force and
effect which singly or in the aggregate could not reasonably be expected to have
a Material Adverse Effect. Neither Borrower nor any of its Subsidiaries is in
violation of the terms of any such franchise, license, lease, permit,
certificate, authorization, qualification, easement, right of way, right or
approval, except for any such violations which singly or in the aggregate could
not reasonably be expected to have a Material Adverse Effect.
6.18 TITLE TO PROPERTY. All Real Estate owned by Borrower or any
Subsidiary of Borrower as of the Closing Date is identified on SCHEDULE 6.18.
Borrower and each Subsidiary of Borrower has good and marketable title in fee
simple to, or a valid leasehold interest in, all such Real Estate, and good
title to all its other property, and none of such property is subject to any
Lien, except Permitted Liens.
6.19 INVESTMENT COMPANY. Neither Borrower nor any of its Subsidiaries is
(A) an investment company or a company controlled by an investment company
within the meaning of the Investment Company Act of 1940, as amended, (B) a
holding company or a Subsidiary of a holding company, or an Affiliate of a
holding company or of a Subsidiary of a holding company, within the meaning of
the Public Utility Holding Company Act of 1935, as amended, or (C) subject to
any other law which purports to regulate or restrict its ability to borrow money
or to consummate the transactions contemplated by this Credit Agreement or the
other Credit Documents or to perform its obligations hereunder or thereunder.
6.20 BORROWER TAXES AND TAX RETURNS.
(A) Except as set forth on SCHEDULE 6.20, Borrower and each
Subsidiary of Borrower (and any affiliated group of which Borrower or any
Subsidiary of Borrower are now or have been members, but with respect to
affiliated groups of which Borrower or any Subsidiary of Borrower were but no
longer are members, only for periods during which Borrower or such Subsidiary
were a member thereof) have timely filed (inclusive of any permitted extensions)
with the appropriate taxing authorities all returns (including information
returns) in respect of Borrower Taxes required to be filed through the date
hereof and will timely file (inclusive of any permitted extensions) any such
returns required to be filed on and after the date hereof. The information filed
is complete and accurate in all material respects. All deductions taken by
Borrower as reflected in such income tax returns have been taken in accordance
with applicable laws and regulations, except deductions that may have been
disallowed but are being challenged in good faith and for which adequate
reserves have been made in accordance with GAAP. As of the Closing Date, except
as specified in SCHEDULE
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6.20, neither Borrower nor any Subsidiary of Borrower, nor any group of which
Borrower or any Subsidiary of Borrower are now or were members, have requested
any extension of time within which to file returns (including information
returns) in respect of any Borrower Taxes.
(B) All taxes, assessments, fees and other governmental charges
payable by Borrower and any Subsidiary of Borrower (and any affiliated group of
which Borrower or any Subsidiary of Borrower is now or has been a member) in
respect of their incomes, franchises, businesses, properties or otherwise
("BORROWER TAXES") in respect of periods beginning prior to the date hereof,
have been timely paid, or will be timely paid, or an adequate reserve has been
established therefor, as set forth in SCHEDULE 6.20 or in the financial
statements referred to in SECTION 6.7 or, after the Closing Date, the most
recent financial statements required to be delivered to Lenders pursuant to
SECTION 7.1, and neither Borrower nor Subsidiary of Borrower has any material
liability for taxes in excess of the amounts so paid or reserves so established.
(C) As of the Closing Date, except as set forth in SCHEDULE 6.20, no
deficiencies for Borrower Taxes have been claimed, proposed or assessed by any
taxing or other Governmental Authority against Borrower or any Subsidiary of
Borrower and no Tax Liens have been filed. As of the Closing Date, except as set
forth in SCHEDULE 6.20, there are no pending or, to the best of the knowledge of
Borrower, threatened audits, investigations or claims for or relating to any
liability in respect of Borrower Taxes, and there are no matters under
discussion with any governmental authorities with respect to Borrower Taxes
which are likely to result in a material additional liability for Borrower
Taxes. Either the federal income tax returns of Borrower have been audited by
the Internal Revenue Service and such audits have been closed, or the period
during which any assessments may be made by the Internal Revenue Service has
expired without waiver or extension, for all years up to and including the
fiscal year ended May 31, 1996. Except as set forth in SCHEDULE 6.20, no
extension of a statute of limitations relating to Borrower Taxes is in effect
with respect to Borrower or any Subsidiary of Borrower.
(D) Except as set forth on SCHEDULE 6.20, neither Borrower nor any
of its Subsidiaries has any obligation under any written Borrower Tax Sharing
Agreement or agreement regarding payments in lieu of Borrower Taxes.
6.21 STATUS OF ACCOUNTS. Each Account of Borrower is based on an actual
and bona fide sale and delivery of goods or rendition of services to customers,
made by Borrower in the ordinary course of its business; the goods and inventory
being sold by Borrower and the Accounts created thereby are the exclusive
property of Borrower and are not and shall not be subject to any Lien whatsoever
other than Permitted Liens. With respect to each Eligible Account, the account
debtors thereunder have accepted the goods or services which generated such
Eligible Account and owe and are obligated to pay the full amount stated in the
invoice, with respect thereto according to its terms, without any dispute,
offset, defense, counterclaim or contra.
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6.22 MATERIAL CONTRACTS. SCHEDULE 6.22 contains a true, correct and
complete list of all the Material Contracts currently in effect on the date
hereof. None of the Material Contracts contains any burdensome restrictions on
Borrower or any Subsidiary of Borrower or any of their respective properties,
except for any such restrictions which singly or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. As of the Closing
Date, all of the Material Contracts are in full force and effect, and no
defaults currently exist thereunder.
6.23 AFFILIATE TRANSACTIONS. Except as set forth on SCHEDULE 6.23, neither
Borrower nor any of its Subsidiaries is a party to or bound by any agreement or
arrangement (whether oral or written) to which any Affiliate of Borrower or
Subsidiary of Borrower is a party except (A) in the ordinary course of and
pursuant to the reasonable requirements of Borrower's or such Subsidiary's
business and (B) upon fair and reasonable terms no less favorable to Borrower
and such Subsidiary than it could obtain in a comparable arm's-length
transaction with an unaffiliated Person.
6.24 ACCURACY AND COMPLETENESS OF INFORMATION. All factual information
furnished by or on behalf of Borrower or any Subsidiary of Borrower in writing
to Agent, any Lender, or the Auditors for purposes of or in connection with this
Credit Agreement or any of the other Credit Documents, or any transaction
contemplated hereby or thereby is or will be true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information not misleading at such time.
6.25 RECORDING TAXES. All mortgage recording taxes, recording fees and
other charges payable in connection with the filing and recording of the Credit
Documents have either been paid in full by Borrower or arrangements for the
payment of such amounts satisfactory to Agent shall have been made.
6.26 NO ADVERSE CHANGE OR EVENT. Since May 31, 1999, no change in the
business, assets, Liabilities, financial condition, results of operations or
business prospects of Borrower or any Subsidiary of Borrower has occurred, and
no event has occurred or failed to occur, that has had or could reasonably be
expected to have, either alone or in conjunction with all other such changes,
events and failures, a Materially Adverse Effect. Such an adverse change may
have occurred, and such an event may have occurred or failed to occur, at any
particular time notwithstanding the fact that at such time no Default or Event
of Default shall have occurred and be continuing.
6.27 ADDITIONAL ADVERSE FACTS. Except for facts and circumstances
disclosed on SCHEDULE 6.27, no fact or circumstance is known to Borrower, as of
the Closing Date, that, either alone or in conjunction with all other such facts
and circumstances, has had or could reasonably be expected to have (so far as
Borrower or any Subsidiary of Borrower can foresee) a Materially Adverse Effect.
If a fact or circumstance disclosed on such Schedule should in the future have a
Materially Adverse Effect, such Materially Adverse Effect shall be a change or
event subject to SECTION 6.26 notwithstanding such disclosure.
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ARTICLE 7
AFFIRMATIVE COVENANTS
Until the Expiration Date and payment and satisfaction of all Obligations:
7.1 FINANCIAL INFORMATION. Borrower shall furnish or cause to be
furnished to the Lenders the following information within the following time
periods:
(A) as soon as available and in any event within ninety (90) days
after the end of each fiscal year of Borrower (I) audited Financial Statements
of Parent (and, if requested by Agent, Borrower) as of the close of the fiscal
year and for the fiscal year, together with comparisons to such Financial
Statements for the prior year and to the most recent projections with respect to
such fiscal year delivered pursuant to CLAUSE (D) of this SECTION 7.1, in each
case accompanied by (A) (I) in the case of audited Financial Statements of
Parent, an unqualified opinion of the Auditors with respect thereto, which
opinion shall be in scope and substance satisfactory to Agent in its sole
discretion, together with a report of the Auditors with respect to the
consolidating Financial Statements of Parent for such fiscal year in scope and
substance reasonably acceptable to Agent and (II) in the case of audited
Financial Statements of Borrower, a report of the Auditors with respect thereto
in form and substance reasonable satisfactory to Agent, (B) such Auditors'
"Management Letter" with respect to Parent or Borrower, as applicable, (C) a
written statement signed by the Auditors stating that in the course of the
regular audit of the business of Parent or Borrower, as applicable, which audit
was conducted by the Auditors in accordance with generally accepted auditing
standards, the Auditors have not obtained any knowledge of the existence of any
Default or Event of Default under any provision of this Credit Agreement, or, if
such Auditors shall have obtained from such examination any such knowledge, they
shall disclose in such written statement the existence of the Default or Event
of Default and the nature thereof, it being understood that such Auditors shall
have no liability, directly or indirectly, to anyone for failure to obtain
knowledge of any such Default or Event of Default, (II) a narrative discussion
of the consolidated and consolidating financial condition and results of
operations and the consolidated and consolidating liquidity and capital
resources of Parent or Borrower, as applicable, for such fiscal year prepared by
the chief executive officer or chief financial officer of Borrower and (III) a
compliance certificate substantially in the form of EXHIBIT D along with a
schedule in form and substance satisfactory to Agent of the calculations used in
determining, as of the end of such fiscal year, whether Borrower was in
compliance with the covenants set forth in SECTION 8.1 of this Credit Agreement
for such year;
(B) as soon as available and in any event within forty-five (45)
days after the end of each fiscal quarter of Borrower (except the last fiscal
quarter of any fiscal year) (I) Financial Statements of Borrower as at the end
of and for such period and for the fiscal year to date, together with
comparisons to such Financial Statements for the same periods in the prior year
and to the most recent projections with respect to such fiscal year delivered
pursuant to CLAUSE (D) of this SECTION 7.1, all in reasonable detail and duly
certified (subject to year-end audit adjustments and the absence of footnotes)
by the chief executive officer or chief financial
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officer of Borrower as having been prepared in accordance with GAAP, (II) a
narrative discussion of the consolidated and consolidating financial condition
and results of operations and the consolidated and consolidating liquidity and
capital resources of Borrower for such period and for the fiscal year to date
prepared by the chief executive officer or chief financial officer of Borrower,
(III) a compliance certificate substantially in the form of EXHIBIT D along with
a schedule in form and substance satisfactory to Agent of the calculations used
in determining, as of the end of such fiscal quarter, whether Borrower was in
compliance with the covenants set forth in ARTICLES 7 AND 8 of this Credit
Agreement for such quarter;
(C) as soon as available and in any event within thirty (30) days
after the end of each month (except the last month of any fiscal quarter, with
respect to which such reports shall be delivered within forty-five (45) days
after the end of the month (other than the last quarter of the fiscal year with
respect to which such reports shall be delivered within ninety (90) days after
the end of the month)), (I) consolidated and consolidating balance sheets for
the Borrower Consolidated Entity as at the end of such month and consolidated
and consolidating statements of operations and cash flows for such month and for
the fiscal year to date, together with a comparison to the consolidated and
consolidating balance sheets, statements of operations and statements of cash
flows for the same periods in the prior year, all in reasonable detail and duly
certified (subject to year-end audit adjustments) by the chief executive officer
or chief financial officer of Borrower as having been prepared in accordance
with GAAP, (II) a compliance certificate substantially in the form of EXHIBIT D
along with a schedule in form and substance satisfactory to Agent of the
calculations used in determining, as of the end of such month, whether Borrower
was in compliance with the covenants set forth in ARTICLES 7 AND 8 of this
Credit Agreement for such month;
(D) thirty (30) days prior to the end of each fiscal year of the
Borrower Consolidated Entity, commencing with such fiscal year ending May 31,
2001, preliminary (and not later than sixty (60) days after the end of such
following fiscal year, final) monthly projections of the consolidated and
consolidating financial condition and results of operations of the Borrower
Consolidated Entity's for the following fiscal year and annual projections for
each subsequent fiscal year through and including the fiscal year in which the
Expiration Date occurs, including, but not limited to, projected consolidating
balance sheets, consolidated and consolidating statements of operations,
consolidated and consolidating statements of cash flows and consolidated and
consolidating statements of changes in shareholders' equity for such fiscal
years;
(E) a copy of the state and federal income tax returns of Borrower
and each Subsidiary of Borrower within thirty (30) days after they are filed
with the appropriate taxing authorities, if and when requested by any Lender;
(F) upon request by Agent at any time and in any event not later
than 12:00 noon on the second Business Day of each week (other than the last
week of any month) and within five (5) Business Days after the last Business Day
of each month (PROVIDED that no weekly certificate need be delivered unless at
the time such delivery would otherwise be required pursuant to the terms of this
CLAUSE (F), based on the most recent Borrowing Base
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Certificate delivered by Borrower to Agent hereunder, there shall be unused
availability under the Borrowing Base of less than $7,000,000 and Agent shall
have requested such delivery), a borrowing base certificate (the "BORROWING BASE
CERTIFICATE") in form and substance satisfactory to Agent, duly completed,
detailing Borrower's Eligible Accounts Receivable and Eligible Inventory as of
each Friday of the immediately preceding week and as of the last day of such
month, as applicable, (or such other date as Agent may specify in such request),
and certified by the chief executive officer or chief financial officer of
Borrower and subject only to adjustment upon completion of the normal year-end
audit of physical inventory. In addition, each Borrowing Base Certificate shall
have attached to it such additional schedules and/or other information as Agent
may request;
(G) promptly and in any event within two (2) Business Days after
becoming aware of the occurrence of a Default or Event of Default, a certificate
of the chief executive officer or chief financial officer of Borrower specifying
the nature thereof and the proposed response thereto, each in reasonable detail;
(H) within thirty (30) days after the end of each month (except the
last month of any fiscal quarter, with respect to which such reports shall be
delivered within forty-five (45) days after the end of the month (other than the
last quarter of the fiscal year with respect to which such reports shall be
delivered within ninety (90) days after the end of the month)), a comparison of
the actual results of consolidated and consolidating operations, consolidated
and consolidating cash flows and capital expenditures for the Borrower
Consolidated Entity for such month and for the period from the beginning of the
current fiscal year through the end of such month (I) with amounts projected for
such month and for the period from the beginning of the current fiscal year
through the end of such month pursuant to SECTION 7.1(D) above and (II) with
actual results of operations, cash flow and capital expenditures for the
Borrower Consolidated Entity for the same periods of the prior fiscal year;
(I) within five Business Days of the occurrence thereof, notice of
any Casualty Loss;
(J) promptly upon the earlier of the mailing or filing thereof,
copies of all ▇▇-▇▇, ▇▇-▇▇, ▇-▇▇, proxy statements, annual reports, quarterly
reports, registration statements and any other filings or other communications
made by Parent to holders of its publicly traded securities or the Securities
Exchange Commission from time to time pursuant to the Securities Exchange Act of
1934, as amended, or the Securities Act of 1933, as amended; and
(K) from time to time, such further information regarding the
Collateral, business affairs and prospects and financial condition of Parent,
Borrower and each Subsidiary of Borrower as Agent may reasonably request.
