LOAN AND SECURITY AGREEMENT
Dated as of July 18, 1997
Between
INTERNATIONAL COMFORT PRODUCTS
CORPORATION (USA)
(the Borrower)
and
NATIONSBANK, N.A.
(the Lender)
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Other Referential Provisions. . . . . . . . . . . .13
Section 1.3 Exhibits and Schedules. . . . . . . . . . . . . . .13
ARTICLE 2 - REVOLVING CREDIT FACILITY . . . . . . . . . . . . . . . . .14
Section 2.1 Revolving Credit Loans. . . . . . . . . . . . . . .14
Section 2.2 Manner of Borrowing Revolving Credit Loans. . . . .14
Section 2.3 Repayment of Revolving Credit Loans . . . . . . . .15
Section 2.4 Revolving Credit Note . . . . . . . . . . . . . . .15
Section 2.5 Extension of Facility . . . . . . . . . . . . . . .15
Section 2.6 Effectiveness of Revolving Credit Facility. . . . .15
Section 2.7 Letters of Credit . . . . . . . . . . . . . . . . .16
ARTICLE 3 - GENERAL LOAN PROVISIONS . . . . . . . . . . . . . . . . . .16
Section 3.1 Interest. . . . . . . . . . . . . . . . . . . . . .16
Section 3.2 Fees. . . . . . . . . . . . . . . . . . . . . . . .18
Section 3.3 Notice of Conversion or Continuation of Loans . . .19
Section 3.4. Conversion or Continuation . . . . . . . . . . . .19
Section 3.5 Duration of Interest Periods; Maximum Number of
LIBOR Loans; Minimum Increments . . . . . . . . . . . . . . . .19
Section 3.6 Changed Circumstances . . . . . . . . . . . . . . .20
Section 3.7 Payments Not at End of Interest Period;
Failure to Borrow . . . . . . . . . . . . . . . . .20
Section 3.8 Increased Costs and Reduced Returns . . . . . . . .21
Section 3.9 Manner of Payment . . . . . . . . . . . . . . . . .21
Section 3.10 Statements of Account. . . . . . . . . . . . . . .21
Section 3.11 Termination of Agreement . . . . . . . . . . . . .21
ARTICLE 4 - CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . .22
Section 4.1 Conditions Precedent to Initial Loan. . . . . . . .22
Section 4.2 All Loans . . . . . . . . . . . . . . . . . . . . .24
Section 4.3 Revolving Credit Facility B . . . . . . . . . . . .24
Section 4.4 Revolving Credit Facility C . . . . . . . . . . . .25
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF THE BORROWER. . . . . . .25
Section 5.1 Representations and Warranties. . . . . . . . . . .25
Section 5.2 Survival of Representations and Warranties, Etc . .29
ARTICLE 6 - SECURITY INTEREST . . . . . . . . . . . . . . . . . . . . .29
Section 6.1 Security Interest . . . . . . . . . . . . . . . . .29
Section 6.2 Continued Priority of Security Interest . . . . . .29
ARTICLE 7 - COLLATERAL COVENANTS. . . . . . . . . . . . . . . . . . . .30
Section 7.1 Collection of Receivables . . . . . . . . . . . . .30
Section 7.2 Sales of Inventory. . . . . . . . . . . . . . . . .30
Section 7.3 Returned Goods. . . . . . . . . . . . . . . . . . .30
Section 7.4 Ownership and Defense of Title. . . . . . . . . . .30
Section 7.5 Insurance . . . . . . . . . . . . . . . . . . . . .31
Section 7.6 Location of Offices and Collateral. . . . . . . . .31
Section 7.7 Records Relating to Collateral. . . . . . . . . . .32
Section 7.8 Inspection. . . . . . . . . . . . . . . . . . . . .32
Section 7.9 Maintenance of Equipment 32
This Table of contents is included for reference purposes only and does
not constitute part of the Loan and Security Agreement.
Section 7.10 Information and Reports. . . . . . . . . . . . . .32
Section 7.11 Power of Attorney. . . . . . . . . . . . . . . . .33
ARTICLE 8 - AFFIRMATIVE COVENANTS 33
Section 8.1 Preservation of Corporate Existence and Similar
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
Section 8.2 Compliance with Applicable Law. . . . . . . . . . .33
Section 8.3 Conduct of Business . . . . . . . . . . . . . . . .33
Section 8.4 Payment of Taxes and Claims . . . . . . . . . . . .33
Section 8.5 Accounting Methods and Financial Records. . . . . .33
Section 8.6 Use of Proceeds . . . . . . . . . . . . . . . . . .33
Section 8.7 Accuracy of Information . . . . . . . . . . . . . .34
ARTICLE 9 - INFORMATION . . . . . . . . . . . . . . . . . . . . . . . .34
Section 9.1 Financial Statements. . . . . . . . . . . . . . . .34
Section 9.2 Discussions With Accountants. . . . . . . . . . . .34
Section 9.3 Officer's Certificate . . . . . . . . . . . . . . .34
Section 9.4 Copies of Other Reports . . . . . . . . . . . . . .35
Section 9.5 Notice of Litigation and Other Matters. . . . . . .35
Section 9.6 ERISA . . . . . . . . . . . . . . . . . . . . . . .35
ARTICLE 10 - NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . .36
Section 10.1 Financial Ratios . . . . . . . . . . . . . . . . .36
Section 10.2 Merger, Consolidation and Sale of Assets.. . . . .37
Section 10.3 Investments. . . . . . . . . . . . . . . . . . . .37
Section 10.4 Benefit Plans. . . . . . . . . . . . . . . . . . .37
Section 10.5 Amendments of Other Agreements . . . . . . . . . .37
Section 10.6 Minimum Availability . . . . . . . . . . . . . . .37
Section 10.7 Capital Expenditures . . . . . . . . . . . . . . .37
Section 10.8 Receivables Transfers. . . . . . . . . . . . . . .37
ARTICLE II - DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . .37
Section 11.1 Events of Default. . . . . . . . . . . . . . . . .37
Section 11.2 Remedies . . . . . . . . . . . . . . . . . . . . .39
Section 11.3 Application of Proceeds. . . . . . . . . . . . . .41
Section 11.4 Power of Attorney. . . . . . . . . . . . . . . . .41
Section 11.5 Miscellaneous Provisions Concerning Remedies . . .42
Section 11.6 Trademark License. . . . . . . . . . . . . . . . .42
ARTICLE 12 - MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . .42
Section 12.1 Notices. . . . . . . . . . . . . . . . . . . . . .42
Section 12.2 Expenses . . . . . . . . . . . . . . . . . . . . .43
Section 12.3 Stamp and Other Taxes. . . . . . . . . . . . . . .44
Section 12.4 Setoff . . . . . . . . . . . . . . . . . . . . . .44
Section 12.5 Litigation . . . . . . . . . . . . . . . . . . . .44
Section 12.6 Waiver of Rights . . . . . . . . . . . . . . . . .44
Section 12.7 Reversal of Payments . . . . . . . . . . . . . . .45
Section 12.8 Injunctive Relief. . . . . . . . . . . . . . . . .45
Section 12.9 Accounting Matters. . . . . . . . . . . . . . . .45
Section 12.10 Assignment; Participation . . . . . . . . . . . .45
Section 12.11 Amendments. . . . . . . . . . . . . . . . . . . .45
Section 12.12 Performance of Borrower's Duties. . . . . . . . .45
Section 12.13 Indemnification . . . . . . . . . . . . . . . . .46
Section 12.14 All Powers Coupled with Interest. . . . . . . . .46
Section 12.15 Survival. . . . . . . . . . . . . . . . . . . . .46
Section 12.16 Severability of Provisions. . . . . . . . . . . .46
Section 12.17 Governing Law . . . . . . . . . . . . . . . . . .46
Section 12.18 Counterparts. . . . . . . . . . . . . . . . . . .46
Section 12.19 Reproduction of Documents . . . . . . . . . . . .46
Section 12.20 Funds Transfer Services . . . . . . . . . . . . .47
Section 12.21 Consent to Advertising and Publicity. . . . . . .47
Section 12.22 Final Agreement. . . . . . . . . . . . . . . . .47
EXHIBITS AND SCHEDULES
EXHIBIT A FORM OF REVOLVING CREDIT NOTE
EXHIBIT B FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C FORM OF OFFICER'S CERTIFICATE
SCHEDULE 1.1A LETTER OF CREDIT FEES
SCHEDULE 5.1(A) JURISDICTIONS IN WHICH BORROWER IS QUALIFIED
AS A FOREIGN CORPORATION
SCHEDULE 5.1(B) BORROWER'S CAPITAL STOCK
SCHEDULE 5.1(E) BORROWER'S BUSINESS
SCHEDULE 5.1(F) EXCEPTIONS TO GOVERNMENTAL APPROVALS
SCHEDULE 5.1(G) NON LIEN TITLE EXCEPTIONS AND DEFECTS
AND PROPERTY DISPOSED OF OUT OF ORDINARY
COURSE OF BUSINESS
SCHEDULE 5.1(H) LIENS
SCHEDULE 5.1(I) INDEBTEDNESS FOR MONEY BORROWED AND
GUARANTIES
SCHEDULE 5.1(J) LITIGATION
SCHEDULE 5.1(K) TAX RETURNS AND PAYMENTS
SCHEDULE 5.1(O) ERISA
SCHEDULE 5.1(S) LOCATION OF CHIEF EXECUTIVE OFFICE
SCHEDULE 5.1(T) LOCATIONS OF INVENTORY
SCHEDULE 5.1(V) CORPORATE AND FICTITIOUS NAMES
SCHEDULE 5.1(Y) EMPLOYEE RELATIONS
SCHEDULE 5.1(Z) PROPRIETARY RIGHTS
SCHEDULE 8.6 USE OF PROCEEDS
LOAN AND SECURITY AGREEMENT
Dated as of July 18, 1997
INTERNATIONAL COMFORT PRODUCTS CORPORATION (USA), a Delaware
corporation, and NATIONSBANK, N.A., a national banking association,
agree as follows:
ARTICLE 1 - DEFINITIONS
Section 1.1 Definitions. For the purposes of this Agreement:
"ABN AMRO" means ABN AMRO Chicago Corporation, a Delaware
corporation, and its successors and assigns.
"Acquire" or "Acquisition", as applied to any Business Unit or
Investment, means the acquiring or acquisition of such Business Unit or
Investment by purchase, exchange, issuance of stock or other
securities, or by merger, reorganization or any other method.
"Affiliate" means, with respect to a Person, (a) any officer,
director, employee or managing agent of such Person, (b) any spouse,
parents, brothers, sisters, children and grandchildren of such Person,
(c) any association, partnership, trust, entity or enterprise in which
such Person is a director, officer or general partner, (d) any other
Person that, (i) directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common
control with, such given Person, (ii) directly or indirectly
beneficially owns or holds 10% or more of any class of voting stock or
partnership or other interest of such Person or any Subsidiary of such
Person, or (iii) 10% or more of the voting stock or partnership or
other interest of which is directly or indirectly beneficially owned or
held by such Person or a Subsidiary of such Person. The term "control"
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 partnership or other
interests, by contract or otherwise.
"Agreement" means this Agreement, including the Exhibits and
Schedules hereto, and all amendments, modifications and supplements
hereto and thereto and restatements hereof and thereof.
"Agreement Date" means the date as of which this Agreement is
dated.
"Assignment of Receivables Securitization Proceeds" means the
Assignment of Receivables Securitization Proceeds, dated on or about
the Effective Date, executed by the Borrower, GHC, the Receivables
Purchaser and the Lender, pursuant to which, among other things, (a)
the Borrower and GHC grant the Lender a first priority security
interest in their right to receive proceeds from the sale and
securitization of accounts receivable contemplated by the Receivables
Purchase Agreement, and (b) the Receivables Purchaser agrees to remit
such proceeds to the Lender on behalf of the Borrower and GHC.
"Availability" means, as of the date of determination, the amount
of Revolving Credit Loans available to be borrowed by the Borrower
hereunder in accordance with Section 2.1 less the sum of the
outstanding principal balance of all Revolving Credit Loans hereunder
as of such date.
"Benefit Plan" means an employee benefit plan as defined in Section
3(35) of ERISA (other than a Multiemployer Plan) in respect of which a
Person or any Related Company is, or within the immediately preceding 6
years was, an "employer" as defined in Section 3(5) of ERISA, including
such plans as may be established after the Agreement Date.
"Blocked Account Agreement" means the letter agreement, dated on or
about the date hereof, among the Lender, the Borrower, ICPPC, GHC, the
Receivables Purchaser, the Receivables Trustee, ABN AMRO, and LaSalle
National Bank, with respect to the transfer of funds from the Master
Collection Account to the Receivables Purchaser Account (as such terms
are defined therein) and from the Receivables Purchaser Account to
NationsBank for application against the Secured Obligations, and any
substitute agreement acceptable to the Lender with respect to the
subject matter thereof.
"Borrower" means International Comfort Products Corporation (USA),
a Delaware corporation, and its successors and assigns.
"Borrowing Base" means at any time an amount equal to the sum of:
(a) 50% (or such lesser percentage as the Lender may determine
from time to time in its reasonable credit judgment) of the lesser of
cost (computed on a first-in-first-out basis) and fair market value of
Eligible Inventory at such time, plus
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(b) the lesser of
(i) 50% (or such lesser percentage as Lender may
determine from time to time in its reasonable credit judgment)
of the aggregate undrawn amount of all documentary Letters of
Credit outstanding at such time with respect to the Borrower's
acquisition of Eligible Inventory; and
(ii) $7,500,000, minus
(c) the Letter of Credit Reserve and such other reserves as the
Lender may determine from time to time in the exercise of its
reasonable credit judgment.
"Borrowing Base Certificate" means a certificate in the form of
Exhibit B attached hereto.
"Business Day" means (a) any day other than a Saturday, Sunday or
other day on which banks in the city in which the principal office of
the Lender is located are authorized to close, and (b) in respect of
any determination with respect to a LIBOR Loan, any day referred to in
clause (a) that is also a day on which tradings are conducted in the
London interbank eurodollar market.
"Business Unit" means the assets constituting the business, or a
division or operating unit thereof, of any Person.
"Capital Expenditures" means, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of
assets (other than assets which constitute a Business Unit) which are
not, in accordance with GAAP, treated as expense items for such Person
in the year made or incurred or as a prepaid expense applicable to a
future year or years.
"Capitalized Lease" means a lease that is required to be cap-
italized for financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means Indebtedness represented by
obligations under a Capitalized Lease, and the amount of such
Indebtedness
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shall be the capitalized amount of such obligations determined in
accordance with GAAP.
"Cash" means Dollars or Cash Equivalents.
"Cash Equivalents" means, at any time:
(a) any evidence of full recourse Indebtedness, maturing not
more than one year after such time, to the extent issued or guaranteed
by the United States Government;
(b) commercial paper, maturing not more than nine months from
the date of issuance and rated A-1 by Standard & Poor's Corporation or
P-1 by ▇▇▇▇▇'▇ Investors Service, Inc., issued by a corporation (except
an Affiliate of the Borrower) organized under the laws of any State of
the United States or of the District of Columbia;
(c) any deposit or account, including any certificate of
deposit, eurodollar time deposit or acceptance, maturing not more than
one year after such time, issued by any commercial banking institution
which is a member of the Federal Reserve System and which has a
combined capital of and surplus and undivided profits of not less than
$250,000,000; or
(d) any repurchase agreement entered into with any commercial
banking institution of the nature referred to in clause (c), secured by
a fully perfected security interest in any obligation of the type
described in any of clauses (a) through (c), having a market value at
the time such repurchase agreement is entered into of not less than
100% of the repurchase obligation thereunder of such commercial banking
institution.
"Change of Control" means (a) the direct or indirect sale, lease,
exchange or other transfer of all or substantially all of the assets of
Holdings to any Person or entity or group of Persons or entities acting
in concert as a partnership or other group (a "Group of Persons") other
than an Affiliate of Holdings, (b) the merger or consolidation of
Holdings with or into another corporation with the effect that the then
existing shareholders of Holdings hold less than 50% of the combined
voting power of the then outstanding securities of the surviving
corporation of such merger or the corporation resulting from such
consolidation ordinarily (and apart from rights arising under special
circumstances) having the right to vote in the election of directors,
(c) the replacement of a majority of the Board of Directors of
Holdings, over a one-year period,
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from the directors who constituted the Board of Directors at the
beginning of such period, and such replacement shall not have been
approved by the Board of Directors of Holdings as constituted at the
beginning of such period (together with any new directors whose
election by such Board or whose nomination for election by the
stockholders of Holdings was approved by a vote of 66-2/3% of the
directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election
was previously so approved), (d) a Person or group of persons (other
than Permitted Holders or an Affiliate of one or more Permitted
Holders) shall, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases or otherwise, have become the
beneficial owner (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) of securities of Holdings
representing 50% or more of the combined voting power of the then
outstanding securities of Holdings ordinarily (and apart from rights
arising under special circumstances) having the right to vote in the
election of directors, or (v) Holdings fails to own, directly or
indirectly, 80% of the voting stock (stock of the Borrower entitled
ordinarily to vote in the election of directors) of the Borrower.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" means and includes all of the Borrower's right, title
and interest in and to each of the following, wherever located and
whether now or hereafter existing or now owned or hereafter acquired or
arising:
(a) all Inventory,
(b) all collateral subject to the Assignment of Receivables
Securitization Proceeds,
(c) all Contract Rights and General Intangibles necessary or
helpful in the realization on the collateral described in clauses (a)
and (b) above or the liquidation thereof,
(d) all documents of title, policies and certificates of
insurance, securities, chattel paper and other documents and instru-
ments evidencing or pertaining to any and all items of Inventory,
-5-
(e) all files, correspondence, computer programs, tapes, disks
and related data processing software which contain information
identifying or pertaining to any of the Collateral or showing the
amounts thereof or otherwise necessary or helpful in the realization
thereon or the liquidation thereof,
(f) all cash deposited with the Lender or any Affiliate thereof
or which the Lender is entitled to retain or otherwise possess as
collateral pursuant to the provisions of this Agreement or any of the
Security Documents, and
(g) any and all products and cash and non-cash proceeds of the
foregoing (including, but not limited to, any claims to any items
referred to in this definition and any claims against third parties for
loss of, damage to or destruction of any or all of the Collateral or
for proceeds payable under or unearned premiums with respect to
policies of insurance) in whatever form, including, but not limited to,
cash, negotiable instruments and other instruments for the payment of
money, accounts receivable, chattel paper, security agreements and
other documents, but
(h) expressly excluding from the definition of "Collateral" all
"Intellectual Property," as that term is defined as of the date hereof
in the Intellectual Property Security Agreement dated as of March 11,
1993 between the Borrower and the Indenture Trustee.
"Consolidated Subsidiary" means each of the Borrower's Subsidiaries
whose accounts are at the time in question in accordance with GAAP
consolidated with those of the Borrower.
"Contract Rights" means and includes, as to any Person, all of such
Person's then owned or existing and future acquired or arising rights
under contracts not yet earned by performance and not evidenced by an
instrument or chattel paper, to the extent that the same may lawfully
be assigned.
"Default" means any of the events specified in Section 11.1 that,
with the passage of time or giving of notice or both, would constitute
an Event of Default.
"Default Margin" means 3%.
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"Disbursement Account" means the account maintained by and in the
name of the Borrower with the Lender for the purpose of disbursing
Revolving Credit Loan proceeds and amounts credited thereto pursuant to
Sections 2.2(b)(i) and 7.1(b)(ii).
"Dollar" and "$" means freely transferable United States dollars.
"EBIT" means Net Income before provision for Interest Expense and
income taxes.
"EBITDA" means Net Income before provision for Interest Expense,
income taxes, depreciation expense and amortization.
"Effective Date" means the later of (a) the Agreement Date, and (b)
the first date on which all of the conditions set forth in Section 4.1
shall have been fulfilled or waived by the Lender.
"Effective Interest Rate" means the rate of interest per annum on
the Loans in effect from time to time pursuant to the provisions of
Section 3.1(a), (b) and (c).
"Eligible Inventory" means items of Inventory of the Borrower held
for sale in the ordinary course of the business of the Borrower (but
not including packaging or shipping materials or maintenance supplies)
which are deemed by the Lender in the exercise of its reasonable credit
judgment to be eligible for inclusion in the calculation of the
Borrowing Base. Unless otherwise approved in writing by the Lender, no
Inventory shall be deemed to be Eligible Inventory unless it meets all
of the following requirements: (a) such Inventory is owned by the
Borrower, is subject to the Security Interest, which is perfected as to
such Inventory, and is subject to no other Lien whatsoever other than a
Permitted Lien; (b) such Inventory consists of finished goods or
service parts and does not consist of raw materials, work-in-process,
supplies or consigned goods; (c) such Inventory is in good condition
and meets all standards applicable to such goods, their use or sale
imposed by any governmental agency, or department or division thereof,
having regulatory authority over such matters; (d) such Inventory is
currently either usable or saleable, at prices approximating at least
the cost thereof, in the normal course of the Borrower's business; (e)
such Inventory is not obsolete or returned or repossessed or used goods
taken in trade; (f) such Inventory is located at one of the locations
listed in Schedule 5.1(t); (g) such Inventory is in the possession and
control of the Borrower and not any third party, or,
-7-
if located in a warehouse or other facility leased by the Borrower, the
warehouseman or lessor has delivered to the Lender a waiver and consent
in form and substance satisfactory to the Lender; and (h) such
Inventory is not subject to any ▇▇▇▇ and hold sale arrangement or any
similar arrangement.
