Exhibit 10.1
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of August 9, 2000
Among
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as the Lenders
and
BANK OF AMERICA, N.A.
as the Agent
and
▇▇▇▇ INDUSTRIES, INC.
as the Borrower
TABLE OF CONTENTS
Section Page
ARTICLE 1 LOANS AND LETTERS OF CREDIT.............................................................................2
1.1 Total Facility..................................................................................2
1.2 Revolving Loans.................................................................................2
1.3 Term Loans......................................................................................5
1.4 Letters of Credit...............................................................................5
1.5 Bank Products...................................................................................9
1.6 Effect On Prior Loans; Prior Credit Agreement...................................................9
1.7 Loan Account...................................................................................10
ARTICLE 2 INTEREST AND FEES......................................................................................10
2.1 Interest.......................................................................................10
2.2 Continuation and Conversion Elections..........................................................11
2.3 Maximum Interest Rate..........................................................................12
2.4 Closing Fee....................................................................................12
2.5 Unused Line Fee................................................................................12
2.6 Letter of Credit Fee...........................................................................13
ARTICLE 3 PAYMENTS AND PREPAYMENTS...............................................................................13
3.1 Revolving Loans................................................................................13
3.2 Termination of Facility........................................................................13
3.3 Repayment of the Term Loans....................................................................14
3.4 Prepayments of the Loans.......................................................................14
3.5 LIBOR Rate Loan Prepayments....................................................................15
3.6 Payments by the Borrower.......................................................................15
3.7 Payments as Revolving Loans....................................................................16
3.8 Apportionment, Application and Reversal of Payments............................................16
3.9 Indemnity for Returned Payments................................................................17
3.10 Agent's and Lenders'Books and Records; Monthly Statements......................................17
ARTICLE 4 TAXES, YIELD PROTECTION AND ILLEGALITY.................................................................17
4.1 Taxes..........................................................................................17
4.2 Illegality.....................................................................................18
4.3 Increased Costs and Reduction of Return........................................................19
4.4 Funding Losses.................................................................................19
4.5 Inability to Determine Rates...................................................................20
4.6 Certificates of Agent..........................................................................20
4.7 Survival.......................................................................................20
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Section Page
ARTICLE 5 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES......................................................20
5.1 Books and Records..............................................................................20
5.2 Financial Information..........................................................................20
5.3 Notices to the Lenders.........................................................................23
ARTICLE 6 GENERAL WARRANTIES AND REPRESENTATIONS.................................................................25
6.1 Authorization, Validity, and Enforceability of this Agreement and the Loan Documents...........25
6.2 Validity and Priority of Security Interest.....................................................26
6.3 Organization and Qualification.................................................................26
6.4 Corporate Name; Prior Transactions.............................................................26
6.5 Subsidiaries and Affiliates....................................................................26
6.6 Financial Statements and Projections...........................................................26
6.7 Capitalization.................................................................................27
6.8 Solvency.......................................................................................27
6.9 Debt...........................................................................................27
6.10 Distributions..................................................................................27
6.11 Real Estate; Leases............................................................................27
6.12 Proprietary Rights.............................................................................28
6.13 Trade Names....................................................................................28
6.14 Litigation.....................................................................................28
6.15 Labor Disputes.................................................................................28
6.16 Environmental Laws.............................................................................28
6.17 No Violation of Law............................................................................29
6.18 No Default.....................................................................................29