7.2 INVENTORY. Upon the request of Agent from time to time, Borrower shall
provide to Agent written statements listing items of Inventory in reasonable
detail as requested by Agent. So long as an Event of Default shall not exist,
Borrower may continue to conduct
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inventory counts on a cycle basis in accordance with its usual and customary
business practices in effect on the Closing Date and upon the request of Agent
from time to time, Borrower shall promptly provide Agent with a copy of any such
count. If an Event of Default shall have occurred and be continuing, Borrower
shall conduct or cause to be conducted upon the request of Agent from time to
time physical counts of the Inventory and a copy of each such count shall be
promptly supplied to Agent accompanied by a report of the value (valued at FIFO)
of such Inventory. In addition to, and not in limitation of, the foregoing, at
any time and from time to time Agent may conduct (or engage third parties to
conduct) such field examinations, appraisals, verifications and evaluations of
the Inventory as Agent shall deem necessary or appropriate in the exercise of
its sole discretion.
7.3 CORPORATE EXISTENCE. Borrower shall, and shall cause each of its
Subsidiaries to, (A) maintain its corporate existence (except that Subsidiaries
of Borrower may merge with Borrower or wholly-owned Subsidiaries of Borrower
upon providing Agent with ten (10) days prior written notice) and maintain in
full force and effect all licenses, bonds, franchises, leases, trademarks and
qualifications to do business, and all patents, contracts and other rights
material to the profitable conduct of their businesses, and (B) continue in, and
limit their operations to, the same general lines of business as presently
conducted by it.
7.4 ERISA. Borrower shall deliver to Agent and each of the Lenders, at
Borrower's expense, the following information at the times specified below:
(A) within thirty (30) days after the filing thereof with the DOL,
Internal Revenue Service or PBGC, copies of each annual report (form 5500
series), including SCHEDULE B thereto, filed with respect to each Benefit Plan;
(B) within thirty (30) days after receipt by Borrower, any
Subsidiary of Borrower or any ERISA Affiliate of each actuarial report for any
Benefit Plan or Multiemployer Plan and each annual report for any Multiemployer
Plan, copies of each such report;
(C) within ten (10) days upon the occurrence thereof, notification
of any increase in the benefits of any existing Plan or the establishment of any
new Benefit Plan or Multiemployer Plan or the commencement of contributions to
any Plan to which Borrower, any Subsidiary of Borrower or any ERISA Affiliate
was not previously contributing; and
(D) within five (5) days upon the occurrence thereof, any event or
condition referred to in CLAUSES (I) THROUGH (VII) of SECTION 9.1(I), whether or
not such event or condition shall constitute an Event of Default.
Borrower and its Subsidiaries shall establish, maintain and operate all
Plans to comply in all material respects with the provisions of ERISA, the Code,
and all other Requirements of Law, other than to the extent that Borrower or any
such Subsidiary (I) is in good faith contesting by appropriate proceedings the
validity or application of any such provision, law,
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rule, regulation or interpretation and (II) has made an adequate reserve or
other appropriate provision therefor as required in order to be in conformity
with GAAP.
7.5 BOOKS AND RECORDS. Borrower agrees to maintain, and to cause each of
its Subsidiaries to maintain, books and records, including those pertaining to
the Collateral, in such detail, form and scope as is consistent with good
business practice, and agrees that such books and records will reflect Agent's
and Lenders' respective interests in its Accounts. Borrower agrees that Agent or
its agents may enter upon the premises of Borrower or any Subsidiary of Borrower
at any time and from time to time, during normal business hours and upon
reasonable notice under the circumstances, and at any time at all on and after
the occurrence of a Default, and which has not otherwise been waived pursuant to
SECTION 11.10, for the purposes of (A) conducting field examinations and
appraisals and inspecting, evaluating and verifying the Collateral, (B)
inspecting and/or copying (at Borrower's expense) any and all records pertaining
thereto and (C) discussing the business affairs and prospects and financial
condition of Borrower and each Subsidiary of Borrower with any officers,
employees and directors of Borrower or such Subsidiary or with the Auditors.
Borrower shall give Agent fifteen (15) Business Days prior written notice of any
change in the location of any Collateral or in the location of its chief
executive office or place of business from the locations specified in SCHEDULE
6.8, and Borrower shall execute in advance of such change and cause to be filed
and/or delivered to Agent any financing statements, Collateral Access Agreements
or other documents required by Agent, all in form and substance reasonably
satisfactory to Agent. Borrower agrees to advise Agent promptly, in sufficient
detail, of any substantial changes relating to the type, quantity or quality of
the Collateral, or any event which singly or in the aggregate reasonably be
expected to have a material adverse effect on the value of the Collateral or on
the Liens granted for the benefit of Agent, the Lenders and the Issuing Lenders
thereon.
7.6 COLLATERAL RECORDS. Borrower agrees to execute and deliver, and to
cause each of its Subsidiaries to execute and deliver, to Agent, from time to
time, solely for Agent's convenience in maintaining a record of the Collateral,
such written statements and schedules as Agent may reasonably require, including
those described in SECTION 7.1 of this Credit Agreement, designating,
identifying or describing the Collateral. The failure by Borrower or any
Subsidiary of Borrower, however, to promptly give Agent such statements or
schedules shall not affect, diminish, modify or otherwise limit the Liens on the
Collateral granted pursuant to the Credit Documents.
7.7 SECURITY INTERESTS. Borrower shall, and shall cause each of its
Subsidiaries to, defend the Collateral against all claims and demands of all
Persons (other than holders of Permitted Liens) at any time claiming the same or
any interest therein. Borrower shall, and shall cause each of its Subsidiaries
to, comply with the requirements of all state and federal laws in order to grant
to Agent, the Lenders and the Issuing Lenders valid and perfected first priority
security interests in the Collateral, with perfection, in the case of any
investment property, being effected by giving Agent control of such investment
property, rather than by the filing of a UCC financing statement with respect to
such investment property. Agent is hereby authorized by Borrower to file any UCC
financing statements covering the Collateral
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whether or not Borrower's signatures appear thereon. Borrower shall, and shall
cause each of its Subsidiaries to, do whatever Agent may reasonably request,
from time to time, to effect the purposes of this Credit Agreement and the other
Credit Documents, including filing notices of liens, UCC financing statements,
fixture filings and amendments, renewals and continuations thereof; cooperating
with Agent's representatives; keeping stock records; obtaining waivers from
landlords and mortgagees and from warehousemen and their landlords and
mortgagees; and, paying claims which might, if unpaid, become a Lien on the
Collateral (other than a Permitted Lien).
7.8 INSURANCE; CASUALTY LOSS.
(A) Borrower agrees to maintain, and to cause each of its
Subsidiaries to maintain, public liability insurance, third party property
damage insurance and replacement value insurance on the Collateral under such
policies of insurance, with such insurance companies, in such amounts and
covering such risks as are at all times satisfactory to Agent in its
commercially reasonable judgement. All policies covering the Collateral are to
name Agent as an additional insured and the loss payee in case of loss. Borrower
shall diligently file and prosecute, or cause to be filed and prosecuted, all
claims for any award or payment in connection with a Casualty Loss with respect
to Borrower. After the occurrence and during the continuance of an Event of
Default, (A) no settlement on account of any such Casualty Loss with respect to
Borrower shall be made without the consent of the Lenders and (B) Agent may
participate in any such proceedings and Borrower shall deliver to Agent such
documents as may be requested by Agent to permit such participation and shall
consult with Agent, its attorneys and agents in the making and prosecution of
such claim or claims. Borrower hereby irrevocably authorizes and appoints Agent
its attorney-in-fact, and agrees that, upon request, it will cause each
Subsidiary of Borrower to authorize and appoint Agent its attorney-in-fact,
after the occurrence and during the continuance of an Event of Default, to
collect and receive any such award or payment and to file and prosecute such
claim or claims, which power of attorney shall be irrevocable and shall be
deemed to be coupled with an interest, and Borrower shall, upon demand of Agent,
make, execute and deliver, and cause each of its Subsidiary to make, execute and
deliver, any and all assignments and other instruments sufficient for the
purpose of assigning any such award or payment to Agent for the benefit of
Agent, the Lenders and the Issuing Lenders, free and clear of any encumbrances
of any kind or nature whatsoever.
(B) UNLESS BORROWER PROVIDES AGENT WITH EVIDENCE OF THE INSURANCE
COVERAGE REQUIRED BY THIS CREDIT AGREEMENT, AGENT MAY PURCHASE INSURANCE AT
BORROWER'S EXPENSE TO PROTECT AGENT'S INTERESTS IN THE COLLATERAL. THIS
INSURANCE MAY, BUT NEED NOT, PROTECT BORROWER'S INTERESTS. THE COVERAGE THAT
AGENT PURCHASES MAY NOT PAY ANY CLAIM THAT BORROWER MAY MAKE OR ANY CLAIM THAT
IS MADE AGAINST BORROWER IN CONNECTION WITH THE COLLATERAL. BORROWER MAY LATER
CANCEL ANY INSURANCE PURCHASED BY AGENT, BUT ONLY AFTER PROVIDING AGENT WITH
EVIDENCE THAT BORROWER HAS OBTAINED INSURANCE AS REQUIRED BY THIS CREDIT
AGREEMENT. IF AGENT PURCHASES INSURANCE FOR THE
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COLLATERAL, BORROWER WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE,
INCLUDING INTEREST AND ANY OTHER CHARGES THAT MAY BE IMPOSED IN CONNECTION WITH
THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR
EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE
OBLIGATIONS. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE
BORROWER MAY BE ABLE TO OBTAIN ON ITS OWN.
