$45,000,000
FINANCING AGREEMENT
Dated February 7 , 2000
By and Between
AMERICAN WOODMARK CORPORATION
And
BANK OF AMERICA, N. A.
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS 1
Section 1.1 Certain Defined Terms. 1
Section 1.2 Accounting Terms and Other Definitional
Provisions. 11
ARTICLE II THE CREDIT FACILITIES 12
Section 2.1 The Revolving Credit Facility. 12
2.1.1 Revolving Credit Facility. 12
2.1.2 Procedure for Making Advances Under the
Revolving Loan; Lender Protection Loans. 12
2.1.3 Revolving Credit Note. 13
2.1.4 Optional Prepayments of Revolving Loan. 13
2.1.5 Revolving Loan Account. 13
2.1.6 Revolving Credit Unused Line Fee. 14
2.1.7 Conversion to Term Notes. 14
Section 2.2 The Letter of Credit Facility. 14
2.2.1 Letters of Credit. 14
2.2.2 Letter of Credit Fees. 15
2.2.3 Terms of Letters of Credit. 15
2.2.4 Procedure for Letters of Credit. 15
2.2.5 Change in Law; Increased Cost. 15
Section 2.3 General Financing Provisions. 16
2.3.1 Borrower's Representatives. 16
2.3.2 Use of Proceeds of the Loan. 16
2.3.3 Computation of Interest and Fees. 16
2.3.4 Payments. 16
2.3.5 Liens; Setoff. 17
2.3.6 Requirements of Law. 17
Section 2.4 Interest. 17
2.4.2 Inability to Determine Eurodollar Base Rate. 18
2.4.3 Payment of Interest. 18
2.4.4 Default Interest Rate on the Obligations. 18
ARTICLE III REPRESENTATIONS AND WARRANTIES 19
Section 3.1 Representations and Warranties. 19
3.1.1 Subsidiaries. 19
3.1.2 Good Standing. 19
3.1.3 Power and Authority. 19
3.1.4 Binding Agreements. 19
3.1.5 No Conflicts. 19
3.1.6 No Defaults, Violations. 20
3.1.7 Compliance with Laws. 20
3.1.8 Margin Stock. 20
3.1.9 Investment Company Act; Margin Securities. 20
3.1.10 Litigation. 21
3.1.11 Financial Condition. 21
3.1.12 Full Disclosure. 21
3.1.13 Indebtedness for Borrowed Money. 21
3.1.14 Taxes. 21
3.1.15 ERISA. 22
3.1.16 Title to Properties. 22
3.1.17 Patents, Trademarks, Etc. 22
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3.1.18 Employee Relations. 22
3.1.19 Presence of Hazardous Materials or Hazardous
Materials Contamination. 23
Section 3.2 Survival; Updates of Representations and
Warranties. 23
ARTICLE IV CONDITIONS PRECEDENT 23
Section 4.1 Conditions to the Initial Advance and Initial
Letter of Credit. 23
4.1.1 Organizational Documents-Borrower. 24
4.1.2 Opinion of Borrower's Counsel. 24
4.1.3 Consents, Licenses, Approvals, Etc. 24
4.1.4 Revolving Credit Note. 24
4.1.5 Financing Documents. 24
4.1.6 Other Financing Documents. 25
4.1.7 Other Documents, Etc. 25
4.1.8 Payment of Fees. 25
4.1.9 Insurance Certificate. 25
Section 4.2 Conditions to all Extensions of Credit. 25
4.2.1 Compliance. 25
4.2.2 Default. 25
4.2.3 Representations and Warranties. 25
4.2.4 Adverse Change. 26
4.2.5 Legal Matters. 26
ARTICLE V COVENANTS OF THE BORROWER 26
Section 5.1 Affirmative Covenants. 26
5.1.1 Financial Statements. 26
5.1.2 Reports to SEC and to Stockholders. 27
5.1.3 Recordkeeping, Rights of Inspection, Field
Examination, Etc. 27
5.1.4 Corporate Existence. 28
5.1.5 Compliance with Laws. 28
5.1.6 Preservation of Properties. 28
5.1.7 Line of Business. 28
5.1.8 Insurance. 28
5.1.9 Taxes. 29
5.1.10 ERISA. 29
5.1.11 Notification of Events of Default and Adverse
Development. 29
5.1.12 Hazardous Materials; Contamination. 30
5.1.13 Disclosure of Significant Transactions. 31
5.1.14 Financial Covenants. 31
Section 5.2 Negative Covenants. 31
5.2.1 Merger, Acquisition or Sale of Assets. 31
5.2.2 Subsidiaries. 32
5.2.3 Purchase or Redemption of Securities. 32
5.2.4 Indebtedness. 32
5.2.5 Investments, Loans and Other Transactions. 32
5.2.6 Stock of Subsidiaries. 33
5.2.7 Subordinated Indebtedness. 33
5.2.8 Liens; Confessed Judgment. 34
5.2.9 Transactions with Affiliates. 34
5.2.10 Other Businesses. 34
5.2.11 ERISA Compliance. 34
5.2.12 Prohibition on Hazardous Materials. 34
5.2.13 Method of Accounting; Fiscal Year. 34
ARTICLE VI DEFAULT AND RIGHTS AND REMEDIES 35
Section 6.1 Events of Default. 35
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6.1.1 Failure to Pay. 35
6.1.2 Breach of Representations and Warranties. 35
6.1.3 Failure to Comply with Covenants. 35
6.1.4 Default Under Other Financing Documents or
Obligations. 35
6.1.5 Receiver; Bankruptcy. 35
6.1.6 Involuntary Bankruptcy, etc. 36
6.1.7 Judgment. 36
6.1.8 Default Under Other Borrowings. 36
6.1.9 Challenge to Agreements. 36
6.1.10 Material Adverse Change. 37
6.1.11 Liquidation, Termination, Dissolution, Change in
Management, etc. 37
Section 6.2 Remedies. 37
6.2.1 Acceleration. 37
6.2.2 Further Advances. 37
6.2.3 Performance by Lender. 37
6.2.4 Other Remedies. 38
ARTICLE VII MISCELLANEOUS 38
Section 7.1 Notices. 38
Section 7.2 Amendments; Waivers. 38
Section 7.3 Cumulative Remedies. 39
Section 7.4 Severability. 40
Section 7.5 Assignments by Lender. 41
Section 7.6 Successors and Assigns. 41
Section 7.7 Continuing Agreements. 41
Section 7.8 Enforcement Costs. 41
Section 7.9 Applicable Law; Jurisdiction. 42
7.9.1 Applicable Law. 42
7.9.2 Jurisdiction. 42
7.9.3 Appointment of Agent for Service of Process. 42
7.9.4 Service of Process. 42
Section 7.10 Duplicate Originals and Counterparts. 43
Section 7.11 Headings. 43
Section 7.12 No Agency. 43
Section 7.13 Date of Payment. 43
Section 7.14 Entire Agreement. 43
Section 7.15 Waiver of Trial by Jury. 44
Section 7.16 Liability of the Lender. 44
Section 7.17 Indemnification. 44
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FINANCING AGREEMENT
THIS FINANCING AGREEMENT (this "Agreement") is made this 7th
day of February, 2000, by and between AMERICAN WOODMARK
CORPORATION, a corporation organized under the laws of the
Commonwealth of Virginia (the "Borrower"), and BANK OF AMERICA, N.
A., a national banking association (the "Lender").
RECITALS
A. The Borrower has applied to the Lender for certain
credit facilities consisting of a revolving credit facility in the
maximum principal amount of $45,000,000 and a letter of credit
facility as a part of the revolving credit facility to be used by
the Borrower for the Permitted Uses described in this Agreement.
B. The Lender is willing to make the credit facilities
available to the Borrower upon the terms and subject to the
conditions set forth in this Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and for
other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
.1 CERTAIN DEFINED TERMS.
As used in this Agreement, the terms defined in the Preamble
and Recitals hereto shall have the respective meanings specified
therein, and the following terms shall have the following
meanings:
"Affiliate" means, with respect to any designated Person, any
other Person, (a) directly or indirectly controlling, directly or
indirectly controlled by, or under direct or indirect common
control with the Person designated, (b) directly or indirectly
owning or holding five percent (5%) or more of any equity interest
in such designated Person, or (c) five percent (5%) or more of
whose stock or other equity interest is directly or indirectly
owned or held by such designated Person. For purposes of this
definition, the term "control" (including with correlative
meanings, the terms "controlling", "controlled by" and "under
common control with") means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of
voting securities or other equity interests or by contract or
otherwise.
"Agreement" means this Financing Agreement, as amended,
restated, supplemented or otherwise modified in writing in
accordance with the provisions of ARTICLE VII.2 (Amendments;
Waivers).
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"Applicable Interest Rate" means the Eurodollar Rate.
"Applicable Margin" means the applicable rate per annum
added, as set forth in ARTICLE II.4(b) (Interest) to the
Eurodollar Rate.
"Assets" means at any date all assets that, in accordance
with GAAP consistently applied should be classified as assets on a
consolidated balance sheet of the Borrower and its Subsidiaries.
"Bank Facilities" means any credit facility provided by the
Lender to the Borrower through Bank of America Leasing and/or any
private placement by the Lender for the Borrower's benefit from
the Closing Date and through April 30, 2002 for equipment
acquisition and financing, BUT SPECIFICALLY EXCLUDING an existing
commitment from Bank of America Leasing in the maximum principal
amount of $3,000,000 and issued and outstanding letters of credit
as of the date hereof more specifically identified on SCHEDULE 1.1
attached hereto and made a part hereof and all renewals of such
letters of credit.
"Bankruptcy Code" means the United States Bankruptcy Code, as
amended from time to time.
"Base Rate" means the floating and fluctuating per annum
prime rate of interest of the Lender, as established and declared
by the Lender at any time or from time to time. The Base Rate
does not necessarily represent the lowest or best rate of interest
charged by the Lender to Borrower.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in the State are authorized or
required to close.
"Capital Lease" means any lease of real or personal property,
for which the related Lease Obligations have been or should be, in
accordance with GAAP consistently applied capitalized on the
balance sheet.
"Cash Equivalents" means (a) securities with maturities of
one year or less from the date of acquisition issued or fully
guaranteed or insured by the United States Government or any
agency thereof, (b) certificates of deposit with maturities of one
(1) year or less from the date of acquisition of, or money market
accounts maintained with, the Lender, any Affiliate of the Lender,
or any other domestic commercial bank having capital and surplus
in excess of One Hundred Million Dollars ($100,000,000.00) or such
other domestic financial institutions or domestic brokerage houses
to the extent disclosed to, and approved by, the Lender and (c)
commercial paper of a domestic issuer rated at least either A-1 by
Standard & Poor's Corporation or P-1 by ▇▇▇▇▇'▇ Investors Service,
Inc. with maturities of six (6) months or less from the date of
acquisition.
"Cash Flow" means as to the Borrower and its Subsidiaries for
any period of determination thereof, the sum of (a) net income (or
loss) after deduction of interest expenses and taxes, plus (b) the
aggregate amount of depreciation and amortization, all calculated
in accordance with GAAP consistently applied.
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"Closing Date" means the Business Day, in any event not later
than February __, 2000 on which the Lender shall be satisfied that
the conditions precedent set forth in ARTICLE IV.1 (Conditions to
Initial Advance) have been fulfilled.
"Commitment" means the Revolving Credit Commitment or the
Letter of Credit Commitment, as the case may be, and "Commitments"
means collectively the Revolving Credit Commitment and the Letter
of Credit Commitment.
"Committed Amount" means the Revolving Credit Committed
Amount or the Letter of Credit Committed Amount, as the case may
be, and "Committed Amounts" means collectively the Revolving
Credit Committed Amount and the Letter of Credit Committed Amount.
"Compliance Certificate" means a periodic Compliance
Certificate described in Section ARTICLE V.1.1 (Financial
Statements).
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Borrower
within the meaning of Section 414(b) or (c) of the Internal
Revenue Code.
"Copyrights" means and includes, in each case whether now
existing or hereafter arising, all of the Borrower's rights, title
and interest in and to (a) all copyrights, rights and interests in
copyrights, works protectable by copyright, copyright
registrations, copyright applications, and all renewals of any of
the foregoing, (b) all income, royalties, damages and payments now
or hereafter due and/or payable under any of the foregoing,
including, without limitation, damages or payments for past,
current or future infringements of any of the foregoing, (c) the
right to ▇▇▇ for past, present and future infringements of any of
the foregoing, and (d) all rights corresponding to any of the
foregoing throughout the world.
"Credit Facility" means the Revolving Credit Facility or the
Letter of Credit Facility, as the case may be, and "Credit
Facilities" means collectively the Revolving Credit Facility, the
Letter of Credit Facility and any and all other credit facilities
now or hereafter extended under or secured by this Agreement.
"Current Assets" means at any date, the amount which, in
accordance with GAAP consistently applied, would be set forth
opposite the caption "total current assets" (or any like caption)
on a consolidated balance sheet of the Borrower and its
Subsidiaries.
"Default" means an event which, with the giving of notice or
lapse of time, or both, could or would constitute an Event of
Default under the provisions of this Agreement.
"EBITDA" means as to the Borrower and its Subsidiaries for
any period of determination thereof, the sum of earnings before
deduction of interest and taxes plus depreciation and
amortization.
"Enforcement Costs" means all expenses, charges, costs and
fees whatsoever (including, without limitation, reasonable outside
and allocated in-house counsel attorney's fees and expenses) of
any nature whatsoever paid or incurred by or on behalf of the
Lender in connection with (a) any or all of the Obligations, this
Agreement and/or any of the other Financing
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Documents, (b) the creation, collection, maintenance,
preservation, defense, protection, realization upon, or
enforcement of all or any part of this Agreement or any of the
other Financing Documents, including, without limitation, those
costs and expenses more specifically enumerated in ARTICLE VII.8
(Enforcement Costs), and (c) the monitoring, administration,
processing and/or servicing of any or all of the Obligations or
the Financing Documents.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Base Rate" means for any Interest Period with
respect to any Eurodollar Loan, the per annum interest rate
rounded upward, if necessary, to the nearest 1/100 of 1%,
appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at or about
11:00 a.m. (London time) on the date that is two (2) Eurodollar
Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period. If for any reason such
rate is not available, the term "Eurodollar Base Rate" shall mean,
for any Eurodollar Loan for any Interest Period therefor, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two (2) Eurodollar Business Days prior to the first
day of such Interest Period for a term comparable to such Interest
Period; PROVIDED, HOWEVER, if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%).