"Environmental Laws" means all federal, state, local and foreign
laws now or hereafter in effect relating to pollution or protection of
the environment, including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances or wastes into the
environment (including, without limitation, ambient air, surface water,
ground water or land) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, removal,
transport or handling of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes, and any and all
regulations, notices or demand letters issued, entered, promulgated or
approved thereunder.
"Equipment" means and includes, as to any Person, all of such
Person's then owned or existing and future acquired or arising
machinery, apparatus, equipment, motor vehicles, tractors, trailers,
rolling stock, fittings, and other tangible personal property (other
than Inventory) of every kind and description used in such Person's
business operations or owned by such Person or in which such Person has
an interest and all parts, accessories and special tools and all
increases and accessions thereto and substitutions and replacements
therefor.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as in effect from time to time, and any successor statute.
"Event of Default" means any of the events specified in Section
11.1.
"Financing Statements" means the Uniform Commercial Code financing
statements executed and delivered by (a) the Borrower to the Lender,
naming the Lender as secured party and the Borrower as debtor, in
connection with this Agreement, and (b) the Borrower and GHC to the
Lender, naming the Lender as secured party and the Borrower and GHC as
debtor, in connection with the Assignment of Receivables Securitization
Proceeds.
"Funded Indebtedness" means (a) the amount outstanding under the
Revolving Credit Facility as of the date of determination, plus (b) the
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outstanding balance on the Senior Secured Notes as of the date of
determination, plus, without duplication, (c) Indebtedness for Money
Borrowed having a maturity of more than 12 months from the date of the
most recent balance sheet of the Borrower or having a maturity of less
than 12 months from the date of such balance sheet but by its terms
being renewable or extendible beyond 12 months from the date of such
balance sheet at the option of the Person liable thereon, plus, without
duplication, (d) all Liabilities appearing on the most recent balance
sheet of the Borrower with respect to the Receivables Purchase
Documents, minus (e) unrestricted Cash.
"GAAP" means generally accepted accounting principles consistently
applied and maintained throughout the period indicated and consistent
with the prior financial practice of the Person referred to.
"General Intangibles" means, as to any Person, all of such Person's
then owned or existing and future acquired or arising general
intangibles, choses in action and causes of action and all other
intangible personal property of such Person of every kind and nature
(other than accounts receivable and Intellectual Property), including,
without limitation, corporate or other business records, computer soft-
▇▇▇▇, customer lists, registrations, licenses, franchises, rights and
claims against carriers and shippers, rights to indemnification,
property, casualty or any similar type of insurance, and any proceeds
thereof.
"GHC" means General Heating and Cooling Company, a Delaware
corporation, and its successors and assigns.
"Governmental Approvals" means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with,
and reports to, all governmental bodies, whether federal, state, local,
foreign national or provincial, and all agencies thereof.
"Governmental Authority" means any government or political
subdivision or any agency, authority, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal, grand
jury or arbitrator, in each case whether foreign or domestic.
"Guaranty", "Guaranteed" or to "Guarantee," as applied to any
obligation of another Person shall mean and include
-9-
(a) a guaranty (other than by endorsement of negotiable instru-
ments for collection in the ordinary course of business), directly or
indirectly, in any manner, of any part or all of such obligation of
such other Person, and
(b) an agreement, direct or indirect, contingent or otherwise,
and whether or not constituting a guaranty, the practical effect of
which is to assure the payment or performance (or payment of damages in
the event of nonperformance) of any part or all of such obligation of
such other Person whether by (i) the purchase of securities or
obligations, (ii) the purchase, sale or lease (as lessee or lessor) of
property or the purchase or sale of services primarily for the purpose
of enabling the obligor with respect to such obligation to make any
payment or performance (or payment of damages in the event of
nonperformance) of or on account of any part or all of such obligation
or to assure the owner of such obligation against loss, (iii) the
supplying of funds to, or in any other manner investing in, the obligor
with respect to such obligation, (iv) repayment of amounts drawn down
by beneficiaries of letters of credit, or (v) the supplying of funds to
or investing in a Person on account of all or any part of such Person's
obligation under a guaranty of any obligation or indemnifying or
holding harmless, in any way, such Person against any part or all of
such obligation.
"Holdings" means International Comfort Products Corporation, a
corporation existing under the Canada Business Corporation Act, and its
successors and assigns.
"ICPPC" means International Comfort Products Partner Corporation, a
Delaware corporation, and its successors and assigns.
"Indebtedness" of any Person means, without duplication, (a)
Liabilities, (b) all obligations for money borrowed or for the deferred
purchase price of property or services or in respect of reimbursement
obligations under letters of credit, (c) all obligations represented by
bonds, debentures, notes and accepted drafts that represent extensions
of credit, (d) Capitalized Lease Obligations, (e) all obligations
(including, during the noncancellable term of any lease in the nature
of a title retention agreement, all future payment obligations under
such lease discounted to their present value in accordance with GAAP)
secured by any Lien to which any property or asset owned or held by
such Person is subject, whether or not the obligation secured thereby
shall have been assumed by such Person, (f) all obligations of other
Persons which such Person has Guaranteed, including, but not limited
to, all obligations of such Person consisting of recourse liability
with respect to accounts receivable sold or otherwise disposed of by
such Person, and (g) in the case of the Borrower (without duplication)
the Loans.
-10-
"Indenture Trustee" means United States Trust Company of New York,
a New York banking corporation, in its capacity as trustee under the
Senior Secured Notes Indenture, and its successors and assigns.
"Initial Loans" means the Revolving Credit Loan made to the
Borrower on the Effective Date.
"Intellectual Property" means, as to any Person, all of such
Person's then owned existing and future acquired or arising patents,
patent rights, copyrights, works which are the subject of copyrights,
trademarks, service marks, trade names, trade styles, patent, trademark
and service ▇▇▇▇ applications, and all licenses and rights related to
any of the foregoing and all other rights under any of the foregoing,
all extensions, renewals, reissues, divisions, continuations and
continuations-in-part of any of the foregoing and all rights to ▇▇▇ for
past, present and future infringements of any of the foregoing.
"Interbank Offered Rate" means, with respect to any LIBOR Loan for
the Interest Period applicable thereto, the average (rounded upward to
the nearest one-sixteenth (1/16) of one percent) per annum rate of
interest determined by the Lender (each such determination to be
conclusive and binding absent manifest error) as of two Business Days
prior to the first day of such Interest Period from Telerate Page 3750
as the effective rate at which deposits in immediately available funds
in Dollars are being offered or quoted to major banks in the interbank
market for eurodollar deposits for a term comparable to such Interest
Period and in the amount of the LIBOR Loan. If such rate is
unavailable from such service, then such rate may be determined by the
Lender from any other interest rate reporting service of recognized
standing that the Lender shall select.
"Intercreditor Agreement re Receivables" means the Intercreditor
Agreement re Receivables, dated on or about the Effective Date, among
the Lender, the Borrower, ICPPC, GHC, the Receivables Purchaser, the
Receivables Trustee and ABN AMRO.
"Interest Expense" means interest on Indebtedness during the period
for which computation is being made, plus, without duplication, the
discount on the Receivables sold pursuant to the Receivables Purchase
Documents during such period; excluding, however, interest paid in kind
and the amortization of fees and costs incurred with respect to the
closing of loans which have been capitalized as transaction costs.
-11-
"Interest Payment Date" means the first day of each calendar month
commencing on August 1, 1997 and continuing thereafter until the
Secured Obligations have been irrevocably paid in full.
"Interest Period" means, with respect to each LIBOR Loan, the
period commencing on the date of the making or continuation of or
conversion to such LIBOR Loan and ending one, two, three, or six months
thereafter, as the Borrower may elect in the applicable Notice of
Borrowing or Notice of Conversion or Continuation; provided, that:
(a) any Interest Period that would otherwise end on a
day that is not a Business Day shall, subject to the provisions
of clause (c) below, be extended to the next succeeding
Business Day unless such Business Day falls in the next
calendar month, in which case such Interest Period shall end on
the immediately preceding Business Day;
(b) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end
of such Interest Period) shall, subject to clause (c) below,
end on the last Business Day of a calendar month;
(c) any Interest Period that would otherwise end after
the Termination Date shall end on the Termination Date; and
(d) notwithstanding clause (c) above, no Interest Period
shall have a duration of less than one month, and, if any
applicable Interest Period would be for a shorter period, such
Interest Period shall not be available hereunder.
"Inventory" means and includes, as to any Person, all of such
Person's then owned or existing and future acquired or arising (a)
goods intended for sale or lease or for display or demonstration, (b)
work in process, (c) raw materials and other materials and supplies of
every nature and description used or which might be used in connection
with the manufacture, packing, shipping, advertising, selling, leasing
or furnishing of goods or otherwise used or consumed in the conduct of
business, and (d) documents evidencing and General Intangibles relating
to any of the foregoing.
-12-
"Investment" means, with respect to any Person: (a) the direct or
indirect purchase or acquisition of any beneficial interest in, any
share of capital stock of, evidence of Indebtedness of or other
security issued by any other Person, (b) any loan, advance or extension
of credit to, or contribution to the capital of, any other Person,
excluding advances to employees in the ordinary course of business for
business expenses and any of the foregoing contemplated by the
Receivables Purchase Agreement, or (c) any commitment or option to take
any of the actions described in clauses (a) or (b) above.
"Lender" means NationsBank, N.A., a national banking association,
and its successors and assigns.
"Lender's Office" means the office of the Lender specified in or
determined in accordance with the provisions of Section 12.1(c).
"Letter of Credit" means any letter of credit issued by the Lender
for the account of the Borrower.
"Letter of Credit Documents" means each of the documents,
agreements and other writings required by the Lender to be executed
and/or delivered in connection with the issuance of a Letter of Credit,
including, without limitation, each letter of credit application and
reimbursement agreement.
"Letter of Credit Facility" means, at any time, obligations arising
under Letters of Credit in an aggregate face amount not to exceed
$15,000,000 incurred pursuant to Section 2.7.
"Letter of Credit Fees" means fees charged by the Lender in
connection with the issuance of a Letter of Credit determined in
accordance with Schedule 1.1A attached hereto.
"Letter of Credit Reserve" means, at any time, 100% of the sum of
(i) the aggregate undrawn amount of all Letters of Credit outstanding
at such time, plus (ii) the aggregate amount of all drawings under
Letters of Credit for which the Lender has not been reimbursed.
-13-
"Liabilities" means all liabilities of a Person determined in
accordance with GAAP and includable on a balance sheet of such Person
prepared in accordance with GAAP.
"LIBOR" means, with respect to the Interest Period applicable
thereto, a simple per annum interest rate determined pursuant to the
following formula:
LIBOR = Interbank Offered Rate
1 - LIBOR Reserve Percentage
LIBOR shall be adjusted automatically as of the effective date of any
change in the LIBOR Reserve Percentage.
"LIBOR Loan" means any Revolving Credit Loan bearing interest at
the time in question determined with reference to LIBOR.
"LIBOR Reserve Percentage" means, for any day, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D of the Board of Governors of the Federal Reserve System,
as such regulation may be amended from time to time, or any successor
regulation, as the maximum reserve requirement (including, without
limitation, any basic, supplemental, emergency, special or marginal
reserves) applicable to any member bank with respect to Eurocurrency
liabilities as that term is defined in Regulation D (or against any
other category of liabilities that includes deposits by reference to
which the interest rate of any LIBOR Loan is determined), whether or
not Lender has any Eurocurrency liabilities subject to such reserve
requirement at that time. All LIBOR Loans shall be deemed to
constitute Eurocurrency liabilities and as such shall be deemed subject
to reserve requirements without the benefit of credits for proration,
exceptions or offsets that may be available from time to time to
Lender.
"Lien" as applied to the property of any Person means: (a) any
mortgage, deed to secure debt, deed of trust, lien, pledge, charge,
lease constituting a Capitalized Lease Obligation, conditional sale or
other title retention agreement, or other security interest, security
title or encumbrance of any kind in respect of any property of such
Person or upon the income or profits therefrom, (b) any arrangement,
express or implied, under which any property of such Person is
transferred, sequestered or otherwise identified for the purpose of
subjecting the same to the payment
-14-
of Indebtedness or performance of any other obligation in priority to
the payment of the general, unsecured creditors of such Person, (c) any
Indebtedness which is unpaid more than 30 days after the same shall
have become due and payable and which if unpaid might by law
(including, but not limited to, bankruptcy and insolvency laws) or
otherwise be given any priority whatsoever over general unsecured
creditors of such Person, and (d) the filing of, or any agreement to
give, any financing statement under the UCC or its equivalent in any
jurisdiction.
"Loan" means any Revolving Credit Loan.
"Loan Documents" means, collectively, this Agreement, the Note, the
Security Documents and each other instrument, agreement and document
executed and delivered by the Borrower or GHC in connection with this
Agreement and each other instrument, agreement or document referred to
herein or contemplated hereby executed by or on behalf of the Borrower
or GHC evidencing, documenting or certifying matters in connection
herewith.
"Materially Adverse Effect" means any act, omission, event or
undertaking which would, singly or in the aggregate, have a materially
adverse effect upon (a) the business, assets, properties, liabilities,
condition (financial or otherwise), results of operations or business
prospects of the Borrower or upon the Borrower because of its effect on
any of its Subsidiaries, (b) upon the ability of the Borrower or GHC to
perform any obligations under this Agreement or any other Loan Document
to which it is a party, or (c) the legality, validity, binding effect,
enforceability or admissibility into evidence of any Loan Document or
the ability of Lender to enforce any material rights or remedies under
or in connection with any Loan Document; in any case, whether resulting
from any single act, omission, situation, status, event, or
undertaking, together with other such acts, omissions, situations, sta-
tuses, events, or undertakings .
"Money Borrowed" means, as applied to Indebtedness, (a)
Indebtedness for money borrowed, (b) Indebtedness, whether or not in
any such case the same was for money borrowed, (i) represented by notes
payable and drafts accepted, that represent extensions of credit, (ii)
constituting obligations evidenced by bonds, debentures, notes or
similar instruments, or (iii) upon which interest charges are
customarily paid (other than trade Indebtedness) or that was issued or
assumed as full or partial payment for property, (c) Indebtedness that
constitutes a Capitalized Lease Obligation, and (d) Indebtedness that
is such by virtue of clause (f) of the definition thereof, but only to
the extent that the obligations Guaranteed are obligations that would
constitute Indebtedness for Money Borrowed.
-15-
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Borrower or a Related Company
is required to contribute or has contributed within the immediately
preceding 6 years.
"Net Income" or "Net Loss" means, as applied to any Person, the net
income (or net loss) of such Person for the period in question after
giving effect to deduction of or provision for all operating expenses,
all taxes and reserves (including reserves for deferred taxes and all
other proper deductions), all determined in accordance with GAAP,
provided that there shall be excluded: (a) the net income (or net loss)
of any Person accrued prior to the date it becomes a Subsidiary of, or
is merged into or consolidated with, the Person whose Net Income is
being determined or a Subsidiary of such Person, (b) the net income (or
net loss) of any Person in which the Person whose Net Income is being
determined or any Subsidiary of such Person has an ownership interest,
except, in the case of net income, to the extent that any such income
has actually been received by such Person or such Subsidiary in the
form of cash dividends or similar distributions, (c) any restoration of
any contingency reserve, except to the extent that provision for such
reserve was made out of income during such period, (d) any net gains or
losses on the sale or other disposition, not in the ordinary course of
business, of Investments, Business Units and other capital assets,
provided that there shall also be excluded any related charges for
taxes thereon, (e) any net gain arising from the collection of the
proceeds of any insurance policy, (f) any write-up of any asset, and
(g) any other extraordinary item.
"Net Worth" of any Person means the total shareholders' equity
(including capital stock, additional paid-in capital and retained
earnings, after deducting treasury stock) which would appear as such on
a balance sheet of such Person prepared in accordance with GAAP.
"Note" means the Revolving Credit Note made by the Borrower payable
to the order of the Lender evidencing the obligation of the Borrower to
pay the aggregate unpaid principal amount of all Revolving Credit Loans
made to it by the Lender (and any promissory note or notes that may be
issued from time to time in substitution, renewal, extension,
replacement or exchange therefor, whether payable to the Lender or a
different lender, whether issued in connection with a Person becoming a
lender after the Effective Date or otherwise), substantially in the
form of Exhibit A hereto, with all blanks properly completed.
"Notice of Borrowing" has the meaning set forth in Section
2.2(a)(iii).
-16-
"Notice of Conversion or Continuation" has the meaning set forth in
Section 3.3.
"Obligor" means the Borrower, each party to the Security Documents
(other than the Lender), and each other party at any time primarily or
secondarily, directly or indirectly, liable on any of the Secured
Obligations.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor agency.
"Permitted Holders" means any individuals who are executive
officers of the Borrower on the Agreement Date.
"Permitted Investments" means Investments in: (a) negotiable
certificates of deposit, time deposits and banker's acceptances issued
by the Lender or any Affiliate of the Lender or by any United States
bank or trust company having capital, surplus and undivided profits in
excess of $250,000,000, (b) any direct obligation of the United States
of America or any agency or instrumentality thereof which has a
remaining maturity at the time of purchase of not more than one year
and repurchase agreements relating to the same, (c) sales on credit in
the ordinary course of business on terms customary in the industry, (d)
notes, accepted in the ordinary course of business, evidencing overdue
accounts receivable arising in the ordinary course of business, and (e)
the "Buyer Note" delivered by the Receivables Purchaser to the Borrower
under the Receivables Purchase Agreement.
"Permitted Liens" means: (a) Liens securing taxes, assessments and
other governmental charges or levies (excluding any Lien imposed
pursuant to any of the provisions of ERISA) or the claims of
materialmen, mechanics, carriers, warehousemen or landlords for labor,
materials, supplies or rentals incurred in the ordinary course of busi-
ness, but (i) in all cases, only if payment shall not at the time be
required to be made in accordance with Section 8.4, and (ii) in the
case of warehousemen or landlords controlling locations where Inventory
is located, only if such liens have been waived or subordinated to the
Security Interest in a manner satisfactory to the Lender; (b) Liens of
the Lender arising under this Agreement and the other Loan Documents;
(c) Liens arising out of or resulting from any judgment or award, the
time for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Borrower is fully protected by
insurance or in respect of which the Borrower shall at any time in good
faith be prosecuting an appeal or proceeding for a review and in
respect of which a stay of execution pending such appeal or proceeding
for review shall have been secured, and as to
-17-
which appropriate reserves have been established on the books of the
Borrower; and (d) Liens on accounts receivable and other "Trust Assets"
(as defined in the Intercreditor Agreement re Receivables) securing
Indebtedness under the Receivables Purchase Agreement, provided the
Person holding such Lien has entered into an intercreditor agreement
with the Lender, in form acceptable to the Lender, subordinating any
Lien such Person may have in proceeds from the liquidation of Inventory
to the Lender's Lien therein.
"Person" means an individual, corporation, partnership, assoc-
iation, trust or unincorporated organization or a government or any
agency or political subdivision thereof.
"Prime Rate" means during the period from the Effective Date
through the last day of the month in which the Effective Date falls,
the per annum rate of interest publicly announced by the Lender at its
principal office as its "prime rate" as in effect on the Effective
Date, and thereafter during each succeeding calendar month, means such
"prime rate" as in effect on the last Business Day of the immediately
preceding calendar month. Any change in an interest rate resulting
from a change in the Prime Rate shall become effective as of 12:01 a.m.
on the first day of the month following the month in which such change
was announced. The Prime Rate is a reference used by the Lender in
determining interest rates on certain loans and is not intended to be
the lowest rate of interest charged on any extension of credit to any
debtor.
"Prime Rate Loan" means a Revolving Credit loan bearing interest at
the time in question determined with reference to the Prime Rate.
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement, dated as of July 25, 1996, among the Borrower, ICPPC, GHC
and the Receivables Purchaser.
"Receivables Purchase Documents" means the Receivables Purchase
Agreement and the other documents executed in connection therewith.
"Receivables Purchaser" means International Comfort Products
Receivables Company, L.P., a Tennessee limited partnership, and its
successors and assigns.
-18-
"Receivables Trustee" means LaSalle National Bank, a national
banking association, in its capacity as trustee under the Pooling
Agreement (as defined in the Receivables Purchase Agreement), and its
successor and assigns.
"Related Company" means, as to any Person, any (a) corporation
which is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the Code) as such Person, (b) part-
nership or other trade or business (whether or not incorporated) under
common control (within the meaning of Section 414(c) of the Code) with
such Person, or (c) member of the same affiliated service group (within
the meaning of Section 414(m) of the Code) as such Person or any
corporation described in clause (a) above or any partnership, trade or
business described in clause (b) above.
"Revolving Credit Facility" means (a) until Revolving Credit
Facility B becomes effective in accordance with Section 2.6(b),
$15,000,000, (b) thereafter, until Revolving Credit Facility C becomes
effective in accordance with Section 2.6(c), $30,000,000, and (c)
thereafter, $45,000,000.
"Revolving Credit Facility A" means the facility for up to
$15,000,000 in principal amount of Revolving Credit Loans.