7.9 BORROWER TAXES. Borrower agrees to pay, when due, and to cause each of
its Subsidiaries to pay when due, all Federal Borrower Taxes and all material
state and other Borrower Taxes, in each case lawfully levied or assessed against
Borrower, any Subsidiary of Borrower or any of their properties, including any
of the Collateral, before any penalty or interest accrues thereon; PROVIDED
that, unless Borrower Taxes have become a federal tax or ERISA Lien on any of
the assets of Borrower or any such Subsidiary, no Borrower Taxes need be paid if
the same is being contested, in good faith, by appropriate proceedings promptly
instituted and diligently conducted and if an adequate reserve or other
appropriate provision shall have been made therefor as required in order to be
in conformity with GAAP.
7.10 COMPLIANCE WITH LAWS. (A) Borrower agrees to comply, and to cause
each of its Subsidiaries to comply with all Requirements of Law applicable to
its business or its operations or to the Collateral or any part thereof, except
for any failures to so comply which singly or in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
(B) Within fifteen (15) days after Borrower learns of the enactment
or promulgation of any Requirement of Law which could reasonably be expected to
have a Material Adverse Effect, Borrower shall provide Agent with notice
thereof.
(C) At the reasonable request of Agent from time to time, but in any
event not more frequently than once in any twelve month period, and at the sole
cost and expense of Borrower, Borrower shall retain an environmental consulting
firm, satisfactory to Agent in its commercially reasonable judgment, to conduct
an environmental review, audit or investigation of the specific items as
requested by Agent relating to the properties of Borrower and its Subsidiaries
located in the United States and provide to Agent and each Lender a copy of any
reports delivered in connection therewith. At the reasonable request of Agent,
Borrower shall provide Agent with any additional information relating to
environmental matters and any potential related liability resulting therefrom as
Agent may reasonably request.
7.11 USE OF PROCEEDS. The initial Loans made to Borrower hereunder shall
be used by Borrower to repay the Refinanced Indebtedness and costs and expenses
of the transactions contemplated by this Credit Agreement which are due and
payable on the Closing Date, including the Fees and Expenses due on the Closing
Date pursuant to ARTICLE 4; and the proceeds of any subsequent Loans made
hereunder shall be used by Borrower solely for solely for working capital and
other general corporate purposes. Borrower shall not use any portion of the
proceeds of any such Loans for the purpose of purchasing or carrying any "margin
stock" (as defined in Regulation U of the Board of Governors of the Federal
Reserve System)
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in any manner which violates the provisions of Regulation U or X of said Board
of Governors or for any other purpose in violation of any applicable statute or
regulation, or of the terms and conditions of this Credit Agreement.
7.12 FISCAL YEAR. Borrower agrees to maintain its fiscal year as a year
ending May 31st unless otherwise required by law, in which case Borrower will
give Agent at least thirty (30) days prior written notice thereof.
7.13 NOTIFICATION OF CERTAIN EVENTS. Borrower agrees that it shall
promptly (but, in the case of CLAUSE (G), in any event within five (5) Business
Days after Borrower learns of any such proceeding, change, development or event)
notify Agent of:
(A) any Material Contract of Borrower or any of its Subsidiaries
that is terminated or amended or any new Material Contract that is entered into
(in which event Borrower shall provide Agent with a copy of such Material
Contract);
(B) any material change or amendment of the material terms upon
which suppliers of Borrower or any of its Subsidiaries do business with Borrower
or such Subsidiary;
(C) the entry of any order, judgment or decree in excess of
$1,000,000 against Borrower or any of its Subsidiaries or any of their
respective properties or assets;
(D) receipt by Borrower or any of its Subsidiaries of any
notification of violation in any material respect of any material Requirement of
Law from any Governmental Authority;
(E) any development or event which has had or could reasonably be
expected to have a Material Adverse Effect;
(F) any material proceedings being instituted or threatened to be
instituted by or against Borrower or any of its Subsidiaries, before any
Governmental Authority or arbitrator; and
(G) any Event of Default or Default.
7.14 INTELLECTUAL PROPERTY. Borrower shall, and shall cause each of its
Subsidiaries to, do and cause to be done all things necessary to preserve and
keep in full force and effect all registrations of patents, copyrights,
trademarks, service marks and other marks, trade names or other trade rights
material to the profitable conduct of their respective businesses.
7.15 MAINTENANCE OF PROPERTY. Borrower agrees to keep, and to cause each
of its Subsidiaries to keep, all property useful and necessary to its respective
businesses in good working order and condition (ordinary wear and tear excepted)
in accordance with their past operating practices and not to commit or suffer
any material waste with respect to any of its properties.
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7.16 FURTHER ASSURANCES. Borrower shall take, and shall cause each of its
Subsidiaries to take, all such further actions and execute all such further
documents and instruments as Agent may at any time reasonably determine in its
sole discretion to be necessary or desirable to further carry out and consummate
the transactions contemplated by the Credit Documents, to cause the execution,
delivery and performance of the Credit Documents to be duly authorized and to
perfect or protect the Liens (and the priority status thereof) of Agent on the
Collateral.
7.17 CHANGES IN MARKET. Borrower agrees that Agent shall be entitled,
after consultation with Borrower, to change the terms and conditions, pricing
and structure of the credit facilities extended hereunder if Agent determines
that such changes are advisable to ensure the successful initial syndication of
thereof, PROVIDED, that (A) the Total Commitments remain unchanged and (B) the
standard and default per annum interest rates applicable to the respective Loans
are not increased by more than one percent (1.00%) per annum in excess of the
maximum standard and default per annum interest rate set forth herein on the
Closing Date.
ARTICLE 8
NEGATIVE COVENANTS
Until the Expiration Date and payment and satisfaction of all Obligations,
Borrower agrees that:
8.1 CERTAIN FINANCIAL COVENANTS.
(A) FIXED CHARGE COVERAGE RATIO.
(I) Borrower shall not permit the Fixed Charge Coverage Ratio,
as determined as of August 31, 2000, for the three-month period
ending on such date, to be less than 0.66 to 1.00;
(II) Borrower shall not permit the Fixed Charge Coverage
Ratio, as determined as of November 30, 2000, for the six-month
period ending on such date, to be less than 0.76 to 1.00;
(III) Borrower shall not permit the Fixed Charge Coverage
Ratio, as determined as of February 28, 2001, for the nine-month
period ending on such date, to be less than 0.84 to 1.00; and
(IV) Borrower shall not permit the Fixed Charge Coverage
Ratio, as determined as of each date set forth below, for the
twelve-month period ending on such date, to be less than the ratio
set forth below opposite such date:
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DATE MINIMUM RATIO
---- -------------
May 31, 2001 0.87 to 1.00
August 31, 2001 0.88 to 1.00
November 30, 2001 0.90 to 1.00
February 28, 2002 0.91 to 1.00
May 31, 2002 0.92 to 1.00
August 31, 2002 0.95 to 1.00
November 30, 2002 0.96 to 1.00
February 28, 2003 0.97 to 1.00
May 31, 2003 0.98 to 1.00
August 31, 2003 0.99 to 1.00
November 30, 2003 and
the last day of each fiscal
quarter of Borrower ending
thereafter 1.00 to 1.00
(B) LEVERAGE RATIOS.
(I) Borrower shall not permit the Total Leverage Ratio, as
determined as of each date set forth below, for the twelve-month period
ending on such date, to be greater than the ratio set forth below opposite
date:
DATE MAXIMUM RATIO
---- -------------
August 31, 2000 4.00 to 1.00
November 30, 2000 4.00 to 1.00
February 28, 2001 4.00 to 1.00
May 31, 2001 3.40 to 1.00
August 31, 2001 3.40 to 1.00
November 30, 2001 3.40 to 1.00
February 28, 2002 3.20 to 1.00
May 31, 2002 3.20 to 1.00
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August 31, 2002 3.00 to 1.00
November 30, 2002 2.80 to 1.00
February 28, 2003 2.80 to 1.00
May 31, 2003 2.60 to 1.00
August 31, 2003 2.60 to 1.00
November 30, 2003 2.60 to 1.00
February 29, 2004 and the
last day of each fiscal
quarter of Borrower ending
thereafter 2.50 to 1.00
(II) Borrower shall not permit the Senior Leverage Ratio, as
determined as of each date set forth below, to be greater than the ratio
set forth below opposite date:
DATE MAXIMUM RATIO
---- -------------
August 31, 2000 3.50 to 1.00
November 30, 2000 3.50 to 1.00
February 28, 2001 3.50 to 1.00
May 31, 2001 3.00 to 1.00
August 31, 2001 3.00 to 1.00
November 30, 2001 3.00 to 1.00
February 28, 2002 2.80 to 1.00
May 31, 2002 2.80 to 1.00
August 31, 2002 2.80 to 1.00
November 30, 2002 2.40 to 1.00
February 28, 2003 2.40 to 1.00
May 31, 2003 2.20 to 1.00
August 31, 2003 2.20 to 1.00
November 30, 2003 2.20 to 1.00
February 29, 2004 and the
last day of each fiscal
quarter of Borrower ending
thereafter 2.00 to 1.00
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(C) INTEREST COVERAGE RATIO.
(I) Borrower shall not permit the Interest Coverage Ratio, as
determined as of August 31, 2000, for the three-month period ending
on such date, to be less than 2.00 to 1.00;
(II) Borrower shall not permit the Interest Coverage Ratio, as
determined as of November 30, 2000, for the six-month period ending
on such date, to be less than 2.20 to 1.00;
(III) Borrower shall not permit the Interest Coverage Ratio,
as determined as of February 28, 2001, for the nine-month period
ending on such date, to be less than 2.30 to 1.00; and
(IV) Borrower shall not permit the Interest Coverage Ratio, as
determined as of each date set forth below for the twelve-month
period ending on such date to be the less than the ratio set forth
below opposite such date:
DATE MINIMUM RATIO
---- -------------
May 31, 2001 2.50 to 1.00
August 31, 2001 2.80 to 1.00
November 30, 2001 2.80 to 1.00
February 28, 2002 2.90 to 1.00
May 31, 2002 3.00 to 1.00
August 31, 2002 3.10 to 1.00
November 30, 2002 3.30 to 1.00
February 28, 2003 3.60 to 1.00
May 31, 2003 3.70 to 1.00
August 31, 2003 4.10 to 1.00
November 30, 2003 4.10 to 1.00
February 28, 2004 4.50 to 1.00
May 31, 2004 4.50 to 1.00
August 31, 2004 4.50 to 1.00
November 30, 2004 and
the last day of each fiscal
quarter of Borrower ending
thereafter 5.00 to 1.00
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8.2 CAPITAL EXPENDITURES. Borrower shall not and shall not permit any of
its Subsidiaries to, directly or indirectly, make payments for Capital
Expenditures in any fiscal year of Borrower, in the aggregate for Borrower and
its Subsidiaries combined, in excess of the sum of (A) $6,000,000 PLUS (B) 50%
of the amount permitted to be spent on capital expenditures pursuant to CLAUSE
(A) of this SECTION 8.2 in the immediately preceding fiscal year of Borrower and
not so used. Borrower shall not and shall not permit any of its Subsidiaries to,
directly or indirectly, make any Capital Expenditures that are not directly
related to the businesses conducted on the Closing Date by Borrower or such
Subsidiary.
8.3 NO ADDITIONAL INDEBTEDNESS. Borrower shall not and shall not
permit any of its Subsidiaries to, directly or indirectly, incur, create, assume
or suffer to exist any Indebtedness other than:
(A) Indebtedness secured by Purchase Money Liens not to exceed, in
the aggregate for Borrower and its Subsidiaries combined, $1,000,000 outstanding
at any one time;
(B) Indebtedness arising under this Credit Agreement and the other
Credit Documents;
(C) Indebtedness evidenced by the Subordinated Notes;
(D) Indebtedness consisting of regularly scheduled rental payments
under Capital Leases not to exceed, in the aggregate for Borrower and its
Subsidiaries combined $250,000 in any fiscal year of Borrower, PROVIDED, that
the aggregate face amount of all Indebtedness of the Borrower and its
Subsidiaries combined in respect of Capital Leases shall not exceed $2,000,000
at any time;
(E) Indebtedness described on SCHEDULE 8.3(D) and any refinancing of
such Indebtedness; PROVIDED that the aggregate principal amount of such
Indebtedness is not increased and such refinancing is on terms and conditions
that are no more restrictive than the terms and conditions of the Indebtedness
being refinanced;
(F) Indebtedness under Derivative Contracts permitted pursuant to
SECTION 8.16; and
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(G) unsecured Indebtedness (in addition to the Indebtedness
permitted pursuant to the foregoing CLAUSES (A) through (F)) in an aggregate
outstanding principal amount not to exceed at any time, in the aggregate for
Borrower and its Subsidiaries combined, $1,000,000.