"Eurodollar Business Day" means any Business Day on which
dealings in United States Dollar deposits are carried out on the
London interbank market and on which commercial banks are open for
domestic and international business (including dealings in Dollar
deposits) in London, England.
"Eurodollar Loan" means any Loan for which interest is to be
computed with reference to the Eurodollar Rate.
"Eurodollar Rate" means for any Interest Period with respect
to any Eurodollar Loan, (a) the Applicable Margin, plus (b) the
per annum rate of interest calculated pursuant to the following
formula:
EURODOLLAR BASE RATE
1.00 - Reserve Percentage
"Event of Default" has the meaning described in ARTICLE VI
(Default and Rights and Remedies).
"Facilities" means the collective reference to the loan,
letter of credit, interest rate protection, foreign exchange risk,
cash management, and other credit facilities now or hereafter
provided to the Borrower by the Lender whether under this
Agreement or otherwise.
"Fees" means the collective reference to each fee payable to
the Lender under the terms of this Agreement or under the terms of
any of the other Financing Documents.
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"Financing Documents" means at any time collectively this
Agreement, the Notes, the Letter of Credit Documents, and any
other instrument, agreement or document previously, simultaneously
or hereafter executed and delivered by the Borrower and/or any
other Person, singly or jointly with another Person or Persons,
evidencing, securing, guarantying or in connection with this
Agreement, the Notes, any of the Facilities, and/or any of the
Obligations.
"Fixed or Capital Assets" of a Person at any date means all
assets which would, in accordance with GAAP consistently applied,
be classified on the balance sheet of such Person as property,
plant or equipment at such date.
"Funded Debt" is defined as the sum of senior debt, letter of
credit obligations, stockholder debt, Subordinated Indebtedness
and the value of all capitalized and synthetic leases.
"GAAP" means generally accepted accounting principles in the
United States of America in effect from time to time.
"Governmental Authority" means 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 and any
department, agency or instrumentality thereof.
"Hazardous Materials" means (a) any "hazardous waste" as
defined by the Resource Conservation and Recovery Act of 1976, as
amended from time to time, and regulations promulgated thereunder;
(b) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, and regulations promulgated thereunder;
(c) any substance the presence of which on any property now or
hereafter owned, acquired or operated by the Borrower is
prohibited by any Law similar to those set forth in this
definition; and (d) any other substance which by Law requires
special handling in its collection, storage, treatment or
disposal.
"Hazardous Materials Contamination" means the contamination
(whether presently existing or occurring after the date of this
Agreement) by Hazardous Materials of any property owned, operated
or controlled by the Borrower or for which the Borrower has
responsibility, including, without limitation, improvements,
facilities, soil, ground water, air or other elements on, or of,
any property now or hereafter owned, acquired or operated by the
Borrower, and any other contamination by Hazardous Materials for
which the Borrower is, or is claimed to be, responsible.
"Indebtedness" of a Person means at any date the total
liabilities of such Person at such time determined in accordance
with GAAP consistently applied.
"Indebtedness for Borrowed Money" of a Person means at any
time the sum at such time of (a) indebtedness of such Person for
borrowed money or for the deferred purchase price of property or
services, (b) any obligations of such Person in respect of letters
of credit, banker's or other acceptances or similar obligations
issued or created for the account of such Person, (c) Lease
Obligations of such Person with respect to Capital Leases, (d) all
liabilities secured by any Lien on any property owned by such
Person, to the extent attached to such Person's interest in such
property, even though such Person has not assumed or become
personally liable for the payment thereof,
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(e) obligations of third parties which are being guarantied or
indemnified against by such Person or which are secured by the
property of such Person; (f) any obligation of such Person under
an employee stock ownership plan or other similar employee benefit
plan; (g) any obligation of such Person or a Commonly Controlled
Entity to a Multi-employer Plan; and (h) any obligations,
liabilities or indebtedness, contingent or otherwise, under or in
connection with, any interest rate or currency swap agreements,
cap, floor, and collar agreements, currency spot, foreign exchange
and forward contracts and other similar agreements and
arrangements; but excluding trade and other accounts payable in
the ordinary course of business in accordance with customary trade
terms and which are not overdue (as determined in accordance with
customary trade practices) or which are being disputed in good
faith by such Person and for which adequate reserves are being
provided on the books of such Person in accordance with GAAP.
"Interest Period" means as to any Eurodollar Loan, the period
commencing on and including the date such Eurodollar Loan is made
and ending on and including the day which is thirty (30) days
thereafter, and thereafter, each period commencing on the last day
of the then preceding Interest Period for such Eurodollar Loan and
ending on and including the day which is thirty (30) days
thereafter, as selected by the Borrower in accordance with the
provisions of this Agreement; provided, however that:
(a) the first day of any Interest Period shall
be a Eurodollar Business Day;
(b) if any Interest Period would end on a day
that shall not be a Eurodollar Business Day, such Interest
Period shall be extended to the next succeeding Eurodollar
Business Day unless such next succeeding Eurodollar Business
Day would fall in the next calendar month, in which case, such
Interest Period shall end on the next preceding Eurodollar
Business Day; and
(c) no Interest Period shall extend beyond the
Revolving Credit Expiration Date.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and the Income Tax Regulations
issued and proposed to be issued thereunder.
"Item of Payment" means each check, draft, cash, money,
instrument, item, and other remittance in payment; and "Items of
Payment" means the collective reference to all of the foregoing.
"Laws" means all ordinances, statutes, rules, regulations,
orders, injunctions, writs, or decrees of any Governmental
Authority.
"Lease Obligations" of a Person means for any period the
rental commitments of such Person for such period under leases for
real and/or personal property (net of rent from subleases thereof,
but including taxes, insurance, maintenance and similar expenses
which such Person, as the lessee, is obligated to pay under the
terms of said leases, except to the extent that such taxes,
insurance, maintenance and similar expenses are payable by
sublessees), including rental commitments under Capital Leases.
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"Letter of Credit" and "Letters of Credit" shall have the
meanings described in Section ARTICLE II.2.1 (Letters of Credit).
"Letter of Credit Agreement" means the collective reference
to each letter of credit application and agreement substantially
in the form of the Lender's then standard form of application for
letter of credit or such other form as may be approved by the
Lender, executed and delivered by the Borrower in connection with
the issuance of a Letter of Credit, as the same may from time to
time be amended, restated, supplemented or modified and "Letter of
Credit Agreements" means all of the foregoing in effect at any
time and from time to time.
"Letter of Credit Commitment" means the agreement of the
Lender relating to the issuance of Letters of Credit subject to
and in accordance with the provisions of this Agreement.
"Letter of Credit Commitment Period" means the period of time
from the Closing Date to the Business Day preceding the Revolving
Credit Termination Date.
"Letter of Credit Documents" means any and all drafts under
or purporting to be under a Letter of Credit, any Letter of Credit
Agreement, and any other instrument, document or agreement
executed and/or delivered by the Borrower or any other Person
under, pursuant to or in connection with a Letter of Credit or any
Letter of Credit Agreement.
"Letter of Credit Facility" means the facility established by
the Lender pursuant to Section ARTICLE II.2.1 (Letter of Credit
Facility).
"Letter of Credit Fee" and "Letter of Credit Fees" have the
meanings described in Section ARTICLE II.2.2 (Letter of Credit
Fees).
"Letter of Credit Obligations" means all Obligations of the
Borrower with respect to the Letters of Credit and the Letter of
Credit Agreements.
"Liabilities" means at any date all liabilities that in
accordance with GAAP consistently applied should be classified as
liabilities on a consolidated balance sheet of the Borrower and
its Subsidiaries, excluding shareholder loans existing as of the
date hereof.
"Lien" means any mortgage, deed of trust, deed to secure
debt, grant, pledge, security interest, assignment, encumbrance,
judgment, lien, hypothecation, provision in any instrument or
other document for confession of judgment, cognovit or other
similar right or remedy, claim or charge of any kind, whether
perfected or unperfected, avoidable or unavoidable, including,
without limitation, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction, excluding the precautionary
filing of any financing statement by any lessor in a true lease
transaction, by any ▇▇▇▇▇▇ in a true bailment transaction or by
any consignor in a true consignment transaction under the Uniform
Commercial Code of any jurisdiction or the agreement to give any
financing statement by any lessee in a true lease transaction, by
any bailee in a true bailment transaction or by any consignee in a
true consignment transaction.
"Loan" means the Revolving Loan.
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"Loan Notice" has the meaning described in Section ARTICLE
II.1.2 (Procedure for Making Advances).
"Management" means the Chairman of the Board, President or
Chief Financial Officer of the Borrower.
"Multi-employer Plan" means a Plan which is a multi-employer
plan as defined in Section 4001(a)(3) of ERISA.
"Net Worth" means as to the Borrower and its Subsidiaries at
any date the excess of (a) the Assets, over (b) the Liabilities.
"Note" means the Revolving Credit Note or any Term Note,
individually as the context implies and "Notes" means the
Revolving Credit Note and the Term Notes, collectively.
"Obligations" means all present and future indebtedness,
duties, obligations, and liabilities, whether now existing or
contemplated or hereafter arising, of the Borrower to the Lender
under, arising pursuant to, in connection with and/or on account
of the provisions of this Agreement, each Note, each Security
Document, and/or any of the other Financing Documents, the Loans,
and/or any of the Facilities including, without limitation, the
principal of, and interest on, each Note, late charges, the Fees,
Enforcement Costs, and prepayment fees (if any), letter of credit
reimbursement obligations, letter of credit fees or fees charged
with respect to any guaranty of any letter of credit; also means
all other present and future indebtedness, duties, obligations,
and liabilities, whether now existing or contemplated or hereafter
arising, of the Borrower to the Lender of any nature whatsoever,
including, without limitation, any indebtedness, duties,
obligations, and liabilities under or in connection with, any Swap
Transaction, regardless of whether such indebtedness, duties,
obligations, and liabilities be direct, indirect, primary,
secondary, joint, several, joint and several, fixed or contingent;
and also means any and all renewals, extensions, substitutions,
amendments, restatements and rearrangements of any such
indebtedness, duties, obligations, and liabilities.
"Outstanding Letter of Credit Obligations" has the meaning
described in Section ARTICLE II.2.3 (Terms of Letters of Credit).
"Patents" means and includes, in each case whether now
existing or hereafter arising, all of the Borrower's rights, title
and interest in and to (a) any and all patents and patent
applications, (b) any and all inventions and improvements
described and claimed in such patents and patent applications, (c)
reissues, divisions, continuations, renewals, extensions and
continuations-in-part of any patents and patent applications, (d)
income, royalties, damages, claims and payments now or hereafter
due and/or payable under and with respect to any patents or patent
applications, including, without limitation, damages and payments
for past and future infringements, (e) rights to ▇▇▇ for past,
present and future infringements of patents, and (f) all rights
corresponding to any of the foregoing throughout the world.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Liens" means: (a) Liens for Taxes which are not
delinquent or which the Lender has determined in the exercise of
its sole and absolute
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discretion (i) are being diligently contested in good faith and by
appropriate proceedings, and such contest operates to suspend
collection of the contested Taxes and enforcement of a Lien, (ii)
the Borrower has the financial ability to pay, with all penalties
and interest, at all times without materially and adversely
affecting the Borrower, and (iii) are not, and will not be with
appropriate filing, the giving of notice and/or the passage of
time, entitled to priority over any Lien of the Lender; (b)
deposits or pledges to secure obligations under workers'
compensation, social security or similar laws, or under
unemployment insurance in the ordinary course of business; (c)
judgment Liens to the extent the entry of such judgment does not
constitute a Default or an Event of Default under the terms of
this Agreement; (d) protective filings recorded in connection with
lease transactions; and (e) purchase money security interests
securing Indebtedness for Borrowed Money for the purchase of
Equipment in arms-length, commercially reasonable transactions
with persons who are not Affiliates; provided, however, that (i)
the indebtedness secured shall not exceed the unpaid purchase
price of the Equipment acquired, plus reasonable finance charges
and the reasonable costs of collection (including, without
limitation, reasonable attorneys fees); and (ii) each item of
Equipment shall secure only its portion of the indebtedness
described in item (i).
"Permitted Uses" means (a) with respect to the Revolving
Loan, the payment of expenses incurred in the ordinary course of
the Borrower's business, including capital expenditures related to
manufacturing expansion contemplated as of the date hereof and (b)
with respect to the Letter of Credit Facility, the issuance of
documentary and standby letters of credit.
"Person" means and includes an individual, a corporation, a
partnership, a joint venture, a limited liability company,
corporation or partnership, a trust, an unincorporated
association, a Governmental Authority, or any other organization
or entity.
"Plan" means any pension plan that is covered by Title IV of
ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is an "employer" as defined in Section 3 of
ERISA.
"Post-Default Rate" means the Base Rate in effect from time
to time, plus two percent (2%) per annum.
"Prepayment" means a Revolving Loan Optional Prepayment or a
Term Loan Optional Prepayment, as the case may be and
"Prepayments" mean collectively all Revolving Loan Optional
Prepayments and all Term Loan Optional Prepayments.
"Pricing Ratio" means the Borrowers' ratio of Funded Debt to
EBITDA.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder.
"Reserve Percentage" means, at any time, the then current
maximum rate for which reserves (including any basic,
supplemental, marginal and emergency reserves) are required to be
maintained by member banks of the Federal Reserve System under
Regulation D of the Board of Governors of the Federal Reserve
System against "Eurocurrency liabilities", as that term is defined
in Regulation D. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Reserve Percentage.
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"Responsible Officer" means the chief executive officer of
the Borrower or the president of the Borrower or, with respect to
financial matters, the chief financial officer of the Borrower.
"Revolving Credit Commitment" means the agreement of the
Lender relating to the making of the Revolving Loan and advances
thereunder subject to and in accordance with the provisions of
this Agreement.
"Revolving Credit Commitment Period" means the period of time
from the Closing Date to the Business Day preceding the Revolving
Credit Termination Date.
"Revolving Credit Committed Amount" has the meaning described
in Section ARTICLE II.1.1 (Revolving Credit Facility).
"Revolving Credit Expiration Date" means February __, 2005.
"Revolving Credit Facility" means the facility established by
the Lender pursuant to ARTICLE II.1 (Revolving Credit Facility).