"Revolving Credit Facility B" means the facility for up to
$15,000,000 in principal amount of Revolving Credit Loans in addition
to the Revolving Credit Loans available under Revolving Credit
Facility A.
"Revolving Credit Facility C" means the facility for up to
$15,000,000 in principal amount of Revolving Credit Loans in addition
to the Revolving Credit Loans available under Revolving Credit
Facility A and Revolving Credit Facility B.
"Revolving Credit Loans" means loans made to the Borrower pursuant
to Section 2.1.
"Schedule of Inventory" means a schedule delivered by the Borrower
to the Lender pursuant to the provisions of Section 7.10(a).
-19-
"Secured Obligations" means, in each case whether now in existence
or hereafter arising, (a) the principal of and interest and premium, if
any, on the Loans, (b) all reimbursement and other obligations relating
to Letters of Credit, and (c) all indebtedness, liabilities,
obligations, overdrafts, covenants and duties of the Borrower (i) to
the Lender of every kind, nature and description, direct or indirect,
absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any note
and whether or not for the payment of money under or in respect of this
Agreement, the Note or any of the other Loan Documents and (ii) to any
Affiliate of the Lender arising directly as a result of any service to
(or by or on behalf of) or relationship with the Borrower or the Lender
in connection with the Loans or this Agreement, including without
limitation any operating or checking account relationships.
"Security Documents" means each of (a) the Financing Statements,
(b) the Assignment of Receivables Securitization Proceeds, and (c) each
other writing executed and delivered by any Person securing the Secured
Obligations or evidencing such security.
"Security Interest" means the Liens of the Lender on and in the
Collateral effected hereby or by any of the Security Documents or
pursuant to the terms hereof or thereof.
"Senior Secured Notes" means the 9-3/4% Senior Secured Notes due
2000 issued by the Borrower pursuant to the Senior Secured Notes
Indenture in the original principal amount of $140,000,000.
"Senior Secured Notes Documents" means the Senior Secured Notes
Indenture and the other documents executed in connection therewith.
"Senior Secured Notes Indenture" means the Indenture, dated as of
March 1, 1993, between the Borrower and the Indenture Trustee pursuant
to which the Borrower issued the Senior Secured Notes.
"Subordinated Indebtedness" means any Indebtedness for Money
Borrowed of the Borrower which is subordinated to the Secured
Obligations on terms and conditions acceptable to the Lender in its
sole discretion.
-20-
"Subsidiary" when used to determine the relationship of a Person to
another Person, means a Person of which an aggregate of 50% or more of
the stock of any class or classes or 50% or more of other ownership
interests is owned of record or beneficially by such other Person or by
one or more Subsidiaries of such other Person or by such other Person
and one or more Subsidiaries of such Person, (i) if the holders of such
stock or other ownership interests (A) are ordinarily, in the absence
of contingencies, entitled to vote for the election of a majority of
the directors (or other individuals performing similar functions) of
such Person, even though the right so to vote has been suspended by the
happening of such a contingency, or (B) are entitled, as such holders,
to vote for the election of a majority of the directors (or individuals
performing similar functions) of such Person, whether or not the right
so to vote exists by reason of the happening of a contingency, or (ii)
in the case of such other ownership interests, if such ownership
interests constitute a majority voting interest.
"Tangible Net Worth" means, as applied to any Person, the Net Worth
of such Person at the time in question, after deducting therefrom all
accounts receivable and other obligations due from Affiliates (provided
that, to and including December 30, 1997, up to $10,000,000 of
receivables due from International Comfort Products Corporation
(Canada) may be included in "Tangible Net Worth") and the amount of all
intangible items reflected therein, including all unamortized debt
discount and expense, unamortized research and development expense,
unamortized deferred charges, goodwill, Intellectual Property,
unamortized excess cost of investment in Subsidiaries over equity at
dates of acquisition, and all similar items which should properly be
treated as intangibles in accordance with GAAP.
"Termination Date" means the earlier of July 23, 1999 or such later
date to which the termination of the Revolving Credit Facility shall be
extended pursuant to Section 2.5.
"Termination Event" means (a) a "Reportable Event" as defined in
Section 4043(b) of ERISA, but excluding any such event as to which the
provision for 30 days' notice to the PBGC is waived under applicable
regulations, (b) the filing of a notice of intent to terminate a
Benefit Plan or the treatment of a Benefit Plan amendment as a
termination under Section 4041 of ERISA, or (c) the institution of
proceedings to terminate a Benefit Plan by the PBGC under Section 4042
of ERISA (other than a standard termination under ERISA Section
4041(b)) or the appointment of a trustee to administer any Benefit
Plan.
-21-
"Type" means, with respect to a Loan, its classification as a LIBOR
Loan or Prime Rate Loan.
"UCC" means the Uniform Commercial Code as in effect from time to
time in the State of Georgia.
"Unfunded Vested Accrued Benefits" means, with respect to any
Benefit Plan at any time, the amount (if any) by which (a) the present
value of all vested nonforfeitable benefits under such Benefit Plan
exceeds (b) the fair market value of all Benefit Plan assets allocable
to such benefits, as determined using such reasonable actuarial
assumptions and methods as are specified in the Schedule B (Actuarial
Information) to the most recent Annual Report (Form 5500) filed with
respect to such Benefit Plan.
Section 1.2 Other Referential Provisions.
(a) All terms in this Agreement, the Exhibits and Schedules
hereto shall have the same defined meanings when used in any other Loan
Documents, unless the context shall require otherwise.
(b) Except as otherwise expressly provided herein, all
accounting terms not specifically defined or specified herein shall
have the meanings generally attributed to such terms under GAAP
including, without limitation, applicable statements and
interpretations issued by the Financial Accounting Standards Board and
bulletins, opinions, interpretations and statements issued by the
American Institute of Certified Public Accountants or its committees.
(c) All personal pronouns used in this Agreement, whether used
in the masculine, feminine or neuter gender, shall include all other
genders; the singular shall include the plural, and the plural shall
include the singular.
(d) 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 provisions of this
Agreement.
-22-
(e) Titles of Articles and Sections in this Agreement are for
convenience only, do not constitute part of this Agreement and neither
limit nor amplify the provisions of this Agreement, and all references
in this Agreement to Articles, Sections, Subsections, paragraphs,
clauses, subclauses, Schedules or Exhibits shall refer to the corres-
ponding Article, Section, Subsection, paragraph, clause or subclause
of, or Schedule or Exhibit attached to, this Agreement, unless specific
reference is made to the articles, sections or other subdivisions or
divisions of , or to schedules or exhibits to, another document or
instrument.
(f) Each definition of a document in this Agreement shall
include such document as amended, modified, supplemented or restated
from time to time in accordance with the terms of this Agreement.
(g) Except where specifically restricted, reference to a party
to a Loan Document includes that party and its successors and assigns
permitted hereunder or under such Loan Document.
(h) Unless otherwise specifically stated, whenever a time is
referred to in this Agreement or in any other Loan Document, such time
shall be the local time in the city in which the principal office of
Lender is located.
(i) Whenever the phrase "to the knowledge of the Borrower" or
words of similar import relating to the knowledge of the Borrower are
used herein, such phrase shall mean and refer to (i) the actual
knowledge of the President or chief financial officer or (ii) the
knowledge that such officers would have obtained if they had engaged in
good faith in the diligent performance of their duties, including the
making of such reasonable specific inquiries as may be necessary of the
appropriate persons in a good faith attempt to ascertain the accuracy
of the matter to which such phrase relates.
(j) The terms accounts, chattel paper, documents, equipment,
instruments, general intangibles and inventory, as and when used
(without being capitalized) in this Agreement or the Security
Documents, shall have the meanings given those terms in the UCC.
Section 1.3 Exhibits and Schedules. All Exhibits and Schedules
attached hereto are by reference made a part hereof.
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ARTICLE 2 - REVOLVING CREDIT FACILITY
Section 2.1 Revolving Credit Loans. Upon the terms and subject
to the conditions of, and in reliance upon the representations and
warranties made under, this Agreement, the Lender shall make Revolving
Credit Loans to the Borrower from time to time from the Effective Date
to the Termination Date, as requested by the Borrower in accordance
with the terms of Section 2.2, in an aggregate principal amount
outstanding not to exceed at any time the lesser of (a) the Revolving
Credit Facility minus the Letter of Credit Reserve and (b) the
Borrowing Base. It is expressly understood and agreed that the Lender
may and at present intends to use the lesser of the amounts referred to
in the foregoing subclauses (a) and (b) as a maximum ceiling on
Revolving Credit Loans; provided, however, that it is agreed that
should Revolving Credit Loans exceed the ceiling so determined or any
other limitation set forth in this Agreement, such Revolving Credit
Loans shall nevertheless constitute Secured Obligations and, as such,
shall be entitled to all benefits thereof and security therefor. The
principal amount of any Revolving Credit Loan which is repaid may be
reborrowed by the Borrower in accordance with the terms of this Section
2.1. The Lender is hereby authorized to record each repayment of
principal of the Revolving Credit Loans in its books and records, such
books and records constituting prima facie evidence of the accuracy of
the information contained therein.
Section 2.2 Manner of Borrowing Revolving Credit Loans.
Borrowings of the Revolving Credit Loans shall be made as follows:
(a) Requests for Borrowing.
(i) Prime Rate Loans. A request for the borrowing of a
Prime Rate Revolving Credit Loan shall be made, or shall be
deemed to be made, in the following manner:
(A)
the Borrower may request a Prime Rate Revolving Credit Loan by
notifying the Lender, before 12:00 noon (Eastern time) on the
proposed borrowing date (10:00 a.m. (Eastern time) in the case
of the last Business Day of each calendar month), of its
intention to borrow, specifying the effective date and amount
of such proposed Prime Rate Revolving Credit Loan;
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(B)
whenever a check is presented to the Lender for payment against
the Disbursement Account in an amount greater than the then
available balance in such account, such presentation shall be
deemed to be a request for a Prime Rate Revolving Credit Loan
on the date of such notice in an amount equal to the excess of
such check over such available balance, and such request shall
be irrevocable;
(C)
unless payment is otherwise made by the Borrower, the becoming
due of any amount required to be paid under this Agreement or
the Note as interest shall be deemed to be a request for a
Prime Rate Revolving Credit Loan on the due date in the amount
required to pay such interest, and such request shall be
irrevocable;
(D)
unless payment is otherwise made by the Borrower, the maturity
of any Secured Obligation required to be paid shall be deemed
to be a request for a Prime Rate Revolving Credit Loan on the
due date in the amount required to pay such Secured Obligation,
and such request shall be irrevocable; and
(E)
whenever a drawing is made under a Letter of Credit and the
Borrower fails to reimburse the Lender therefor, such failure
to reimburse shall be deemed to be a request for a Prime Rate
Revolving Credit Loan on the date such notification is received
in the amount so unreimbursed, and such request shall be
irrevocable.
(ii) LIBOR Loans. The Borrower may request a LIBOR Loan
by notifying the Lender (which notice shall be irrevocable) not
later than 12:00 noon (Eastern time) on the date two Business
Days before the day on which the requested LIBOR Loan is to be
made, specifying the effective date and amount of such LIBOR
Loan and the duration of the applicable Interest Period;
provided that, notwithstanding anything to the contrary
contained in this Agreement, if an Event of Default exists the
Borrower shall not have the right to request LIBOR Loans.
(iii) Notice of Borrowing. Any request for a Prime Rate
Loan under Section 2.2(a)(i)(A) or a LIBOR Loan under Section
2.2(a)(ii) (a "Notice of Borrowing") shall be made by telephone
or in writing (including telecopy) and, in the case of any
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telephonic notice, shall be immediately followed by a written
confirmation thereof in a form acceptable to the Lender,
provided that the failure to provide written confirmation shall
not invalidate any telephonic notice and, if such written
confirmation differs in any respect from the action taken by
the Lender, the records of the Lender shall control absent
manifest error.
(b) Disbursement of Loans. The Borrower hereby irrevocably
authorizes the Lender to disburse the proceeds of each borrowing
requested, or deemed to be requested, pursuant to this Section 2.2 as
follows: (i) the proceeds of each borrowing requested under Section
2.2(a)(i)(A) or (B) or Section 2.2(ii) shall be disbursed by the Lender
in lawful money of the United States of America in immediately
available funds, (A) in the case of the initial borrowing, in
accordance with the terms of the written instructions from the Borrower
to the Lender, and (B) in the case of each subsequent borrowing, by
credit to the Disbursement Account or to such other account as may be
agreed upon by the Borrower and the Lender from time to time; and (ii)
the proceeds of each borrowing requested under Section 2.2(a)(i)(C),
(D) or (E) shall be disbursed by the Lender by way of direct payment of
the relevant principal, interest or other Secured Obligation, as the
case may be.
Section 2.3 Repayment of Revolving Credit Loans. The Revolving
Credit Loans will be repaid as follows: (a) whether or not any Default
or Event of Default has occurred, the outstanding principal amount of
all the Revolving Credit Loans is due and payable, and shall be repaid
by the Borrower in full together with accrued and unpaid interest on
the amount repaid to the date of repayment, on the Termination Date;
(b) if at any time the aggregate unpaid principal amount of the
Revolving Credit Loans then outstanding exceeds the lesser of the
amounts referred to in clauses (a) and (b) of Section 2.1, the Borrower
shall repay the Revolving Credit Loans in an amount sufficient to
reduce the aggregate unpaid principal amount of such Loans by an amount
equal to such excess, together with accrued and unpaid interest on the
amount repaid to the date of repayment; and (c) the Borrower hereby
instructs the Lender to repay the Revolving Credit Loans outstanding on
any day in an amount equal to the amount received by the Lender on such
day pursuant to Section 7.1(b).
Section 2.4 Revolving Credit Note. The Revolving Credit Loans
and the obligation of the Borrower to repay such Loans shall also be
evidenced by a single Revolving Credit Note payable to the order of the
Lender. Such Note shall be dated the Effective Date and be duly and
validly executed and delivered by the Borrower.
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Section 2.5 Extension of Facility. The Termination Date shall
be automatically extended for successive one-year periods unless either
the Lender or the Borrower provides to the other written notice of
termination not less than 60 days prior to the then effective
Termination Date.
Section 2.6 Effectiveness of Revolving Credit Facility.
(a) Revolving Credit Facility A shall be effective upon the
satisfaction of the conditions precedent set forth in Sections 4.1 and
4.2.
(b) Revolving Credit Facility B shall be effective upon the
satisfaction of the conditions precedent set forth in Sections 4.2 and
4.3. The Borrower acknowledges that the Lender has not extended a
commitment to activate Revolving Credit Facility B and that the Lender
has no obligation to do so, or to make any Loans under Revolving Credit
Facility B, unless and until all of the conditions precedent set forth
in Sections 4.2 and 4.3 are satisfied, including the Lender's written
election at such time to accept the Revolving Credit Facility B Closing
Fee (as defined in Section 3.2(d)) and activate Revolving Credit
Facility B.
(c) Revolving Credit Facility C shall be effective upon the
satisfaction of the conditions precedent set forth in Sections 4.2 and
4.4. The Borrower acknowledges that the Lender has not extended a
commitment to activate Revolving Credit Facility C and that the Lender
has no obligation to do so, or to make any Loans under Revolving Credit
Facility C, unless and until all of the conditions precedent set forth
in Sections 4.2 and 4.4 are satisfied, including the Lender's written
election at such time to accept the Revolving Credit Facility C Closing
Fee (as defined in Section 3.2(d)) and activate Revolving Credit
Facility C.
Section 2.7 Letters of Credit.
(a) Upon the request of the Borrower from time to time, the
Lender shall, in accordance with the provisions of this Section 2.7,
issue one or more Letters of Credit up to an aggregate amount available
to be drawn (plus the aggregate amount of unreimbursed drawings under
all Letters of Credit) at any time not to exceed the Letter of Credit
Facility; provided, that (1) all Letter of Credit Documents in
connection with each Letter of Credit shall be satisfactory to the
Lender in its sole discretion, (2) no
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Letter of Credit shall be issued if, after issuance thereof, the sum of
the aggregate principal amount of Revolving Credit Loans outstanding,
plus the aggregate amount available to be drawn under all Letters of
Credit, plus the aggregate amount of any unreimbursed drawings under
Letters of Credit, would exceed the lesser of (A) the Revolving Credit
Facility and (B) the Borrowing Base plus the Letter of Credit Reserve,
(3) each Letter of Credit shall be a documentary letter of credit
issued to or for the benefit of a supplier of the Borrower in
connection with the purchase of Inventory or a standby letter of credit
issued to a beneficiary and for a purpose acceptable to the Lender in
its sole discretion, and (4) no Letter of Credit shall have an initial
term longer than one year or an expiration date later than the
Termination Date.
(b) The Borrower acknowledges and agrees that if and to the
extent the Borrower shall fail to reimburse the Lender under any Letter
of Credit Documents, the Borrower hereby irrevocably requests and
directs the Lender, subject to and in accordance with the provisions of
Section 2.1, to make payment on its behalf and the amount of any such
payment by the Lender shall constitute a Revolving Credit Loan made at
the time of such payment.
(c) The issuance and negotiation of Letters of Credit shall be
governed by the Uniform Customs and Practices for Documentary Credits
(1993 Revision), as published in the International Chamber of Commerce
Uniform Customs and Practices, Publication No. 500 or such other
policies and practices as may be followed by the Lender with respect to
similar letters of credit at the time.
ARTICLE 3 - GENERAL LOAN PROVISIONS
Section 3.1 Interest.
(a) (i) Prime Rate Loans. The Borrower will pay interest on
the unpaid principal amount of each Prime Rate Loan for each
day from the day such Loan was made until such Loan is paid
(whether at maturity, by reason of acceleration or otherwise),
or is converted to a Loan of a different Type, at a rate per
annum equal to the Prime Rate, payable monthly in arrears on
each Interest Payment Date and on the Termination Date.
(ii) LIBOR Loans. The Borrower will pay interest on the
unpaid principal amount of each LIBOR Loan for the Interest
Period applicable thereto at a rate per annum equal to the sum
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the Applicable Margin plus LIBOR, payable in arrears on each
Interest Payment Date, on the last day of such Interest Period,
and when such LIBOR Loan is paid (whether at maturity, by
reason of acceleration or otherwise). As used herein,
"Applicable Margin" means, on any date of determination, two
percent (2.0%) per annum, as adjusted in accordance with the
pricing matrix set forth below based upon the ratio of Funded
Indebtedness to EBITDA for the Borrower and its Consolidated
Subsidiaries (excluding GHC):
Funded Indebtedness to
EBITDA Ratio Applicable Margin
Greater than 3.5 2.0%
Greater than 3.0 but less than 3.5 1.75%
3.0 or less 1.50%
Adjustments to the Applicable Margin shall be effective as of
the first day of the calendar month after the Lender's receipt
of the Borrower's quarterly financial statements (commencing
with the financial statements for the fiscal quarter ending on
June 30, 1997) in conformance with Section 9.1(b), together
with the officer's certificate described in Section 9.3 setting
forth the calculation of the above-referenced ratio. In the
event the Borrower fails to timely provide the financial
statements and officer's certificate referred to above, and
without prejudice to any additional rights under Section 11.2,
the maximum Applicable Margin shall apply to all LIBOR Loans
until the first day of the calendar month after the Lender's
receipt of such financial statements and certificate.
(b) The Borrower shall pay interest on the unpaid principal
amount of each Secured Obligation (other than a Loan) for each day from
the day the Borrower receives notice that such Secured Obligation is
due and payable until such Secured Obligation is paid at the rate per
annum applicable to Prime Rate Loans, payable on demand.
(c) From and after the occurrence of an Event of Default, the
unpaid principal amount of each Secured Obligation shall bear interest
until paid in full (or, if earlier, until such Event of Default is
cured or waived in writing by the Lender) at a rate per annum equal to
the Default Margin plus the rate otherwise in effect under Section
3.1(a) or
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(b), payable on demand. The interest rate provided for in this Section
3.1(c) shall to the extent permitted by applicable law apply to and
accrue on the amount of any judgment entered with respect to any
Secured Obligation and shall continue to accrue at such rate during any
proceeding described in Section 11.1(g) or (h).
(d) The interest rates provided for in Sections 3.1(a), (b) and
(c) shall be computed on the basis of a year of 360 days and the actual
number of days elapsed.
(e) It is not intended by the Lender, and nothing contained in
this Agreement or the Note shall be deemed, to establish or require the
payment of a rate of interest in excess of the maximum rate permitted
by applicable law (the "Maximum Rate"). If, in any month, the
Effective Interest Rate, absent such limitation, would have exceeded
the Maximum Rate, then the Effective Interest Rate for that month shall
be the Maximum Rate, and if, in future months, the Effective Interest
Rate would otherwise be less than the Maximum Rate, then the Effective
Interest Rate shall remain at the Maximum Rate until such time as the
amount of interest paid hereunder equals the amount of interest which
would have been paid if the same had not been limited by the Maximum
Rate. In this connection, in the event that, upon payment in full of
the Secured Obligations, the total amount of interest paid or accrued
under the terms of this Agreement is less than the total amount of
interest which would have been paid or accrued if the Effective
Interest Rate had at all times been in effect, then the Borrower shall,
to the extent permitted by applicable law, pay to the Lender an amount
equal to the difference between (i) the lesser of (A) the amount of
interest which would have been charged if the Maximum Rate had, at all
times, been in effect and (B) the amount of interest which would have
accrued had the Effective Interest Rate, at all times, been in effect,
and (ii) the amount of interest actually paid or accrued under this
Agreement. In the event the Lender receives, collects or applies as
interest any sum in excess of the Maximum Rate, such excess amount
shall be applied to the reduction of the principal balance of the
applicable Secured Obligation, and, if no such principal is then
outstanding, such excess or part thereof remaining shall be paid to the
Borrower.