8.4 NO LIENS; JUDGMENTS. Borrower shall not and shall not permit any of
its Subsidiaries to, directly or indirectly, mortgage, assign, pledge, transfer,
create, incur, assume, suffer to exist or otherwise permit any Lien (whether as
a result of a purchase money or title retention transaction, or other security
interest, judgment or otherwise) to exist on any of its property, assets,
revenues or goods, whether real, personal or mixed, whether now owned or
hereafter acquired, except for the following (the "PERMITTED LIENS"):
(A) Liens granted by Borrower or Subsidiary pursuant to any Credit
Document;
(B) Liens listed on SCHEDULE 8.4(B);
(C) Purchase Money Liens;
(D) Liens of warehousemen, mechanics, material men, workers,
repairmen, common carriers, landlords and other similar Liens arising by
operation of law or otherwise, not waived in connection herewith, for amounts
that are not yet due and payable or which are being diligently contested in good
faith by Borrower or Subsidiary by appropriate proceedings;
(E) Attachment and judgment Liens securing outstanding liabilities
of Borrower or any Subsidiary of Borrower which individually or in the aggregate
for all such Liens are not in excess of $1,000,000 for Borrower and its
Subsidiaries combined (exclusive of (I) any amounts that are duly bonded to the
reasonable satisfaction of Agent or (II) any amount adequately covered by
insurance as to which the insurance company has not disclaimed or disputed in
writing its obligations for coverage);
(F) Liens for Borrower Taxes not yet due and payable or which are
being diligently contested in good faith by Borrower by appropriate proceedings,
PROVIDED that in any such case an adequate reserve is being maintained by
Borrower for the payment of same;
(G) Deposits or pledges to secure obligations arising in the
ordinary course of business under workmen's compensation, social security or
similar laws, or under unemployment insurance;
(H) Deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations, surety
and appeal bonds and other obligations of like nature arising in the ordinary
course of business;
(I) Easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in
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amount and which do not materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of Borrower or any Subsidiary of Borrower;
(J) Liens upon any Equipment of Borrower or any Subsidiary of
Borrower subject to a Capital Lease, to the extent such Capital Lease is
permitted by SECTION 8.3(D), PROVIDED, that such Liens (I) secure only the
payment of Indebtedness arising under such Capital Lease and (II) extend only to
such Equipment, the contracts related thereto and the proceeds thereof; and
(K) Extensions and renewals of the foregoing permitted Liens;
PROVIDED that the aggregate amount of such extended or renewed Liens is not
increased and such extended or renewed Liens are on terms and conditions no more
restrictive than the terms and conditions of the Liens being extended or
renewed.
8.5 NO SALE OF ASSETS. Borrower shall not and shall not permit any of
its Subsidiaries to, directly or indirectly, sell, lease, assign, transfer or
otherwise dispose of any assets other than (A) Inventory in the ordinary course
of business, (B) the owned real property of Borrower located at #▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, (C) the owned real property and related assets of
Borrower located at 1960 South 4250 West, Salt Lake City, Utah, (D) obsolete or
worn out properly disposed of in the ordinary course of business, (E) Capital
Securities of any subsidiary of Subsidiary Guarantor incorporated or otherwise
organized outside of the United States or any state or territory thereof and (F)
other dispositions of assets, PROVIDED that (I) such other dispositions of
assets are for fair value, (II) the total consideration received in connection
with each such disposition is in cash and (III) the aggregate consideration for
such dispositions does not exceed $1,000,000 in any fiscal year of the Borrower.
8.6 NO CORPORATE CHANGES. Borrower shall not and shall not permit any of
its Subsidiaries to, directly or indirectly, merge or consolidate with any other
Person, or otherwise alter or modify Borrower's or such Subsidiary's Governing
Documents, corporate or other name, mailing addresses, principal places of
business, structure, status or existence, or enter into or engage in any
operation or activity materially different from that currently being conducted
by Borrower or such Subsidiary, except that (A) any Subsidiary of Borrower may
be merged or consolidated with or into Borrower, PROVIDED that (I) Borrower
shall be the continuing or surviving corporation and (II) no Default or Event of
Default shall exist or result therefrom and (B) Borrower or any Subsidiary of
Borrower may alter or modify its Governing Documents, PROVIDED, that such
alteration or modification could not reasonably be expected to affect in any
material and adverse respect Agent or any of the Lenders or their respective
rights and remedies hereunder or under any of the other Credit Documents
8.7 NO GUARANTIES. Borrower shall not and shall not permit any of its
Subsidiaries to, directly or indirectly, issue or assume any Guaranty with
respect to the Liabilities of any other Person, including any Subsidiary or
Affiliate of Borrower, except (A) by the endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of
business, (B) by the giving of customary indemnities in connection with the sale
of
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Inventory or other asset dispositions permitted hereunder and (C) Indebtedness
permitted to be incurred pursuant to SECTION 8.3.
8.8 NO RESTRICTED PAYMENTS. Borrower shall not and shall not permit
any of its Subsidiaries to, directly or indirectly make any Restricted Payment;
PROVIDED, that:
(A) Borrower may make interest payments under the Subordinated
Notes, to the extent and at the times permitted pursuant to the
Subordination Agreement;
(B) any Subsidiary of Borrower may declare and pay dividends to
Borrower;
(C) Borrower may make distributions to Parent to permit Parent
(contemporaneously with, and in the same amount of, such distributions)
to pay Federal, state and local income tax obligations actually due and
payable in cash by Parent, to the extent such obligations are the direct
result of the net income or loss of Borrower and its Subsidiaries being
attributed to Parent for tax purposes;
(D) so long as immediately before and after giving effect thereto no
Event of Default shall have occurred and be continuing, Borrower may
make distributions to Parent to permit Parent (contemporaneously with,
and in the same amount of, such distributions) to pay fees and expenses
necessary to maintain Parent's corporate existence and good standing;
(E) (I) so long as immediately before and after giving effect
thereto no Default or Event of Default shall have occurred and be
continuing and (II) so long as immediately after giving effect thereto,
there shall be unused availability under the Borrowing Base of at least
$3,000,000, Borrower may make a distribution to Parent to permit Parent
(contemporaneously with, and in the same amount of, such payments) to
pay quarterly cash dividends in an amount not exceeding 15 cents per
share per fiscal year in respect of its common stock, PROVIDED that (A)
only one such distribution may be made during any fiscal quarter of the
Borrower, (B) each such distribution made during any fiscal quarter of
the Borrower shall be made during the fifteenth (15th) through the
twentieth (20th) consecutive day immediately following the end of the
immediately preceding such fiscal quarter and (C) at least five (5) days
prior to such distribution, Agent shall have received preliminary
versions of the Financial Statements to be delivered to Agent pursuant
to SECTION 7.1(B) for the immediately preceding such fiscal quarter,
together with an attached certificate of the Chief Financial Officer of
Parent (on behalf of itself and Borrower) to the effect that (1) the
final Financial Statements to be delivered to Agent for such immediately
preceding Fiscal Quarter will not differ in any material respect from
such preliminary Financial Statements, (2) no Default or Event of
Default had occurred and been continuing as of the end of the period
covered by such Financial Statements, has occurred or is continuing as
of the date of such certificate or would result from the making of such
distribution and (3) attached thereto is the calculation of unused
availability under the Borrowing Base after giving effect to such
distribution
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indicating compliance with the requirements of the foregoing CLAUSE (I)
of this SECTION 8.8(E);
(F) Borrower may forgive Indebtedness evidenced by the Management
Notes at the respective times and in the respective amounts required
pursuant to the terms thereof; and
(G) Borrower may make distributions to Parent to permit Parent
(contemporaneously with, and in the same amount of, such distributions),
to repurchase shares of its common stock in the amount and at the time
and price per share, respectively, in each case required pursuant to the
▇▇▇▇▇▇▇▇ Agreement.
8.9 NO INVESTMENTS. Borrower shall not and shall not permit any of
its Subsidiaries to, directly or indirectly, make any Investment in any Person
other than:
(I) Advances or loans to officers and employees made in the ordinary
course of business not to exceed in the aggregate for Borrower and its
Subsidiaries combined, $500,000, outstanding at any one time to any one Person
and $1,000,000 in the aggregate outstanding at any one time;
(II) Cash Equivalents;
(III) Interest-bearing demand or time deposits (including
certificates of deposit) which are insured by the Federal Deposit Insurance
Corporation ("FDIC") or a similar federal insurance program; however, PROVIDED
that Borrower may, in the ordinary course of its business, maintain in its
disbursement accounts from time to time accounts in excess of then applicable
FDIC or other program insurance limits;
(IV) Guaranties permitted under SECTION 8.7;
(V) Investments listed on SCHEDULE 8.9;
(VI) So long as before and after giving effect thereto no Default or
Event of Default shall have occurred or be continuing, Investments in any
wholly-owned subsidiary of Subsidiary Guarantor incorporated or otherwise
organized outside of the United States or any state or territory thereof, in an
aggregate amount not exceeding $1,000,000;
(VII) Investments in Subsidiary Guarantor to permit Subsidiary
Guarantor (contemporaneously with, and in the same amount of, such
distributions) to pay state and local franchise and similar tax obligations
actually due and payable in cash by Subsidiary Guarantor; and
(VIII) Such other Investments as Agent may approve in writing in its
sole discretion.
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8.10 NO AFFILIATE TRANSACTIONS. Except to the extent expressly permitted
pursuant to SECTIONS 8.6, 8.8 or 8.9, Borrower shall not and shall not permit
any of its Subsidiaries to, directly or indirectly, enter into any transaction
with, including the purchase, sale or exchange of property or the rendering of
any service to any Subsidiary of Borrower or other Affiliate of Borrower and
whether or not such transaction would otherwise be permitted under any of the
other provisions of the Credit Documents, except in the ordinary course of and
pursuant to the reasonable requirements of Borrower's or such Subsidiary's
business, as the case may be, and upon fair and reasonable terms no less
favorable to Borrower or such Subsidiary than could be obtained in a comparable
arms-length transaction with an unaffiliated Person.
8.11 LIMITATION ON TRANSACTIONS UNDER ERISA. Borrower shall not and
shall not permit any of its Subsidiaries to, directly or indirectly:
(A) amend, or permit any ERISA Affiliate to amend, a Benefit Plan
resulting in an increase in current liability for the plan year such that
Borrower, any Subsidiary of Borrower or any ERISA Affiliate is required to
provide security to such a Benefit Plan under Section 401(a)(29) of the Code; or
(B) allow the representation made in SECTION 6.15 to be untrue at
any time.
8.12 NO ADDITIONAL BANK ACCOUNTS. Borrower shall not and shall not
permit any of its Subsidiaries to, directly or indirectly, open, maintain or
otherwise have any checking, savings or other accounts at any bank or other
financial institution, or any other account where money is or may be deposited
or maintained with any Person, other than the Lockbox Accounts and the accounts
set forth on SCHEDULE 8.12.
8.13 MATERIAL AMENDMENTS OF MATERIAL CONTRACTS. Borrower shall not and
shall not permit any of its Subsidiaries to, directly or indirectly, without the
prior written consent of Agent, amend, modify, cancel or terminate or permit the
amendment, modification, cancellation or termination of, any of the Material
Contracts, except for any of the foregoing which singly or in the aggregate
could not reasonably be expected to have a Material Adverse Effect.
8.14 ADDITIONAL RESTRICTIVE COVENANTS. Except for Permitted Restrictive
Covenants, Borrower shall not and shall not permit any of its Subsidiaries to,
directly of indirectly, create or otherwise cause or suffer to exist or become
effective (A) any consensual restriction limiting the ability (whether by
covenant, event of default, subordination or otherwise and including any such
the effect of which is to require the providing of equal and ratable security to
any other Person in the event a Lien is granted to or for the benefit of Agent
and the Lenders) to (I) pay dividends or make any other distributions on shares
of its Capital Securities held by Borrower or any other Subsidiary of Borrower;
(II) pay any Liability owed to Borrower or any other Subsidiary; (III) make any
loans or advances to other Investments in Borrower or in any other Subsidiary of
Borrower; or (IV) create or permit to exist any Lien upon the assets of Borrower
or any Subsidiary of Borrower, other than Liens permitted under SECTION 8.4; or
(B) any contractual obligation which may restrict or inhibit Agent's rights or
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ability to sell or otherwise dispose of the Collateral or any part thereof after
the occurrence of an Event of Default.
8.15 NO ADDITIONAL SUBSIDIARIES. Borrower shall not and shall not permit
any of its Subsidiaries to, directly or indirectly, form or acquire any new
Subsidiaries.
8.16 LIMITATION ON DERIVATIVE TRANSACTIONS. Except for Derivative
Transactions pursuant to Derivative Contracts evidencing interest rate hedging
arrangements entered into by Borrower in connection with the Loans, Borrower
shall not and shall not permit any of its Subsidiaries to, enter into any
Derivative Transaction.