"Revolving Credit Note" has the meaning described in Section
ARTICLE II.1.3 (Revolving Credit Note).
"Revolving Credit Unused Line Fee" and "Revolving Credit
Unused Line Fees" have the meanings described in Section ARTICLE
II.1.6 (Revolving Credit Unused Fee).
"Revolving Credit Termination Date" means the earlier of (a)
the Revolving Credit Expiration Date, or (b) the date on which the
Revolving Credit Commitment is terminated pursuant to ARTICLE VI.2
or otherwise.
"Revolving Loan" has the meaning described in Section ARTICLE
II.1.1 (Revolving Credit Facility).
"Revolving Loan Account" has the meaning described in Section
ARTICLE II.1.5 (Revolving Loan Account).
"Revolving Loan Optional Prepayment" and "Revolving Loan
Optional Prepayments" have the meanings described in Section
ARTICLE II.1.4 (Optional Prepayment of Revolving Loan).
"State" means the State of Maryland.
"Subordinated Indebtedness" means all Indebtedness, incurred
at any time by the Borrower, which is in amounts, subject to
repayment terms, and subordinated to the Obligations, as set forth
in one or more written agreements, all in form and substance
satisfactory to the Lender in its sole and absolute discretion.
"Subsidiary" means any corporation the majority of the voting
shares of which at the time are owned directly by the Borrower
and/or by one or more Subsidiaries of the Borrower.
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"Taxes" means all taxes and assessments whether general or
special, ordinary or extraordinary, or foreseen or unforeseen, of
every character (including all penalties or interest thereon),
which at any time may be assessed, levied, confirmed or imposed by
any Governmental Authority on the Borrower or any of its
properties or assets or any part thereof or in respect of any of
its franchises, businesses, income or profits.
"Term Note Optional Prepayment" and "Term Note Optional
Prepayments" have the meanings described in Section ARTICLE II.1.7
(Conversion to Term Notes).
"Term Note" and "Term Notes" have the meanings described in
Section ARTICLE II.1.7 (Conversion to Term Notes).
"Trademarks" means and includes in each case whether now
existing or hereafter arising, all of the Borrower's rights, title
and interest in and to (a) any and all trademarks (including
service marks), trade names and trade styles, and applications for
registration thereof and the goodwill of the business symbolized
by any of the foregoing, (b) any and all licenses of trademarks,
service marks, trade names and/or trade styles, whether as
licensor or licensee, (c) any renewals of any and all trademarks,
service marks, trade names, trade styles and/or licenses of any of
the foregoing, (d) income, royalties, damages and payments now or
hereafter due and/or payable with respect thereto, including,
without limitation, damages, claims, and payments for past,
present and future infringements thereof, (e) rights to ▇▇▇ for
past, present and future infringements of any of the foregoing,
including the right to settle suits involving claims and demands
for royalties owing, and (f) all rights corresponding to any of
the foregoing throughout the world.
"Uniform Commercial Code" means, unless otherwise provided in
this Agreement, the Uniform Commercial Code as adopted by and in
effect from time to time in the State or in any other
jurisdiction, as applicable.
"Wholly Owned Subsidiary" means any domestic United States
corporation all the shares of stock of all classes of which (other
than directors' qualifying shares) at the time are owned directly
or indirectly by the Borrower and/or by one or more Wholly Owned
Subsidiaries of the Borrower.
.2 ACCOUNTING TERMS AND OTHER DEFINITIONAL PROVISIONS.
Unless otherwise defined herein, as used in this Agreement
and in any certificate, report or other document made or delivered
pursuant hereto, accounting terms not otherwise defined herein,
and accounting terms only partly defined herein, to the extent not
defined, shall have the respective meanings given to them under
GAAP, as consistently applied to the applicable Person. Unless
otherwise defined herein, all terms used herein which are defined
by the Uniform Commercial Code shall have the same meanings as
assigned to them by the Uniform Commercial Code unless and to the
extent varied by this Agreement. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and article, section,
subsection, schedule and exhibit references are references to
articles, sections or subsections of, or schedules or exhibits to,
as the case may be, this Agreement unless otherwise specified. As
used
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herein, the singular number shall include the plural, the plural
the singular and the use of the masculine, feminine or neuter
gender shall include all genders, as the context may require.
Reference to any one or more of the Financing Documents shall mean
the same as the foregoing may from time to time be amended,
restated, substituted, extended, renewed, supplemented or
otherwise modified.
ARTICLE II
THE CREDIT FACILITIES
.1 THE REVOLVING CREDIT FACILITY.
.1 REVOLVING CREDIT FACILITY.
Subject to and upon the provisions of this
Agreement, the Lender establishes a revolving credit facility in
favor of the Borrower. The aggregate of all advances under the
Revolving Credit Facility is sometimes referred to in this
Agreement collectively as the "Revolving Loan".
The principal amount of Forty Five Million
Dollars ($45,000,000) is the "Revolving Credit Committed Amount".
If at any time the unpaid principal balance of the Revolving Loan
exceeds the Revolving Credit Committed Amount in effect from time
to time, the Borrower shall pay such excess to the Lender ON
DEMAND.
During the Revolving Credit Commitment Period,
the Lender agrees to make advances under the Revolving Loan
requested by the Borrower from time to time provided that after
giving effect to the Borrower's request, the outstanding principal
balance of the Revolving Loan and of the Letter of Credit
Obligations would not exceed the Revolving Credit Committed Amount
LESS the aggregate outstanding principal amount under the Bank
Facilities and Term Notes, if any.
Unless sooner paid, the unpaid Revolving Loan,
together with interest accrued and unpaid thereon, and all other
Obligations shall be due and payable in full on the Revolving
Credit Expiration Date.
.2 PROCEDURE FOR MAKING ADVANCES UNDER THE REVOLVING
LOAN; LENDER PROTECTION LOANS.
The Borrower may borrow under the Revolving
Credit Commitment on any Business Day. Advances under the
Revolving Loan shall be deposited to a demand deposit account of
the Borrower with the Lender (or an Affiliate of the Lender) or
shall be otherwise applied as directed by the Borrower, which
direction the Lender may require to be in writing. No later than
10:00 a.m. (Baltimore time) on the date of the requested
borrowing, the Borrower shall give the Lender oral or written
notice (a "Loan Notice") of the amount and (if requested by the
Lender) the purpose of the requested borrowing. Any oral Loan
Notice shall be confirmed in writing by the Borrower within five
(5) Business Days after the making of the requested Revolving
Loan. Each Loan Notice shall be irrevocable. In addition, the
Borrower hereby irrevocably authorizes the Lender at any time and
from time to time if the Lender determines that an event has
occurred which impairs the prospect of payment of the Obligations,
without further request from or
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notice to the Borrower, to make advances under the Revolving Loan
which the Lender, in its sole and absolute discretion, deems
necessary or appropriate to protect the Lender's interests under
this Agreement, including, without limitation, advances under the
Revolving Loan made to cover debit balances in the Revolving Loan
Account, and/or principal of, and/or interest on, any Loan, prior
to, on, or after the termination of other advances under this
Agreement, regardless of whether the outstanding principal amount
of the Revolving Loan that the Lender may make hereunder exceeds
the Revolving Credit Committed Amount.
.3 REVOLVING CREDIT NOTE.
The obligation of the Borrower to pay the
Revolving Loan, with interest, shall be evidenced by a promissory
note (as from time to time extended, amended, restated,
supplemented or otherwise modified, the "Revolving Credit Note")
substantially in the form of EXHIBIT "A" attached hereto and made
a part hereof, with appropriate insertions. The Revolving Credit
Note shall be dated as of the Closing Date, shall be payable to
the order of the Lender at the times provided in the Revolving
Credit Note, and shall be in the principal amount of the Revolving
Credit Committed Amount. The Borrower acknowledges and agrees
that, if the outstanding principal balance of the Revolving Loan
outstanding from time to time exceeds the face amount of the
Revolving Credit Note, the excess shall bear interest at the Post-
Default Rate for the Revolving Loan and shall be payable, with
accrued interest, ON DEMAND. The Revolving Credit Note shall not
operate as a novation of any of the Obligations or nullify,
discharge, or release any such Obligations or the continuing
contractual relationship of the parties hereto in accordance with
the provisions of this Agreement.
.4 OPTIONAL PREPAYMENTS OF REVOLVING LOAN.
The Borrower shall have the option, at any time
and from time to time, to prepay (each a "Revolving Loan Optional
Prepayment" and collectively the "Revolving Loan Optional
Prepayments") the Revolving Loan, in whole or in part without
premium or penalty.
.5 REVOLVING LOAN ACCOUNT.
The Lender will establish and maintain a loan
account on its books (the "Revolving Loan Account") to which the
Lender will (a) DEBIT (i) the principal amount of each advance of
the Revolving Loan made by the Lender hereunder as of the date
made, (ii) the amount of any interest accrued on the Revolving
Loan as and when due, and (iii) any other amounts due and payable
by the Borrower to the Lender from time to time under the
provisions of this Agreement in connection with the Revolving
Loan, including, without limitation, Enforcement Costs, Fees, late
charges, and service and collection fees, as and when due and
payable, and (b) CREDIT all payments made by the Borrower to the
Lender on account of the Revolving Loan as of the date made. The
Lender may debit the Revolving Loan Account for the amount of any
Item of Payment which is returned to the Lender unpaid. All
credit entries to the Revolving Loan Account are conditional and
shall be readjusted as of the date made if final and indefeasible
payment is not received by the Lender in cash or solvent credits.
Any and all periodic or other statements or reconciliations, and
the information contained in those statements or reconciliations,
of the Revolving Loan Account shall be final, binding and
conclusive upon the Borrower in all respects, absent manifest
error, unless the Lender receives specific written objection
thereto from the Borrower within thirty (30) Business Days after
such statement or reconciliation shall have been sent by the
Lender.
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.6 REVOLVING CREDIT UNUSED LINE FEE.
The Borrower shall pay to the Lender a
quarterly revolving credit facility fee on the average daily
unused and undisbursed portion of the Revolving Credit Committed
Amount in effect from time to time LESS the aggregate outstanding
principal amount under the Bank Facilities and Term Notes, if any,
accruing during each calendar quarter (collectively, the
"Revolving Credit Unused Line Fees" and individually, a "Revolving
Credit Unused Line Fee") in an amount determined quarterly based
upon the achievement of the Pricing Ratio as set forth in the
following table:
Funded Debt to EBITDA Unused Fee
2.50:1 > but <= 1.51 to 1.0 35 basis points
1.50:1 > but <= 1.01 to 1.0 30 basis points
1.0 to 1 or less 20 basis points
The accrued and unpaid portion of the Revolving
Credit Unused Line Fee shall be paid by the Borrower to the Lender
on the first day of each quarter, commencing on the first such
date following the date hereof, and on the Revolving Credit
Termination Date.
.7 CONVERSION TO TERM NOTES.
Upon proper notice to the Lender, the Borrower
may elect to have a portion of the Revolving Loan in an amount not
less than $5,000,000 converted to a term note (individually a
"Term Note" and collectively, the "Term Notes"). The terms of
each Term Note shall be a 10-year amortization maturing on the
earlier of the Revolving Credit Expiration Date, 5 years from the
date of the Term Note or such other date as is mutually agreed
upon by the Borrower and the Lender. The aggregate outstanding
principal amount under the Term Notes from time to time shall
reduce the principal amount available under the Revolving Credit
Commitment. The Borrower shall have the option, at any time and
from time to time, to prepay (each a "Term Note Optional
Prepayment" and collectively the "Term Note Optional Prepayments")
any Term Note, in whole or in part without premium or penalty.
.2 THE LETTER OF CREDIT FACILITY.
.1 LETTERS OF CREDIT.
Subject to and upon the provisions of this
Agreement, and as a part of the Revolving Credit Commitment, the
Borrower may, upon the prior approval of the Lender, obtain
standby or documentary letters of credit (as the same may from
time to time be amended, supplemented or otherwise modified, each
a "Letter of Credit" and collectively the "Letters of Credit")
from the Lender from time to time from the Closing Date until the
Business Day preceding the Revolving Credit Termination Date. The
Borrower will not be entitled to obtain a Letter of Credit
hereunder unless after giving effect to the request, the
outstanding principal balance of the Revolving Loan and of the
Letter of Credit Obligations would not exceed the Revolving Credit
Committed Amount LESS the aggregate outstanding principal amount
under the Bank Facilities and Term Notes, if any.
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.2 LETTER OF CREDIT FEES.
Prior to or simultaneously with the opening of
each standby Letter of Credit, the Borrower shall pay to the
Lender, a letter of credit fee in an amount equal to the customary
fees charged by the Lender for standby letters of credit or such
other amount as may be negotiated and upon negotiation of each
documentary Letter of Credit the Borrower shall pay to the Lender,
a letter of credit fee in an amount equal to the customary fees
charged by the Lender for negotiation of documentary letters of
credit (each a "Letter of Credit Fee" and collectively the "Letter
of Credit Fees"). Such Letter of Credit Fees for standby Letters
of Credit shall be paid upon the opening of the standby Letter of
Credit and upon each anniversary thereof, if any. In addition,
the Borrower shall pay to the Lender any and all additional
issuance, negotiation, processing, transfer or other fees to the
extent and as and when required by the provisions of any Letter of
Credit Agreement; such additional fees are included in and a part
of the "Fees" payable by the Borrower under the provisions of this
Agreement.
.3 TERMS OF LETTERS OF CREDIT.
Each Letter of Credit shall (a) be opened
pursuant to a Letter of Credit Agreement, and (b) if a standby
Letter of Credit, expire on a date not later than the Business Day
preceding the Revolving Credit Expiration Date and if a
documentary Letter of Credit, expire on a date not later than two
hundred and seventy (270) days from the date of issuance;
provided, however, if any Letter of Credit does have an expiration
date later than the Business Day preceding the Revolving Credit
Termination Date, as of the Business Day preceding the Revolving
Credit Termination Date an advance of the Revolving Credit
Facility shall be made by the Lender in the face amount of such
Letter of Credit (or Letters of Credit) and the proceeds thereof
shall be deposited in an account titled in the name of the Lender
as trustee for the Borrower. The proceeds of the trustee account
referred to in the immediately preceding sentence shall be held as
collateral for the Letter of Credit (or Letters of Credit) and in
the event of a draw under or negotiation of the Letter of Credit
(or Letters of Credit), used to pay any such draw or negotiation.