6.19 ERISA Compliance...............................................................................30
6.20 Taxes..........................................................................................30
6.21 Regulated Entities.............................................................................30
6.22 Use of Proceeds; Margin Regulations............................................................30
6.23 Copyrights, Patents, Trademarks and Licenses, etc..............................................31
6.24 No Material Adverse Change.....................................................................31
6.25 Full Disclosure................................................................................31
6.26 Material Agreements............................................................................31
6.27 Bank Accounts..................................................................................31
6.28 Governmental Authorization.....................................................................31
ARTICLE 7 AFFIRMATIVE AND NEGATIVE COVENANTS.....................................................................32
7.1 Taxes and Other Obligations....................................................................32
7.2 Legal Existence and Good Standing..............................................................32
7.3 Compliance with Law and Agreements; Maintenance of Licenses....................................32
7.4 Maintenance of Property; Inspection of Property................................................32
7.5 Insurance......................................................................................33
7.6 Insurance and Condemnation Proceeds............................................................33
7.7 Environmental Laws.............................................................................34
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Section Page
7.8 Compliance with ERISA..........................................................................35
7.9 Mergers, Consolidations or Sales...............................................................35
7.10 Distributions; Capital Change; Restricted Investments..........................................37
7.11 Transactions Affecting Collateral or Obligations...............................................37
7.12 Guaranties.....................................................................................37
7.13 Debt...........................................................................................37
7.14 Prepayment.....................................................................................37
7.15 Transactions with Affiliates...................................................................37
7.16 Investment Banking and Finder's Fees...........................................................38
7.17 Business Conducted.............................................................................38
7.18 Liens..........................................................................................38
7.19 Sale and Leaseback Transactions................................................................38
7.20 New Subsidiaries...............................................................................39
7.21 Fiscal Year....................................................................................39
7.22 Capital Expenditures...........................................................................39
7.23 Operating Lease Obligations....................................................................39
7.24 Fixed Charge Coverage Ratio....................................................................39
7.25 Availability...................................................................................40
7.26 Use of Proceeds................................................................................40
7.27 Distributions to Fund Prepayments..............................................................40
7.28 Florida Mortgage/Texas Mortgage................................................................40
7.29 Further Assurances.............................................................................40
ARTICLE 8 CONDITIONS OF LENDING..................................................................................41
8.1 Conditions Precedent to Making of Loans on the Closing Date....................................41
8.2 Conditions Precedent to Each Loan..............................................................42
ARTICLE 9 DEFAULT; REMEDIES......................................................................................43
9.1 Events of Default..............................................................................43
9.2 Remedies.......................................................................................46
ARTICLE 10 TERM AND TERMINATION..................................................................................47
10.1 Term and Termination...........................................................................47
ARTICLE 11 AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS..........................................47
11.1 Amendments and Waivers.........................................................................47
11.2 Assignments; Participations....................................................................49
ARTICLE 12 THE AGENT.............................................................................................51
12.1 Appointment and Authorization..................................................................51
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Section Page
12.2 Delegation of Duties...........................................................................51
12.3 Liability of Agent.............................................................................51
12.4 Reliance by Agent..............................................................................52
12.5 Notice of Default..............................................................................52
12.6 Credit Decision................................................................................52
12.7 Indemnification................................................................................53