ARTICLE 9
EVENTS OF DEFAULT AND REMEDIES
9.1 EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an Event of Default hereunder (whatever the reason for such
event and whether it shall be voluntary or involuntary, or within or without the
control of Borrower, any Subsidiary of Borrower or any other Credit Party, or be
effected by operation of law or pursuant to any judgment or order of any court
or any order, rule or regulation of any governmental or nongovernmental body):
(A) failure of Borrower to pay (I) any interest, Fees, Expenses or
other Obligations (other than an Obligation referred to in CLAUSE (II)) when
due, whether at stated maturity, by acceleration, or otherwise, or (II) when
due, whether at stated maturity, by acceleration or otherwise any (A) principal
of any Loan or (B) reimbursement obligation with respect to any Letter of
Credit; or
(B) failure of Borrower or any Subsidiary of Borrower to perform,
comply with or observe any term, covenant or agreement applicable to it
contained in SECTION 2.4(C), (D), (E) or (G) or in ARTICLE 7 (other than
SECTIONS 7.3, 7.10 OR 7.14) or ARTICLE 8; or
(C) (I) any representation or warranty made by Borrower, any
Subsidiary of Borrower or any other Credit Party under this Credit
Agreement or under any other Credit Document shall prove to have been
incorrect or misleading in any material respect when made or deemed
made; or
(II) Borrower, any Subsidiary of Borrower or any other Credit
Party shall fail to comply with any covenant contained in this Credit
Agreement (other than under a provision covered by SECTION 9.1(A) OR (B)
above) or the other Credit Documents (other than a provision covered
under SECTION 9.1(A)(II)(B) OR (C) above), which failure to comply is
not cured within fifteen (15) Business Days of its occurrence; or
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(D) dissolution, liquidation, winding up or cessation of any Credit
Party's businesses, or the failure of any Credit Party to meet its debts as they
mature, or the calling of one or more meetings of any Credit Party's major
creditors for purposes of obtaining a moratorium on payment or a compromise of
such Credit Party's debts; or
(E) (I) the insolvency of any Credit Party; or
(II) the commencement by or against any Credit Party of any
bankruptcy, insolvency, arrangement, reorganization, receivership or similar
proceedings under any federal or state law and, in the event any such proceeding
is commenced against any Credit Party, such proceeding is not dismissed within
sixty (60) days; or
(F) the occurrence of a Change of Control; or
(G) (I) an "Event of Default" occurs under the Subordinated Loan
Agreement or a default or an event of default occurs under any of the other
Subordinated Debt Documents (in each case which shall continue beyond the
expiration of any applicable grace periods), or (II) the occurrence of a default
or event of default (in each case which shall continue beyond the expiration of
any applicable grace periods) which permits the acceleration of the maturity of,
any note, agreement or instrument evidencing any other Indebtedness of Borrower
or any of its Subsidiaries, and the aggregate principal amount of all such
Indebtedness with respect to which a default or an event of default has
occurred, or the maturity of which is permitted to be accelerated, exceeds
$1,000,000; or
(H) any covenant, agreement or obligation of any party contained in
or evidenced by any of the Credit Documents shall cease to be enforceable in
accordance with its terms, or any party (other than Agent or the Lenders, in its
capacity as such, and not in its capacity as an Issuing Lender) to any Credit
Document shall deny or disaffirm its obligations under any of the Credit
Documents, or any Credit Document shall be cancelled, terminated, revoked or
rescinded without the express prior written consent of Agent, or any action or
proceeding shall have been commenced by any Person (other than Agent or a
Lender, in its capacity as such, and not in its capacity as an Issuing Lender)
seeking to cancel, revoke, rescind or disaffirm the obligations of any party to
any Credit Document, or any court or other Governmental Authority shall issue a
judgment, order, decree or ruling to the effect that any of the obligations of
any party to any Credit Document are illegal, invalid or unenforceable; or
(I) (I) any Termination Event shall occur with respect to any
Benefit Plan of Borrower, any Subsidiary of Borrower or any ERISA Affiliate,
(II) any Accumulated Funding Deficiency, whether or not waived, shall exist with
respect to any such Benefit Plan, (III) any Person shall engage in any
Prohibited Transaction involving any such Benefit Plan, (IV) Borrower, any
Subsidiary of Borrower or any ERISA Affiliate shall be in "default" (as defined
in ERISA Section 4219(c)(5)) with respect to payments owing to any such Benefit
Plan that is a Multiemployer Plan as a result of such Person's complete or
partial withdrawal (as described in ERISA Section 4203 or 4205) therefrom, (V)
Borrower, any Subsidiary of Borrower or any ERISA Affiliate shall fail to pay
when due an amount that is payable by it to
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the PBGC or to any such Benefit Plan under Title IV of ERISA, or (VI) a
proceeding shall be instituted by a fiduciary of any such Benefit Plan against
Borrower, any Subsidiary of Borrower or any ERISA Affiliate to enforce ERISA
Section 515 and such proceeding shall not have been dismissed within 30 days
thereafter, except that no event or condition referred to in CLAUSES (I) THROUGH
(VI) shall constitute an Event of Default if it, together with all other such
events or conditions at the time existing, has not subjected, and in the
reasonable determination of the Majority Lenders will not subject, Borrower or
any of its Subsidiaries to any liability that, alone or in the aggregate with
all such liabilities for all such Persons, exceeds $500,000; or
(J) (I) payment by Borrower after the date hereof of Required
Earn-Out Payments in an aggregate amount exceeding 9,150,000 Deutsche Marks, or
(II) payment by Borrower after the date hereof of any Required Earn-Out Payment
or any Restricted Payment permitted pursuant to SECTION 8.8(G) if (X)
immediately before or after giving effect thereto, a Default or an Event of
Default shall have occurred and be continuing or (Y) immediately after giving,
effect thereto there shall be unused availability under the Borrowing Base in an
amount less than $5,000,000.
9.2 ACCELERATION AND CASH COLLATERALIZATION. Upon the occurrence of an
Event of Default and which is continuing, Agent shall, upon the request of the
Majority Lenders, and by delivery of notice to Borrower from Agent, take any or
all of the following actions, without prejudice to the rights of Agent, any
Lender or the holder of any Note to enforce its claims against Borrower: (A)
declare all Obligations to be immediately due and payable (except with respect
to any Event of Default set forth in SECTION 9.1(E), in which case all
Obligations shall automatically become immediately due and payable without the
necessity of any notice or other demand) without presentment, demand, protest or
any other action or obligation of Agent or any Lender; and (B) immediately
terminate the Aggregate Commitments of the respective Lenders hereunder.
In addition, upon demand by Agent or the Majority Lenders upon the
occurrence of any Event of Default and which is continuing, Borrower shall
deposit with Agent with cash or Cash Equivalents in an amount equal to 110% of
the Letter of Credit Outstandings (in each case to the extent the same are such
by virtue of clause (a) of the definition thereof). Such deposit shall be held
by Agent as security for, and to provide for the payment of, Letter of Credit
Outstandings.
If at any time after acceleration of the maturity of the Obligations,
Borrower shall pay all arrears of interest and all payments on account of
principal of the Loans which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in SECTION 4.4) and all Events of
Default and Defaults (other than nonpayment of principal of and accrued interest
on the Loans and other Obligations due and payable solely by virtue of
acceleration) shall be remedied or waived, then by written notice to Borrower,
the Majority Lenders may elect, in the sole discretion of such Majority Lenders,
to rescind and annul the acceleration and its consequences and return any cash
collateral; but such action shall not affect any subsequent Default or Event
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of Default or impair any right or remedy consequent thereon. The provisions of
the preceding sentence are intended merely to bind the Lenders to a decision
which may be made at the election of the Majority Lenders; they are not intended
to benefit Borrower and do not give Borrower the right to require the Lenders to
rescind or annul any acceleration hereunder or to return any cash collateral,
even if the conditions set forth herein are met.
9.3 REMEDIES. From and after the occurrence of any Event of Default and
which is continuing, Agent may: (A) remove from any premises where same may be
located any and all documents, instruments, files and records (including the
copying of any computer records), and any receptacles or cabinets containing
same, relating to any or all of the Collateral, or Agent may use (at the expense
of Borrower) such of the supplies or space of Borrower at Borrower's place of
business or otherwise, as may be necessary to properly administer and control
any or all of the Collateral or the handling of collections and realizations
thereon; (B) bring suit, in the name of Borrower or the Lenders and generally
shall have all other rights respecting any or all of the Collateral, including
the right to: accelerate or extend the time of payment, settle, compromise,
release in whole or in part any amounts owing on any or all of the Collateral
and issue credits in the name of Borrower or the Lenders; and (C) foreclose the
security interests created pursuant to the Credit Documents by any available
judicial procedure, or to take possession of any or all of the Collateral
without judicial process and enter any premises where any Collateral may be
located for the purpose of taking possession of or removing same. Agent shall
have the right, without notice or advertisement, to sell, lease, or otherwise
dispose of all or any part of the Collateral, whether in its then condition or
after further preparation or processing, in the name of Borrower or the Lenders,
or in the name of such other party as Agent may designate, either at public or
private sale or at any broker's board, in lots or in bulk, for cash or for
credit, with or without warranties or representations, and upon such other terms
and conditions as Agent in its sole discretion may deem advisable, and Agent or
any other Lender shall have the right to purchase at any such sale. If any
Collateral shall require rebuilding, repairing, maintenance or preparation,
Agent shall have the right, at its option, to do such of the aforesaid as is
necessary, for the purpose of putting such Collateral in such saleable form as
Agent shall deem appropriate. Borrower agrees, at the request of Agent, to
assemble the Collateral and to make it available to Agent at places which Agent
shall select, whether at the premises of Borrower or elsewhere, and to make
available to Agent the premises and facilities of Borrower for the purpose of
Agent's taking possession of, removing or putting the Collateral in saleable
form. However, if notice of intended disposition of any Collateral is required
by law, it is agreed that ten (10) Business Days notice shall constitute
reasonable notification. Unless expressly prohibited by the licensor thereof, if
any, Agent is hereby granted a license to use all computer software programs,
data bases, processes and materials used by Borrower in connection with its
businesses or in connection with the Collateral. The net cash proceeds resulting
from Agent's exercise of any of the foregoing rights (after deducting all
charges, costs and expenses, including reasonable attorneys' fees) shall be
applied by Agent to the payment of the Obligations, whether due or to become
due, in such order as Agent may elect, and pending such payment shall be held as
security for such payment. Borrower shall remain liable to Agent and the Lenders
for any deficiencies. The enumeration of the foregoing rights is not intended to
be exhaustive and the exercise of any right shall not preclude the exercise of
any other rights, all of which shall be cumulative.
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ARTICLE 10
AGENT
10.1 APPOINTMENT OF AGENT.
(A) Each Lender hereby designates BTCo as its contractual
representative to act as herein specified. Each Lender hereby irrevocably
authorizes, and each holder of a Note or a participation interest in a Letter of
Credit by the acceptance of such Note or participation interest shall be deemed
irrevocably to authorize, Agent to take such action on its behalf under the
provisions of this Credit Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto. Agent shall hold all Collateral and
all payments of principal, interest, Fees, charges and Expenses received
pursuant to this Credit Agreement or any other Credit Document for the benefit
of the Lenders and the Issuing Lenders to be distributed as provided herein.
Agent may perform any of its duties hereunder by or through its agents or
employees.
(B) The provisions of this Article 10 (other than SECTIONS 10.9 and
10.10, respectively) are solely for the benefit of Agent, the Lenders and the
Issuing Lenders, and none of the Credit Parties shall have any rights as a third
party beneficiary of any of the provisions hereof (other than SECTION 10.9). In
performing its functions and duties under this Credit Agreement, Agent shall act
solely as agent of the Lenders and the Issuing 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.
10.2 NATURE OF DUTIES OF AGENT. Agent shall have no duties or
responsibilities except those expressly set forth in this Credit Agreement and
the other Credit Documents. Neither Agent nor any of its officers, directors,
employees or agents shall be liable for any action taken or omitted by it as
such hereunder or in connection herewith, unless caused by its or their gross
negligence or willful misconduct. The duties of Agent shall be mechanical and
administrative in nature; Agent shall not have by reason of this Credit
Agreement or the other Credit Documents a fiduciary relationship in respect of
any Lender or any Issuing Lender, and nothing in this Credit Agreement or the
other Credit Documents, expressed or implied, is intended to or shall be so
construed as to impose upon Agent any obligations in respect of this Credit
Agreement or the other Credit Documents except as expressly set forth herein or
therein.
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10.3 LACK OF RELIANCE ON AGENT.