The aggregate face amount of all Letters of Credit at any one time
outstanding and issued by the Lender pursuant to the provisions of
this Agreement, plus the amount of any unpaid Letter of Credit
Fees accrued or scheduled to accrue thereon, and less the
aggregate amount of all drafts issued under or purporting to have
been issued under such Letters of Credit that have been paid by
the Lender, is herein called the "Outstanding Letter of Credit
Obligations".
.4 PROCEDURE FOR LETTERS OF CREDIT.
The Borrower shall give the Lender written
notice at least three (3) Business Days prior to the date on which
a Letter of Credit is requested to be opened of their request for
a Letter of Credit. Such notice shall be accompanied by a duly
executed and delivered Letter of Credit Agreement. Upon receipt
of the Letter of Credit Agreement and the Letter of Credit Fee,
the Lender shall process such Letter of Credit Agreement in
accordance with its customary procedures and open such Letter of
Credit on the Business Day specified in such notice.
.5 CHANGE IN LAW; INCREASED COST.
If any change in any law or regulation or in
the interpretation thereof by any court or other Governmental
Authority charged with the administration thereof shall either (a)
impose, modify or deem
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applicable any reserve, special deposit or similar requirement
against Letters of Credit issued by the Lender, or (b) impose on
the Lender any other condition regarding this Agreement or any
Letter of Credit, and the result of any event referred to in
clauses (a) or (b) above shall be to increase the cost to the
Lender of issuing, maintaining or extending the Letter of Credit
or the cost to the Lender of funding any obligation under or in
connection with the Letter of Credit, then, upon demand by the
Lender, the Borrower shall immediately pay to the Lender from time
to time as specified by the Lender, additional amounts which shall
be sufficient to compensate the Lender for such increased cost,
together with interest on each such amount from the date demanded
until payment in full thereof at a rate per annum equal to the
then highest current rate of interest on the Revolving Loan. A
certificate as to such increased cost incurred by the Lender,
submitted by the Lender to the Borrower, shall be conclusive,
absent manifest error.
.3 GENERAL FINANCING PROVISIONS.
.1 BORROWER'S REPRESENTATIVES.
The Lender is hereby irrevocably authorized by
the Borrower to make advances under the Loan to the Borrower
pursuant to the provisions of this Agreement upon the written,
oral or telephone request of any one of the Persons who is from
time to time a Responsible Officer of the Borrower under the
provisions of the most recent "Certificate" of corporate
resolutions of the Borrower on file with the Lender or who is an
officer or employee of the Borrower whom a Responsible Officer
from time to time authorizes in writing to do so. The Lender does
not and shall not assume any responsibility or liability for any
errors, mistakes, and/or discrepancies in the oral, telephonic,
written or other transmissions of any instructions, orders,
requests and confirmations between the Lender and the Borrower in
connection with the Credit Facilities, any Loan or any other
transaction in connection with the provisions of this Agreement.
.2 USE OF PROCEEDS OF THE LOAN.
The proceeds of each advance under the Loan and
each Letter of Credit issued hereunder shall be used by the
Borrower for Permitted Uses, and for no other purposes except as
may otherwise be agreed by the Lender in writing.
.3 COMPUTATION OF INTEREST AND FEES.
All applicable Fees and interest shall be
calculated on the basis of a year of 360 days for the actual
number of days elapsed. Any change in the interest rate on any of
the Obligations resulting from a change in the Eurodollar Base
Rate shall become effective as of the opening of business on the
day on which such change in the Eurodollar Base Rate is announced.
.4 PAYMENTS.
All payments of the Obligations, including,
without limitation, principal, interest, Prepayments, and Fees,
shall be paid by the Borrower without setoff, recoupment or
counterclaim to the Lender in immediately available funds not
later than 12:00 noon, Baltimore, Maryland time on the due date of
such payment. All such payments shall be made to the Lender's
principal office in Baltimore, Maryland or at such other location
as the Lender may at any time and from time to time notify the
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Borrower. Alternatively, at its sole discretion, the Lender may
charge any deposit account of the Borrower at the Lender or any
Affiliate of the Lender with all or any part of any amount due to
the Lender under this Agreement or any of the other Financing
Documents to the extent that the Borrower shall have not otherwise
tendered payment to the Lender. All payments shall be applied
first to any unpaid Fees, second to any and all accrued and unpaid
late charges and Enforcement Costs, third to any and all accrued
and unpaid interest on the Obligations, and then to the then
unpaid principal balance of the Obligations, all in such order and
manner as shall be determined by the Lender in its sole and
absolute discretion.
.5 LIENS; SETOFF.
The Borrower hereby grants to the Lender as
collateral and security for all of the Obligations, a continuing
Lien on any and all monies, Securities, and like assets of the
Borrower and any and all proceeds thereof, now or hereafter held
or received by, or in transit to, the Lender or any Affiliate of
the Lender from, or for the account of, the Borrower, and also
upon any and all depository accounts (whether general or special)
and credits of the Borrower, if any, with the Lender or any
Affiliate of the Lender, at any time existing, excluding any
depository accounts held by the Borrower in its capacity as
trustee for Persons who are not Affiliates of the Borrower.
Without implying any limitation on any other rights the Lender may
have under the Financing Documents or applicable Laws, during the
continuance of an Event of Default, the Lender is hereby
authorized by the Borrower at any time and from time to time at
the Lender's option, without notice to, or consent of, the
Borrower, to set off, appropriate, seize, freeze and apply any or
all items hereinabove referred to against all Obligations then
outstanding (whether or not then due), all in such order and
manner as shall be determined by the Lender in its sole and
absolute discretion.
.6 REQUIREMENTS OF LAW.
In the event that the Lender shall have
determined in good faith that (a) the adoption of any Laws
regarding capital adequacy, or (b) any change in such Laws or in
the interpretation or application thereof or (c) compliance by the
Lender or any corporation controlling the Lender with any request
or directive regarding capital adequacy (whether or not having the
force of law) from any Governmental Authority or central bank,
does or shall have the effect of reducing the rate of return on
the capital of the Lender or such controlling corporation as a
consequence of the Lender's obligations under this Agreement to a
level below that which the Lender or such corporation would have
achieved but for such adoption, change or compliance (taking into
consideration the policies of the Lender and its controlling
corporation with respect to capital adequacy) by an amount deemed
by the Lender, in its discretion, to be material, then from time
to time, after submission by the Lender to the Borrower of a
written request therefor and a statement of the basis for the
Lender's determination, the Borrower shall pay to the Lender such
additional amount or amounts in order to compensate the Lender or
its controlling corporation for any such reduction.
.4 INTEREST.
(a) Each Revolving Loan shall bear
interest until maturity (whether by acceleration, declaration,
extension or otherwise) at the Eurodollar Rate or as otherwise
determined in accordance with the
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provisions of this .4, and as may be adjusted from time to time in
accordance with the provisions of Section .2 (Inability to
Determine Eurodollar Base Rate).
(b) The Applicable Margin for Eurodollar
Loans shall be 50 basis points per annum until a change is
required by the operation of .4(c).
(c) Changes in the Applicable Margin
shall be made not more frequently than quarterly based on the
Borrower's Pricing Ratio, determined by the Lender in the exercise
of its sole and absolute discretion, five (5) Business Days after
Lender's receipt of the quarterly reports required by Section
ARTICLE V.1.1(b) (Quarterly Statements and Certificates). The
first such determination shall be made based on the Borrower's
most recent quarterly statements for the period ended January 31,
2000. The Applicable Margin (expressed as basis points) shall
vary depending upon the Borrower's Pricing Ratio, as follows:
Total Funded Debt to EBITDA Spread Over LIBOR
2.50:1 > but <= 1.51 to 1.0 125 bp
1.50:1 > but <= 1.01 to 1.0 85 bp
1.0 to 1 > but <=.51 to 1.0 67.5 bp
.50 to 1 or less 50 bp
.2 INABILITY TO DETERMINE EURODOLLAR BASE RATE.
In the event that (a) the Lender shall have
determined that, by reason of circumstances affecting the London
interbank eurodollar market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Base Rate or (b) the Lender
shall determine that the Eurodollar Base Rate does not adequately
and fairly reflect the cost to the Lender of funding, the Lender
shall give telephonic or written notice of such determination to
the Borrower at least one (1) day prior to the proposed date for
funding such Revolving Loan. If such notice is given, any request
for a Eurodollar Loan shall be made as a Base Rate Loan. Until
such notice has been withdrawn by the Lender, the Borrower will
not request that any Revolving Loan be made as a Eurodollar Loan.
.3 PAYMENT OF INTEREST.
Unpaid and accrued interest on any portion of
the Loan shall be paid monthly, in arrears, on the first day of
each calendar month, commencing on the first such date after the
date of this Agreement, and on the first day of each calendar
month thereafter, and at maturity (whether by acceleration,
declaration, extension or otherwise).
.4 DEFAULT INTEREST RATE ON THE OBLIGATIONS.
Notwithstanding any provision contained herein
to the contrary, following the occurrence and during the
continuance of an Event of Default, at the option of the Lender,
all Loans and all other Obligations shall bear interest at the
Post-Default Rate.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
.1 REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Lender, as
follows:
.1 SUBSIDIARIES.
The Borrower has the Subsidiaries listed on
Schedule .1 attached hereto and made a part hereof and no others.
Each of the Subsidiaries is a Wholly Owned Subsidiary except as
shown on Schedule .1, which correctly indicates the nature and
amount of the Borrower's ownership interests therein.
.2 GOOD STANDING.
Each of the Borrower and its Subsidiaries, is a
corporation duly organized, existing and in good standing under
the laws of the jurisdiction of its formation, (b) has the power
to own its property and to carry on its business as now being
conducted, and (c) is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the
properties owned by it therein or in which the transaction of its
business makes such qualification necessary.
.3 POWER AND AUTHORITY.
The Borrower has full power and authority to
execute and deliver this Agreement, the other Financing Documents
to which it is a party, to make the borrowings under this
Agreement and to incur and perform the Obligations whether under
this Agreement, the other Financing Documents or otherwise, all of
which have been duly authorized by all proper and necessary
corporate action. No consent or approval of shareholders or any
creditors of the Borrower, and no consent, approval, filing or
registration with or notice to any Governmental Authority on the
part of the Borrower, is required as a condition to the execution,
delivery, validity or enforceability of this Agreement, the other
Financing Documents, the performance by the Borrower of the
Obligations.
.4 BINDING AGREEMENTS.
This Agreement and the other Financing
Documents executed and delivered by the Borrower have been
properly executed and delivered and constitute the valid and
legally binding obligations of the Borrower and are fully
enforceable against the Borrower in accordance with their
respective terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general applications
affecting the rights and remedies of creditors and secured
parties, and general principles of equity regardless of whether
applied in a proceeding in equity or at law.
.5 NO CONFLICTS.
Neither the execution, delivery and performance
of the terms of this Agreement or of any of the other Financing
Documents executed and delivered by the Borrower nor the
consummation of the transactions contemplated by this Agreement
will conflict with, violate or be prevented
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by (a) the Borrower's articles of organization of operating
agreement, (b) any existing mortgage, indenture, contract or
agreement binding on the Borrower or affecting any of its
property, or (c) to its knowledge, any Laws.
.6 NO DEFAULTS, VIOLATIONS.
(a) No Default or Event of Default has
occurred and is continuing.
(b) Neither the Borrower nor any of
its Subsidiaries is in default under or with respect to any
obligation under any existing mortgage, indenture, contract or
agreement binding on it or affecting its property in any respect
which could be materially adverse to the business, operations,
property or financial condition of the Borrower, or which could
materially adversely affect the ability of the Borrower to perform
its obligations under this Agreement or the other Financing
Documents, to which the Borrower is a party.
.7 COMPLIANCE WITH LAWS.
To the best of its knowledge, neither the
Borrower nor any of its Subsidiaries is in violation of any
applicable Laws (including, without limitation, any Laws relating
to employment practices, to environmental, occupational and health
standards and controls) or order, writ, injunction, decree or
demand of any court, arbitrator, or any Governmental Authority
affecting the Borrower or any of its properties, the violation of
which, considered in the aggregate, could materially adversely
affect the business, operations or properties of the Borrower
and/or its Subsidiaries.
.8 MARGIN STOCK.
None of the proceeds of the Loan will be used,
directly or indirectly, by the Borrower or any Subsidiary for the
purpose of purchasing or carrying, or for the purpose of reducing
or retiring any indebtedness which was originally incurred to
purchase or carry, any "margin security" within the meaning of
Regulation G (12 CFR Part 207), or "margin stock" within the
meaning of Regulation U (12 CFR Part 221), of the Board of
Governors of the Federal Reserve System or for any other purpose
which might make the transactions contemplated in this Agreement a
"purpose credit" within the meaning of said Regulation G or
Regulation U, or cause this Agreement to violate any other
regulation of the Board of Governors of the Federal Reserve System
or the Securities Exchange Act of 1934 or the Small Business
Investment Act of 1958, as amended, or any rules or regulations
promulgated under any of such statutes.
.9 INVESTMENT COMPANY ACT; MARGIN SECURITIES.
Neither the Borrower nor any of its
Subsidiaries is an investment company within the meaning of the
Investment Company Act of 1940, as amended, nor is it, directly or
indirectly, controlled by or acting on behalf of any Person which
is an investment company within the meaning of said Act. Neither
the Borrower nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying "margin
security" within the meaning of Regulation G (12 CFR Part 207), or
"margin stock" within the meaning of Regulation U (12 CFR Part
221), of the Board of Governors of the Federal Reserve System.
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.10 LITIGATION.
Except as otherwise disclosed to the Lender on
Schedule .10 attached to and made a part of this Agreement, there
are no proceedings, actions or investigations pending or, so far
as the Borrower knows, threatened before or by any court,
arbitrator or any Governmental Authority which, in any one case or
in the aggregate, if determined adversely to the interests of the
Borrower or any Subsidiary, would have a material adverse effect
on the business, properties, condition (financial or otherwise) or
operations, present or prospective, of the Borrower.
.11 FINANCIAL CONDITION.
The financial statements of the Borrower dated
October 31, 1999, are complete and correct and fairly present the
financial position of the Borrower and its Subsidiaries and the
results of their operations and transactions in their surplus
accounts as of the date and for the period referred to and have
been prepared in accordance with GAAP applied on a consistent
basis throughout the period involved. There are no liabilities,
direct or indirect, fixed or contingent, of the Borrower or any
Subsidiary as of the date of such financial statements that are
not reflected therein or in the notes thereto. There has been no
adverse change in the financial condition or operations of the
Borrower or any Subsidiary since the date of such financial
statements and to the Borrower's knowledge no such adverse change
is pending or threatened. Neither the Borrower nor any Subsidiary
has guaranteed the obligations of, or made any investment in or
advances to, any Person, except as disclosed in such financial
statements.