12.8 Agent in Individual Capacity...................................................................53
12.9 Successor Agent................................................................................53
12.10 Withholding Tax................................................................................54
12.11 Collateral Matters.............................................................................55
12.12 Restrictions on Actions by Lenders; Sharing of Payments........................................56
12.13 Agency for Perfection..........................................................................57
12.14 Payments by Agent to Lenders...................................................................57
12.15 Settlement.....................................................................................57
12.16 Letters of Credit; Intra-Lender Issues.........................................................60
12.17 Concerning the Collateral and the Related Loan Documents.......................................62
12.18 Field Audit and Examination Reports; Disclaimer by Lenders.....................................62
12.19 Relation Among Lenders.........................................................................63
ARTICLE 13 MISCELLANEOUS.........................................................................................63
13.1 No Waivers; Cumulative Remedies................................................................63
13.2 Severability...................................................................................63
13.3 Governing Law; Choice of Forum; Service of Process.............................................63
13.4 WAIVER OF JURY TRIAL...........................................................................64
13.5 Survival of Representations and Warranties.....................................................65
13.6 Other Security and Guaranties..................................................................65
13.7 Fees and Expenses..............................................................................65
13.8 Notices........................................................................................65
13.9 Waiver of Notices..............................................................................67
13.10 Binding Effect.................................................................................67
13.11 Indemnity of the Agent and the Lenders by the Borrower.........................................67
13.12 Limitation of Liability........................................................................68
13.13 Final Agreement................................................................................68
13.14 Counterparts...................................................................................68
13.15 Captions.......................................................................................68
13.16 Right of Setoff................................................................................68
13.17 Confidentiality................................................................................69
13.18 Conflicts with Other Loan Documents............................................................69
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EXHIBITS AND SCHEDULES
ANNEX A - DEFINED TERMS
EXHIBIT A-1 - FORM OF REVOLVING LOAN NOTE
EXHIBIT A-2 - FORM OF TERM LOAN NOTE
EXHIBIT B - FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C - FINANCIAL STATEMENTS
EXHIBIT D - FORM OF NOTICE OF BORROWING
EXHIBIT E - FORM OF NOTICE OF CONTINUATION/CONVERSION
EXHIBIT F - FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
SCHEDULE 1.2 - LENDERS' COMMITMENTS (ANNEX A - DEFINED TERMS)
SCHEDULE 6.3 - ORGANIZATION AND QUALIFICATIONS
SCHEDULE 6.4 - PRIOR NAMES
SCHEDULE 6.5 - SUBSIDIARIES AND AFFILIATES
SCHEDULE 6.9 - DEBT
SCHEDULE 6.10 - DISTRIBUTIONS
SCHEDULE 6.11 - REAL ESTATE LIENS ON REAL ESTATE; AND LEASES
SCHEDULE 6.12 - PROPRIETARY RIGHTS
SCHEDULE 6.13 - TRADE NAMES
SCHEDULE 6.14 - LITIGATION
SCHEDULE 6.15 - LABOR DISPUTES
SCHEDULE 6.16 - ENVIRONMENTAL LAW
SCHEDULE 6.19 - ERISA COMPLIANCE
SCHEDULE 6.26 - MATERIAL AGREEMENTS
SCHEDULE 6.27 - BANK ACCOUNTS
SCHEDULE 7.12 - GUARANTIES
SCHEDULE 7.16 - INVESTMENT BANKERS' FEES
AMENDED AND RESTATED
CREDIT AGREEMENT
Amended and Restated Credit Agreement, dated as of August 9, 2000,
(this "Agreement") among the financial institutions from time to time parties
hereto (such financial institutions, together with their respective successors
and assigns, are referred to hereinafter each individually as a "Lender" and
collectively as the "Lenders"), Bank of America, N.A. with an office at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ as agent for the Lenders (in its capacity
as agent, the "Agent"), and ▇▇▇▇ Industries, Inc., a Delaware corporation, with
offices at Tyson Place, Suite 200, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ (the "Borrower").
W I T N E S S E T H:
WHEREAS, Borrower, NationsBank, N.A. (as predecessor to Agent), as
Agent and a Lender, and the Lenders party thereto, are parties to a Credit
Agreement dated as of June 26, 1998 (the "Prior Credit Agreement"), pursuant to
which Agent and the Lenders party thereto provided to Borrower certain loans in
the amount of $50,000,000 (the "Prior Loans");
WHEREAS, Borrower desires that the terms governing the outstanding
Prior Loans be amended and restated in accordance herewith;
WHEREAS, the Borrower has requested the Lenders to make available to
the Borrower a revolving line of credit for loans and letters of credit in an
amount not to exceed $50,000,000 and to make term loans to the Borrower in the
aggregate principal amount of $35,000,000, and which extensions of credit the
Borrower will use for the purposes permitted hereunder;
WHEREAS, capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed thereto in Annex A which is
attached hereto and incorporated herein; the rules of construction contained
therein shall govern the interpretation of this Agreement, and all Annexes,
Exhibits and Schedules attached hereto are incorporated herein by reference;
WHEREAS, the Lenders have agreed to make available to the Borrower a
revolving credit facility and term loans upon the terms and conditions set forth
in this Agreement.