Section 3.2 Fees.
(a) Commitment Fee. In connection with and as consideration for
the Lender's commitment hereunder, subject to the terms hereof, to lend
to the Borrower under the Revolving Credit Facility, the Borrower shall
pay a fee to the Lender, from the Effective Date until the Termination
Date, in an amount equal to, (i) in the event Revolving Credit
Facility B
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and Revolving Credit Facility C are not effective in accordance with
Section 2.6, 3/8% per annum of the average daily unused portion of
Revolving Credit Facility A, (ii) in the event Revolving Credit
Facility B (but not Revolving Credit Facility C) is effective in
accordance with Section 2.6, 3/8% per annum of the average daily unused
portion of Revolving Credit Facility A and 1/4% per annum of the average
daily unused portion of Revolving Credit Facility B, and (iii) in the
event Revolving Credit Facility B and Revolving Credit Facility C are
both effective in accordance with Section 2.6, 3/8% per annum of the
average daily unused portion of Revolving Credit Facility A and 1/4% per
annum of the average daily unused portion of Revolving Credit
Facility B and Revolving Credit Facility C. In calculating such fees,
all outstanding Revolving Credit Loans and Letter of Credit obligations
shall be allocated first to Revolving Credit Facility A. All such fees
shall be payable monthly in arrears on the first day of each month.
(b) Closing Fee. On the Effective Date, the Borrower shall pay
to the Lender a closing fee in the amount of $25,000 in connection with
the establishment of the Revolving Credit Facility and in consideration
of the making of Loans under this Agreement and in order to compensate
the Lender for the costs associated with structuring, processing,
approving and closing the Revolving Credit Facility and the Loans, but
excluding expenses for which the Borrower has agreed elsewhere in this
Agreement to reimburse the Lender.
(c) Administration Fee. For services performed by the Lender in
connection with its continuing administration hereof, the Borrower
shall pay to the Lender a fee of $3,125 per quarter, payable quarterly
in advance on the Effective Date and on the first day of each October,
January, April and July thereafter, and continuing so long as any Loan
shall remain outstanding or the Revolving Credit Facility shall not
have been terminated.
(d) Activation Fees.
(i) On the date on which Revolving Credit Facility B becomes
effective in accordance with Section 2.6, the Borrower
shall pay to the Lender a closing fee in the amount of
$25,000 (the "Revolving Credit Facility B Closing Fee")
in connection with the establishment of Revolving
Credit Facility B and in consideration of the making of
Loans thereunder and in order to compensate the
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Lender for the costs associated with structuring, processing,
approving and closing Revolving Credit Facility B and the Loans
thereunder, but excluding expenses for which the Borrower has
agreed elsewhere in this Agreement to reimburse the Lender.
(ii) On the date on which Revolving Credit Facility C
becomes effective in accordance with Section 2.6(c),
the Borrower shall pay to the Lender a closing fee in
the amount of $25,000 (the "Revolving Credit Facility C
Closing Fee") in connection with the establishment of
Revolving Credit Facility C and in consideration of the
making of Loans thereunder and in order to compensate
the Lender for the costs associated with structuring,
processing, approving and closing Revolving Credit
Facility C and the Loans thereunder, but excluding
expenses for which the Borrower has agreed elsewhere in
this Agreement to reimburse the Lender.
(e) Letter of Credit Fees. As consideration for the issuance by
the Lender of a Letter of Credit, the Borrower agrees to pay to the
Lender all applicable Letter of Credit Fees. Such fees shall be
payable to the Lender in advance on the date of issuance of each Letter
of Credit and shall be calculated according to the face amount of such
Letter of Credit based on its stated term.
(f) General. All fees shall be fully earned by the Lender when
due and payable and, except as otherwise set forth herein, shall not be
subject to refund or rebate. All fees are for compensation for
services and are not, and shall not be deemed to be, interest or a
charge for the use of money.
Section 3.3 Notice of Conversion or Continuation of Loans.
Whenever the Borrower desires, subject to the provisions of Section
3.4, to convert an outstanding Loan into a Loan of a different Type
provided for in this Agreement or to continue all or a portion of an
outstanding LIBOR Loan for a subsequent Interest Period, the Borrower
shall notify the Lender (which notice shall be irrevocable) by
telephone or in writing (including telecopy) not later than 12:00 noon
(Eastern time) on the date
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one Business Day before the day on which a proposed conversion of a
LIBOR Loan into a Prime Rate Loan is to be effective (which effective
date shall be the last day of the Interest Period applicable to such
LIBOR Loan) and two Business Days before the day on which a proposed
conversion of a Prime Rate Loan into, or continuation of a LIBOR Loan
as, a LIBOR Loan is to be effective (and such effective date of any
continuation shall be the last day of the Interest Period for such
LIBOR Loan). Each such notice (a "Notice of Conversion or
Continuation") shall (a) identify the Loan to be converted or
continued, including the Type thereof, the aggregate outstanding
principal balance thereof and, in the case of a LIBOR Loan, the last
day of the Interest Period therefor, (b) specify the effective date of
such conversion or continuation, (c) specify the principal amount of
such Loan to be converted or continued and, if converted, the Type or
Types of Loan into which conversion of such principal amount or
specified portions thereof is to be made, and (d) in the case of any
conversion into or continuation as a LIBOR Loan, the Interest Period to
be applicable thereto, and, in the case of any telephonic notice, shall
be immediately followed by a written confirmation thereof by the
Borrower in a form acceptable to the Lender, provided that the failure
to provide a written confirmation shall not invalidate any telephonic
notice and, if such written confirmation differs in any respect from
the action taken by the Lender, the records of the Lender shall control
absent manifest error. In the event the Borrower fails to provide
timely notice of the conversion or continuation of any LIBOR Loan, such
Loan shall automatically convert to a Prime Rate Loan as of the last
day of the Interest Period applicable to such LIBOR Loan.
Section 3.4. Conversion or Continuation. Provided that no Event
of Default exists (but subject to the provisions of Sections 3.5 and
3.6), the Borrower may request that all or any part of any outstanding
Loan of one Type (a) be converted into a Loan or Loans of any other
Type provided for in this Agreement, or (b) be continued as a Loan or
Loans of the same Type, in the same aggregate principal amount, on any
Business Day (which, in the case of a conversion or continuation of a
LIBOR Loan, shall be the last day of the Interest Period applicable to
such LIBOR Loan), upon notice (which notice shall be irrevocable) given
in accordance with Section 3.3. Notwithstanding anything to the
contrary contained in this Agreement, if an Event of Default exists (i)
the Borrower shall not have the right to convert Loans into, or
continue Loans as, LIBOR Loans and (ii) all outstanding LIBOR Loans
shall, at the Lender's election, be converted to Prime Rate Loans as of
the date of the occurrence of such Event of Default.
Section 3.5 Duration of Interest Periods; Maximum Number of
LIBOR Loans; Minimum Increments.
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(a) Subject to the provisions of the definition "Interest
Period", the duration of each Interest Period applicable to a LIBOR
Loan shall be as specified in the applicable Notice of Borrowing or
Notice of Conversion or Continuation. The Borrower may elect a
subsequent Interest Period to be applicable to any LIBOR Loan by giving
a Notice of Conversion or Continuation with respect to such Loan in
accordance with Section 3.3.
(b) If the Lender does not receive a Notice of Conversion or
Continuation in accordance with Section 3.3 with respect to the
continuation of a LIBOR Loan within the applicable time limits
specified in Section 3.3, or if, when such notice must be given, an
Event of Default exists or such Type of Loan is not available, the
Borrower shall be deemed to have elected to convert such LIBOR Loan in
whole into a Prime Rate Loan on the last day of the Interest Period
therefor.
(c) Notwithstanding the foregoing, the Borrower may not select
an Interest Period that would end, but for the provisions of the
definition "Interest Period," after the Termination Date.
(d) In no event shall there be more than five LIBOR Loans
outstanding hereunder at any time. For the purpose of this subsection
(d), each LIBOR Loan having a distinct Interest Period shall be deemed
to be a separate Loan hereunder.
(e) Each LIBOR Loan shall be in a minimum amount of $1,000,000.
Section 3.6 Changed Circumstances.
(a) If the introduction of or any change in or in the
interpretation of (in each case, after the date hereof) any law or
regulation makes it unlawful, or any Governmental Authority asserts,
after the date hereof, that it is unlawful, for the Lender to perform
its obligations hereunder to make or maintain LIBOR Loans, the Lender
shall notify the Borrower of such event, and the right of the Borrower
to select LIBOR Loans for any subsequent Interest Period or in
connection with any subsequent conversion of any Loan shall be
suspended until the Lender shall notify the Borrower that the
circumstances causing such suspension no longer exist, and the Borrower
shall forthwith prepay in full all LIBOR Loans then outstanding, and
shall pay all interest accrued thereon through the date of such
prepayment; provided, that if the date of such repayment is not the
last day of the Interest Period applicable to such LIBOR Loans, the
Borrower shall also pay any amount due pursuant to Section 3.7.
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(b) If the Lender shall, prior to the disbursement of any
requested Revolving Credit Loan or the effective date of any conversion
or continuation of an existing Loan to be made or continued as or
converted into a LIBOR Loan (each such requested Revolving Credit Loan
made and Loan to be converted or continued, a "Pending Loan"), notify
the Borrower that LIBOR will not adequately reflect the cost to the
Lender of making or funding such Pending Loan as a LIBOR Loan or that
the Interbank Offered Rate is not determinable from any interest rate
reporting service of recognized standing, then the right of the
Borrower to select LIBOR Loans for such Pending Loan, any subsequent
Revolving Credit Loan, or in connection with any subsequent conversion
or continuation of any Loan, shall be suspended until the Lender shall
notify the Borrower that the circumstances causing such suspension no
longer exist, and each Loan comprising each Pending Loan and each such
subsequent Loan requested to be made, continued or converted shall be
made or continued as or converted into a Prime Rate Loan.
Section 3.7 Payments Not at End of Interest Period; Failure to
Borrow. If (a) for any reason any payment of principal with respect to
any LIBOR Loan is made on any day prior to the last day of the Interest
Period applicable to such LIBOR Loan, (b) any LIBOR Loan is converted
to a Prime Rate Loan under Section 3.4 as a result of the occurrence of
an Event of Default, or (c) after having given a Notice of Borrowing
with respect to any Loan to be comprised of LIBOR Loans or a Notice of
Conversion or Continuation with respect to any Loan to be continued as
or converted into a LIBOR Loan, such Loan is not made or is not
continued as or converted into a LIBOR Loan due to the Borrower's
failure to borrow or to fulfill the applicable conditions set forth in
Article 4, the Borrower shall pay to the Lender, in addition to any
other amounts that may be due under this Agreement, an amount (if a
positive number) computed pursuant to the following formula:
L = (R - T) x P x D
360
L = amount payable
R =
interest rate applicable to the LIBOR Loan prepaid, converted
or unborrowed
T =
effective interest rate per annum at which any readily
marketable bonds or other obligations of the United States,
selected at the Lender's sole discretion, maturing on or near
the last day of the then applicable or requested Interest
Period for such Loan and in approximately the same amount as
such Loan, can be purchased by the Lender on the day of such
payment of principal or failure to borrow
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P =
the amount of principal paid or converted or the amount of the
requested Loan
D =
the number of days remaining in the Interest Period as of the
date of such payment or conversion or the number of days in the
requested Interest Period
The Borrower shall pay such amount upon presentation by the Lender of a
statement setting forth the amount and the Lender's calculation thereof
pursuant hereto, which statement shall be deemed true and correct
absent manifest error.
Section 3.8 Increased Costs and Reduced Returns. The Borrower
agrees that if any law now or hereafter in effect and whether or not
presently applicable to the Lender or any request, guideline or
directive of any Governmental Authority (whether or not having the
force of law and whether or not failure to comply therewith would be
unlawful) or the interpretation or administration thereof by any
Governmental Authority , shall either (a)(i) impose, affect, modify or
deem applicable any reserve, special deposit, capital maintenance or
similar requirement against any Loan, (ii) impose on the Lender any
other condition regarding any Loan, this Agreement, the Note or the
facilities provided hereunder, or (iii) result in any requirement
regarding capital adequacy (including any risk-based capital
guidelines) affecting the Lender being imposed or modified or deemed
applicable to the Lender, or (b) subject the Lender to any taxes on the
recording, registration, notarization or other formalization of the
Loans or the Note, and the result of any event referred to in clause
(a) or (b) above shall be to increase the cost to the Lender of making,
funding or maintaining any Loan or to reduce the amount of any sum
receivable by the Lender or the Lender's rate of return on capital with
respect to any Loan to a level below that which the Lender could have
achieved but for such imposition, modification or deemed applicability
(taking into consideration the Lender's policies with respect to
capital adequacy) by an amount deemed by Lender (in the exercise of its
discretion) to be material, then, upon demand by the Lender, the
Borrower shall immediately pay to the Lender additional amounts which
shall be sufficient to compensate the Lender for such increased cost,
tax or reduced rate of return. A certificate of the Lender to the
Borrower claiming compensation under this Section 3.8 shall constitute
prima facie evidence of the accuracy of the information contained
therein. Such certificate shall set forth the nature of the occurrence
giving rise to such compensation, the additional amount or amounts to
be paid to it hereunder, and the method by which such amounts were
determined. In determining such amount, the Lender may use any
reasonable averaging and attribution methods.
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Section 3.9 Manner of Payment. (a) Each payment (including
prepayments) by the Borrower on account of the principal of or interest
on the Loans or of any fee or other amounts payable to the Lender under
this Agreement or the Note shall be made not later than 1:30 p.m. on
the date specified for payment under this Agreement (or if such day is
not a Business Day, the next succeeding Business Day) to the Lender at
the Lender's Office, in Dollars, in immediately available funds and
shall be made without any setoff, counterclaim or deduction whatsoever.
(b) The Borrower hereby irrevocably authorizes the Lender and
each Affiliate of the Lender to charge any account of the Borrower
maintained with the Lender or such Affiliate with such amounts as may
be necessary from time to time to pay any Secured Obligations which are
not paid when due.
Section 3.10 Statements of Account. The Lender will account to
the Borrower within 30 days after the end of each calendar month with a
statement of Loans, charges and payments made pursuant to this
Agreement during such calendar month, and such account rendered by the
Lender shall be deemed an account stated as between the Borrower and
the Lender and shall be deemed final, binding and conclusive unless the
Lender is notified by the Borrower in writing to the contrary within 60
days after the date such account is delivered to the Borrower, save for
manifest error. Any such notice shall be deemed an objection only to
those items specifically objected to therein. Failure of the Lender to
render such account shall in no way affect its rights hereunder.
Section 3.11 Termination of Agreement. On the Termination Date,
the Borrower shall pay to the Lender, in same day funds, an amount
equal to the aggregate amount of all Loans outstanding on such date,
together with accrued interest thereon, all fees payable pursuant to
Section 3.2 accrued from the date last paid through the effective date
of termination, any amounts payable to the Lender pursuant to the other
provisions of this Agreement, including, without limitation, Sections
3.7, 3.8, 11.2, 12.12 and 12.13, any and all other Secured Obligations
then outstanding, and an amount equal to the Letter of Credit Reserve
to be held by the Lender as cash collateral security for the payment of
and to be applied to the payment of any amounts which may thereafter
become due with respect to any Letter of Credit, and provide the Lender
with an indemnification agreement in form and substance reasonably
satisfactory to the Lender with respect to returned and dishonored
items and such other matters as the Lender shall reasonably require.
Upon 60 days prior written notice to the Lender, the Borrower may
terminate this Agreement prior to the Termination Date in effect at
such time, upon payment of an early termination fee computed as
follows: (A) $100,000 if such termination occurs on or prior to the
first anniversary of the Effective Date, and (B) $50,000 if such
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termination occurs at any time thereafter other than on a Termination
Date; provided that no early termination fee shall be due if (a) the
Lender, in accordance with the terms thereof, decreases any of the
advance rates set forth in the definition of Borrowing Base or
materially restricts the eligibility standards set forth in the
definition of Eligible Inventory, (b) the Borrower terminates this
Agreement and pays the Lender all amounts due hereunder within 180 days
after any decrease or restriction described in clause (a) above, (c) no
Event of Default existed at the time of such decrease or restriction,
and (d) no Event of Default exists at the time of such termination.
ARTICLE 4 - CONDITIONS PRECEDENT
Section 4.1 Conditions Precedent to Initial Loan. Notwith-
standing any other provision of this Agreement, the Lender's obligation
to make the Initial Loans is subject to the fulfillment of each of the
following conditions prior to or contemporaneously with the making of
such Loan:
(a) Closing Documents. The Lender shall have received each of
the following documents, all of which shall be satisfactory in form and
substance to the Lender and its counsel:
(1) this Agreement, duly executed and delivered by the
Borrower;
(2) the Note, dated the Effective Date and duly executed
and delivered by the Borrower;
(3) certified copies of the articles of incorporation
and by-laws of the Borrower as in effect on the Effective Date;
(4) certified copies of all corporate action, including
stockholder approval, if necessary, taken by the Borrower to
authorize the execution, delivery and performance of this
Agreement and the other Loan Documents and the borrowings under
this Agreement;
(5) certificates of incumbency and specimen signatures
with respect to each of the officers of the Borrower who is
authorized to execute and deliver this Agreement or any other
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Loan Document on behalf of the Borrower or any document,
certificate or instrument to be delivered in connection with
this Agreement or the other Loan Documents and to request
borrowings under this Agreement;
(6) a certificate evidencing the good standing of the
Borrower in the jurisdiction of its incorporation and in each
other jurisdiction in which it does business and where the
failure so to be in good standing could reasonably be expected
to have a Materially Adverse Effect;
(7) the Financing Statements duly executed and delivered
by the Borrower, and evidence satisfactory to the Lender that
the Financing Statements have been filed in each jurisdiction
where such filing may be necessary or appropriate to perfect
the Security Interest;
(8) landlord's waiver and consent agreements duly
executed on behalf of each landlord of real property on which
any Collateral is located;
(9) a Schedule of Inventory prepared as of a recent
date;
(10) certificates or binders of insurance relating to
each of the policies of insurance covering any of the
Collateral together with loss payable clauses which comply with
the terms of Section 7.5(b);
(11) the Assignment of Receivables Securitization
Proceeds, duly executed by the Borrower, GHC and the
Receivables Purchaser, together with the originals of the Buyer
Notes (as defined therein) duly endorsed to the Lender;
(12) the Blocked Account Agreement, duly executed by
each of the parties thereto;
(13) the Intercreditor Agreement re Receivables, duly
executed by the Borrower, ICPPC, GHC, the Receivables
Purchaser, the Receivables Trustee and ABN AMRO;
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(14) a Borrowing Base Certificate prepared as of the
Effective Date duly executed and delivered by the chief
financial officer of the Borrower;
(15) a letter from the Borrower to the Lender requesting
the Initial Loans and specifying the method of disbursement;
(16) copies of all the financial statements referred to
in Section 5.1(m) and meeting the requirements thereof;
(17) a balance sheet of the Borrower and its
Consolidated Subsidiaries (including and excluding GHC) as at
March 31, 1997, prepared by the Borrower on a pro forma basis,
giving effect to the transactions contemplated by this
Agreement and setting forth the assumptions on which such
balance sheet was prepared; forecasted consolidated financial
statements consisting of balance sheets, cash flow statements
and income statements of the Borrower and its Consolidated
Subsidiaries (including and excluding GHC), giving effect to
the transactions contemplated by this Agreement and reflecting
projected borrowings hereunder and setting forth the
assumptions on which such forecasted financial statements were
prepared, covering the one-year period commencing on January 1,
1997, and prepared on a quarterly basis; and such other
evidence as the Lender shall require supporting the
representation and warranty of the Borrower set forth in
Section 5.1(r);
(18) a certificate of the President of the Borrower
stating that, to the best of his knowledge and based on an
examination sufficient to enable him to make an informed
statement, (a) all of the representations and warranties made
or deemed to be made under this Agreement are true and correct
as of the Effective Date, both with and without giving effect
to the Loans to be made at such time and the application of the
proceeds thereof, and (b) no Default or Event of Default
exists;
(19) true and correct copies of the Receivables Purchase
Documents, as certified by the President of the Borrower;
(20) true and correct copies of the Senior Secured Notes
Documents,
as certified by the President of the Borrower;
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(21) certified copies of the articles of incorporation and
by-laws
(or certificate of limited partnership and limited partnership
agreement) of GHC and the Receivables Purchaser as in effect on
the Effective Date;
(22) certified copies of all corporate or partnership action
taken by
GHC and the Receivables Purchaser to authorize the execution,
delivery and performance of the Loan Documents to which each is
a party;
(23) certificates of incumbency and specimen signatures with
respect
to each of the officers of GHC and the Receivables Purchaser
who is authorized to execute and deliver the Loan Documents to
which each is a party;
(24) a certificate evidencing the good standing of GHC and the
Receivables Purchaser in the jurisdiction of its incorporation
or organization;
(25) signed opinions of Tuke ▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for
the Borrower, GHC and the Receivables Purchaser, and such local
counsel as the Lender shall deem necessary or desirable,
opining as to such matters in connection with this Agreement as
the Lender or its counsel may reasonably request; and
(26) copies of each of the other Loan Documents duly
executed by the parties thereto with evidence satisfactory to
the Lender and its counsel of the due authorization, binding
effect and enforceability of each such Loan Document on each
such party and such other documents and instruments as the
Lender may reasonably request.