.12 FULL DISCLOSURE.
The financial statements referred to in Section
.11 (Financial Condition), the Financing Documents (including,
without limitation, this Agreement), and the statements, reports
or certificates furnished by the Borrower in connection with the
Financing Documents (a) do not contain any untrue statement of a
material fact and (b) when taken in their entirety, do not omit
any material fact necessary to make the statements contained
therein not misleading. There is no fact known to the Borrower
which the Borrower has not disclosed to the Lender in writing
prior to the date of this Agreement with respect to the
transactions contemplated by the Financing Documents which
materially and adversely affects or in the future could, in the
reasonable opinion of the Borrower materially adversely affect the
condition, financial or otherwise, results of operations,
business, or assets of the Borrower or of any Subsidiary.
.13 INDEBTEDNESS FOR BORROWED MONEY.
Except for the Obligations and except as set
forth in Schedule .13 attached to and made a part of this
Agreement, the Borrower has no Indebtedness for Borrowed Money.
The Lender has received photocopies of all promissory notes
evidencing any Indebtedness for Borrowed Money set forth in
Schedule .13, together with any and all subordination agreements,
other agreements, documents, or instruments securing, evidencing,
guarantying or otherwise executed and delivered in connection
therewith.
.14 TAXES.
The Borrower and its Subsidiaries have filed
all returns, reports and forms for Taxes which, to the knowledge
of the Borrower, are required to be filed, and has paid all Taxes
as shown on such returns or on
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any assessment received by it, to the extent that such Taxes have
become due, unless and to the extent only that such Taxes,
assessments and governmental charges are currently contested in
good faith and by appropriate proceedings by the Borrower, such
Taxes are not the subject of any Liens other than Permitted Liens,
and adequate reserves therefor have been established as required
under GAAP. All tax liabilities of the Borrower were as of the
date of audited financial statements referred to in Section .11
(Financial Condition), and are now, adequately provided for on the
books of the Borrower or its Subsidiaries, as appropriate. No tax
liability has been asserted by the Internal Revenue Service or any
state or local authority against the Borrower for Taxes in excess
of those already paid.
.15 ERISA.
With respect to any "pension plan" as defined
in Section 3(2) of ERISA, which plan is now or previously has been
maintained or contributed to by the Borrower and/or by any
commonly controlled entity: (a) no "accumulated funding
deficiency" as defined in Code 412 or ERISA 302 has occurred,
whether or not that accumulated funding deficiency has been
waived; (b) no Reportable Event has occurred; (c) no termination
of any plan subject to Title IV of ERISA has occurred; (d) neither
the Borrower nor any commonly controlled entity (as defined under
ERISA) has incurred a "complete withdrawal" within the meaning of
ERISA 4203 from any Multi-employer Plan; (e) neither the Borrower
nor any commonly controlled entity has incurred a "partial
withdrawal" within the meaning of ERISA 4205 with respect to any
Multi-employer Plan; (f) no Multi-employer Plan to which the
Borrower or any commonly controlled entity has an obligation to
contribute is in "reorganization" within the meaning of ERISA
4241 nor has notice been received by the Borrower or any commonly
controlled entity that such a Multi-employer Plan will be placed
in "reorganization".
.16 TITLE TO PROPERTIES.
The Borrower has good and marketable title to
all of its properties, including, without limitation, the
properties and assets reflected in the balance sheets described in
Section .11 (Financial Condition). The Borrower has legal,
enforceable and uncontested rights to use freely such property and
assets.
.17 PATENTS, TRADEMARKS, ETC.
The Borrower and its Subsidiaries owns,
possesses, or has the right to use all necessary Patents,
licenses, Trademarks, Copyrights, permits and franchises to own
its properties and to conduct its business as now conducted,
without known conflict with the rights of any other Person. Any
and all obligations to pay royalties or other charges with respect
to such properties and assets are properly reflected on the
financial statements described in Section .11 (Financial
Condition).
.18 EMPLOYEE RELATIONS.
Except as disclosed on Schedule .18 attached
hereto and made a part hereof, (a) neither the Borrower nor any
Subsidiary thereof nor the Borrower's or Subsidiary's employees is
subject to any collective bargaining agreement, (b) no petition
for certification or union election is pending with respect to the
employees of the Borrower or any Subsidiary and no union or
collective bargaining unit has sought such certification or
recognition with respect to the employees of the Borrower, (c)
there are no
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strikes, slowdowns, work stoppages or controversies pending or, to
the best knowledge of Borrower after due inquiry, threatened
between the Borrower and its employees, and (d) neither the
Borrower nor any Subsidiary is subject to a written employment
contract, severance agreement, commission contract, consulting
agreement or bonus agreement in an amount in excess of One Hundred
Thousand Dollars ($100,0000) per year. Hours worked and payments
made to the employees of the Borrower have not been in violation
of the Fair Labor Standards Act or any other applicable law
dealing with such matters. All payments due from the Borrower or
for which any claim may be made against the Borrower, on account
of wages and employee and retiree health and welfare insurance and
other benefits have been paid or accrued as a liability on its
books. The consummation of the transactions contemplated by the
Financing Agreement or any of the other Financing Documents, will
not give rise to a right of termination or right of renegotiation
on the part of any union under any collective bargaining agreement
to which the Borrower is a party or by which it is bound.
.19 PRESENCE OF HAZARDOUS MATERIALS OR HAZARDOUS
MATERIALS CONTAMINATION.
Except as disclosed on SCHEDULE .19 attached
hereto and made a part hereof, to the best of the Borrower's
knowledge, (a) no Hazardous Materials are located on any real
property owned, controlled or operated by of the Borrower or for
which the Borrower is, or is claimed to be, responsible, except
for reasonable quantities of necessary supplies for use by the
Borrower in the ordinary course of its current line of business
and stored, used and disposed in accordance with applicable Laws;
and (b) no property owned, controlled or operated by the Borrower
or for which the Borrower has, or is claimed to have,
responsibility has ever been used as a manufacturing, storage, or
dump site for Hazardous Materials nor is affected by Hazardous
Materials Contamination at any other property.
.2 SURVIVAL; UPDATES OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties contained in or made under
or in connection with this Agreement and the other Financing
Documents shall survive the Closing Date, the making of any
advance under the Loan and extension of credit made hereunder, and
the incurring of any other Obligations and shall be deemed to have
been made at the time of each request for, and again at the time
the making of, each advance under the Loan or the issuance of each
Letter of Credit, except that the representations and warranties
which relate to financial statements which are referred to in
Section .1.11 (Financial Condition), shall also be deemed to cover
financial statements furnished from time to time to the Lender
pursuant to Section ARTICLE V.1.1 (Financial Statements).
ARTICLE IV
CONDITIONS PRECEDENT
.1 CONDITIONS TO THE INITIAL ADVANCE AND INITIAL LETTER OF CREDIT.
The making of the initial advance under the Loan and the
issuance of the initial Letter of Credit is subject to the
fulfillment on or before the Closing Date of the following
conditions precedent in a manner satisfactory in form and
substance to the Lender and its counsel:
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.1 ORGANIZATIONAL DOCUMENTS-BORROWER.
The Lender shall have received:
(a) a certificate of good standing for
the Borrower certified by the Secretary of State, or other
appropriate Governmental Authority, of the state of
incorporation for the Borrower;
(b) a certificate of qualification to
do business for the Borrower certified by the Secretary of
State or other Governmental Authority of each state in which
the Borrower conducts business;
(c) a certificate dated as of the Closing
Date by the Secretary or an Assistant Secretary of the Borrower
covering:
(i) true and complete copies of the
Borrower's corporate charter, bylaws, and all amendments
thereto;
(ii) true and complete copies of the
resolutions of its Board of Directors authorizing (A) the
execution, delivery and performance of the Financing
Documents, (ii) the borrowings hereunder, and (C) the
granting of the Liens contemplated by this Agreement; and
(iii) the incumbency, authority and
signatures of the officers of the Borrower authorized to
sign this Agreement and the other Financing Documents to
which the Borrower is a party.
.2 OPINION OF BORROWER'S COUNCEL.
The Lender shall have received the favorable
opinion of counsel for the Borrower addressed to the Lender.
.3 CONSENTS, LICENSES, APPROVALS, ETC.
The Lender shall have received copies of all
consents, licenses and approvals, required in connection with the
execution, delivery, performance, validity and enforceability of
the Financing Documents, and such consents, licenses and approvals
shall be in full force and effect.
.4 REVOLVING CREDIT NOTE.
The Lender shall have received the Revolving
Credit Note, conforming to the requirements hereof and executed by
a Responsible Officer of the Borrower and attested by a duly
authorized representative of the Borrower.
.5 FINANCING DOCUMENTS.
The Borrower shall have executed and delivered
the Financing Documents to be executed by them.
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.6 OTHER FINANCING DOCUMENTS.
In addition to the Financing Documents to be
delivered by the Borrower, the Lender shall have received the
Financing Documents duly executed and delivered by Persons other
than the Borrower.
.7 OTHER DOCUMENTS, ETC.
The Lender shall have received such other
certificates, opinions, documents and instruments confirmatory of
or otherwise relating to the transactions contemplated hereby as
may have been reasonably requested by the Lender.
.8 PAYMENT OF FEES.
The Lender shall have received payment of any
Fees due on or before the Closing Date.
.9 INSURANCE CERTIFICATE.
The Lender shall have received an insurance
certificate in accordance with the provisions of Section ARTICLE
V.1.8 (Insurance).
.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The making of all advances under the Loan and the issuance
of all Letters of Credit is subject to the fulfillment of the
following conditions precedent in a manner satisfactory in form
and substance to the Lender and its counsel:
.1 COMPLIANCE.
The Borrower shall have complied and shall then
be in compliance with all terms, covenants, conditions and
provisions of this Agreement and the other Financing Documents
that are binding upon it.
.2 DEFAULT.
There shall exist no Event of Default or
Default hereunder.
.3 REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the
Borrower contained among the provisions of this Agreement shall be
true and with the same effect as though such representations and
warranties had been made at the time of the making of, and of the
request for, each advance under the Loan or the issuance of each
Letter of Credit, except that the representations and warranties
which relate to financial statements which are referred to in
Section ARTICLE III.1.11 (Financial Condition), shall also be
deemed to cover financial statements furnished from time to time
to the Lender pursuant to Section ARTICLE V.1.1 (Financial
Statements).
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.4 ADVERSE CHANGE.
No adverse change shall have occurred in the
condition (financial or otherwise), operations or business of the
Borrower that would, in the good faith judgment of the Lender,
materially impair the ability of the Borrower to pay or perform
any of the Obligations.
.5 LEGAL MATTERS.
All legal documents incident to each advance
under the Loan and each of the Letters of Credit shall be
reasonably satisfactory to counsel for the Lender.
ARTICLE V
COVENANTS OF THE BORROWER
.1 AFFIRMATIVE COVENANTS.
So long as any of the Obligations or the Commitments shall be
outstanding hereunder, the Borrower agrees with the Lender as
follows:
.1 FINANCIAL STATEMENTS.
The Borrower shall furnish to the Lender:
(a) Annual Statements and Certificates.
The Borrower shall furnish to the Lender as soon as available, but
in no event more than ninety (90) days after the close of each
fiscal year of the Borrower, (i) a copy of the annual financial
statement in reasonable detail satisfactory to the Lender relating
to the Borrower and its Subsidiaries, prepared in accordance with
GAAP and examined and certified by independent certified public
accountants satisfactory to the Lender, which financial statement
shall include a consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal year and consolidated
statements of income, cash flows and changes in shareholders
equity of the Borrower and its Subsidiaries for such fiscal year,
(ii) a Compliance Certificate, in substantially the form attached
to this Agreement as EXHIBIT B, as may be amended by the Lender
from time to time, containing a detailed computation of each
financial covenant which is applicable for the period reported and
a cash flow projection report, each prepared by a Responsible
Officer of the Borrower in a format acceptable to the Lender, and
(iii) a management letter in the form prepared by the Borrower's
independent certified public accountants.
(b) Quarterly Statements and Certificates.
The Borrower shall furnish to the Lender as soon as available, but
in no event more than forty five (45) days after the close of the
Borrower's fiscal quarters, consolidated and consolidating balance
sheets of the Borrower and its Subsidiaries as of the close of
such period, consolidated and consolidating income, cash flows and
changes in shareholders equity statements for such period, and a
Compliance Certificate, in substantially the form attached to this
Agreement as EXHIBIT B, containing a detailed computation of each
financial covenant which is applicable for the period reported and
a cash flow projection report, each prepared by a Responsible
Officer of the Borrower in a format acceptable to the Lender, all
as prepared and certified by a Responsible Officer of the Borrower
and accompanied by a certificate of that officer stating whether
any event has
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occurred which constitutes a Default or an Event of Default
hereunder, and, if so, stating the facts with respect thereto.
(c) Tax Returns. The Borrower will
furnish to the Lender, not later than thirty (30) days after the
date of filing with the Internal Revenue Service, a complete copy
of the Borrower's corporate tax return.
(d) Annual Budget and Projections. The
Borrower shall furnish to the Lender as soon as available, but in
no event later than the 45th day after the close of the previous
fiscal year:
(i) a consolidated budget and pro forma
financial statements on a quarterly basis for the following
fiscal year, and
(ii) three year projections.
The Lender agrees that it shall keep
confidential all projections delivered to it by the Borrower
pursuant to the terms of this subsection.
(e) Additional Reports and Information.
The Borrower shall furnish to the Lender promptly, such additional
information, reports or statements as the Lender may from time to
time reasonably request.
.2 REPORTS TO SEC AND TO STOCKHOLDERS.
The Borrower will furnish to the Lender,
promptly upon the filing or making thereof, at least one (1) copy
of all financial statements, reports, notices and proxy statements
sent by the Borrower to its stockholders, and of all regular and
other reports filed by the Borrower with any securities exchange
or with the Securities and Exchange Commission.
.3 RECORDKEEPING, RIGHTS OF INSPECTION, FIELD
EXAMINATION, ETC.