(A) Independently and without reliance upon Agent, any Lender or any
Issuing Lender, to the extent it deems appropriate, has made and shall continue
to make (I) its own independent investigation of the financial or other
condition and affairs of each Credit Party in connection with the taking or not
taking of any action in connection herewith and (II) its own appraisal of (A)
the creditworthiness of each Credit Party, and (B) the Collateral, and, except
as expressly provided in this Credit Agreement, Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
or any Issuing Lender with any credit or other information with respect thereto,
whether coming into its possession before the initial Credit Event or at any
time or times thereafter.
(B) Agent shall not be responsible to any Lender or Issuing Lender
for any recitals, statements, information, representations or warranties herein
or in any other Credit Document or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility, priority or sufficiency
of this Credit Agreement or any other Credit Document or the financial or other
condition of any Credit Party. Agent shall not be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Credit Agreement or any other Credit Document, or the
financial condition of any Credit Party, or the existence or possible existence
of any Default or Event of Default, unless specifically requested to do so in
writing by any Lender or Issuing Lender, as the case may be.
10.4 CERTAIN RIGHTS OF AGENT. Agent shall have the right to request
instructions from the Lenders at any time. If Agent shall request instructions
from the Lenders with respect to any act or action (including the failure to
act) in connection with this Credit Agreement, Agent shall be entitled to
refrain from such act or taking such action unless and until Agent shall have
received instructions from the Majority Lenders (or, to the extent required
pursuant to SECTION 11.10, the Super Majority Lenders or all Lenders), and Agent
shall not incur liability to any Person by reason of so refraining. Without
limiting the foregoing, no Lender or Issuing Lender shall have any right of
action whatsoever against Agent as a result of Agent acting or refraining from
acting hereunder in accordance with the instructions of the Majority Lenders.
10.5 RELIANCE BY AGENT. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex or facsimile transmission, E-mail, telecopier
message, cablegram, order or other documentary, teletransmission or telephone
message believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person. Agent may consult with legal counsel (including
counsel for Borrower with respect to matters concerning Borrower), 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. Agent may, but shall not be
required to, rely on Borrowing Base Certificates and any other schedules or
reports delivered to Agent in connection herewith in determining the amount of
the Borrowing Base and the then eligibility of Accounts and
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Inventory of Borrower. Reliance thereon by Agent from time to time shall not be
deemed to limit the right of Agent to revise advance rates or standards of
eligibility as provided in the definition of the term "Borrowing Base" set forth
herein.
10.6 INDEMNIFICATION OF AGENT. To the extent Agent is not reimbursed and
indemnified by Borrower, each Lender will reimburse and indemnify Agent, in
proportion to its respective Aggregate Commitment, for and against any and all
Liabilities, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever (including all Expenses) which may be imposed on, incurred
by or asserted against Agent, in any way relating to or arising out of this
Credit Agreement or any other Credit Document; PROVIDED that no Lender, shall be
liable for any portion of such Liabilities, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent it is
determined by a judgment of a court that is binding on Agent, final and not
subject to review on appeal, to be the result of acts or omissions on the part
of Agent, constituting gross negligence or willful misconduct.
10.7 AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its obligation to
lend under this Credit Agreement, the Loans made by it and the Notes issued to
it, and its participation in Letters of Credit, Agent shall have the same rights
and powers hereunder as any other Lender or holder of a Note or participation
interests and may exercise the same as though it was not performing the duties
specified herein; and the terms "Lenders," "Majority Lenders," "Super Majority
Lenders," "holders of Notes," or any similar terms shall, unless the context
clearly otherwise indicates, include Agent in its individual capacity. Agent may
accept deposits from, lend money to, acquire equity interests in, and generally
engage in any kind of banking, trust, financial advisory or other business with
Borrower or any Affiliate of Borrower as if it were not performing the duties
specified herein, and may accept fees and other consideration from Borrower for
services in connection with this Credit Agreement and otherwise without having
to account for the same to the Lenders or any Issuing Lender.
10.8 HOLDERS OF NOTES.
(A) Agent may deem and treat the payee of any Note as the owner
thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note, shall be conclusive
and binding on any subsequent holder, transferee or assignee of such Note or of
any Note or Notes issued in exchange therefor.
10.9 SUCCESSOR AGENT.
(A) Agent may, upon five (5) Business Days' notice to the Lenders
and Borrower, resign at any time (effective upon the appointment of a successor
Agent pursuant to the provisions of this SECTION 10.9) by giving written notice
thereof to the Lenders and Borrower. Upon such resignation, the Majority Lenders
shall have the right, upon five (5) days' notice to Borrower, to appoint a
successor Agent. If no successor Agent (I) shall have
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been so appointed by the Majority Lenders and (II) shall have accepted such
appointment, within thirty (30) days after the retiring Agent's giving of notice
of resignation, then, upon five (5) days' notice, the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent.
(B) Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Credit Agreement. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article 10 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this Credit
Agreement.
(C) In the event of a material breach by Agent of its duties
hereunder, Agent may be removed by the Majority Lenders for cause and the
provisions of this SECTION 10.9 shall apply to the appointment of a successor
Agent. Such removal of Agent shall also operate, if at the time any such Person
is serving as such, as a removal of BTCo and each of its Serving Affiliates, if
any, as an Issuing Lender , subject to SECTION 10.9(D).
(D) No removal of BTCo, Deutsche Bank or any of its Serving
Affiliates pursuant to SECTION 10.9(C), as an Issuing Lender, shall be effective
unless its Liabilities under each Letter of Credit are secured with cash or by
letters of credit in form and substance, and issued by issuers, satisfactory to
BTCo, Deutsche Bank or such Serving Affiliate.
10.10 COLLATERAL MATTERS.
(A) Each Lender and each Issuing Lender authorizes and directs Agent
to enter into the Collateral Documents for the benefit of such Person. Each
Lender and each Issuing Lender hereby agrees, and each holder of any Note by the
acceptance thereof will be deemed to agree, that, except as otherwise set forth
in SECTION 11.10, any action taken by the Majority Lenders or the Super Majority
Lenders, as the case may be, in accordance with the provisions of this Credit
Agreement or the Collateral Documents, and the exercise by the Majority Lenders
or Super Majority Lenders of the powers set forth herein or therein, together
with such other powers as are reasonably incidental thereto, shall be authorized
and binding upon all of the Lenders and all the Issuing Lenders. Agent is hereby
authorized on behalf of all of the Lenders and all the Issuing Lenders, without
the necessity of any notice to or further consent from any Lender or any Issuing
Lender from time to time prior to an Event of Default, to take any action with
respect to any Collateral or Collateral Documents which may be necessary to
perfect and maintain perfected the Liens upon the Collateral granted pursuant to
the Collateral Documents.
(B) Each Lender and each Issuing Lender hereby authorize Agent, at
its option and in its discretion, to release any Lien granted to or held by
Agent upon any Collateral (I) upon termination of the Aggregate Commitments of
the respective Lenders and payment and satisfaction of all of the Obligations at
any time arising under or in respect of this Credit Agreement or the other
Credit Documents or the transactions contemplated hereby or
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thereby, (II) constituting property which is subject to a Purchase Money Lien or
Capital Lease, in each case to the extent the Indebtedness in connection
therewith is permitted pursuant to SECTIONS 8.3(A) and 8.3(D), respectively,
(III) constituting property being sold or disposed of upon receipt of the
proceeds of such sale by Agent, if Borrower certifies to Agent that such sale or
disposition is made in compliance with SECTION 8.5 (and Agent may rely
conclusively on any such certificate, without further inquiry) or (IV) if
approved, authorized or ratified in writing by the Majority Lenders, unless such
release is required to be approved by all of the Lenders pursuant to SECTION
11.10. Upon request by Agent at any time, each Lender and each Issuing Lender
will confirm in writing Agent's authority to release particular types or items
of Collateral pursuant to this SECTION 10.10.
(C) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Credit Agreement, or consented to in
writing by the Majority Lenders (or all Lenders, if such release is required to
be approved by all of the Lenders pursuant to SECTION 11.10), and upon at least
five (5) Business Days' prior written request by Borrower, Agent shall (and is
hereby irrevocably authorized by each Lender and each Issuing Lender, to)
execute such documents as may be necessary to evidence the release of the Liens
granted to Agent for the benefit of Agent, the Lenders and the Issuing Lenders
herein or pursuant hereto upon the Collateral that was sold or transferred;
PROVIDED that (I) Agent shall not be required to execute any such document on
terms which, in Agent's opinion, would expose Agent to or create any Liability
or entail any consequence other than the release of such Liens without recourse
or warranty and (II) such release shall not in any manner discharge, affect or
impair the Obligations or any Liens upon (or obligations of Borrower or any
Credit Party in respect of) all interests retained by Borrower or any Credit
Party, including the proceeds of the sale, all of which shall continue to
constitute part of the Collateral. In the event of any sale or transfer of
Collateral, or any foreclosure with respect to any of the Collateral, Agent
shall be authorized to deduct all of the Expenses reasonably incurred by Agent
from the proceeds of any such sale, transfer or foreclosure.
(D) Agent shall have no obligation whatsoever to any Lender, any
Issuing Lender or any other Person to assure that the Collateral exists or is
owned by Borrower or any Subsidiary thereof or is cared for, protected or
insured or that the Liens granted to Agent herein or in any of the Collateral
Documents or pursuant hereto or thereto have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise or to continue exercising at all or in any
manner or under any duty of care, disclosure or fidelity any of the rights,
authorities and powers granted or available to Agent in this SECTION 10.10 or in
any of the Collateral Documents, it being understood and agreed that in respect
of the Collateral, or any act, omission or event related thereto, Agent may act
in any manner it may deem appropriate, in its sole discretion, given Agent's own
interest in the Collateral as one of the Lenders and that Agent shall have no
duty or liability whatsoever to the Lenders, except for its gross negligence or
willful misconduct.
10.11 ACTIONS WITH RESPECT TO DEFAULTS. In addition to Agent's right to
take actions on its own accord as permitted under this Credit Agreement, Agent
shall take such action with respect to a Default or Event of Default as shall be
directed by the Majority
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Lenders; PROVIDED that until Agent shall have received such directions, Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable and in the best interests of the Lenders and the Issuing Lenders; and,
further, PROVIDED that Agent shall not be required under any circumstances to
take any action that, in its judgment, (A) is contrary to any provision of the
Credit Documents or applicable law or (B) will expose it to any liability or
expense against which it has not been indemnified to its satisfaction.
10.12 DELIVERY OF INFORMATION. Agent shall not be required to deliver to
any Lender or any Issuing Lender originals or copies of any documents,
instruments, notices, communications or other information received by Agent from
Borrower, any Subsidiary of Borrower, the Majority Lenders, any Lender, any
Issuing Lender or any other Person under or in connection with this Credit
Agreement or any other Credit Document except (A) as specifically provided in
this Credit Agreement or any other Credit Document and (B) as specifically
requested from time to time in writing by any Lender, or any Issuing Lender with
respect to a specific document, instrument, notice or other written
communication received by and in the possession of Agent at the time of receipt
of such request and then only in accordance with such specific request.
ARTICLE 11
MISCELLANEOUS
11.1 SUBMISSION TO JURISDICTION; WAIVERS. EACH PARTY HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO
WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT THEREOF, TO THE NONEXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, IN EACH CASE LOCATED IN NEW YORK, NEW YORK, AND APPELLATE
COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM
THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION
OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY
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REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL),
POSTAGE PREPAID, TO BORROWER AT THE ADDRESS OF SUCH PERSON BORROWER SET FORTH IN
SECTION 11.5 OR AT SUCH OTHER ADDRESS OF WHICH EACH OTHER PARTY HERETO SHALL
HAVE BEEN NOTIFIED PURSUANT THERETO;
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY OTHER
PARTY HERETO TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR AFFECT THE RIGHT OF ANY OTHER PARTY HERETO TO BRING ANY ACTION OR PROCEEDING
AGAINST SUCH PERSON OR ITS PROPERTY IN THE COURTS OF OTHER JURISDICTIONS.
(E) WAIVES THE RIGHT TO ASSERT ANY SETOFF, COUNTERCLAIM OR
CROSS-CLAIM IN RESPECT OF, AND ALL STATUTES OF LIMITATIONS WHICH MAY BE RELEVANT
TO, SUCH ACTION OR PROCEEDING; AND
(F) IN THE CASE OF BORROWER, WAIVES DUE DILIGENCE, DEMAND,
PRESENTMENT AND PROTEST AND ANY NOTICES THEREOF AS WELL AS NOTICE OF NONPAYMENT.
11.2 JURY TRIAL. BORROWER, AGENT, EACH ISSUING LENDER AND THE LENDERS
EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
ARISING OUT OF THIS CREDIT AGREEMENT, THE OTHER CREDIT DOCUMENTS OR ANY OTHER
AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO.