(b) Fees. The Lender shall have received all fees payable on
the Effective Date under this Agreement.
(c) Availability. The Lender shall be provided with evidence
satisfactory to it that, as of the Effective Date, after giving effect
to the Initial Loans, Availability will be not less than $5,000,000.
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(d) No Injunctions, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or
proposed before any court, governmental agency or legislative body to
enjoin, restrain or prohibit or to obtain substantial damages in
respect of or which is related to or arises out of this Agreement or
the consummation of the transactions contemplated hereby or which, in
the Lender's sole discretion, would make it inadvisable to consummate
the transactions contemplated by this Agreement.
(e) Material Adverse Change. As of the Effective Date, there
shall not have occurred any change which, in the Lender's sole
discretion, has had or may have a Materially Adverse Effect as compared
to the condition of the Borrower presented by the most recent unaudited
financial statements of the Borrower described in Section 5.1(m).
(f) Solvency. The Lender shall have received evidence
satisfactory to it that, after giving effect to the Initial Loans (i)
the Borrower has assets (excluding goodwill and other intangible assets
not capable of valuation) having value, both at fair value and at
present fair saleable value, greater than the amount of its
liabilities, and (ii) the Borrower's assets are sufficient in value to
provide the Borrower with sufficient working capital to enable it
profitably to operate its business and to meet its obligations as they
become due, and (iii) the Borrower has adequate capital to conduct the
business in which it is and proposes to be engaged.
(g) Release of Security Interests. The Lender shall have
received evidence satisfactory to it of the release and termination of
all Liens other than Permitted Liens.
Section 4.2 All Loans. At the time of making of each Loan,
including the Initial Loan:
(a) all of the representations and warranties made or deemed to
be made under this Agreement shall be true and correct at such time
both with and without giving effect to the Loans to be made at such
time and the application of the proceeds thereof, except that
representations and warranties which, by their terms, are applicable
only to the Effective Date shall be required to be true and correct
only as of the Effective Date,
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(b) the corporate actions of the Borrower referred to in Section
4.1(a)(4) shall remain in full force and effect and the incumbency of
officers shall be as stated in the certificates of incumbency delivered
pursuant to Section 4.1(a)(5) or as subsequently modified and reflected
in a certificate of incumbency delivered to the Lender, and
(c) the Lender may, without waiving either condition, consider
the conditions specified in Sections 4.2(a) and (b) fulfilled and a
representation by the Borrower to such effect made if no written notice
to the contrary is received by the Lender from the Borrower prior to
the making of the Loans then to be made.
Section 4.3 Revolving Credit Facility B. In addition to the
conditions set forth in Section 4.2, the effectiveness of Revolving
Credit Facility B and the obligation of the Lender to make Loans
thereunder are subject to the prior fulfillment of each of the
following conditions:
(a) the Borrower shall have paid the $25,000 Revolving Facility
B Closing Fee described in Section 3.2(d)(i);
(b) the Lender shall have elected, in its sole discretion, to
make Revolving Credit Facility B available, as evidenced by the
Lender's written notice to the Borrower accepting the Revolving Credit
Facility B Closing Fee and acknowledging the effectiveness of Revolving
Credit Facility B; and
(c) the Borrower shall execute such documentation as the Lender
may reasonably request in connection therewith, including amendments to
the Financing Statements if necessary or appropriate to reflect the
increased maximum amount of indebtedness covered thereby, and the
Borrower shall pay all recording taxes in connection with the recording
of such amendments.
Section 4.4 Revolving Credit Facility C. In addition to the
conditions set forth in Section 4.2, the effectiveness of Revolving
Credit Facility C and the obligation of the Lender to make Loans
thereunder are subject to the prior fulfillment of each of the
following conditions:
(a) the Borrower shall have given the Lender at least 30 days
prior written notice of its request to activate Revolving Credit
Facility C;
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(b) the Borrower shall have paid the $25,000 Revolving Credit
Facility C Closing Fee described in Section 3.2(d)(ii);
(c) the Lender shall have elected, in its sole discretion, to
make Revolving Credit Facility C available, as evidenced by the
Lender's written notice to the Borrower accepting the Revolving Credit
Facility C Closing Fee and acknowledging the effectiveness of Revolving
Credit Facility C; and
(d) the Borrower shall execute such documentation as the Lender
may reasonably request in connection therewith, including amendments to
the Financing Statements if necessary or appropriate to reflect the
increased maximum amount of indebtedness covered thereby, and the
Borrower shall pay all recording taxes in connection with the recording
of such amendments.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF THE BORROWER
Section 5.1 Representations and Warranties. The Borrower
represents and warrants to the Lender as follows:
(a) Organization; Power; Qualification. The Borrower and each
of its Subsidiaries is a corporation (or, in the case of the
Receivables Purchaser, a limited partnership), duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation (as the case may be), has the corporate
power and authority to own its properties and to carry on its business
as now being and hereafter proposed to be conducted and is duly
qualified and authorized to do business in each jurisdiction in which
failure to be so qualified and authorized could reasonably be expected
to have a Materially Adverse Effect. The jurisdictions in which the
Borrower and each of its Subsidiaries is qualified as of the Effective
Date to do business as a foreign corporation or limited partnership (as
the case may be) are listed on Schedule 5.1(a).
(b) Subsidiaries and Ownership of the Borrower. Except as set
forth on Schedule 5.1(b), the Borrower has no Subsidiaries as of the
Effective Date. The outstanding stock of the Borrower and each of its
corporate Subsidiaries has been duly and validly issued and is fully
paid and nonassessable and the number and owners of such shares of
capital stock as of the Effective Date are set forth on Schedule
5.1(b).
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(c) Authorization of Agreement, Note, Loan Documents and
Borrowing. The Borrower has the right and power and has taken all
necessary action to authorize it to execute, deliver and perform this
Agreement and each of the other Loan Documents to which it is a party
in accordance with their respective terms and to borrow hereunder.
This Agreement and each of the other Loan Documents to which it is a
party have been duly executed and delivered by the duly authorized
officers of the Borrower and each is, or when executed and delivered in
accordance with this Agreement will be, a legal, valid and binding
obligation of the Borrower, enforceable in accordance with its terms,
except, as to enforcement, only to bankruptcy, insolvency,
reorganization, moratorium, or similar laws at the time in effect
affecting the enforceability of the rights of creditors generally.
(d) Compliance of Agreement, Note, Loan Documents and Borrowing
with Laws, Etc. The execution, delivery and performance of this
Agreement and each of the other Loan Documents to which the Borrower or
any of its Subsidiaries is a party in accordance with their respective
terms do not and will not, by the passage of time, the giving of notice
or otherwise,
(i) require any Governmental Approval or violate any
applicable law relating to the Borrower or any of its
Subsidiaries,
(ii) conflict with, result in a breach of or constitute
a default under (A) the articles or certificate of
incorporation or by-laws of the Borrower or any of its
Subsidiaries, (B) any material indenture, agreement or other
material instrument to which the Borrower or any of its
Subsidiaries is a party or by which any of its property may be
bound or (C) any Governmental Approval relating to the Borrower
or any of its Subsidiaries, or,
(iii) result in or require the creation or imposition of
any Lien upon or with respect to any property now owned or
hereafter acquired by the Borrower or any of its Subsidiaries
other than the Security Interest.
(e) Business. The Borrower is engaged principally in the
business described on Schedule 5.1(e).
(f) Compliance with Law; Governmental Approvals. Except as set
forth in Schedule 5.1(f), the Borrower and each of its Subsidiaries (i)
has all Governmental Approvals, including permits relating to federal,
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state and local Environmental Laws, ordinances and regulations required
by any applicable law for it to conduct its business, each of which is
in full force and effect, is final and not subject to review on appeal
and is not the subject of any pending or, to the knowledge of the
Borrower, threatened attack by direct or collateral proceeding, and
(ii) is in compliance with each Governmental Approval applicable to it
and in compliance with all other applicable laws relating to it,
including, without being limited to, all Environmental Laws and all
occupational health and safety laws applicable to it or its properties,
except for matters described in clause (i) or (ii) which would not,
singly or in the aggregate, cause a Default or Event of Default or have
a Materially Adverse Effect and in respect of which adequate reserves
have been established on its books.
(g) Titles to Properties. Except as set forth in Schedule
5.1(g) or, with respect to property other than the Collateral, for such
matters which would not have a Materially Adverse Effect, the Borrower
and each of its Subsidiaries has good and marketable title to or a
valid leasehold interest in all its real estate and valid and legal
title to or a valid leasehold interest in all personal property and
assets used in or necessary to the conduct of its business, including,
but not limited to, those reflected on the consolidated balance sheet
of the Borrower delivered pursuant to Section 5.1(m)(ii).
(h) Liens. Except as set forth in Schedule 5.1(h) or, with
respect to property other than the Collateral, for such matters which
would not have a Materially Adverse Effect, none of the properties and
assets of the Borrower or any of its Subsidiaries is subject to any
Lien, except Permitted Liens. Other than the Financing Statements, no
financing statement under the Uniform Commercial Code of any state
which names the Borrower as debtor and which has not been terminated
has been filed in any state or other jurisdiction, and the Borrower has
not signed any such financing statement or any security agreement
authorizing any secured party thereunder to file any such financing
statement, except to perfect those Liens listed in Schedule 5.1(h) and
Permitted Liens.
(i) Indebtedness and Guaranties. Set forth on Schedule 5.1(i)
is a complete and correct listing as of the Effective Date of all of
the Borrower's and its Subsidiaries' (i) Indebtedness for Money
Borrowed and (ii) Guaranties. Neither the Borrower nor any of its
Subsidiaries is in default of any material provision of any agreement
evidencing or relating to such any such Indebtedness or Guaranty.
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(j) Litigation. Except as set forth on Schedule 5.1(j), there
are no actions, suits or proceedings pending (nor, to the knowledge of
the Borrower, are there any actions, suits or proceedings threatened,
nor is there any basis therefor) against or in any other way relating
adversely to or affecting the Borrower or any of its Subsidiaries or
any of their property in any court or before any arbitrator of any kind
or before or by any governmental body, which, if determined adversely
to the Borrower or any of its Subsidiaries, could reasonably be
expected to have a Materially Adverse Effect.
(k) Tax Returns and Payments. Except as set forth on Schedule
5.1(k) or for those matters which would not have a Materially Adverse
Effect, all United States federal, state and local and foreign
national, provincial and local and all other tax returns of the
Borrower and each of its Subsidiaries required by applicable law to be
filed have been duly filed, and all United States federal, state and
local and foreign national, provincial and local and all other taxes,
assessments and other governmental charges or levies upon the Borrower
and each of its Subsidiaries and their property, income, profits and
assets which are due and payable have been paid, except any such
nonpayment which is at the time permitted under Section 8.4. The
charges, accruals and reserves on the books of the Borrower and each of
its Subsidiaries in respect of United States federal, state and local
taxes and foreign national, provincial and local taxes for all fiscal
years and portions thereof since the organization of the Borrower and
each of its Subsidiaries are in the judgment of the Borrower adequate,
and the Borrower knows of no reason to anticipate any additional
assessments for any of such years which, singly or in the aggregate,
could reasonably be expected to have a Materially Adverse Effect.
(l) Burdensome Provisions. Neither the Borrower nor any of its
Subsidiaries is a party to any indenture, agreement, lease or other
instrument, or subject to any charter or corporate restriction,
Governmental Approval or applicable law, compliance with the terms of
which could reasonably be expected to have a Materially Adverse Effect.
(m) Financial Statements. The Borrower has furnished to the
Lender a copy of (i) its audited balance sheet as at December 31, 1996,
and the related statements of income, cash flow and retained earnings
for the twelve-month period then ended and (ii) its unaudited balance
sheet as at March 31, 1997, and the related statement of income for the
three-month period then ended. Such financial statements are complete
and correct and present fairly and in all material respects in
accordance with GAAP, the financial position of the Borrower and its
Consolidated Subsidiaries (in the case of such unaudited financial
statements, both including and excluding GHC) as at the dates thereof
and the results of operations of
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the Borrower and its Consolidated Subsidiaries (including and excluding
GHC) for the periods then ended. Except as disclosed or reflected in
such financial statements, neither the Borrower nor any of its
Consolidated Subsidiaries had any material liabilities, contingent or
otherwise, and there were no material unrealized or anticipated losses
of the Borrower or any of its Consolidated Subsidiaries.
(n) Adverse Change. Since the date of the financial statements
described in clause (i) of Section 5.1(m), (i) no change in the
business, assets, liabilities, condition (financial or otherwise),
results of operations or business prospects of the Borrower or any of
its Subsidiaries has occurred that has had, or could reasonably be
expected to have, a Materially Adverse Effect, and (ii) no event has
occurred or failed to occur which has had, or could reasonably be
expected to have, a Materially Adverse Effect.
(o) ERISA. Neither the Borrower nor any Related Company
maintains or contributes to any Benefit Plan other than those listed on
Schedule 5.1(o). Each Benefit Plan maintained by the Borrower or any
Related Company is in substantial compliance with ERISA, and neither
the Borrower nor any Related Company has received any notice asserting
that a Benefit Plan is not in compliance with ERISA. No material
liability to the PBGC or to a Multiemployer Plan has been, or is
expected by the Borrower to be, incurred by the Borrower or any Related
Company.
(p) Absence of Defaults. Neither the Borrower nor any of its
Subsidiaries is in default under its articles or certificate of
incorporation or by-laws, and no event has occurred which has not been
remedied, cured or waived (i) that constitutes a Default or an Event of
Default or (ii) that constitutes or that, with the passage of time or
giving of notice, or both, would constitute a default or event of
default by the Borrower or any of its Subsidiaries under any material
agreement (other than this Agreement) or judgment, decree or order to
which the Borrower or any of its Subsidiaries is a party or by which
the Borrower or any of its Subsidiaries or any of their properties may
be bound or which would require the Borrower or any of its Subsidiaries
to make any payment thereunder prior to the scheduled maturity date
therefor.
(q) Accuracy and Completeness of Information. All written
information, reports and other papers and data produced by or on behalf
of the Borrower and furnished to the Lender were, at the time the same
were so furnished, complete and correct in all material respects to the
extent necessary to give the recipient a true and accurate knowledge of
the subject matter, no fact is known to the Borrower which has had, or
could reasonably be expected to have (so far as the Borrower can
foresee),
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a Materially Adverse Effect which has not been set forth in the
financial statements or disclosure delivered prior to the Effective
Date, in each case referred to in Section 5.1(m), or in such written
information, reports or other papers or data or otherwise disclosed in
writing to the Lender prior to the Effective Date. No document
furnished or written statement made to the Lender by the Borrower in
connection with the negotiation, preparation or execution of this
Agreement or any of the Loan Documents contains any untrue statement of
a fact material to the creditworthiness of the Borrower and its
Subsidiaries or omits to state a material fact necessary in order to
make the statements contained therein not misleading.
(r) Solvency. In each case after giving effect to the
Indebtedness represented by the Loans outstanding and to be incurred
and the transactions contemplated by this Agreement, each of the
Borrower and GHC is solvent, having assets of a fair value which
exceeds the amount required to pay its debts (including contingent,
subordinated, unmatured and unliquidated liabilities) as they become
absolute and matured, and each of the Borrower and GHC is able to and
anticipates that it will be able to meet its debts as they mature and
has adequate capital to conduct the business in which it is or proposes
to be engaged.
(s) Chief Executive Office. The chief executive office of the
Borrower and GHC is located at the address or addresses set forth on
Schedule 5.1(s); except as set forth Schedule 5.1(s), neither the
Borrower nor GHC has maintained its chief executive office at any other
address at any time during the four months immediately preceding the
Agreement Date.
(t) Status of Inventory. All Inventory included in any
Borrowing Base Certificate delivered to the Lender pursuant to Section
7.10(a) meets the criteria enumerated in the definition of Eligible
Inventory, except as disclosed in such Borrowing Base Certificate or in
a subsequent Borrowing Base Certificate or as otherwise specifically
disclosed in writing to the Lender. All Inventory is in good condi-
tion, meets all standards imposed by any governmental agency or
department or division thereof having regulatory authority over such
goods, their use or sale, and is currently either usable or saleable in
the normal course of the Borrower's business, except to the extent
reserved against in the financial statements delivered pursuant to
Article 9 or as disclosed on a Schedule of Inventory delivered to the
Lender pursuant to Section 7.10(a). Set forth on Schedule 5.1(t) is
the (i) address (including street, city, county and state) of each
facility at which Inventory is located, (ii) the approximate quantity
in Dollars of the Inventory customarily located at each such facility,
and (iii) if the facility is leased or is a third party warehouse or
processor location, the name of
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the landlord or such third party warehouseman or processor. All
Inventory is located on the premises set forth on Schedule 5.1(t) or is
in transit to one of such locations, except as otherwise disclosed in
writing to the Lender; the Borrower has not located Inventory at
premises other than those set forth on Schedule 5.1(t) at any time
during the four months immediately preceding the Agreement Date.
(u) Equipment. All Equipment is in good order and repair in all
material respects, normal wear and tear excepted.
(v) Corporate and Fictitious Names; Trade Names. Except as
otherwise disclosed on Schedule 5.1(v), during the one-year period
preceding the Agreement Date, neither the Borrower nor GHC has been
known as or used any corporate or fictitious name other than the
corporate names of the Borrower and GHC on the Effective Date. All
trade names or styles under which the Borrower and GHC sell Inventory
are listed on Schedule 5.1(v).
(w) Federal Regulations. The Borrower is not engaged,
principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any
"margin stock" (as each of the quoted terms is defined or used in
Regulations G and U of the Board of Governors of the Federal Reserve
System).
(x) Investment Company Act. The Borrower is not an "investment
company" or a company "controlled" by an "investment company" (as each
of the quoted terms is defined or used in the Investment Company Act of
1940, as amended).
(y) Employee Relations. As of the Effective Date the Borrower
is not, except as set forth on Schedule 5.1(y), party to any collective
bargaining agreement nor has any labor union been recognized as the
representative of the Borrower's employees; the Borrower knows of no
pending, threatened or contemplated strikes, work stoppage or other
labor disputes involving its employees or those of its Subsidiaries.
(z) Intellectual Property. The Borrower owns or possesses all
Intellectual Property required to conduct its business as now and
presently planned to be conducted without, to its knowledge, conflict
with the rights of others, and Schedule 5.1(z) lists all Intellectual
Property owned as of the Effective Date by the Borrower, the absence of
which would have a Materially Adverse Effect.
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(aa) Receivables. The Borrower has not transferred any of its
accounts receivable to ICPPC, whether by means of a sale, capital
contribution or other transfer, since the transfer of the "Contributed
ICPPC Initial Receivables" pursuant to Section 1.8(a)(i) of the
Receivables Purchase Agreement.
Section 5.2 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article 5 and all
statements contained in any certificate, financial statement or other
instrument delivered by or on behalf of the Borrower pursuant to or in
connection with this Agreement or any of the Loan Documents (including,
but not limited to, any such representation, warranty or statement made
in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All
representations and warranties made under this Agreement shall be made
or deemed to be made at and as of the Agreement Date, at and as of the
Effective Date and at and as of the date of each Loan, except that
representations and warranties which, by their terms are applicable
only to one such date shall be deemed to be made only at and as of such
date. All representations and warranties made or deemed to be made
under this Agreement shall survive and not be waived by the execution
and delivery of this Agreement, any investigation made by or on behalf
of the Lender or any borrowing hereunder.
ARTICLE 6 - SECURITY INTEREST
Section 6.1 Security Interest. (a) To secure the payment,
observance and performance of the Secured Obligations, the Borrower
hereby mortgages, pledges and assigns all of the Collateral to the
Lender for itself and as agent for any Affiliate of the Lender and
grants to the Lender for itself and as agent for any Affiliate of the
Lender a continuing security interest in, and a continuing Lien upon,
all of the Collateral.
(b) As additional security for all of the Secured Obligations,
the Borrower grants to the Lender for itself and as agent for any
Affiliate of the Lender a security interest in, and assigns to the
Lender for itself and as agent for any Affiliate of the Lender all of
the Borrower's right, title and interest in and to, any deposits or
other sums at any time credited by or due from the Lender and each
Affiliate of the Lender to the Borrower, with the same rights therein
as if the deposits or other sums were credited by or due from the
Lender.
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Section 6.2 Continued Priority of Security Interest. (a) The
Security Interest granted by the Borrower shall at all times be valid,
perfected and enforceable against the Borrower and all third parties in
accordance with the terms of this Agreement, as security for the
Secured Obligations, and the Collateral shall not at any time be
subject to any Liens that are prior to, on a parity with or junior to
the Security Interest, other than Permitted Liens.