(a) The Borrower shall, and shall cause
each of its Subsidiaries to, maintain (i) a standard system of
accounting in accordance with GAAP, and (ii) proper books of
record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its
properties, business and activities.
(b) The Borrower shall, and shall
cause each of its Subsidiaries to, permit authorized
representatives of the Lender to visit and inspect the properties
of the Borrower and its Subsidiaries, to review, audit, check and
inspect the Borrower's other books of record at any time with or
without notice and to make abstracts and photocopies thereof, and
to discuss the affairs, finances and accounts of the Borrower
and/or any Subsidiaries, with the officers, directors, employees
and other representatives of the Borrower and/or any Subsidiaries
and their respective accountants, all at such times during normal
business hours and other reasonable times and as often as the
Lender may reasonably request.
(c) The Borrower hereby irrevocably
authorizes all accountants and auditors employed by the Borrower
and/or any Subsidiaries at any time prior to the repayment in full
of the Obligations to exhibit and deliver to the Lender copies of
any and all of the financial
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statements, trial balances, management letters, or other
accounting records of any nature of the Borrower and/or any
Subsidiaries in the accountant's or auditor's possession, and to
disclose to the Lender any information they may have concerning
the financial status and business operations of the Borrower and
its Subsidiaries. Further, the Borrower hereby authorizes all
Governmental Authorities to furnish to the Lender copies of
reports or examinations relating to the Borrower and/or any
Subsidiaries, whether made by the Borrower or otherwise.
.4 CORPORATE EXISTENCE.
The Borrower shall maintain, and cause each of
its Subsidiaries to maintain, its corporate existence in good
standing in the jurisdiction in which it is incorporated and in
each other jurisdiction where it is required to register or
qualify to do business if the failure to do so in such other
jurisdiction might have a material adverse effect on the ability
of the Borrower to perform the Obligations, the conduct of the
Borrower's operations, the Borrower's financial condition, or the
value of, or the ability of the Lender to realize upon, the
Collateral.
.5 COMPLIANCE WITH LAWS.
The Borrower shall comply, and cause each of
its Subsidiaries to comply, with all applicable Laws and observe
the valid requirements of Governmental Authorities, the
noncompliance with or the nonobservance of which might have a
material adverse effect on the ability of the Borrower to perform
the Obligations, the conduct of the Borrower's operations, or the
Borrower's financial condition.
.6 PRESERVATION OF PROPERTIES.
The Borrower will, and will cause each of its
Subsidiaries to, at all times (a) maintain, preserve, protect and
keep its properties, whether owned or leased, in good operating
condition, working order and repair (ordinary wear and tear
excepted), and from time to time will make all proper repairs,
maintenance, replacements, additions and improvements thereto
needed to maintain such properties in good operating condition,
working order and repair, and (b) do or cause to be done all
things necessary to preserve and to keep in full force and effect
its material franchises, leases of real and personal property,
trade names, Patents, Trademarks, Copyrights and permits which are
necessary for the orderly continuance of its business.
.7 LINE OF BUSINESS.
The Borrower will continue to engage
substantially only in the business of manufacturing and
distribution of cabinetry.
.8 INSURANCE.
The Borrower will, and will cause each of its
Subsidiaries to, at all times maintain with A-or better rated
insurance companies such insurance as is required by applicable
Laws and such other insurance, all in such amounts not less than
the Lender shall reasonably determine from time to time, of such
types and against such risks, hazards, liabilities, casualties and
contingencies as are usually insured against in the same
geographic areas by business entities engaged in the same or
similar business. Without limiting the generality of the
foregoing, the
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Borrower will, and will cause each of its Subsidiaries to, keep
adequately insured all of its property against loss or damage
resulting from fire or other risks insured against by extended
coverage and maintain public liability insurance against claims
for personal injury, death or property damage occurring upon, in
or about any properties occupied or controlled by it, or arising
in any manner out of the businesses carried on by it and business
interruption coverage. The Borrower shall deliver to the Lender
on the Closing Date (and thereafter on each date there is a
material change in the insurance coverage) a certificate of a
Responsible Officer of the Borrower containing a detailed list of
the insurance then in effect and stating the names of the
insurance companies, the types, the amounts and rates of the
insurance, dates of the expiration thereof and the properties and
risks covered thereby. Within thirty (30) days after notice in
writing from the Lender, the Borrower will obtain such additional
insurance as the Lender may reasonably request and which is
customarily provided to the Lender by borrowers in a like industry
at the time.
.9 TAXES.
Except to the extent that the validity or
amount thereof is being contested in good faith and by appropriate
proceedings, the Borrower will, and will cause each of its
Subsidiaries to, pay and discharge all Taxes prior to the date
when any interest or penalty would accrue for the nonpayment
thereof. The Borrower shall furnish to the Lender at such times
as the Lender may require proof satisfactory to the Lender of the
making of payments or deposits required by applicable Laws
including, without limitation, payments or deposits with respect
to amounts withheld by the Borrower from wages and salaries of
employees and amounts contributed by the Borrower on account of
federal and other income or wage taxes and amounts due under the
Federal Insurance Contributions Act, as amended.
.10 ERISA.
The Borrower will, and will cause each of its
Subsidiaries and Affiliates to, comply with the funding
requirements of ERISA with respect to employee pension benefit
plans for its respective employees. The Borrower will not permit
with respect to any employee benefit plan or plans covered by
Title IV of ERISA (a) any prohibited transaction or transactions
under ERISA or the Internal Revenue Code, which results, or may
result, in any material liability of the Borrower and/or any
Subsidiary and/or Affiliate, or (b) any Reportable Event if, upon
termination of the plan or plans with respect to which one or more
such Reportable Events shall have occurred, there is or would be
any material liability of the Borrower and/or any Subsidiary
and/or Affiliate to the PBGC. Upon the Lender's request, the
Borrower will deliver to the Lender a copy of the most recent
actuarial report, financial statements and annual report completed
with respect to any "defined benefit plan", as defined in ERISA.
.11 NOTIFICATION OF EVENTS OF DEFAULT AND ADVERSE
DEVELOPMENTS
The Borrower shall promptly notify the Lender
upon obtaining knowledge of the occurrence of:
(a) any Event of Default;
(b) any Default;
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(c) any litigation instituted or threatened
against the Borrower or its Subsidiaries and of the entry of any
judgment or Lien (other than any Permitted Liens) against any of
the assets or properties of the Borrower or any Subsidiary where
the claims against the Borrower or any of its Subsidiaries exceed
One Hundred Thousand Dollars ($100,000) and are not covered by
insurance;
(d) any event, development or circumstance
whereby the financial statements furnished hereunder fail in any
material respect to present fairly, in accordance with GAAP, the
financial condition and operational results of the Borrower or
any of its Subsidiaries;
(e) any judicial, administrative or arbitral
proceeding pending against the Borrower or any of its Subsidiaries
and any judicial or administrative proceeding known by the Borrower
to be threatened against it or any of its Subsidiaries which, if
adversely decided, could materially adversely affect its financial
condition or operations (present or prospective);
(f) the receipt by the Borrower or any of its
Subsidiaries of any notice, claim or demand from any Governmental
Authority which alleges that the Borrower or any Subsidiary is in
violation of any of the terms of, or has failed to comply with any
applicable Laws regulating its operation and business, including,
but not limited to, the Occupational Safety and Health Act and the
Environmental Protection Act; and
(g) any other development in the business or
affairs of the Borrower and any of its Subsidiaries which may be
materially adverse;
in each case describing in detail satisfactory to the Lender the
nature thereof and the action the Borrower propose to take with respect
thereto.
.12 HAZARDOUS MATERIALS; CONTAMINATION.
The Borrower agrees to:
(a) give notice to the Lender immediately
upon the Borrower's acquiring knowledge of the presence of any
Hazardous Materials and of any Hazardous Materials Contamination
on any property owned or controlled by the Borrower or for which
the Borrower is, or is claimed to be, responsible (provided that
such notice shall not be required for Hazardous Materials placed
or stored on such property in accordance with applicable Laws in
the ordinary course (including, without limitation, quantity) of
the Borrower's line of business expressly described in this
Agreement) or of any Hazardous Materials Contamination, with a
full description thereof;
(b) promptly comply with any Laws
requiring the removal, treatment or disposal of Hazardous
Materials or Hazardous Materials Contamination and provide the
Lender with satisfactory evidence of such compliance;
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(c) provide the Lender, within thirty (30)
days after a demand by the Lender, with a bond, letter of credit
or similar financial assurance evidencing to the Lender's
satisfaction that the necessary funds are available to pay the
cost of removing, treating, and disposing of such Hazardous
Materials or Hazardous Materials Contamination and discharging any
Lien which may be established as a result thereof on any property
owned or controlled by the Borrower or for which the Borrower is,
or is claimed to be, responsible; and
(d) as part of the Obligations, defend,
indemnify and hold harmless the Lender and its agents, employees,
trustees, successors and assigns from any and all claims which may
now or in the future (whether before or after the termination of
this Agreement) be asserted as a result of the presence of any
Hazardous Materials or of any Hazardous Materials Contamination on
any property owned or controlled by the Borrower or for which the
Borrower is, or is claimed to be, responsible. The Borrower
acknowledges and agrees that this indemnification shall survive
the termination of this Agreement and the Commitments and the
payment and performance of all of the other Obligations.
.13 DISCLOSURE OF SIGNIFICANT TRANSACTIONS.
The Borrower shall deliver to the Lender a
written notice describing in detail each transaction by it
involving the purchase, sale, lease, or other acquisition or loss
or casualty to or disposition of an interest in Fixed or Capital
Assets which exceeds Five Hundred Thousand Dollars ($500,000.00),
said notices to be delivered to the Lender within thirty (30) days
of the occurrence of each such transaction.
.14 FINANCIAL COVENANTS.
(a) Liabilities to Net Worth Ratio. The
Borrower will maintain, tested as of the end of each of the
Borrower's fiscal years, a Liabilities to Net Worth Ratio equal to
not more than 1.5 to 1.0.
(b) Funded Debt to EBITDA Ratio. The
Borrower will maintain, tested as of the end of each fiscal
quarter for the quarter then ending and the three immediately
preceding quarters, a Funded Debt to EBITDA Ratio equal to not
less than 2.5 to 1.0.
.2 NEGATIVE COVENANTS.
So long as any of the Obligations or the Commitments shall be
outstanding hereunder, the Borrower agrees with the Lender as
follows:
.1 MERGER, ACQUISITION OR SALE OF ASSETS.
The Borrower will not enter into any merger or
consolidation or amalgamation, windup or dissolve itself (or
suffer any liquidation or dissolution) or acquire all or
substantially all the assets of any Person, or sell, lease or
otherwise dispose of any of its assets (except Inventory disposed
of in the ordinary course of business prior to an Event of
Default). Any consent of the Lender to the disposition of any
assets may be conditioned on a specified use of the proceeds of
disposition.
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.2 SUBSIDIARIES.
The Borrower will not create or acquire any
Subsidiaries other than the Subsidiaries existing as of the date
hereof and identified on Schedule ARTICLE III.1.1.
.3 PURCHASE OR REDEMPTION OF SECURITIES.
The Borrower will not purchase, redeem or
otherwise acquire any warrants now or hereafter outstanding, apply
any of its property or assets to the purchase, redemption or other
retirement of, set apart any sum for the purchase, redemption, or
other retirement of, make any distribution by reduction of capital
or otherwise in respect of, any warrants, permit any Subsidiary to
purchase or acquire any warrants issued by, the Borrower, and not
prepay, purchase or redeem any Indebtedness for Borrowed Money
other than the Obligations.
.4 INDEBTEDNESS.
The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or suffer to exist any
Indebtedness for Borrowed Money, or permit any Subsidiary so to
do, except:
(a) the Obligations;
(b) accounts payable arising in the ordinary
course;
(c) Indebtedness for Borrowed Money secured by
Permitted Liens;
(d) other Bank Facilities;
(e) Indebtedness of the Borrower existing on the
date hereof and reflected on the financial statements furnished
pursuant to Section ARTICLE III.1.11 (Financial Condition);
(f) Indebtedness of the Borrower identified on
Schedule .4 attached hereto and made a part hereof;
(g) Capital Leases;
(h) Other Indebtedness of the Borrower in an
aggregate amount outstanding at any time equal to not more than
$1,000,000; and
(i) Subordinated Indebtedness.
.5 INVESTMENTS, LOANS AND OTHER TRANSACTIONS.
Except as otherwise provided in this Agreement,
the Borrower will not, and will not permit any of its Subsidiaries
to, (a) make, assume, acquire or continue to hold any investment
in any real property (unless used in connection with its business
and treated as a Fixed or Capital Asset of the Borrower or the
Subsidiary) or any Person, whether by stock purchase, capital
contribution, acquisition of indebtedness of such
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Person or otherwise (including, without limitation, investments in
any joint venture or partnership), (b) guaranty or otherwise
become contingently liable for the indebtedness or obligations of
any Person, or (c) make any loans or advances, or otherwise extend
credit to any Person, except:
(i) any advance to an officer of the Borrower
or of any Subsidiary for travel or other business expenses
in the ordinary course of business, provided that the aggregate
amount of all such advances by the Borrower and its Subsidiaries
(taken as a whole) outstanding at any time shall not exceed One
Hundred Thousand Dollars ($100,000);
(ii) advances or loans to an officer of the
Borrower or of any Subsidiary or to employees of the Borrower
or of any Subsidiary made in the ordinary course of business;
(iii) the endorsement of negotiable instruments
for deposit or collection or similar transactions in the
ordinary course of business;
(iv) any investment in Cash Equivalents, which
are pledged to the Lender as collateral and security for the
Obligations; and
(v) trade credit extended to customers in the
ordinary course of business.
.6 STOCK OF SUBSIDIARIES.
The Borrower will not sell or otherwise dispose
of any shares of capital stock of any Subsidiary (except in
connection with a merger or consolidation of a Wholly Owned
Subsidiary into the Borrower or another Wholly Owned Subsidiary or
with the dissolution of any Subsidiary) or permit any Subsidiary
to issue any additional shares of its capital stock except pro
rata to its stockholders.
.7 SUBORDINATED INDEBTEDNESS.