11.3 GOVERNING LAW. THE RIGHTS AND DUTIES OF BORROWER, AGENT, EACH
ISSUING LENDER AND THE LENDERS UNDER THIS CREDIT AGREEMENT, THE NOTES (INCLUDING
MATTERS RELATING TO THE MAXIMUM PERMISSIBLE RATE) AND THE OTHER CREDIT DOCUMENTS
SHALL PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTIONS 5- 1401 BE GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW
PRINCIPLES.
11.4 DELAYS; PARTIAL EXERCISE OF REMEDIES. No delay or omission of
Agent, any Issuing Lender or any Lender to exercise any right or remedy
hereunder or under any of the other Credit Documents, whether before or after
the happening of any Event of Default, shall impair any such right or shall
operate as a waiver thereof or as a waiver of any such Event of Default. No
single or partial exercise by Agent, any Issuing Lender or any Lender of any
right or remedy shall preclude any other or further exercise thereof, or
preclude any other right or remedy.
11.5 NOTICES. Except as otherwise provided herein, all notices and
correspondence hereunder shall be in writing and sent by certified or
registered mail, return receipt requested,
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or by overnight delivery service, with all charges prepaid, to the following
addresses, if to Agent, or any of the Lenders, then to Bankers Trust Company,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Credit
Department, if to any Issuing Lender, to the address specified in the applicable
Letter of Credit Request, and if to Borrower, then at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer or by facsimile
transmission, promptly confirmed in writing sent by first class mail, if to
Agent, or any of the Lenders, at (▇▇▇) ▇▇▇-▇▇▇▇, if to an Issuing Lender, as
specified in the applicable Letter of Request, and if to Borrower at (801)
972-6532. All such notices and correspondence shall be deemed given (A) if sent
by certified or registered mail, three (3) Business Days after being postmarked,
(B) if sent by overnight delivery service, when received at the above stated
addresses or when delivery is refused and (C) if sent by facsimile transmission,
when receipt of such transmission is acknowledged except, in the case of a
notice from Agent to Borrower under SECTION 9.2, such notice shall be deemed
given when sent by facsimile transmission.
11.6 ASSIGNABILITY.
(A) Borrower shall not have the right to assign this Credit
Agreement or any interest therein except with the prior written consent of
Agent.
(B) Any Lender may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an Affiliate of such
Lender except to the extent such transfer would result in increased costs to
Borrower.
(C) Each Lender may assign to one or more banks, other financial
institutions or investment funds all or a portion of its rights and obligations
under this Credit Agreement, the Notes and the other Credit Documents; PROVIDED
that, except in the case of an assignment to a Federal Reserve Bank (which may
be made without condition or restriction), (I) such assignment shall be for a
fixed and not varying percentage of the assigning Lender's Loans, participation
interests in Letters of Credit, Revolving Loan Commitment and Term Loan
Commitment, (II) Agent shall consent to such assignment, (III) unless such
assignment is to a Person disclosed to Borrower by Agent prior to the Closing
Date or is consummated after the occurrence and during the continuance of Event
of Default, Borrower shall consent to such assignment (which consent by Borrower
shall not be unreasonably withheld or delayed), (IV) for each such assignment,
the parties thereto shall execute and deliver to Agent, for its acceptance and
recording in the Register (as defined below), an Assignment and Assumption
Agreement, together with any Note or Notes subject to such assignment and a
processing and recordation fee of $3,500 and (V) except for any assignment
covering all or the remaining portion of an assigning Lender's rights and
obligations under this Credit Agreement, the Notes and the other Credit
Documents, no such assignment shall be for less than $10,000,000 of the
assigning Lender's Aggregate Commitment, unless such assignment is to a
then-current holder of a Note. Upon such execution and delivery of the
Assignment and Assumption Agreement to Agent, from and after the date specified
as the effective date in the Assignment and Assumption Agreement (the
"ACCEPTANCE DATE"), (A) the assignee thereunder shall be a party hereto, and, to
the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Assumption Agreement, such assignee shall have
the rights
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and obligations of a Lender hereunder and (B) the assignor thereunder shall, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Assumption Agreement, relinquish its rights
(other than any rights it may have pursuant to SECTION 11.8, which rights will
survive) and be released from its obligations (other than any obligations it may
have pursuant to SECTION 11.7, which obligations will survive under this Credit
Agreement (and, in the case of an Assignment and Assumption Agreement covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Credit Agreement, such Lender shall cease to be a party hereto).
(D) By executing and delivering an Assignment and Assumption
Agreement, the assignee thereunder confirms and agrees as follows: (I) other
than as provided in such Assignment and Assumption Agreement, the assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Credit Agreement or any other Credit Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Credit Agreement, the Notes, or any other Credit Document; (II) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower, any other
Credit Parties or any Issuing Lender, the value of the Collateral, or the
performance or observance by (A) Borrower or any other Credit Parties of any of
its obligations under this Credit Agreement or any other Credit Document, or (B)
any Issuing Lender of any of its obligations in respect of any Letter of Credit;
(III) such assignee confirms that it has received a copy of this Credit
Agreement, together with copies of the financial statements referred to in
SECTION 7.1 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Assumption Agreement; (IV) such assignee will continue,
independently and without reliance upon Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, to make its own credit decisions in taking or not
taking action under this Credit Agreement; (V) such assignee appoints and
authorizes Agent to take such action as agent on its behalf and to exercise such
powers under this Credit Agreement and the other Credit Documents as are
delegated to Agent by their terms, together with such powers as are reasonably
incidental thereto; and (VI) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Credit Agreement are required to be performed by it as a Lender.
(E) Agent shall maintain at its address referred to in SECTION 11.5
a copy of each Assignment and Assumption Agreement delivered to and accepted by
it and a register for the recordation of the names and addresses of the Lenders
and the Aggregate Commitment of, and principal amount of the Loans owing to,
each Lender from time to time (the "REGISTER"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and
Borrower, Agent and the Lenders may treat each Person whose name is recorded in
the Register as a Lender hereunder for all purposes of this Credit Agreement.
The Register and copies of each Assignment and Assumption shall be available for
inspection by Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
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(F) Upon its receipt of an Assignment and Assumption Agreement
executed by an assigning Lender, together with the Note or Notes subject to such
assignment, Agent shall, if such Assignment and Assumption Agreement has been
completed and is in substantially the form of EXHIBIT A hereto, (I) accept such
Assignment and Assumption Agreement, (II) record the information contained
therein in the Register and (III) give prompt notice thereof to Borrower. Within
five (5) Business Days after its receipt of such notice, Borrower shall execute
and deliver to Agent in exchange for the surrendered Note or Notes a new Note or
Notes to the order of the assignee in an amount equal to the Aggregate
Commitment assumed by it pursuant to such Assignment and Assumption Agreement
and, if the assigning Lender has retained a Revolving Loan Commitment or Term
Loan Commitment hereunder, a new Note or Notes to the order of the assigning
Lender in an amount equal to the Commitment retained by it hereunder. Such new
Note or Notes shall re-evidence the Indebtedness outstanding under the old Note
or Notes and shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be dated the Closing
Date and shall otherwise be in substantially the form of the Note or Notes
subject to such assignments.
(G) Each Lender may sell participations (without the consent of
Agent, Borrower or any other Lender) to one or more parties in or to all or a
portion of its rights and obligations under this Credit Agreement (including all
or a portion of its Aggregate Commitment, the Loans owing to it and the Note or
Notes held by it); PROVIDED that (I) such Lender's obligations under this Credit
Agreement (including its Aggregate Commitment to Borrower hereunder) shall
remain unchanged, (II) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (III) such Lender shall
remain the holder of any such Note for all purposes of this Credit Agreement,
(IV) Borrower, Agent, and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Credit Agreement and such Notes and (V) such Lender shall
not transfer, grant, assign or sell any participation under which the
participant shall have rights to approve any amendment or waiver of this Credit
Agreement except to the extent such amendment or waiver would (A) extend the
final maturity date or the date for the payments of any installment of fees or
principal or interest of any Loans or Letter of Credit reimbursement obligations
in which such participant is participating; (B) reduce the amount of any
installment of principal of the Loans or the amount of any Drawing under any
Letter of Credit in which such participant is participating; (C) except as
otherwise expressly provided in this Credit Agreement, reduce the interest rate
applicable to the Loans or the amount of any Drawing under any Letter of Credit
in which such participant is participating; or (D) except as otherwise expressly
provided in this Credit Agreement, reduce any Fees payable hereunder. Each
Lender selling or granting a participation, including a participation sold
pursuant to SECTION 2.9, shall indemnify Borrower and Agent for any Taxes and
Liabilities that either may sustain as a result of such Lender's failure to
withhold and pay any Taxes applicable to payments by such Lender to its
participant in respect of such participation.
(H) Each Lender agrees that, without the prior written consent of
Borrower and Agent, it will not make any assignment hereunder in any manner or
under any
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circumstances that would require registration or qualification of, or filings in
respect of, any Loan, Note or other Obligation under the securities laws of the
United States of America or of any jurisdiction.
(I) In connection with the efforts of any Lender to assign its
rights or obligations or to participate interests, such Lender may disclose any
information in its possession regarding Borrower.
11.7 CONFIDENTIALITY. Each Lender agrees that it will use its reasonable
best efforts not to disclose without the prior consent of Borrower (other than
to its employees, auditors, advisors, Affiliates and counsel, or to another
Lender if the disclosing Lender or such disclosing Lender's holding or parent
company in its sole discretion determines that any such party should have access
to such information) any information with respect to Borrower or any of its
Subsidiaries, which is furnished pursuant to this Credit Agreement and which is
designated by Borrower to the Lenders in writing as confidential, PROVIDED that
any Lender may disclose any such information (A) as has become generally
available to the public, (B) as may be required or appropriate in any report,
statement or testimony submitted to or examination conducted by any Governmental
Authority having or claiming to have jurisdiction over such Lender, (C) as may
be required or appropriate in response to any summons or subpoena or in
connection with any litigation, (D) in order to comply with any Requirement of
Law, (E) to any prospective or actual transferee or participant in connection
with any contemplated transfer or participation of any of the Notes or Revolving
Loan Commitments or Term Loan Commitments or any interest therein by such
Lender, (F) to other financial institutions with respect to which the respective
Lender has a contractual relationship in accordance with such Lender's regular
banking procedures, PROVIDED that each such other financial institution agrees
to be bound by the confidentiality provisions contained in this SECTION 11.7,
(G) to any nationally recognized rating agency that requires access to
information regarding the respective Lender's investment portfolio in connection
with such rating agency's issuance of ratings with respect to such Lender,
PROVIDED that such Lender advises such rating agency of the confidential nature
of such information, (H) as may be required or appropriate in protecting,
preserving, exercising or enforcing any of its rights in, under or related to
the Collateral or the Credit Documents and (I) as may be required or appropriate
in consulting with any Person with respect to any of the foregoing matters.
11.8 INDEMNIFICATION. Borrower shall and hereby agrees to indemnify,
defend and hold harmless Agent, each Issuing Lender and each of the Lenders and
their respective directors, officers, agents, employees, counsel, advisors and
Affiliates from and against (A) any and all losses, claims, damages,
liabilities, deficiencies, judgments or expenses incurred by any of them (except
to the extent that it is finally judicially determined to have resulted from
their own gross negligence or willful misconduct) arising out of or by reason of
any litigations, investigations, claims or proceedings which arise out of or are
in any way related to (I) this Credit Agreement or the transactions contemplated
thereby; (II) the issuance of Letters of Credit; (III) the failure of an Issuing
Lender to honor a Drawing under any Letter of Credit, as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or Governmental Authority; (IV) any actual or proposed use by
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Borrower of (A) the proceeds of any Loans or (B) any Letter of Credit; or (V)
Agent's, the Lenders' or any Issuing Lender's entering into this Credit
Agreement, the other Credit Documents or any other agreements and documents
relating thereto, including amounts paid in- settlement, court costs and the
fees and disbursements of counsel incurred in connection with any such
litigation, investigation, claim or proceeding or any advice rendered in
connection with any of the foregoing; and (B) any such losses, claims, damages,
liabilities, deficiencies, judgments or expenses that arise directly or
indirectly from or in connection with any federal, state or local environmental
laws, acts, rules, regulations, orders, directions, ordinances, criteria or
guidelines (except to the extent that it is finally judicially determined to
have resulted from their own gross negligence or willful misconduct). If and to
the extent that the Obligations are unenforceable for any reason, Borrower
hereby agrees to make the maximum contribution to the payment and satisfaction
of such Obligations which is permissible under applicable law. Borrower's
Obligations hereunder shall survive any termination of this Credit Agreement and
the other Credit Documents and the payment in full of the Obligations, and are
in addition to, and not in substitution of, any other of its Obligations. In
addition, Borrower shall, upon demand, pay to Agent and each Lender all costs
and expenses (including the reasonable fees and disbursements of counsel and
other professionals) paid or incurred by Agent or such Lender in (I) enforcing
or defending its rights under or in respect of this Credit Agreement, the other
Credit Documents or any other document or instrument now or hereafter executed
and delivered in connection herewith, (II) collecting the Loans, (III)
foreclosing or otherwise collecting upon the Collateral or any part thereof and
(IV) obtaining any legal, accounting or other advice in connection with any of
the foregoing.