(b) The Borrower shall, at its sole cost and expense, take all
action that may be necessary or desirable, or that the Lender may
reasonably request, so as at all times to maintain the validity,
perfection, enforceability and rank of the Security Interest in the
Collateral in conformity with the requirements of Section 6.2(a) or to
enable the Lender to exercise or enforce its rights hereunder,
including, but not limited to: (i) paying all taxes, assessments and
other claims lawfully levied or assessed on any of the Collateral,
except to the extent that such taxes, assessments and other claims
constitute Permitted Liens, (ii) diligently seeking to obtain, after
the Agreement Date, landlords', mortgagees' or mechanics' releases,
subordinations or waivers, (iii) delivering to the Lender, endorsed or
accompanied by such instruments of assignment as the Lender may
specify, and stamping or marking in such manner as the Lender may
specify, any and all chattel paper, instruments, letters and advices of
guaranty and documents evidencing or forming a part of the Collateral,
and (iv) executing and delivering financing statements, pledges,
designations, hypothecations, notices and assignments, in each case in
form and substance satisfactory to the Lender, relating to the
creation, validity, perfection, maintenance or continuation of the
Security Interest under the UCC or other applicable law.
(c) During the existence of a Default or Event of Default, the
Lender is hereby authorized to file one or more financing or
continuation statements or amendments thereto without the signature of
or in the name of the Borrower for any purpose described in Section
6.2(b). A carbon, photographic or other reproduction of this Agreement
or of any of the Security Documents or of any financing statement filed
in connection with this Agreement is sufficient as a financing
statement, to the extent permitted by applicable law.
(d) The Borrower shall ▇▇▇▇ its books and records as may be
necessary or appropriate to evidence, protect and perfect the Security
Interest and shall cause its financial statements to reflect the
Security Interest.
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ARTICLE 7 - COLLATERAL COVENANTS
Until the Revolving Credit Facility has been terminated and all the
Secured Obligations have been indefeasibly paid in full, unless the
Lender shall otherwise consent in the manner provided in Section 12.11:
Section 7.1 Collection of Receivables Securitization Proceeds.
(a) The Borrower will cause all moneys, checks, notes, drafts and
other payments relating to or constituting proceeds of the Receivables
Purchase Agreement to be remitted to the Lender for application against
the Secured Obligations, and in particular the Borrower will advise the
Receivables Purchaser to remit all amounts payable on account of the
Receivables Purchase Agreement to the Lender in accordance with the
terms of the Assignment of Receivables Securitization Proceeds and the
Blocked Account Agreement.
(b) All proceeds of the Receivables Purchase Agreement described
above shall be remitted daily to the Lender at the Lender's Office (i)
for application, on account of the Secured Obligations, as provided in
Section 2.3(c), 11.2 and 11.3, such credits to be entered on the second
Business Day after receipt (except in the case of funds received by the
Lender via wire transfer, which shall be entered on the date of
receipt) and to be conditioned upon final payment in cash or solvent
credits of the items giving rise to them, and (ii) with respect to any
balance remaining after such application, so long as no Event of
Default has occurred and is continuing, for transfer to the
Disbursement Account or such other account of the Borrower as the
Borrower and the Lender may agree.
(c) Any moneys, checks, notes, drafts or other payments referred
to in clause (a) of this Section 7.1 which are received by or on behalf
of the Borrower will be held in trust for the Lender and will be
delivered to the Lender at the Lender's Office as promptly as possible
in the exact form received, together with any necessary endorsements.
Section 7.2 Sales of Inventory. All sales of Inventory will be
made in compliance with all requirements of applicable law, with
respect to which noncompliance would have a Materially Adverse Effect.
Section 7.3 Returned Goods. The Security Interest in the
Inventory shall, without further act, attach to the cash and non-cash
proceeds resulting from the sale or other disposition thereof and to
all Inventory which is returned to the Borrower by customers or is
otherwise recovered.
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Section 7.4 Ownership and Defense of Title. (a) Except for
Permitted Liens, the Borrower shall at all times be the sole owner of
each and every item of Collateral and shall not create any Lien on, or
sell, lease, exchange, assign, transfer, pledge, hypothecate, grant a
security interest or security title in or otherwise dispose of, any of
the Collateral or any interest therein, except for sales of Inventory
in the ordinary course of business (including sales to Affiliates in
accordance with current procedures), for cash or on open account or on
terms of payment ordinarily extended to its customers, sales of
Inventory with a fair market value of up to $1,000,000 in connection
with any sale of the Borrower's St. Louis, Missouri branch permitted
under Section 10.2, and except as otherwise expressly contemplated
herein. The inclusion of "proceeds" of the Collateral under the
Security Interest shall not be deemed a consent by the Lender to any
other sale or other disposition of any part or all of the Collateral.
(b) The Borrower shall defend its title in and to the Collateral
and shall defend the Security Interest in the Collateral against the
claims and demands of all Persons.
(c) In addition to, and not in derogation of, the foregoing and
the requirements of any of the Security Documents, the Borrower shall
(i) protect and preserve all properties material to its business,
including Intellectual Property and maintain all tangible property in
good and workable condition in all material respects, with reasonable
allowance for wear and tear, and (ii) from time to time make or cause
to be made all needed and appropriate repairs, renewals, replacements
and additions to such properties necessary for the conduct of its busi-
ness, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times.
Section 7.5 Insurance. (a) The Borrower shall at all times
maintain insurance on the Inventory against loss or damage by fire,
theft, burglary, pilferage, loss in transit and such other hazards as
the Lender shall reasonably specify, in amounts and under policies
issued by insurers acceptable to the Lender. All premiums on such
insurance shall be paid by the Borrower and copies of the policies
delivered to the Lender. The Borrower will not use or permit the
Inventory to be used in violation of any applicable law or in any
manner which might render inapplicable any insurance coverage.
(b) All insurance policies required under Section 7.5(a) shall
name the Lender as an additional named insured and shall contain "New
York standard" loss payable clauses in the form submitted to the
Borrower by
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the Lender, or otherwise in form and substance satisfactory to the
Lender, naming the Lender as loss payee as its interests may appear,
and providing that (i) all proceeds thereunder shall be payable to the
Lender, (ii) no such insurance shall be affected by any act or neglect
of the insured or owner of the property described in such policy, and
(iii) such policy and loss payable clauses may not be canceled, amended
or terminated unless at least 30 days' prior written notice is given to
the Lender, except that only 15 days' prior written notice shall be
required for cancellation due to nonpayment of premiums.
(c) Any proceeds of insurance referred to in this Section 7.5
which are paid to the Lender shall be, at the option of the Lender in
its sole discretion, either (i) applied to rebuild, restore or replace
the damaged or destroyed property, or (ii) applied to the payment or
prepayment of the Secured Obligations.
(d) The Borrower shall at all times maintain, in addition to the
insurance required by Section 7.5(a) or any of the Security Documents,
insurance with responsible insurance companies against such risks and
in such amounts as is customarily maintained by similar businesses or
as may be required by applicable law, including such public liability,
products liability, third party property damage and business
interruption insurance as is consistent with reasonable business
practices, and from time to time deliver to the Lender upon its request
a detailed list of the insurance then in effect, stating the names of
the insurance companies, the amounts and rates of the insurance, the
dates of the expiration thereof and the properties and risks covered
thereby.
Section 7.6 Location of Offices and Collateral. (a) The
Borrower will not change the location of its chief executive office or
the place where it keeps its books and records relating to the
Collateral or change its name, identity or corporate structure without
giving the Lender 30 days' prior written notice thereof.
(b) All Inventory, other than Inventory in transit to any such
location, will at all times be kept by the Borrower at one of the
locations set forth in Schedules 5.1(t), and shall not, without the
prior written consent of the Lender, be removed therefrom except, so
long as no Event of Default shall have occurred and be continuing, for
sales of Inventory permitted under Section 7.2.
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(c) If any Inventory is in the possession or control of any of
the Borrower's agents or processors, the Borrower shall notify such
agents or processors of the Security Interest and, upon the occurrence
of an Event of Default, shall instruct them (and cause them to
acknowledge such instruction) to hold all such Inventory for the
account of the Lender, subject to the instructions of the Lender.
Section 7.7 Records Relating to Collateral. (a) The Borrower
will at all times (i) keep complete and accurate records of Inventory
on a basis consistent with past practices of the Borrower, itemizing
and describing the kind, type and quantity of Inventory and the
Borrower's cost therefor and a current price list for such Inventory,
and (ii) keep complete and accurate records of all other Collateral.
(b) The Borrower will take a physical listing of all Inventory,
wherever located, at least annually.
Section 7.8 Inspection. The Lender (by any of its officers,
employees or agents) shall have the right, to the extent that the
exercise of such right shall be within the control of the Borrower, at
any time or times to (a) visit the properties of the Borrower, inspect
the Collateral and the other assets of the Borrower and its
Subsidiaries and inspect and make extracts from the books and records
of the Borrower and its Subsidiaries, including, but not limited to,
management letters prepared by independent accountants, all during
customary business hours at such premises, (b) discuss the Borrower's
business, assets, liabilities, financial condition, results of
operations and business prospects, insofar as the same are reasonably
related to the rights of the Lender hereunder or under any of the Loan
Documents, with the Borrower's and its Subsidiaries' (i) principal
officers, (ii) independent accountants and other professionals
providing services to the Borrower, and (iii) any other Person (except
that any such discussion with any third parties shall be conducted only
in accordance with the Lender's standard operating procedures relating
to the maintenance of confidentiality of confidential information of
borrowers), and (c) verify the amount, quantity, value and condition
of, or any other matter relating to, any of the Collateral and in this
connection to review, audit and make extracts from all records and
files related to any of the Collateral. The Borrower will deliver to
the Lender any instrument necessary to authorize an independent
accountant or other professional to have discussions of the type
outlined above with the Lender or for the Lender to obtain records from
any service bureau maintaining records on behalf of the Borrower.
Section 7.9 Maintenance of Equipment. The Borrower shall
maintain all physical property that constitutes Equipment in good and
workable
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condition in all material respects, with reasonable allowance for wear
and tear, and shall exercise proper custody over all such property.
Section 7.10 Information and Reports.
(a) Schedule of Inventory. The Borrower shall deliver to the
Lender on or before the Effective Date, and no later than the 15th day
after the end of each accounting month of the Borrower thereafter, a
Schedule of Inventory as of the last Business Day of the immediately
preceding accounting month of the Borrower, itemizing and describing
the kind, type, quantity and location of Inventory and the cost
thereof.
(b) Borrowing Base Certificate. The Borrower shall deliver to
the Lender not later than the 15th day of each accounting month of the
Borrower a Borrowing Base Certificate prepared as of the close of
business on the last Business Day of the preceding accounting month.
(c) Monthly Securitization Report. Simultaneous with the
delivery thereof to the Receivables Trustee, and in any event within
the time period set forth in the Pooling Agreement (as defined in the
Receivables Purchase Agreement), the Borrower shall deliver to the
Lender a copy of the Monthly Report described in Section 3.5(d) of the
Pooling Agreement.
(d) Notice of Diminution of Value. The Borrower shall give
prompt notice to the Lender of any matter or event which has resulted
in, or may result in, the actual or potential diminution in excess of
$500,000 in the value of any of its Collateral, except for any
diminution in the value of any Inventory in the ordinary course of
business which has been appropriately reserved against, as reflected in
the financial statements previously delivered to the Lender pursuant to
Article 9.
(e) Certification. Each of the schedules delivered to the
Lender pursuant to this Section 7.10 shall be certified by the Chief
Financial Officer of the Borrower to be true, correct and complete as
of the date indicated thereon.
(f) Other Information. The Lender may, in its discretion, from
time to time require the Borrower to deliver the schedules described in
Section 7.10(a) and (b) more or less often and on different schedules
than specified in such Section, and the Borrower will comply with such
requests, it being understood that initially the Lender will require
that the Borrower deliver Borrowing Base certificates by the second
Business
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Day of each week (prepared as of the close of business on the last
Business Day of the preceding week). The Borrower shall also furnish
to the Lender such other information with respect to the Collateral as
the Lender may from time to time reasonably request.
Section 7.11 Power of Attorney. The Borrower hereby appoints
the Lender, during the existence of a Default or Event of Default, as
its attorney, with power (a) to endorse the name of the Borrower on any
checks, notes, acceptances, money orders, drafts or other forms of
payment or security that may come into the Lender's possession, and (b)
to sign the name of the Borrower on any invoice or ▇▇▇▇ of lading
relating to any Inventory or other Collateral, on any drafts against
customers related to letters of credit, and on notices of assignment,
financing statements and other public records relating to the
perfection or priority of the Security Interest.
ARTICLE 8 - AFFIRMATIVE COVENANTS
Until the Revolving Credit Facility has been terminated and all the
Secured Obligations have been indefeasibly paid in full, unless the
Lender shall otherwise consent in the manner provided for in Section
12.11, the Borrower will, and will cause each of its Subsidiaries to:
Section 8.1 Preservation of Corporate Existence and Similar
Matters. Preserve and maintain its corporate existence, rights,
franchises, licenses and privileges in the jurisdiction of its
incorporation and qualify and remain qualified as a foreign corporation
and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification or authorization and the failure to be so qualified would
have a Materially Adverse Effect.
Section 8.2 Compliance with Applicable Law. Comply with all
applicable laws relating to it where the failure to comply would have a
Materially Adverse Effect.
Section 8.3 Conduct of Business. Engage only in businesses in
substantially the same fields as the businesses conducted on the
Effective Date.
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Section 8.4 Payment of Taxes and Claims. Pay or discharge when
due (a) all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or upon any properties
belonging to it, and (b) all lawful claims of materialmen, mechanics,
carriers, warehousemen and landlords for labor, materials, supplies and
rentals which, if unpaid, might become a Lien on any properties of the
Borrower or such Subsidiary, except that this Section 8.4 shall not
require the payment or discharge of any such tax, assessment, charge,
levy or claim which is being contested in good faith by appropriate
proceedings and for which adequate reserves have been established on
the appropriate books.
Section 8.5 Accounting Methods and Financial Records. Maintain
a system of accounting, and keep such books, records and accounts
(which shall be true and complete), as may be required or as may be
necessary to permit the preparation of financial statements in
accordance with GAAP consistently applied.
Section 8.6 Use of Proceeds. (a) Use the proceeds of (i) the
Initial Loans to pay the amounts indicated in Schedule 8.6 to the
Persons indicated therein, and (ii) all subsequent Revolving Credit
Loans only for working capital and general business purposes, including
but not limited to acquisitions of businesses in similar lines of
business as the Borrower, and
(b) not use any part of such proceeds to purchase or carry, or
to reduce or retire or refinance any credit incurred to purchase or
carry, any margin stock (within the meaning of Regulation G or U of the
Board of Governors of the Federal Reserve System) or for any other
purpose which would involve a violation of such Regulation G or U or
Regulation T or X of such Board of Governors or for any other purpose
prohibited by law or by the terms and conditions of this Agreement.
Section 8.7 Accuracy of Information. Furnish to the Lender
written information, reports, statements and other papers and data,
whether pursuant to Article 9 or any other provision of this Agreement
or any of the other Loan Documents, which shall be, at the time the
same is so furnished, complete and correct in all material respects to
the extent necessary to give the Lender true and accurate knowledge of
the subject matter.
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ARTICLE 9 - INFORMATION
Until the Revolving Credit Facility has been terminated and all the
Secured Obligations have been indefeasibly paid in full, unless the
Lender shall otherwise consent in the manner set forth in Section
12.11, the Borrower will furnish to the Lender at the Lender's Office:
Section 9.1 Financial Statements.
(a) Audited Year-End Statements. As soon as available, but in
any event within 150 days after the end of each fiscal year of the
Borrower, copies of the consolidated balance sheets of the Borrower and
its Consolidated Subsidiaries (including and excluding GHC) as at the
end of such fiscal year and the related consolidated and consolidating
statements of income, stockholders' equity and cash flow for such
fiscal year, in each case setting forth in comparative form the figures
for the previous year of the Borrower and its Consolidated Subsidiaries
and reported on, without qualification, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other
independent certified public accountants selected by the Borrower and
acceptable to the Lender.
(b) Quarterly Financial Statements. As soon as available, but
in any event within 45 days after the end of each accounting quarter of
the Borrower, copies of the unaudited consolidated balance sheets of
the Borrower and its Consolidated Subsidiaries (including and excluding
GHC) as at the end of such quarter and the related unaudited
consolidated and consolidating income statement for the Borrower and
its Consolidated Subsidiaries (including and excluding GHC) for such
quarter and for the portion of the fiscal year of the Borrower and its
Consolidated Subsidiaries through such quarter, certified by the chief
financial officer of the Borrower to the best of his knowledge as
presenting fairly the financial condition and results of operations of
the Borrower and its Consolidated Subsidiaries (including and excluding
GHC) as at the date thereof and for the periods ended on such date,
subject to normal year end adjustments.
(c) Projected Financial Statements. As soon as available, but
in any event on or before January 31 following the end of each fiscal
year of the Borrower, forecasted financial statements, prepared by the
Borrower, consisting of balance sheets, cash flow statements and income
statements of the Borrower and its Consolidated Subsidiaries (including
and excluding GHC), reflecting projected borrowings hereunder and
setting forth the assumptions on which such forecasted financial
statements were prepared, covering the one-year period until the next
fiscal year end.
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All such financial statements shall be complete and correct in all
material respects and all such financial statements referred to in
clauses (a) and (b) shall be prepared in accordance with GAAP (except,
with respect to interim financial statements, for the omission of
footnotes) applied consistently throughout the periods reflected
therein.
Section 9.2 Discussions With Accountants. The Borrower
authorizes the Lender to discuss the financial condition of the
Borrower with the Borrower's independent certified public accountants
and agrees that such discussion or communication shall be without
liability to either the Lender or the Borrower's independent certified
public accountants. The Borrower shall deliver a letter addressed to
such accountants authorizing them to comply with the provisions of this
Section 9.2.
Section 9.3 Officer's Certificate. Together with each delivery
of financial statements required by Section 9.1(a) and (b), a
certificate of the Borrower's President or chief financial officer, in
the form of Exhibit C attached hereto, (a) stating that, based on an
examination sufficient to enable him to make an informed statement, no
Default or Event of Default exists or, if such is not the case,
specifying such Default or Event of Default and its nature, when it
occurred, whether it is continuing and the steps being taken by the
Borrower with respect to such Default or Event of Default, and (b)
setting forth the calculations necessary to establish whether or not
the Borrower was in compliance with the covenants contained in Sections
10.1, 10.2, and 10.5 as of the date of such statements.
Section 9.4 Copies of Other Reports. (a) Promptly upon receipt
thereof, copies of all material reports, if any, submitted to the
Borrower or its Board of Directors by its independent public
accountants, including, without limitation, all management reports .
(b) From time to time and promptly upon each request, such
forecasts, data, certificates, reports, statements, opinions of
counsel, documents or further information regarding the business,
assets, liabilities, financial condition, results of operations or
business prospects of the Borrower and its Subsidiaries as the Lender
may reasonably request. The rights of the Lender under this Section
9.4(b) are in addition to and not in derogation of its rights under any
other provision of this Agreement or any Loan Document.
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(c) As soon as practicable, copies of all financial statements,
proxy statements and reports that the Borrower or Holdings shall send
to its shareholders generally and of all registration statements and
all regular or periodic reports which the Borrower or Holdings shall
file with the Securities and Exchange Commission or any successor
commission or other securities commission.
(d) If requested by the Lender, statements in conformity with
the requirements of Federal Reserve Form G-1 or U-1 referred to in
Regulations G and U, respectively, of the Board of Governors of the
Federal Reserve System.
(e) As soon as practicable, copies of all amendments,
modifications, supplements and waivers relating to the Senior Secured
Notes Documents or the Receivables Purchase Documents.
Section 9.5 Notice of Litigation and Other Matters. Prompt
notice of:
(a) the commencement, to the extent the Borrower is aware of the
same, of all proceedings and investigations by or before any
governmental or nongovernmental body and all actions and proceedings in
any court or before any arbitrator against or in any other way relating
adversely to, or adversely affecting, the Borrower or any Affiliate of
the Borrower or any of their respective property, assets or businesses
which might, singly or in the aggregate, cause a Default or an Event of
Default or have a Materially Adverse Effect,
(b) any amendment of the articles of incorporation or by-laws of
the Borrower,
(c) any change in the business, assets, liabilities, financial
condition, results of operations or business prospects of the Borrower
or any Affiliate of the Borrower which has had or could reasonably be
expected to have any Materially Adverse Effect and any change in the
executive officers (chief executive officer and chief financial
officer) of the Borrower,
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(d) any (i) Default or Event of Default, (ii) event that
constitutes or that, with the passage of time or giving of notice or
both, would constitute a default or event of default by the Borrower
under any material agreement (other than this Agreement) to which it is
a party or by which it or any of its property is bound if the exercise
of remedies thereunder by the other party to such agreement would have,
either individually or in the aggregate, a Materially Adverse Effect,
(iii) "Default" or "Event of Default" under and as defined in the
Senior Secured Notes Indenture, or (iv) "Early Amortization Event"
under and as defined in the Receivables Purchase Agreement, and
(e) any termination or purported termination of the Blocked
Account Agreement.