The Borrower will not, and will not permit any
Subsidiary to make:
(a) any payment of principal of, or interest on,
any of the Subordinated Indebtedness, including, without limitation,
the Subordinated Debt, if a Default or an Event of Default then
exists hereunder or would result from such payment;
(b) any payment of the principal or interest due
on the Subordinated Indebtedness as a result of acceleration
thereunder or a mandatory prepayment thereunder;
(c) any amendment or modification of or
supplement to the documents evidencing or securing the Subordinated
Indebtedness; or
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(d) payment of principal or interest on the
Subordinated Indebtedness other than when due (without giving effect
to any acceleration of maturity or mandatory prepayment).
.8 LIENS; CONFESSED JUDGMENT.
The Borrower agrees that it (a) will not
create, incur, assume or suffer to exist any Lien upon any of its
properties or assets, whether now owned or hereafter acquired, or
permit any Subsidiary so to do, except for Liens securing the
Obligations and Permitted Liens, (b) will not agree to, assume or
suffer to exist any provision in any instrument or other document
for confession of judgment, cognovit or other similar right or
remedy, (c) will not enter into any contracts for the consignment
of goods to the Borrower, (e) will not execute or suffer the
filing of any financing statements or the posting of any signs
giving notice of consignments to the Borrower and (f) will not, as
a material part of its business, engage in the sale of goods
belonging to others.
.9 TRANSACTIONS WITH AFFILIATES.
Except as disclosed on SCHEDULE .9, the
Borrower and its Subsidiaries will not enter into or participate
in any transaction with any Affiliate or, except in the ordinary
course of business, with the officers, directors, employees and
other representatives of the Borrower and/or any Subsidiary.
.10 OTHER BUSINESSES.
Neither the Borrower nor its Subsidiaries will
engage directly or indirectly in any business other than its
current line of business described elsewhere in this Agreement.
.11 ERISA COMPLIANCE.
Neither the Borrower nor any Commonly
Controlled Entity shall: (a) engage in or permit any "prohibited
transaction" (as defined in ERISA); (b) cause any "accumulated
funding deficiency" as defined in ERISA and/or the Internal
Revenue Code; (c) terminate any pension plan in a manner which
could result in the imposition of a lien on the property of the
Borrower pursuant to ERISA; (d) terminate or consent to the
termination of any Multi-employer Plan; or (e) incur a complete or
partial withdrawal with respect to any Multi-employer Plan.
.12 PROHIBITION ON HAZARDOUS MATERIALS.
The Borrower shall not place, manufacture or
store or permit to be placed, manufactured or stored any Hazardous
Materials on any property owned, operated or controlled by the
Borrower or for which the Borrower is responsible other than
Hazardous Materials placed or stored on such property in
accordance with applicable Laws in the ordinary course.
.13 METHOD OF ACCOUNTING; FISCAL YEAR.
(a) The Borrower shall not change the method of
accounting employed in the preparation of any financial statements
furnished to the Lender under the provisions of Section .1.1
(Financial Statements), unless required to conform to GAAP and on
the condition that the Borrower's
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accountants shall furnish such information as the Lender may
request to reconcile the changes with the Borrower's prior
financial statements.
(b) Without the prior written consent of the
Lender, the Borrower will not change their fiscal year from a year
ending on April 30.
ARTICLE VI
DEFAULT AND RIGHTS AND REMEDIES
.1 EVENTS OF DEFAULT.
The occurrence of any one or more of the following events
shall constitute an "Event of Default" under the provisions of
this Agreement:
.1 FAILURE TO PAY.
The failure of the Borrower to pay any of the
Obligations as and when due and payable in accordance with the
provisions of this Agreement, the Notes and/or any of the other
Financing Documents.
.2 BREACH OF REPRESENTATIONS AND WARRANTIES.
Any representation or warranty made in this
Agreement or in any report, statement, schedule, certificate,
opinion (including any opinion of counsel for the Borrower),
financial statement or other document furnished in connection with
this Agreement, any of the other Financing Documents, or the
Obligations, shall prove to have been false or misleading when
made (or, if applicable, when reaffirmed) in any material respect.
.3 FAILURE TO COMPLY WITH COVENANTS.
The failure of the Borrower to perform, observe
or comply with any covenant, condition or agreement contained in
this Agreement.
.4 DEFAULT UNDER OTHER FINANCING DOCUMENTS OR
OBLIGATIONS.
A default shall occur under any of the other
Financing Documents or under any other Obligations, and such
default is not cured within any applicable grace period provided
therein.
.5 RECEIVER; BANKRUPTCY.
The Borrower or any Subsidiary shall (a) apply
for or consent to the appointment of a receiver, trustee or
liquidator of itself or any of its property, (b) admit in writing
its inability to pay its debts as they mature, (c) make a general
assignment for the benefit of creditors, (d) be adjudicated a
bankrupt or insolvent, (e) file a voluntary petition in bankruptcy
or a petition or an answer seeking or consenting to reorganization
or an arrangement with creditors or to take advantage of any
bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation law or statute, or an answer admitting
the material allegations of a petition filed against it in any
proceeding under any such law, or take corporate action for the
purposes of effecting any of the foregoing, or (f) by any act
indicate its consent to, approval of or acquiescence in any such
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proceeding or the appointment of any receiver of or trustee for
any of its property, or suffer any such receivership, trusteeship
or proceeding to continue undischarged for a period of sixty (60)
days, or (g) by any act indicate its consent to, approval of or
acquiescence in any order, judgment or decree by any court of
competent jurisdiction or any Governmental Authority enjoining or
otherwise prohibiting the operation of a material portion of the
Borrower's or any Subsidiary's business or the use or disposition
of a material portion of the Borrower's or any Subsidiary's
assets.
.6 INVOLUNTARY BANKRUPTCY, ETC.
(a) An order for relief shall be entered in any
involuntary case brought against the Borrower or any Subsidiary
under the Bankruptcy Code, or (b) any such case shall be commenced
against the Borrower or any Subsidiary and shall not be dismissed
within sixty (60) days after the filing of the petition, or (c) an
order, judgment or decree under any other Law is entered by any
court of competent jurisdiction or by any other Governmental
Authority on the application of a Governmental Authority or of a
Person other than the Borrower or any Subsidiary (i) adjudicating
the Borrower, or any Subsidiary bankrupt or insolvent, or (ii)
appointing a receiver, trustee or liquidator of the Borrower or of
any Subsidiary, or of a material portion of the Borrower's or any
Subsidiary's assets, or (iii) enjoining, prohibiting or otherwise
limiting the operation of a material portion of the Borrower's or
any Subsidiary's business or the use or disposition of a material
portion of the Borrower's or any Subsidiary's assets, and such
order, judgment or decree continues unstayed and in effect for a
period of thirty (30) days from the date entered.
.7 JUDGEMENT.
Unless adequately insured or bonded in the
opinion of the Lender, the entry of a final judgment for the
payment of money involving more than $1,000,000 against the
Borrower or any Subsidiary, and the failure by the Borrower or
such Subsidiary to discharge the same, or cause it to be
discharged, within thirty (30) days from the date of the order,
decree or process under which or pursuant to which such judgment
was entered, or to secure a stay of execution pending appeal of
such judgment.
.8 DEFAULT UNDER OTHER BORROWINGS.
Default shall be made with respect to any
Indebtedness for Borrowed Money (other than the Loan and the
Outstanding Letter of Credit Obligations) if the effect of such
default is to accelerate the maturity of such Indebtedness for
Borrowed Money or to permit the holder or obligee thereof or other
party thereto to cause any such Indebtedness for Borrowed Money to
become due prior to its stated maturity.
.9 CHALLENGE TO AGREEMENTS.
The Borrower shall challenge the validity and
binding effect of any provision of any of the Financing Documents
or shall state its intention to make such a challenge of any of
the Financing Documents or any of the Financing Documents shall
for any reason (except to the extent permitted by its express
terms) cease to be effective.
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.10 MATERIAL ADVERSE CHANGE.
The Lender in its sole discretion determines in
good faith that a material adverse change has occurred in the
financial condition of the Borrower.
.11 LIQUIDATION, TERMINATION, DISSOLUTION, CHANGE IN
MANAGEMENT, ETC.
The Borrower shall liquidate, dissolve or
terminate its existence or shall suspend or terminate a
substantial portion of its business operations or any change,
other than as a result of death, disability or retirement, occurs
in a majority of the Management of the Borrower without the prior
written consent of the Lender.
.2 REMEDIES.
Upon the occurrence of any Default or Event of Default, the
Lender may at any time thereafter exercise any one or more of the
following rights, powers or remedies:
.1 ACCELERATION.
The Lender may declare the Obligations to be
immediately due and payable, notwithstanding anything contained in
this Agreement or in any of the other Financing Documents to the
contrary, without presentment, demand, protest, notice of protest
or of dishonor, or other notice of any kind, all of which the
Borrower hereby waives.
.2 FURTHER ADVANCES.
The Lender may from time to time without notice
to the Borrower suspend, terminate or limit any further loans or
other extensions of credit under this Agreement and under any of
the other Financing Documents. Further, upon the occurrence of an
Event of Default or Default specified in Sections .1.5 (Receiver;
Bankruptcy) or .1.6 (Involuntary Bankruptcy, etc.), the
Commitments and any agreement in any of the Financing Documents to
provide additional credit shall immediately and automatically
terminate and the unpaid principal amount of the Notes (with
accrued interest thereon) and all other Obligations then
outstanding, shall immediately become due and payable without
further action of any kind and without presentment, demand,
protest or notice of any kind, all of which are hereby expressly
waived by the Borrower.
.3 PERFORMANCE BY LENDER.
Upon the occurrence and continuation of an
Event of Default, the Lender without notice to or demand upon the
Borrower and without waiving or releasing any of the Obligations
or any Default or Event of Default, may (but shall be under no
obligation to) at any time thereafter make such payment or perform
such act for the account and at the expense of the Borrower, and
may enter upon the premises of the Borrower for that purpose and
take all such action thereon as the Lender may consider necessary
or appropriate for suchpurpose and the Borrower hereby irrevocably
appoints the Lender as its attorney-in-fact to do so, with power
of substitution, in the name of the Lender or in the name of the
Borrower or otherwise, for the use and benefit of the Lender, but
at the cost and expense of the Borrower and without notice to the
Borrower. All sums so paid or advanced by the Lender together
with interest thereon from the date
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of payment, advance or incurring until paid in full at the Post-
Default Rate and all costs and expenses, shall be deemed part of
the Enforcement Costs, shall be paid by the Borrower to the Lender
on demand, and shall constitute and become a part of the
Obligations.
.4 OTHER REMEDIES.
The Lender may from time to time proceed to
protect or enforce its rights by an action or actions at law or in
equity or by any other appropriate proceeding, whether for the
specific performance of any of the covenants contained in this
Agreement or in any of the other Financing Documents, or for an
injunction against the violation of any of the terms of this
Agreement or any of the other Financing Documents, or in aid of
the exercise or execution of any right, remedy or power granted in
this Agreement, the Financing Documents, and/or applicable Laws.
The Lender is authorized to offset and apply to all or any part of
the Obligations all moneys, credits and other property of any
nature whatsoever of the Borrower now or at any time hereafter in
the possession of, in transit to or from, under the control or
custody of, or on deposit with, the Lender.
ARTICLE VII
MISCELLANEOUS
.1 NOTICES.
All notices, requests and demands to or upon the parties to
this Agreement shall be in writing and shall be deemed to have
been given or made when delivered by hand on a Business Day, or
two (2) days after the date when deposited in the mail, postage
prepaid by registered or certified mail, return receipt requested,
or when sent by overnight courier, on the Business Day next
following the day on which the notice is delivered to such
overnight courier, addressed as follows:
Borrower: AMERICAN WOODMARK CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Lender: Bank of America, N. A
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By written notice, each party to this Agreement may change
the address to which notice is given to that party, provided that
such changed notice shall include a street address to which
notices may be delivered by overnight courier in the ordinary
course on any Business Day.
.2 AMENDMENTS; WAIVERS.
This Agreement and the other Financing Documents may not be
amended, modified, or changed in any respect except by an
agreement in writing signed by the Lender and the Borrower. No
waiver of any provision of this Agreement or of any of the other
Financing Documents, nor consent to any
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departure by the Borrower therefrom, shall in any event be
effective unless the same shall be in writing. No course of
dealing between the Borrower and the Lender and no act or failure
to act from time to time on the part of the Lender shall
constitute a waiver, amendment or modification of any provision of
this Agreement or any of the other Financing Documents or any
right or remedy under this Agreement, under any of the other
Financing Documents or under applicable Laws.
Without implying any limitation on the foregoing:
(a) Any waiver or consent shall be effective
only in the specific instance, for the terms and purpose for which
given, subject to such conditions as the Lender may specify in any
such instrument.
(b) No waiver of any Default or Event of Default
shall extend to any subsequent or other Default or Event of Default,
or impair any right consequent thereto.
(c) No notice to or demand on the Borrower in
any case shall entitle the Borrower to any other or further notice
or demand in the same, similar or other circumstance.
(d) No failure or delay by the Lender to insist
upon the strict performance of any term, condition, covenant or
agreement of this Agreement or of any of the other Financing
Documents, or to exercise any right, power or remedy consequent
upon a breach thereof, shall constitute a waiver, amendment or
modification of any such term, condition, covenant or agreement
or of any such breach or preclude the Lender from exercising any
such right, power or remedy at any time or times.
(e) By accepting payment after the due date
of any amount payable under this Agreement or under any of the
other Financing Documents, the Lender shall not be deemed to waive
the right either to require prompt payment when due of all other
amounts payable under this Agreement or under any of the other
Financing Documents, or to declare a default for failure to effect
such prompt payment of any such other amount.
.3 CUMULATIVE REMEDIES.
The rights, powers and remedies provided in this Agreement
and in the other Financing Documents are cumulative, may be
exercised concurrently or separately, may be exercised from time
to time and in such order as the Lender shall determine and are in
addition to, and not exclusive of, rights, powers and remedies
provided by existing or future applicable Laws. In order to
entitle the Lender to exercise any remedy reserved to it in this
Agreement, it shall not be necessary to give any notice, other
than such notice as may be expressly required in this Agreement.