11.9 ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS. This Credit Agreement and
the other Credit Documents constitute the entire agreement among Borrower, Agent
and the Lenders (in their capacities as such and not in their capacity, if any,
as an Issuing Lender), supersedes any prior agreements among them, and shall
bind and benefit Borrower, Agent and the Lenders and their respective successors
and permitted assigns.
11.10 AMENDMENTS, ETC. No amendment or waiver of any provision of this
Credit Agreement or any Collateral Document, nor consent to any departure by any
Credit Party therefrom, shall in any event be effective unless the same shall be
in writing and signed by Borrower and the Majority Lenders (or by Agent on their
behalf), or if the Lenders shall not be parties thereto, by the parties thereto
and consented to by the Majority Lenders (or by Agent on their behalf), and each
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; PROVIDED, that,
notwithstanding the foregoing:
(A) no amendment, waiver or consent shall, unless in writing and
signed by the Super Majority Lenders, increase the advance rates set forth in
CLAUSES (A) and (B) of the definition of the term Borrowing Base; and
(B) no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following: (I) increase the Aggregate
Commitments of the Lenders or subject the Lenders to any additional obligations;
(II) except as otherwise expressly
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provided in this Credit Agreement, reduce the principal of, or interest on, the
Notes or any Drawing under any Letter of Credit or any fees hereunder; (III)
postpone any date fixed for any payment in respect of principal of, or interest
on, the Notes or any Drawing under any Letter of Credit or any fees hereunder;
(IV) change the percentage of the Aggregate Commitments, or any minimum
requirement necessary for the Lenders, the Majority Lenders or the Super
Majority Lenders to take any action hereunder; (V) amend or waive this SECTION
11.10, or change the respective definitions of Majority Lenders or Super
Majority Lenders; or (VI) except in connection with the financing, refinancing,
sale or other disposition of any Collateral of Borrower permitted under this
Credit Agreement, release Agent's Liens on all or substantially all of the
Collateral and, PROVIDED that no amendment, waiver or consent affecting the
rights or duties of Agent or any Issuing Lender under, (X) in the case of Agent,
any term or provision of this Credit Agreement and (Y) in the case of any
Issuing Lender, (1) SECTIONS 3.3(B), 3.4, 3.5 AND 3.6 of this Credit Agreement,
(2) any Letter of Credit or (3) any application in respect of any Letter of
Credit, shall in any event be effective, unless in writing and signed by
Borrower and Agent or such Issuing Lender, as applicable, in addition to the
Lenders required hereinabove to take such action.
Notwithstanding any of the foregoing to the contrary, the consent of Borrower
shall not be required for any amendment, modification or waiver of the
provisions of ARTICLE 10 (other than the provisions of SECTIONS 10.9 and 10.10,
respectively). In addition, Borrower and the Lenders hereby authorize Agent to
modify this Credit Agreement by unilaterally amending or supplementing Annex I
from time to time in the manner requested by Borrower, Agent or any Lender in
order to reflect any assignments or transfers of the Loans as provided for
hereunder; however, PROVIDED that Agent shall promptly deliver a copy of any
such modification to Borrower and each Lender.
11.11 NONLIABILITY OF AGENT AND LENDERS. The relationship between
Borrower and the Lenders and Agent shall be solely that of borrower and lender.
Neither Agent, any Lender or any Issuing Lender shall have any fiduciary
responsibilities to Borrower. Neither Agent, any Lender or any Issuing Lender
undertakes any responsibility to Borrower to review or inform Borrower of any
matter in connection with any phase of Borrower's business or operations.
11.12 COUNTERPARTS. This Credit Agreement may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
11.13 EFFECTIVENESS. This Credit Agreement shall become effective on the
date on which all of the parties hereto shall have signed a copy hereof (whether
the same or different copies) and shall have delivered the same to Agent
pursuant to SECTION 11.5 or, in the case of the Lenders, shall have given to
Agent written or facsimile notice (actually received) at such office that the
same has been signed and mailed to it.
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11.14 SEVERABILITY. In case any provision in or obligation under this
Credit Agreement or the Notes or the other Credit Documents shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
11.15 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Credit Agreement, and the Table of Contents, are inserted
for convenience only and shall not in any way affect the meaning or construction
of any provision of this Credit Agreement.
11.16 MAXIMUM RATE. Notwithstanding anything to the contrary contained
elsewhere in this Credit Agreement or in any other Credit Document, Borrower,
Agent and the Lenders hereby agree that all agreements among them under this
Credit Agreement and the other Credit Documents, whether now existing or
hereafter arising and whether written or oral, are expressly limited so that in
no contingency or event whatsoever shall the amount paid, or agreed to be paid,
to Agent or any Lender for the use, forbearance, or detention of the money
loaned to Borrower and evidenced hereby or thereby or for the performance or
payment of any covenant or obligation contained herein or therein, exceed the
Highest Lawful Rate. If due to any circumstance whatsoever, fulfillment of any
provisions of this Credit Agreement or any of the other Credit Documents at the
time performance of such provision shall be due shall exceed the Highest Lawful
Rate, then, automatically, the obligation to be fulfilled shall be modified or
reduced to the extent necessary to limit such interest to the Highest Lawful
Rate, and if from any such circumstance any Lender should ever receive anything
of value deemed interest by applicable law which would exceed the Highest Lawful
Rate, such excessive interest shall be applied to the reduction of the principal
amount then outstanding hereunder or on account of any other then outstanding
Obligations and not to the payment of interest, or if such excessive interest
exceeds the principal unpaid balance then outstanding hereunder and such other
then outstanding Obligations, such excess shall be refunded to Borrower. All
sums paid or agreed to be paid to Agent or any Lender for the use, forbearance,
or detention of the Obligations and other Indebtedness of Borrower to Agent or
any Lender shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such Indebtedness
until payment in full so that the actual rate of interest on account of all such
Indebtedness does not exceed the Highest Lawful Rate throughout the entire term
of such Indebtedness. The terms and provisions of this Section shall control
every other provision of this Credit Agreement and all agreements among
Borrower, Agent and the Lenders.
11.17 RIGHT OF SETOFF. In addition to and not in limitation of all
rights of offset that any Lender may have under applicable law, each Lender
shall, upon the occurrence and during the continuance of any Event of Default
and whether or not such Lender has made any demand on Borrower or the
Obligations are matured, have the right to appropriate and apply to the payment
of the Obligations all deposits of Borrower (general or special, time or demand,
provisional or final) then or thereafter held by and other Indebtedness or
property then or thereafter owing by such Lender to Borrower, including any and
all amounts in any Lockbox
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Account or the BT Account. For purposes of this SECTION 11.17, the Obligations
of Borrower to a Lender shall include, as fully as though such Obligations were
the direct Obligations of Borrower to such Lender, the Obligations of Borrower
in which such Lender has an participation interest pursuant to ARTICLE III, in
each case, to the extent of such participation. Each Lender exercising such
rights shall notify Agent thereof and any amount received as a result of the
exercise of such rights shall be reallocated as set forth in SECTION 2.9.
11.18 DEFAULTING LENDER. (A) Unless Agent shall have received notice
from a Lender, prior to the time specified in such Section, that such Lender
will not make available to Agent a Loan required to be made by it pursuant to
SECTION 2.2, or its funding with respect to any participation interest in any
Letter of Credit pursuant to ARTICLE III, Agent may assume that such Lender has
made such amounts available to Agent in accordance with such Sections and Agent
in its sole discretion may, in reliance upon such assumption, make available to
Borrower or the applicable Issuing Lender a corresponding amount on behalf of
such Lender.
(B) If any amount referred to in SUBSECTION (A) of this SECTION
11.18 or in SECTION 2.3 is not made available to Agent by a Lender (a
"DEFAULTING LENDER") and Agent has made such amount available to Borrower or an
Issuing Lender, Agent shall be entitled to recover such amount on demand from
such Defaulting Lender together with interest as hereinafter provided. If such
Defaulting Lender does not pay such amount forthwith upon Agent's demand
therefor, Agent shall promptly notify Borrower and Borrower shall immediately
(but in no event later than five Business Days after such demand) pay such
amount to Agent together with interest calculated as hereinafter provided. Agent
shall also be entitled to recover from such Defaulting Lender and/or Borrower,
as the case may be, (I) interest on such amount in respect of each day from the
date such corresponding amount was made available by Agent to Borrower to the
date such amount is recovered by Agent, at a rate per annum equal to either (A)
if paid by such Defaulting Lender, the overnight Federal Funds Rate or (B) if
paid by Borrower, the then applicable rate of interest, calculated in accordance
with SECTION 4.1 or SECTION 4.2, PLUS (II) in each case, an amount equal to any
costs (including legal expenses) and losses incurred as a result of the failure
of such Defaulting Lender to provide such amount as provided in this Credit
Agreement. Nothing herein shall be deemed to relieve any Lender from its duty to
fulfill its obligations hereunder or to prejudice any rights which Borrower or
any Issuing Lender, may have against any Lender as a result of any default by
such Lender hereunder, including the right of Borrower to seek reimbursement
from any Defaulting Lender for any amounts paid by Borrower under CLAUSE (II)
above on account of such Defaulting Lender's default.
(C) (I) Notwithstanding anything contained herein to the contrary,
so long as any Lender is a Defaulting Lender or has rejected its Revolving Loan
Commitment or Term Loan Commitment, Agent shall not be obligated to transfer to
such Lender (A) any payments made by Borrower to Agent for the benefit of such
Lender or (B) any amounts contemplated by SECTION 2.3(B)(I); and, such Lender
shall not be entitled to the sharing of any payments pursuant to SECTION 2.9.
Amounts otherwise payable to such Lender under SECTION 2.9 shall instead be paid
to Agent.
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(II) For purposes of voting or consenting to matters with
respect to the Credit Documents and determining Proportionate Share, such
Defaulting Lender shall be deemed not to be a "Lender" and such Lender's
Aggregate Commitment shall be deemed to be zero (0).
(III) This SECTION 11.18(C) shall remain effective with
respect to a Defaulting Lender until (A) the Obligations under this Credit
Agreement shall have been declared or shall have become immediately due and
payable or (B) the Majority Lenders, Agent and Borrower shall have waived such
Lender's default in writing.
(IV) No Lender's Revolving Loan Commitment or Term Loan
Commitment shall be increased or otherwise affected, and performance by Borrower
shall not be excused, by the operation of this SECTION 11.18(C). Any payments of
principal or interest which would, but for this SUBSECTION (C), be paid to any
Lender, shall be paid to the Lenders who shall not be in default under their
respective Aggregate Commitments and who shall not have rejected any portion of
their Aggregate Commitment, for application to the Loans then due and payable or
to the other Obligations then due and payable or to provide cash collateral to
secure Obligations not then due and payable in such manner and order as shall be
determined by Agent.
11.19 RIGHTS CUMULATIVE. Each of the rights and remedies of Agent, each
Issuing Lender and the Lenders under the Credit Documents shall be in addition
to all of their other rights and remedies under the Credit Documents and
applicable law, and nothing in the Credit Documents shall be construed as
limiting any such rights or remedies.
11.20 THIRD PARTY BENEFICIARIES. Each Issuing Lender shall be deemed to
be a third party beneficiary of its rights under this Credit Agreement, PROVIDED
that, except as otherwise provided in SECTION 11.10, such rights may be amended
or waived, and any departure therefrom by any Credit Party consented to, without
their respective consents.
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IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement
to be executed and delivered by their proper and duly authorized officers as of
the date set forth above.
BORROWER:
WEIDER NUTRITION GROUP, INC.,
a Utah corporation, as Borrower
By: ________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
AGENT:
BANKERS TRUST COMPANY,
as Agent
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
LENDERS:
BANKERS TRUST COMPANY
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
ANNEX I
TO
CREDIT AGREEMENT
DATED AS OF JUNE 30, 2000
LENDERS; COMMITMENTS; LENDING OFFICES
1. BANKERS TRUST COMPANY:
Revolving Loan Commitment: $60,000,000
Term Loan Commitment: $30,000,000
Aggregate Commitment: $90,000,000
Domestic Lending Office and LIBOR Lending
Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
I-1
ANNEX II
TO
CREDIT AGREEMENT
DATED AS OF JUNE 30, 2000
CLOSING DOCUMENT LIST
Attached
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