Section 9.6 ERISA. As soon as possible and in any event within
30 days after the Borrower knows, or has reason to know, that:
(a) any Termination Event with respect to a Benefit Plan has
occurred or will occur,
(b) the aggregate present value of the Unfunded Vested Accrued
Benefits under all Plans has increased to an amount in excess of
$3,000,000, or
(c) the Borrower is in "default" (as defined in Section
4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
required by reason of its complete or partial withdrawal (as described
in Section 4203 or 4205 of ERISA) from such Multiemployer Plan, a
certificate of the President or the chief financial officer of the
Borrower setting forth the details of such of the events described in
clauses (a) through (c) as applicable and the action which is proposed
to be taken with respect thereto and, simultaneously with the filing
thereof, copies of any notice or filing which may be required by the
PBGC or other agency of the United States government with respect to
such of the events described in clauses (a) through (c) as applicable.
ARTICLE 10 - NEGATIVE COVENANTS
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Until the Revolving Credit Facility has been terminated and all the
Secured Obligations have been indefeasibly paid in full, unless the
Lender shall otherwise consent in the manner set forth in Section
12.11, the Borrower will not (and the Borrower will not permit any of
its Subsidiaries to) directly or indirectly:
Section 10.1 Financial Ratios.
(a) Maximum Liabilities to Tangible Net Worth. Permit the ratio
of total Liabilities to Tangible Net Worth for the Borrower and its
Consolidated Subsidiaries (other than GHC) at the end of any fiscal
quarter:
(i) from the Effective Date to and including December
30, 1997, to be greater than 16 to 1;
(ii) from and including December 31, 1997 to and
including December 30, 1998, to be greater than 14 to 1; and
(iii) at any time thereafter, to be greater than 12
to 1.
(b) Minimum Tangible Net Worth. Permit the Tangible Net Worth
of the Borrower and its Consolidated Subsidiaries (other than GHC) at
the end of any fiscal quarter:
(i) from the Effective Date to and including December
30, 1997, to be less than $15,000,000;
(ii) from and including December 31, 1997 to and
including December 30, 1998, to be less than $20,000,000; and
(iii) at any time thereafter, to be less than
$25,000,000.
(c) Minimum Interest Coverage Ratio. Permit the ratio of (i)
the Borrower's and its Consolidated Subsidiaries' (other than GHC) EBIT
to (ii) the Borrower's and its Consolidated Subsidiaries' (other than
GHC)
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Interest Expense, as of the end of each fiscal quarter of the Borrower,
measured for the immediately preceding four fiscal quarters, to be less
than 1.25 to 1.
(d) Maximum Funded Indebtedness Ratio. Permit the ratio of (i)
Average Funded Indebtedness to (ii) the Borrower's and its Consolidated
Subsidiaries' (other than GHC) EBITDA, as of the end of each fiscal
quarter of the Borrower, measured for the immediately preceding four
fiscal quarters, to be greater than 5.0 to 1. As used herein, "Average
Funded Indebtedness" means (A) the average outstanding amount of Funded
Indebtedness of the Borrower and its Consolidated Subsidiaries (other
than GHC) during the applicable fiscal quarter less (B) the unpaid
amount of the Purchase Price (as defined in the Receivables Purchase
Agreement) due and payable to the Borrower as of the last day of the
applicable fiscal quarter pursuant to Section 3.1(a)(i) of the
Receivables Purchase Agreement (after deducting from such Purchase
Price any applicable setoffs, claims or other deductions).
Section 10.2 Merger, Consolidation and Sale of Assets. Merge or
consolidate with any other Person or sell, lease or transfer or
otherwise dispose of all or a substantial portion of its assets to any
Person, except that (a) the Borrower may merge or consolidate with
another Person (including any Subsidiary) so long as the Borrower is
the surviving corporation and after giving effect thereto no Default or
Event of Default would exist, provided the Borrower has delivered to
the Lender evidence of compliance with the financial covenants set
forth in Article 10 on a pro forma basis after giving effect to such
merger or consolidation, (b) any Subsidiary may merge or consolidate
with another Person so long as such Subsidiary is the surviving
corporation and after giving effect thereto no Default or Event of
Default would exist, and (c) the Borrower may sell or dispose of its
interest in GHC to a non-Affiliated party in an arms length sale,
through a stock or asset sale, merger or consolidation, as long as the
Borrower receives fair consideration for such interest, provided, in
each case, that the Borrower has delivered to the Lender evidence of
compliance with the financial covenants set forth in Article 10 on a
pro forma basis after giving effect to such sale, merger or
consolidation.
Section 10.3 Investments. Except as permitted under Section
4.20 of the Senior Secured Notes Indenture, Acquire, after the
Agreement Date, any Business Unit or Investment or, after such date,
permit any Investment to be outstanding, other than Permitted
Investments; provided, however, that Borrower or any of its
Subsidiaries may Acquire any Business Unit or Person engaged in the
same or substantially similar line of business so long as (a) no
Default or Event of Default exists or will result
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therefrom, and (b) the Borrower has delivered to the Lender evidence of
compliance with the financial covenants set forth in Article 10 on a
pro forma basis after giving effect to the Acquisition.
Section 10.4 Benefit Plans. Permit, or take any action which
would result in, the aggregate present value of the Unfunded Vested
Accrued Benefits under all Benefit Plans of the Borrower to exceed $0.
Section 10.5 Amendments of Other Agreements. Amend, modify or
supplement, or permit or consent to any amendment, modification or
supplement of: (a) Sections 4.9, 4.10, 4.11, 4.12, 4.13, 4.15 or 4.20
of the Senior Secured Notes Indenture; or (b) any other provision of
the Senior Secured Notes Documents or Receivables Purchase Documents in
any way which would be materially adverse to the Lender.
Section 10.6 Minimum Availability. Permit Availability at any
time to be less than $3,000,000.
Section 10.7 Capital Expenditures. Make or incur any Capital
Expenditures, except that the Borrower and its Subsidiaries may make or
incur Capital Expenditures in any fiscal year in an amount not to
exceed, in the aggregate, $15,000,000 annually.
Section 10.8 Receivables Transfers. Transfer any of its
accounts receivable to ICPPC, whether by means of a sale, capital
contribution or other transfer, unless such receivables are sold by
ICPPC to the Receivables Purchaser pursuant to the Receivables Purchase
Agreement and ICPPC becomes a party to the Assignment of Receivables
Securitization Proceeds and subjects its right to receive the proceeds
from such sale to the first priority security interest of the Lender.
ARTICLE 11 - DEFAULT
Section 11.1 Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event and
whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment or order of any court or
any order, rule or regulation of any governmental or nongovernmental
body:
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(a) Default in Payment of Loans. The Borrower shall default in
any payment of principal of, or interest on, any Loan or Note when and
as due (whether at maturity, by reason of acceleration or otherwise).
(b) Other Payment Default. The Borrower shall default in the
payment, as and when due, of principal of or interest on, any other
Secured Obligation, and such default shall continue for five days after
written notice thereof has been given to the Borrower by the Lender.
(c) Misrepresentation. Any representation or warranty made or
deemed to be made by the Borrower under this Agreement or any other
Loan Document or any amendment hereto or thereto shall at any time
prove to have been incorrect or misleading in any material respect when
made.
(d) Default in Performance. The Borrower shall default (i) in
the performance or observance of any material term, covenant, condition
or agreement contained in Articles 6, 7, 8, 9 or 10; or (ii) in the
performance or observance of any material term, covenant, condition or
agreement contained in any other provision of this Agreement (other
than as specifically provided for otherwise in this Section 11.1) and
such default shall continue for a period of 30 days after written
notice thereof has been given to the Borrower by the Lender.
(e) Indebtedness Cross-Default.
(i) The Borrower or any of its Subsidiaries shall fail
to pay when due and payable the principal of or interest on
Indebtedness (other than the Loans or Note) where the principal
amount of such Indebtedness is in excess of $1,500,000, or the
maturity of any such Indebtedness shall have been accelerated
in accordance with the provisions of any indenture, contract or
instrument providing for the creation of or concerning such
Indebtedness or been required to be prepaid prior to the stated
maturity thereof, or any event shall have occurred and be
continuing which, with or without the passage of time or the
giving of notice, or both, would permit any holder or holders
of such Indebtedness, any trustee or agent acting on behalf of
such holder or holders or any other Person so to accelerate
such maturity.
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(ii) A "Default" or "Event of Default" under and as
defined in the Senior Secured Notes Indenture shall have
occurred and be continuing or the Senior Secured Notes
Indenture shall be terminated or for any reason no longer be in
effect.
(iii) An "Early Amortization Event" under and as defined
in the Receivables Purchase Agreement shall have occurred and
be continuing or, at any time prior to the termination of the
Receivables Purchase Agreement, the Blocked Account Agreement
shall be terminated or for any reason no longer be in effect
(or the Lender or the Borrower shall receive a notice
purporting to terminate the Blocked Account Agreement).
(f) Other Cross-Defaults. The Borrower or any of its
Subsidiaries shall default in the payment when due or in the
performance or observance of any material obligation or condition of
any agreement, contract or lease (other than the Security Documents or
any such agreement, contract or lease relating to Indebtedness), if the
exercise of remedies thereunder by the other party to such agreement
could have a Materially Adverse Effect.
(g) Voluntary Bankruptcy Proceeding. The Borrower, any of its
Subsidiaries or any Obligor shall (i) commence a voluntary case under
the federal bankruptcy laws (as now or hereafter in effect), (ii)
commence a proceeding seeking to take advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts,
(iii) consent to or fail to contest in a timely and appropriate manner
any petition filed against it in an involuntary case under such
bankruptcy laws or other laws, (iv) apply for or consent to, or fail to
contest in a timely and appropriate manner, the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator
of itself or of a substantial part of its property, domestic or
foreign, (v) admit in writing its inability to pay its debts as they
become due, (vi) make a general assignment for the benefit of
creditors, or (vii) take any corporate action for the purpose of
authorizing any of the foregoing.
(h) Involuntary Bankruptcy Proceeding. A case or other
proceeding shall be commenced against the Borrower, any of its
Subsidiaries or any Obligor in any court of competent jurisdiction
seeking (i) relief under the federal bankruptcy laws (as now or
hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or
adjustment of debts, or (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of any such
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Person or of all or any substantial part of the assets, domestic or
foreign, of any such Person, and such case or proceeding shall continue
undismissed or unstayed for a period of 60 consecutive calendar days,
or an order granting the relief requested in such case or proceeding
against any such Person (including, but not limited to, an order for
relief under such federal bankruptcy laws) shall be entered.
(i) Loan Documents. Any Obligor shall default in the per-
formance or observance of any material term, covenant, condition or
agreement contained in, or the payment of any other sum covenanted to
be paid by any Obligor under, any such Loan Document and such default
shall continue for a period of 30 days after written notice thereof has
been given to the Borrower by the Lender; or any provision of this
Agreement, or of any other Loan Document after delivery thereof
hereunder, shall for any reason cease to be valid and binding, other
than a nonmaterial provision rendered unenforceable by operation of
law, or any Obligor or other party thereto (other than the Lender)
shall so state in writing; or this Agreement or any other Loan
Document, after delivery thereof hereunder, shall for any reason (other
than any action taken independently by the Lender and except to the
extent permitted by the terms thereof) cease to create a valid,
perfected and, except as otherwise expressly permitted herein, first
priority Lien on, or security interest in, any of the Collateral
purported to be covered thereby.
(j) Judgment. A judgment or order for the payment of money
which exceeds $1,500,000 in amount shall be entered against the
Borrower, any of its Subsidiaries or any Obligor by any court and such
judgment or order shall continue undischarged or unstayed for 30 days.
(k) Attachment. A warrant or writ of attachment or execution or
similar process which exceeds $1,500,000 in value shall be issued
against any property of the Borrower, any of its Subsidiaries or any
Obligor and such warrant or process shall continue undischarged or
unstayed for 30 days.
(l) ERISA. (i) Any Termination Event with respect to a Benefit
Plan shall occur that, after taking into account the excess, if any, of
(A) the fair market value of the assets of any other Benefit Plan with
respect to which a Termination Event occurs on the same day (but only
to the extent that such excess is the property of the Borrower) over
(B) the present value on such day of all vested nonforfeitable benefits
under such other Benefit Plan, results in an Unfunded Vested Accrued
Benefit in excess of $0, (ii) any Benefit Plan shall incur an
"accumulated funding deficiency" (as defined in Section 412 of the Code
or Section 302 of
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ERISA) for which a waiver has not been obtained in accordance with the
applicable provisions of the Code and ERISA, or (iii) the Borrower is
in "default" (as defined in Section 4219(c)(5) of ERISA) with respect
to payments to a Multiemployer Plan resulting from the Borrower's
complete or partial withdrawal (as described in Section 4203 or 4205 of
ERISA) from such Multiemployer Plan, and with respect to clauses (i),
(ii) and (iii) above, any such event or occurrence could reasonably be
expected to heave a Materially Adverse Effect or result in liability to
the Borrower in excess of $1,500,000.
(m) Qualified Audits. The independent certified public
accountants retained by the Borrower shall refuse to deliver an opinion
in accordance with Section 9.1(a) with respect to the annual financial
statements of the Borrower and its Consolidated Subsidiaries.
(n) Change of Control. A Change of Control shall occur.
(o) Material Adverse Change. There occurs any act, omission,
event, undertaking or circumstance or series of acts, omissions,
events, undertakings or circumstances which have, or in the sole
judgment of the Lender would have, either individually or in the
aggregate, a Materially Adverse Effect.
(p) Change in Management. The person serving as the Borrower's
chief executive officer shall for any reason cease to hold such
position and 90 days shall have elapsed during which time no
replacement satisfactory to the Lender shall have been appointed.
Section 11.2 Remedies.
(a) Automatic Acceleration and Termination of Facilities. Upon
the occurrence of an Event of Default specified in Section 11.1(g) or
(h), (i) the principal of and the interest on the Loans and the Note at
the time outstanding, and all other amounts owed to the Lender under
this Agreement or any of the Loan Documents and all other Secured
Obligations, shall thereupon become due and payable without pre-
sentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in this Agreement or any of the Loan
Documents to the contrary notwithstanding, and (ii) the Revolving
Credit Facility and the commitment of the Lender to make advances
thereunder or under this Agreement shall immediately terminate.
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(b) Other Remedies. If any Event of Default (other than as
specified in Section 11.1(g) or (h)) shall have occurred and be
continuing, the Lender, in its sole and absolute discretion, may do any
of the following:
(i) declare the principal of and interest on the Loans
and the Notes at the time outstanding, and all other amounts
owed to the Lender under this Agreement or any of the Loan
Documents and all other Secured Obligations, to be forthwith
due and payable, whereupon the same shall immediately become
due and payable without presentment, demand, protest or other
notice of any kind, all of which are expressly waived, anything
in this Agreement or the Loan Documents to the contrary
notwithstanding;
(ii) terminate the Revolving Credit Facility and any
commitment of the Lender to make advances hereunder;
(c) Further Remedies. If any Event of Default shall have
occurred and be continuing, the Lender, in its sole and absolute
discretion, may do any of the following:
(i) enter upon any premises on which Inventory may be
located and, without resistance or interference by the
Borrower, take physical possession of any or all thereof and
maintain such possession on such premises or move the same or
any part thereof to such other place or places as the Lender
shall choose, without being liable to the Borrower on account
of any loss, damage or depreciation that may occur as a result
thereof, so long as the Lender shall act reasonably and in good
faith;
(ii) require the Borrower to and the Borrower shall,
without charge to the Lender, assemble the Inventory and
maintain or deliver it into the possession of the Lender or any
agent or representative of the Lender at such place or places
as the Lender may designate;
(iii) at the expense of the Borrower, cause any of the
Inventory to be placed in a public or field warehouse, and the
Lender shall not be liable to the Borrower on account of any
loss, damage or depreciation that may occur as a result
thereof, so long as the Lender shall act reasonably and in good
faith;
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(iv) without notice, demand or other process, and
without payment of any rent or any other charge, enter any of
the Borrower's premises and, without breach of the peace, until
the Lender completes the enforcement of its rights in the
Collateral, take possession of such premises or place
custodians in exclusive control thereof, remain on such
premises and use the same and any of the Borrower's equipment,
for the purpose of completing any work in process and preparing
any Inventory for disposition and disposing thereof, and the
Lender is hereby granted a license or sublicense and all other
rights as may be necessary, appropriate or desirable to use the
Intellectual Property in connection with the foregoing, and the
rights of the Borrower under all licenses and franchise
agreements shall inure to the Lender's benefit (provided,
however, that any use of any federally registered trademarks as
to any goods shall be subject to the control as to the quality
of such goods of the owner of such trademarks and the goodwill
of the business symbolized thereby);
(v) exercise any and all of its rights under any and all
of the Security Documents;
(vi) apply any cash Collateral to the payment of the
Secured Obligations in any order in which the Lender may elect
or use such cash in connection with the exercise of any of its
other rights hereunder or under any of the Security Documents;
and
(vii) exercise all of the rights and remedies of a
secured party under the UCC (whether or not the UCC is
applicable) and under any other applicable law, including,
without limitation, the right, without notice except as
specified below and with or without taking the possession
thereof, to sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any location chosen
by the Lender, for cash, on credit or for future delivery and
at such price or prices and upon such other terms as the Lender
may deem commercially reasonable. The Borrower agrees that, to
the extent notice of sale shall be required by law, at least 10
days' notice to the Borrower of the time and place of any
public sale or the time after which any private sale is to be
made shall constitute reasonable notice, but notice given in
any other reasonable manner or at any other reasonable time
shall also constitute reasonable notification. The Lender
shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Lender may
adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place
to which it was so adjourned.
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Section 11.3 Application of Proceeds. All proceeds from each
sale of, or other realization upon, all or any part of the Collateral
following an Event of Default shall be applied or paid over as follows:
(a) First: to the payment of all costs and expenses incurred in
connection with such sale or other realization, including reasonable
attorneys' fees,
(b) Second: to the payment of the Secured Obligations (with the
Borrower remaining liable for any deficiency) in any order which the
Lender may elect,
(c) Third: to the creation of a fund in an amount equal to the
Letter of Credit Reserve, which fund shall be held by the Lender as
security for and applied to the payment of any amounts which may
thereafter become due under the Letter of Credit Facility, and
(d) Fourth: the balance (if any) of such proceeds shall be paid
to the Borrower or, subject to any duty imposed by law or otherwise, to
whomsoever is entitled thereto.
The Borrower shall remain liable and will pay, on demand, any
deficiency remaining in respect of the Secured Obligations, together
with interest thereon at a rate per annum equal to the highest rate
then payable hereunder on such Secured Obligations, which interest
shall constitute part of the Secured Obligations.
Section 11.4 Power of Attorney. In addition to the
authorizations granted to the Lender under Section 7.11 or under any
other provision of this Agreement or any of the Loan Documents, upon
and during the continuance of an Event of Default, the Borrower hereby
irrevocably designates, makes, constitutes and appoints the Lender (and
all Persons designated by the Lender from time to time) as the
Borrower's true and lawful attorney and agent in fact, and the Lender
or any agent of the Lender may, without notice to the Borrower, and at
such time or times as the Lender or any such agent in its sole
discretion may determine, in the name of the Borrower or the Lender,
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(a) demand payment of the Collateral, enforce payment thereof by
legal proceedings or otherwise, settle, adjust, compromise, extend or
renew any or all of the Collateral or any legal proceedings brought to
collect the Collateral, discharge and release the Collateral or any
portion thereof and exercise all of the Borrower's rights and remedies
with respect to the collection of the Collateral,
(b) prepare, file and sign the name of the Borrower on any proof
of claim in bankruptcy or any notice of Lien, assignment or
satisfaction of Lien or similar document in connection with any of the
Collateral,
(c) endorse the name of the Borrower upon any chattel paper,
document, instrument, notice, freight ▇▇▇▇, ▇▇▇▇ of lading or similar
document or agreement relating to the Inventory or any other
Collateral,
(d) use the stationery of the Borrower, open the Borrower's
mail, and notify the post office authorities to change the address for
delivery of the Borrower's mail to an address designated by the Lender,
(e) use the information recorded on or contained in any data
processing equipment and computer hardware and software relating to the
Inventory or other Collateral to which the Borrower or any Subsidiary
of the Borrower has access.
Section 11.5 Miscellaneous Provisions Concerning Remedies .
(a) Rights Cumulative. The rights and remedies of the Lender
under this Agreement, the Note and each of the Loan Documents shall be
cumulative and not exclusive of any rights or remedies which it or they
would otherwise have. In exercising such rights and remedies, the
Lender may be selective and no failure or delay by the Lender in
exercising any right shall operate as a waiver of such right nor shall
any single or partial exercise of any power or right preclude its other
or further exercise or the exercise of any other power or right.
(b) Waiver of Marshalling. The Borrower hereby waives any right
to require any marshalling of assets and any similar right.
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(c) Limitation of Liability. Nothing contained in this Article
11 or elsewhere in this Agreement or in any of the Loan Documents shall
be construed as requiring or obligating the Lender or any agent or
designee of the Lender to make any demand or to make any inquiry as to
the nature or sufficiency of any payment received by it or to present
or file any claim or notice or take any action with respect to any
Collateral or the moneys due or to become due thereunder or in
connection therewith or to take any steps necessary to preserve any
rights against prior parties, and neither the Lender nor any of its
agents or designees shall have any liability to the Borrower for
actions taken pursuant to this Article 11, any other provision of this
Agreement or any of the Loan Documents, so long as the Lender or such
agent or designee shall act reasonably and in good faith.