Without limiting the generality of the foregoing, the Lender may:
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(a) proceed against the Borrower with or
without proceeding against any Person who may be liable (by
endorsement, guaranty, indemnity or otherwise) for all or any
part of the Obligations;
(b) proceed against the Borrower with or
without proceeding under any of the other Financing Documents
or against any collateral and security for all or any part of
the Obligations;
(c) without reducing or impairing the obligation
of the Borrower and without notice, release or compromise with any
guarantor or other Person liable for all or any part of the
Obligations under the Financing Documents or otherwise;
(d) without reducing or impairing the obligations
of the Borrower and without notice thereof: approve the making of
advances under the Revolving Loan under this Agreement, approve
the issuance of Letters of Credit under this Agreement, waive any
provision of this Agreement or the other Financing Documents,
exercise or fail to exercise rights of set-off or other rights,
or accept partial payments or extend from time to time the maturity
of all or any part of the Obligations.
.4 SEVERABILITY.
In case one or more provisions, or part thereof, contained in
this Agreement or in the other Financing Documents shall be
invalid, illegal or unenforceable in any respect under any Law,
then without need for any further agreement, notice or action:
(a) the validity, legality and enforceability
of the remaining provisions shall remain effective and binding on
the parties thereto and shall not be affected or impaired thereby;
(b) the obligation to be fulfilled shall be
reduced to the limit of such validity;
(c) if such provision or part thereof pertains
to repayment of the Obligations, then, at the sole and absolute
discretion of the Lender, all of the Obligations of the Borrower
to the Lender shall become immediately due and payable; and
(d) if the affected provision or part thereof
does not pertain to repayment of the Obligations, but operates or
would prospectively operate to invalidate this Agreement in whole
or in part, then such provision or part thereof only shall be
void, and the remainder of this Agreement shall remain operative
and in full force and effect.
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.5 ASSIGNMENTS BY LENDOR.
The Lender may, without notice to, or consent of, the
Borrower, sell, assign or transfer to or participate with any
Person or Persons all or any part of the Obligations, and each
such Person or Persons shall have the right to enforce the
provisions of this Agreement and any of the other Financing
Documents as fully as the Lender, provided that the Lender shall
continue to have the unimpaired right to enforce the provisions of
this Agreement and any of the other Financing Documents as to so
much of the Obligations that the Lender has not sold, assigned or
transferred. In connection with the foregoing, the Lender shall
have the right to disclose to any such actual or potential
purchaser, assignee, transferee or participant all financial
records, information, reports, financial statements and documents
obtained in connection with this Agreement and any of the other
Financing Documents or otherwise.
.6 SUCCESSORS AND ASSIGNS.
This Agreement and all other Financing Documents shall be
binding upon and inure to the benefit of the Borrower and the
Lender and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent
of the Lender.
.7 CONTINUING AGREEMENTS.
All covenants, agreements, representations and warranties
made by the Borrower in this Agreement, in any of the other
Financing Documents, and in any certificate delivered pursuant
hereto or thereto shall survive the making by the Lender of the
Loan, the issuance of Letters of Credit by the Lender and the
execution and delivery of the Notes, shall be binding upon the
Borrower regardless of how long before or after the date hereof
any of the Obligations were or are incurred, and shall continue in
full force and effect so long as any of the Obligations are
outstanding and unpaid. From time to time upon the Lender's
request, and as a condition of the release of any one or more of
the Security Documents, the Borrower and other Persons obligated
with respect to the Obligations shall provide the Lender with such
acknowledgments and agreements as the Lender may require to the
effect that there exists no defenses, rights of setoff or
recoupment, claims, counterclaims, actions or causes of action of
any kind or nature whatsoever against the Lender, its agents and
others, or to the extent there are, the same are waived and
released.
.8 ENFORCEMENT COSTS.
The Borrower shall pay to the Lender on demand all
Enforcement Costs, together with interest thereon from the date
incurred or advanced until paid in full at a per annum rate of
interest equal at all times to the Post-Default Rate. Enforcement
Costs shall be immediately due and payable at the time advanced or
incurred, whichever is earlier. Without implying any limitation
on the foregoing, the Borrower shall pay, as part of the
Enforcement Costs, upon demand any and all stamp and other Taxes
and fees payable or determined to be payable in connection with
the execution and delivery of this Agreement and the other
Financing Documents and to save the Lender harmless from and
against any and all liabilities with respect to or resulting from
any delay in paying or omission to pay any Taxes or fees
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referred to in this Section. The provisions of this Section shall
survive the execution and delivery of this Agreement, the
repayment of the other Obligations and shall survive the
termination of this Agreement.
.9 APPLICABLE LAW; JURISDICTION.
.1 APPLICABLE LAW.
As a material inducement to the Lender to enter
into this Agreement, the Borrower acknowledges and agrees that the
Financing Documents, including, this Agreement, shall be governed
by the Laws of the State, as if each of the Financing Documents
and this Agreement had each been executed, delivered, administered
and performed solely within the State even though for the
convenience and at the request of the Borrower, one or more of the
Financing Documents may be executed elsewhere. The Lender
acknowledges, however, that remedies under certain of the
Financing Documents that relate to property outside the State may
be subject to the laws of the state in which the property is
located.
.2 JURISDICTION.
The Borrower irrevocably submits to the
jurisdiction of any state or federal court sitting in the State
over any suit, action or proceeding arising out of or relating to
this Agreement or any of the other Financing Documents. The
Borrower irrevocably waives, to the fullest extent permitted by
law, any objection that it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding brought in any
such court and any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient
forum. Final judgment in any such suit, action or proceeding
brought in any such court shall be conclusive and binding upon the
Borrower and may be enforced in any court in which the Borrower is
subject to jurisdiction, by a suit upon such judgment, provided
that service of process is effected upon the Borrower in one of
the manners specified in this Section or as otherwise permitted by
applicable Laws.
.3 APPOINTMENT OF AGENT FOR SERVICE OF PROCESS.
The Borrower hereby irrevocably designates and
appoints ▇▇▇ ▇. ▇▇▇▇▇▇, Esquire, McGuireWoods Battle & ▇▇▇▇▇▇ LLP,
at ▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, as
the Borrower's authorized agent to receive on the Borrower's
behalf service of any and all process that may be served in any
suit, action or proceeding of the nature referred to in this
Section in any state or federal court sitting in the State. If
such agent shall cease so to act, the Borrower shall irrevocably
designate and appoint without delay another such agent in the
State satisfactory to the Lender and shall promptly deliver to the
Lender evidence in writing of such other agent's acceptance of
such appointment and its agreement that such appointment shall be
irrevocable.
.4 SERVICE OF PROCESS.
The Borrower hereby consents to process being
served in any suit, action or proceeding of the nature referred to
in this Section by (a) the mailing of a copy thereof by registered
or certified mail, postage prepaid, return receipt requested, to
the Borrower at the Borrower's address designated in or pursuant
to .1 (Notices), and (b) serving a copy thereof
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upon the agent, if any, designated and appointed by the Borrower
as the Borrower's agent for service of process by or pursuant to
this Section. The Borrower irrevocably agrees that such service
(y) shall be deemed in every respect effective service of process
upon the Borrower in any such suit, action or proceeding, and (z)
shall, to the fullest extent permitted by law, be taken and held
to be valid personal service upon the Borrower. Nothing in this
Section shall affect the right of the Lender to serve process in
any manner otherwise permitted by law or limit the right of the
Lender otherwise to bring proceedings against the Borrower in the
courts of any jurisdiction or jurisdictions.
.10 DUPLICATE ORIGINALS AND COUNTERPARTS.
This Agreement may be executed in any number of duplicate
originals or counterparts, each of such duplicate originals or
counterparts shall be deemed to be an original and all taken
together shall constitute but one and the same instrument.
.11 HEADINGS.
The headings in this Agreement are included herein for
convenience only, shall not constitute a part of this Agreement
for any other purpose, and shall not be deemed to affect the
meaning or construction of any of the provisions hereof.
.12 NO AGENCY.
Nothing herein contained shall be construed to constitute the
Borrower as the Lender's agent for any purpose whatsoever or to
permit the Borrower to pledge any of the Lender's credit. The
Lender shall not, by anything herein or in any of the Financing
Documents or otherwise, assume the Borrower's obligations under
any contract or agreement assigned to the Lender, and the Lender
shall not be responsible in any way for the performance by the
Borrower of any of the terms and conditions thereof.
.13 DATE OF PAYMENT.
Should the principal of or interest on any of the Notes
become due and payable on other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day and
in the case of principal, interest shall be payable thereon at the
rate per annum specified in the applicable Note during such
extension.
.14 ENTIRE AGREEMENT.
This Agreement is intended by the Lender and the Borrower to
be a complete, exclusive and final expression of the agreements
contained herein. Neither the Lender nor the Borrower shall
hereafter have any rights under any prior agreements pertaining to
the matters addressed by this Agreement but shall look solely to
this Agreement for definition and determination of all of their
respective rights, liabilities and responsibilities under this
Agreement.
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.15 WAIVER OF TRIAL BY JURY.
THE BORROWER AND THE LENDER HEREBY JOINTLY AND SEVERALLY
WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE
BORROWER AND THE LENDER MAY BE PARTIES, ARISING OUT OF OR IN ANY
WAY PERTAINING TO (A) THIS AGREEMENT OR (B) ANY OF THE FINANCING
DOCUMENTS. THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF
ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS,
INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS
AGREEMENT.
This waiver is knowingly, willingly and voluntarily made by
the Borrower and the Lender, and the Borrower and the Lender
hereby represent that no representations of fact or opinion have
been made by any individual to induce this waiver of trial by jury
or to in any way modify or nullify its effect. The Borrower and
the Lender further represent that they have been represented in
the signing of this Agreement and in the making of this waiver by
independent legal counsel, selected of their own free will, and
that they have had the opportunity to discuss this waiver with
counsel.
.16 LIABILITY OF THE LENDER.
The Borrower hereby agrees that the Lender shall not be
chargeable for any negligence, mistake, act or omission of any
accountant, examiner, agency or attorney employed by the Lender in
making examinations, investigations or collections.
By inspecting any properties of the Borrower or by accepting
or approving anything required to be observed, performed or
fulfilled by the Borrower or to be given to the Lender pursuant to
this Agreement or any of the other Financing Documents, the Lender
shall not be deemed to have warranted or represented the
condition, sufficiency, legality, effectiveness or legal effect of
the same, and such acceptance or approval shall not constitute any
warranty or representation with respect thereto by the Lender.
.17 INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless, the
Lender, the Lender's parent and Affiliates and the Lender's
parent's and Affiliates' officers, directors, shareholders,
employees and agents (each an "Indemnified Party," and
collectively, the "Indemnified Parties"), from and against any and
all claims, liabilities, losses, damages, costs and expenses
(whether or not such Indemnified Party is a party to any
litigation), including without limitation, reasonable attorney's
fees and costs and costs of investigation, document production,
attendance at depositions or other discovery, incurred by any
Indemnified Party with respect to, arising out of or as a
consequence of (a) this Agreement or any of the other Financing
Documents, including without limitation, any failure of the
Borrower to pay when due (at maturity, by acceleration or
otherwise) any principal, interest, fee or any other amount due
under this Agreement or the other Financing Documents, or any
other Event of Default (b) the use by the Borrower of any proceeds
advanced hereunder; (c) the transactions contemplated hereunder;
or (d) any claim, demand, action or cause of action being asserted
against (i) the Borrower or any of its Affiliates by any
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other Person, or (ii) any Indemnified Party by the Borrower in
connection with the transactions contemplated hereunder.
Notwithstanding anything herein or elsewhere to the contrary, the
Borrower shall not be obligated to indemnify or hold harmless any
Indemnified Party from any liability, loss or damage resulting
from the gross negligence, willful misconduct or unlawful actions
of such Indemnified Party. Any amount payable to the Lender under
this Section will bear interest at the Post-Default Rate from the
due date until paid.
IN WITNESS WHEREOF, each of the parties hereto have executed
and delivered this Agreement under their respective seals as of
the day and year first written above.
WITNESS OR ATTEST: AMERICAN WOODMARK
CORPORATION
/s/ ▇▇▇▇▇ ▇▇▇▇▇ By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ (Seal)
--------------- -----------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
Chief Financial Officer
WITNESS: BANK OF AMERICA, N. A.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By:/s/ E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Seal)
---------------- -----------------------
E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Senior Vice President
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LIST OF EXHIBITS
A. Revolving Credit Note
B. Form of Compliance Certificate
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February 18,20007:59 AM
EXHIBIT B
COMPLIANCE CERTIFICATE
THIS CERTIFICATE is made as of __________________, 200_ , by
AMERICAN WOODMARK CORPORATION, a corporation organized under the
laws of the State of ___________ (the "Borrower"), to Bank of
America, N. A, a national banking association (the "Lender"),
pursuant to Section of the Financing Agreement dated February __,
2000, (as amended, modified, restated, substituted, extended and
renewed at any time and from time to time, the "Financing
Agreement") by and between the Borrower and the Lender.
I, ____________________, hereby certify that I am the
______________ of the Borrower and am a Responsible Officer (as
that term is defined in the Financing Agreement) authorized to
certify to the Lender on behalf the Borrower as follows:
1. This Certificate is given to induce the Lender to make
advances to the Borrower under the Financing Agreement.
2. This Certificate accompanies the _____________ financial
statements for the period ended ___________________, 199__ (the
"Current Financials") which the Borrower is furnishing to the
Lender pursuant to Section 5.1.1(__) of the Financing Agreement.
The Current Financials have been prepared in accordance with GAAP
(as that term is defined in the Financing Agreement).
3. As required by Section 5.1.1(__) of the Financing
Agreement, I have set forth on SCHEDULE 1 a detailed computation
of each financial covenant in Financing Agreement and a cash flow
projection report.
4. As of the date hereof, there exists no Default or Event
of Default, as defined in the Article 6 of the Financing
Agreement, nor any event which, upon notice or the lapse of time,
or both, would constitute such an Event of Default.
5. On the date hereof, the representations and warranties
contained in Article 3 of the Financing Agreement are true with
the same effect as though such representations and warranties had
been made on the date hereof.
WITNESS my signature this _____ day of ____________, 200_.
AMERICAN WOODMARK CORPORATION
__________________________
Name:
Title:
1
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Schedule 1
2
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Schedule 2
3
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LIST OF SCHEDULES
Schedule 1.1 Outstanding Letters of Credit
Schedule ARTICLE III.1.1 Subsidiaries
Schedule ARTICLE III.1.10 Litigation
Schedule ARTICLE III.1.13 Other Indebtedness
Schedule ARTICLE III.1.18 Employee Relations
Schedule ARTICLE III.1.19 Environmental Matters
Schedule ARTICLE V.2.4 Indebtedness
Schedule ARTICLE V.2.9 Transaction with Affiliates