(d) Appointment of Receiver. In any action under this Article
11, the Lender shall be entitled to the appointment of a receiver,
without notice of any kind whatsoever, to take possession of all or any
portion of the Collateral and to exercise such power as the court shall
confer upon such receiver.
Section 11.6 Trademark License. The Borrower hereby grants to
the Lender the nonexclusive right and license to use any trademark then
used by the Borrower, for the purposes set forth in Section 11.2(c)(vi)
and for the purpose of enabling the Lender to realize on the Collateral
and to permit any purchaser of any portion of the Collateral through a
foreclosure sale or any other exercise of the Lender's rights and
remedies under the Loan Documents to use, sell or otherwise dispose of
the Collateral bearing any such trademark. Such right and license is
granted free of charge, without the requirement that any monetary
payment whatsoever be made to the Borrower or any other Person by the
Lender. The Borrower hereby represents, warrants, covenants and agrees
that it presently has, and shall continue to have, the right, without
the approval or consent of others, to grant the license set forth in
this Section 11.6.
ARTICLE 12 - MISCELLANEOUS
Section 12.1 Notices.
(a) Method of Communication. Except as specifically provided in
this Agreement or in any of the Loan Documents, all notices and the
communications hereunder and thereunder shall be in writing or by
telephone subsequently confirmed in writing. Notices in writing shall
be
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delivered personally or sent by overnight courier service, by certified
or registered mail, postage pre-paid, or by facsimile transmission and
shall be deemed received, in the case of personal delivery, when
delivered, in the case of overnight courier service, on the next
Business Day after delivery to such service, in the case of mailing, on
the third day after mailing (or, if such day is a day on which
deliveries of mail are not made, on the next succeeding day on which
deliveries of mail are made) and, in the case of facsimile
transmission, upon transmittal. A telephonic notice to the Lender as
understood by the Lender will be deemed to be the controlling and
proper notice in the event of a discrepancy with or failure to receive
a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent
to it at the following addresses, or any other address of which all the
other parties are notified in writing.
If to the Borrower: International Comfort Products
Corporation (USA)
▇▇▇ ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: International Comfort Products
Corporation (USA)
Suite 1700
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Lender: NationsBank, N.A.
c/o NationsBank Business Credit
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(c) Lender's Office. The Lender hereby designates its
office located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, or any subsequent office which shall have been specified for
such purpose by written notice to the Borrower, as the office to which
payments due are to be made and at which Loans will be disbursed.
Section 12.2 Expenses. The Borrower agrees to pay or reimburse
on demand all costs and expenses incurred by the Lender, including,
without limitation, the reasonable fees and disbursements of counsel,
in connection with (a) the negotiation, preparation, execution,
delivery, enforcement and termination of this Agreement and each of the
other Loan Documents, whenever the same shall be executed and
delivered, including, without limitation, (i) the costs and expenses of
appraisals of the collateral, (ii) the costs and expenses of lien
searches, and (iii) taxes, fees and other charges of filing the
Financing Statements and continuations and the costs and expenses of
taking other actions to perfect, protect, and continue the Security
Interest; (b) the preparation, execution and delivery of any waiver,
amendment, supplement or consent by the Lender relating to this
Agreement or any of the Loan Documents; (c) sums paid or obligations
incurred in connection with the payment of any amount or taking any
action required of the Borrower under the Loan Documents that the
Borrower fails to pay or take; (d) if an Event of Default exists, costs
of inspections and verifications of the Collateral, including, without
limitation, standard per diem fees charged by the Lender for travel,
lodging, and meals for inspections of the Collateral and the Borrower's
operations and books and records by the Lender's agents; (e) costs and
expenses of forwarding loan proceeds, collecting checks and other items
of payment, and establishing and maintaining each Disbursement Account;
(f) costs and expenses of preserving and protecting the Collateral; (g)
after the occurrence of a Default, consulting with and obtaining
opinions and appraisals from one or more Persons, including personal
property appraisers, accountants and lawyers, concerning the value of
any Collateral for the Secured Obligations or related to the nature,
scope or value of any right or remedy of the Lender hereunder or under
any of the Loan Documents, including any review of factual matters in
connection therewith, which expenses shall include the reasonable fees
and disbursements of such Persons; and (h) costs and expenses paid or
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incurred to obtain payment of the Secured Obligations, enforce the
Security Interest, sell or otherwise realize upon the Collateral, and
otherwise enforce the provisions of the Loan Documents, or to prosecute
or defend any claim in any way arising out of, related to or connected
with, this Agreement or any of the Loan Documents, which expenses shall
include the reasonable fees and disbursements of counsel and of experts
and other consultants retained by the Lender.
The foregoing shall not be construed to limit any other provisions of
the Loan Documents regarding costs and expenses to be paid by the
Borrower. The Borrower hereby authorizes the Lender to debit the
Borrower's loan accounts (by increasing the principal amount of the
Revolving Credit Loan) in the amount of any such costs and expenses
owed by the Borrower when due.
Section 12.3 Stamp and Other Taxes. The Borrower will pay any
and all stamp, registration, recordation and similar taxes, fees or
charges and shall indemnify the Lender against any and all liabilities
with respect to or resulting from any delay in the payment or omission
to pay any such taxes, fees or charges, which may be payable or
determined to be payable in connection with the execution, delivery,
performance or enforcement of this Agreement and any of the Loan
Documents or the perfection of any rights or security interest
thereunder.
Section 12.4 Setoff. In addition to any rights now or hereafter
granted under applicable law, and not by way of limitation of any such
rights, upon and after the occurrence of any Event of Default, the
Lender and any participant with the Lender in the Loans are hereby
authorized by the Borrower at any time or from time to time, without
notice to the Borrower or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, time or demand, including, but
not limited to, indebtedness evidenced by certificates of deposit,
whether matured or unmatured) and any other indebtedness at any time
held or owing by the Lender or any participant to or for the credit or
the account of the Borrower against and on account of the Secured
Obligations irrespective or whether or not (a) the Lender shall have
made any demand under this Agreement or any of the Loan Documents, or
(b) the Lender shall have declared any or all of the Secured
Obligations to be due and payable as permitted by Section 11.2 and
although such Secured Obligations shall be contingent or unmatured.
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Section 12.5 Litigation. EACH OF THE LENDER AND THE BORROWER
HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY WAIVES TRIAL BY JURY IN
ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT IN WHICH AN
ACTION MAY BE COMMENCED BY OR AGAINST THE BORROWER OR THE LENDER
ARISING OUT OF THIS AGREEMENT, THE COLLATERAL OR ANY ASSIGNMENT THEREOF
OR BY REASON OF ANY OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN THE
BORROWER AND THE LENDER OF ANY KIND OR NATURE. THE BORROWER AND THE
LENDER HEREBY AGREE THAT THE FEDERAL COURT OF THE NORTHERN DISTRICT OF
GEORGIA OR, AT THE OPTION OF THE LENDER, ANY COURT IN WHICH THE LENDER
SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT
MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY AND WHICH SITS IN A
JURISDICTION IN WHICH THE BORROWER TRANSACTS BUSINESS SHALL HAVE NON-
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN THE BORROWER AND THE LENDER, PERTAINING DIRECTLY OR INDIRECTLY
TO THIS AGREEMENT OR THE LOAN DOCUMENTS OR TO ANY MATTER ARISING
THEREFROM. THE BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS,
HEREBY WAIVING PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT OR OTHER
PROCESS OR PAPERS ISSUED THEREIN AND AGREEING THAT SERVICE OF SUCH
SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE BORROWER AT THE ADDRESS
SET FORTH IN SECTION 12.1(b), WHICH SERVICE SHALL BE DEEMED MADE UPON
RECEIPT THEREOF. THE NON-EXCLUSIVE CHOICE OF FORUM SET FORTH IN THIS
SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT
OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT
TO ENFORCE THE SAME IN ANY APPROPRIATE JURISDICTION.
Section 12.6 Waiver of Rights. THE BORROWER HEREBY KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY WAIVES ALL RIGHTS WHICH THE BORROWER HAS
UNDER CHAPTER 14 OF TITLE 44 OF THE OFFICIAL CODE OF GEORGIA OR UNDER
ANY SIMILAR PROVISION OF APPLICABLE LAW TO NOTICE AND TO A JUDICIAL
HEARING PRIOR TO THE ISSUANCE OF A WRIT OF POSSESSION ENTITLING THE
LENDER, ITS SUCCESSORS AND ASSIGNS TO POSSESSION OF THE COLLATERAL UPON
DEFAULT OR EVENT OF DEFAULT. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING AND WITHOUT LIMITING ANY OTHER RIGHT WHICH THE LENDER MAY
HAVE, THE BORROWER CONSENTS THAT, IF THE LENDER FILES A PETITION FOR AN
IMMEDIATE WRIT OF POSSESSION IN COMPLIANCE WITH SECTIONS ▇▇-▇▇-▇▇▇ AND
▇▇-▇▇-▇▇▇ OF THE OFFICIAL CODE OF GEORGIA OR UNDER ANY SIMILAR
PROVISION OF APPLICABLE LAW AND THIS WAIVER OR A COPY HEREOF IS ALLEGED
IN SUCH PETITION AND ATTACHED THERETO, THE COURT BEFORE WHICH SUCH
PETITION IS FILED MAY DISPENSE WITH ALL RIGHTS AND PROCEDURES HEREIN
WAIVED AND MAY ISSUE FORTHWITH AN IMMEDIATE WRIT OF POSSESSION IN
ACCORDANCE WITH CHAPTER 14 OF TITLE 44 OF THE OFFICIAL CODE OF GEORGIA
OR IN ACCORDANCE WITH ANY SIMILAR PROVISION OF APPLICABLE LAW, WITHOUT
THE NECESSITY OF AN ACCOMPANYING BOND AS OTHERWISE REQUIRED BY SECTION
▇▇-▇▇-▇▇▇ OF THE OFFICIAL CODE OF GEORGIA OR IN ACCORDANCE WITH ANY
SIMILAR PROVISION OF APPLICABLE LAW. THE BORROWER HEREBY ACKNOWLEDGES
THAT IT HAS READ AND FULLY UNDERSTANDS THE TERMS OF THIS WAIVER AND THE
EFFECT HEREOF.
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Section 12.7 Reversal of Payments. To the extent the Borrower
makes a payment or payments to the Lender or the Lender receives any
payment or proceeds of the Collateral for the Borrower's benefit, which
payment(s) or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable
cause, then, the Lender shall have the continuing and exclusive right
to apply, reverse and re-apply any and all payments to any portion of
the Secured Obligations, and, to the extent of such payment or proceeds
received, the Secured Obligations or part thereof intended to be
satisfied shall be revived and continued in full force and effect, as
if such payment or proceeds had not been received by the Lender.
Section 12.8 Injunctive Relief. The Borrower recognizes that,
in the event the Borrower fails to perform, observe or discharge any of
its obligations or liabilities under this Agreement, any remedy of law
may prove to be inadequate relief to the Lender; therefore, the
Borrower agrees that the Lender, at the Lender's option, shall be
entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
Section 12.9 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose
relating to this Agreement, including, without limitation, all
computations utilized by the Borrower to determine whether it is in
compliance with any covenant contained herein, shall, unless there is
an express written direction or consent by the Lender to the contrary,
be performed in accordance with GAAP.
Section 12.10 Assignment; Participation. All the provisions of
this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, except that
the Borrower may not assign or transfer any of its rights under this
Agreement. The Lender may assign to one or more Persons, or sell
participations to one or more Persons in, all or a portion of its
rights and obligations hereunder and under the Note and, in connection
with any such assignment or sale of a participation, may assign its
rights and obligations under the Security Documents. The Lender may,
in connection with any assignment or proposed assignment or sale or
proposed sale of a participation, disclose to the assignee or proposed
assignee or participant or proposed participant any information
relating to the Borrower furnished to the Lender by or on behalf of the
Borrower.
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Section 12.11 Amendments. Any term, covenant, agreement or
condition of this Agreement or any of the other Loan Documents may be
amended or waived and any departure therefrom may be consented to if,
but only if, such amendment, waiver or consent is in writing signed by
the Lender and, in the case of an amendment, by the Borrower. Unless
otherwise specified in such waiver or consent, a waiver or consent
given hereunder shall be effective only in the specific instance and
for the specific purpose for which given.
Section 12.12 Performance of Borrower's Duties. The Borrower's
obligations under this Agreement and each of the Loan Documents shall
be performed by the Borrower at its sole cost and expense. If the
Borrower shall fail to do any act or thing which it has covenanted to
do under this Agreement or any of the Loan Documents, the Lender may
(but shall not be obligated to) do the same or cause it to be done
either in the name of the Lender or in the name and on behalf of the
Borrower, and the Borrower hereby irrevocably authorizes the Lender so
to act.
Section 12.13 Indemnification. The Borrower agrees to reimburse
the Lender for all reasonable costs and expenses, including reasonable
counsel fees and disbursements, incurred and to indemnify and hold the
Lender harmless from and against all losses suffered by the Lender,
other than losses resulting from the Lender's gross negligence or
willful misconduct, in connection with (a) the exercise by the Lender
of any right or remedy granted to it under this Agreement or any of the
Loan Documents, (b) any claim, and the prosecution or defense thereof,
arising out of or in any way connected with this Agreement or any of
the Loan Documents, except in the case of a dispute between the
Borrower and the Lender in which the Borrower prevails in a final
unappealed or unappealable judgment, and (c) the collection or
enforcement of the Secured Obligations or any of them.
Section 12.14 All Powers Coupled with Interest. All powers of
attorney and other authorizations granted to the Lender and any Persons
designated by the Lender pursuant to any provisions of this Agreement
or any of the Loan Documents shall be deemed coupled with an interest
and shall be irrevocable so long as any of the Secured Obligations
remain unpaid or unsatisfied or the Revolving Credit Facility has not
been terminated.
Section 12.15 Survival. Notwithstanding any termination of this
Agreement, (a) until all Secured Obligations arising under or with
respect to this Agreement have been paid in full and the Revolving
Credit Facility terminated, the Lender shall retain its Security
Interest and shall retain
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all rights under this Agreement and each of the Security Documents with
respect to the Collateral as fully as though this Agreement had not
been terminated, and (b) the indemnities to which the Lender is
entitled under the provisions of this Article 12 and any other
provision of this Agreement and the Loan Documents shall continue in
full force and effect and shall protect the Lender against events
arising after such termination as well as before.
Section 12.16 Severability of Provisions. Any provision of this
Agreement or any other Loan Document which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability
without invalidating the remainder of such provision or the remaining
provisions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 12.17 Governing Law. This Agreement and the Note shall
be construed in accordance with and governed by the law of the State of
Georgia.
Section 12.18 Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and shall be binding upon all parties, their successors and
assigns, and all of which taken together shall constitute one and the
same agreement.
Section 12.19 Reproduction of Documents. This Agreement, each
of the Loan Documents and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that may
hereafter be executed, (b) documents received by the Lender, and
(c) financial statements, certificates and other information previously
or hereafter furnished to the Lender, may be reproduced by the Lender
by any photographic, photostatic, microcard, microfilm, miniature
photographic or other similar process, and the Lender may destroy any
original document so reproduced. Each party hereto stipulates that, to
the extent permitted by applicable laws any such reproduction shall be
as admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original shall be in
existence and whether or not such reproduction was made by such Lender
in the regular course of business), and any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible
in evidence.
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Section 12.20 Funds Transfer Services.
(a) The Borrower acknowledges that the Lender has made available
to it a description of security procedures regarding funds transfers
executed by the Lender or an affiliate bank at the request of such
Borrower (the "Security Procedures"). The Borrower and the Lender agree
that the Security Procedures are commercially reasonable. The Borrower
further acknowledges that the full scope of the Security Procedures
which the Lender or such affiliate bank offers and strongly recommends
for funds transfers is available only if the Borrower communicates
directly with the Lender or such affiliate bank as applicable in
accordance with said procedures. If the Borrower attempts to
communicate by any other method or otherwise not in accordance with the
Security Procedures, the Lender or such affiliate bank, as applicable,
shall not be required to execute such instructions, but if the Lender
or such affiliate bank, as applicable, does so, the Borrower will be
deemed to have refused the Security Procedures that the Lender or such
affiliate bank, as applicable, offers and strongly recommends, and the
Borrower will be bound by any funds transfer, whether or not
authorized, which is issued in the Borrower's name and accepted by the
Lender or such affiliate bank, as applicable, in good faith. The
Lender or such affiliate bank, as applicable, may modify the Security
Procedures at such time or times and in such manner as the Lender or
such affiliate bank, as applicable, in its sole discretion, deems
appropriate to meet prevailing standards of good banking practice. By
continuing to use the Lender's or such affiliate bank's, as applicable,
wire transfer services after receipt of any modification of the
Security Procedures, the Borrower agrees that the Security Procedures,
as modified, are likewise commercially reasonable. The Borrower
further agrees to establish and maintain procedures to safeguard the
Security Procedures and any information related thereto.
(b) The Lender or such affiliate bank, as applicable, will
generally use the Fedwire funds transfer system for domestic funds
transfers, and the funds transfer system operated by the Society for
Worldwide International Financial Telecommunication (SWIFT) for
international funds transfers. International funds transfers may also
be initiated through the Clearing House InterBank Payment System
(CHIPs) or international cable. However, the Lender or such affiliate
bank, as applicable, may use any means and routes that the Lender or
such affiliate bank, as applicable, in its sole discretion, may
consider suitable for the transmission of funds. Each payment order,
or cancellation thereof, carried out through a funds transfer system or
a clearing house will be governed by all applicable funds transfer
system rules and clearing house rules and clearing arrangements,
whether or not the Lender or such affiliate bank, as applicable, is a
member of the system, clearing house or arrangement and the Borrower
acknowledges that the Lender's or such affiliate bank's, as applicable,
right to reverse, adjust, stop payment
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or delay posting of an executed payment order is subject to the laws,
regulations, rules, circulars and arrangements described herein.
Section 12.21 Consent to Advertising and Publicity. The
Borrower agrees that the Lender may issue and disseminate to the public
information describing the credit accommodation entered into pursuant
to this Agreement, including the name and address of the Borrower and
the amount and a general description of the credit facilities provided
hereunder.
Section 12.22 Final Agreement. This Agreement and the other
Loan Documents are intended by the parties hereto as the final,
complete and exclusive expression of the agreement among them with
respect to the subject matter hereof and thereof. This Agreement and
the other Loan Documents supersede any and all prior oral or written
agreements between the parties hereto relating to the subject matter
hereof and thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed in Atlanta, Georgia by their duly authorized officers in
several counterparts all as of the day and year first written above.
BORROWER:
INTERNATIONAL COMFORT PRODUCTS
CORPORATION (USA)
[CORPORATE SEAL]
Attest: By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ Title: Senior Vice President, CFO
--------------------------- & Treasurer
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President, General
Counsel & Secretary
LENDER:
NATIONSBANK, N.A.
By:
---------------------------------
Name:
Title:
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EXHIBIT "A"
REVOLVING CREDIT NOTE
$45,000,000 Date: July __, 1997
FOR VALUE RECEIVED, on July __, 1999 the undersigned promises
to pay to the order of NationsBank, N.A., (hereinafter, together with
any holder hereof, called "Holder") at Atlanta, Georgia (or at such
other place as the Holder may designate in writing to the undersigned)
the principal amount of $45,000,000 or so much thereof as has been
advanced hereunder.
The undersigned shall pay interest as provided in that certain
Loan and Security Agreement between the undersigned and Holder dated
July __, 1997 (the "Loan Agreement").
It is contemplated that the principal sum evidenced by this
Note may be reduced from time to time and that additional advances may
be made from time to time, as provided in the Loan Agreement; provided,
however, that the outstanding principal amount evidenced by this Note
shall not exceed the maximum amount provided in the Loan Agreement.
This Note is subject to the terms and conditions of, and
entitled to the benefit of the Collateral described in, the Loan
Agreement. Capitalized terms not defined herein shall have the
meanings given in the Loan Agreement.
No delay or failure on the part of the Holder in the exercise
of any right or remedy hereunder, under the Loan Agreement, the
Security Documents or at law or in equity, shall operate as a waiver
thereof, and no single or partial exercise by the Holder of any right
or remedy hereunder, under the Loan Agreement, the Security Documents,
or at law or in equity shall preclude or estop another or further
exercise thereof or the exercise of any other right or remedy.
Principal and interest on this Note shall be payable and paid
in lawful money of the United States of America.
The undersigned and all endorsers waive presentment, notice of
dishonor and protest.
Time is of the essence of this Note and, in case this Note is
collected by law or through an attorney at law, or under advice
therefrom, the undersigned agrees to pay all costs of collection,
including reasonable attorneys' fees if collected by or through an
attorney.
The provisions of this Note shall be construed and interpreted
and all rights and obligations of the parties hereunder determined in
accordance with the laws of the State of Georgia.
IN WITNESS WHEREOF, the undersigned has caused this Note to be
executed, sealed and delivered in Atlanta, Georgia, in its corporate
name, by and through its respective duly authorized officers, as of the
day and year first above written.
INTERNATIONAL COMFORT PRODUCTS
CORPORATION (USA)
By:
(Title)
ATTEST:
By:
(Title)
[CORPORATE SEAL]
OTHER EXHIBITS AND SCHEDULES OMITTED AS NOT MATERIAL