WHEREAS, Anchor Holdings, Inc., a Delaware corporation ("Holdings"), is
willing to guarantee all of the obligations of Borrower to Agent and Lenders
under the Loan Documents and to pledge all of the stock of Borrower, for the
benefit of Agent and the Lenders, to secure such guaranty.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Lenders, the Agent, and the
Borrower hereby agree as follows.
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ARTICLE 1
LOANS AND LETTERS OF CREDIT
1.1 Total Facility. Subject to all of the terms and conditions of this
Agreement, the Lenders agree to make available a total credit facility of up to
$85,000,000 (the "Total Facility") to the Borrower from time to time during the
term of this Agreement. The Total Facility shall be composed of a revolving line
of credit consisting of Revolving Loans and Letters of Credit and the Term Loans
described herein.
1.2 Revolving Loans. (a) (i) Amounts. Subject to the satisfaction of the
conditions precedent set forth in Article 8, each Lender severally, but not
jointly, agrees, upon the Borrower's request from time to time on any Business
Day during the period from the Closing Date to the Termination Date, to make
revolving loans (the "Revolving Loans") to the Borrower in amounts not to exceed
such Lender's Pro Rata Share of Availability, except for Non-Ratable Loans and
Agent Advances. The Lenders, however, in their unanimous discretion, may elect
to make Revolving Loans or issue or arrange to have issued Letters of Credit in
excess of the Borrowing Base on one or more occasions, but if they do so,
neither the Agent nor the Lenders shall be deemed thereby to have changed the
limits of the Borrowing Base or to be obligated to exceed such limits on any
other occasion. If the Aggregate Revolver Outstandings exceed the Borrowing
Base, the Lenders may refuse to make or may otherwise restrict the making of
Revolving Loans as the Lenders determine until such excess has been eliminated,
subject to the Agent's authority, in its sole discretion, to make Agent Advances
pursuant to the terms of Section 1.2(i).
(ii) Borrower shall execute and deliver to each Lender a note to
evidence the Revolving Loans of that Lender. Each note shall be in the principal
amount of the Lender's Pro Rata Share of the Revolving Loan Commitments, dated
the date hereof and substantially in the form of Exhibit A-1 (each a "Revolving
Loan Note" and, collectively, the "Revolving Loan Notes"). Each Revolving Loan
Note shall represent the obligation of Borrower to pay the amount of Lender's
Pro Rata Share of the Revolving Loan Commitments, or, if less, such Lender's Pro
Rata Share of the aggregate unpaid principal amount of all Revolving Loans to
Borrower together with interest thereon as prescribed in Section 2.1. The entire
unpaid balance of the Revolving Loans and all other non-contingent Obligations
shall be immediately due and payable in full in immediately available funds on
the Termination Date.
(b) Procedure for Borrowing. (1) Each Borrowing shall be made
upon the Borrower's written notice delivered to the Agent in the form of a
notice of borrowing ("Notice of Borrowing"), which must be received by the Agent
prior to 11:00 a.m. (Chicago time) (i) three (3) Business Days prior to the
requested Funding Date, in the case of LIBOR Rate Loans and (ii) no later than
11:00 a.m. (Chicago time) on the requested Funding Date, in the case of Base
Rate Loans, specifying:
(A) the amount of the Borrowing, which in the
case of a LIBOR Rate Loan must equal or exceed $1,000,000 (and increments of
$250,000 in excess of such amount);
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(B) the requested Funding Date, which must
be a Business Day;
(C) whether the Revolving Loans requested
are to be Base Rate Revolving Loans or LIBOR Revolving Loans (and if not
specified, it shall be deemed a request for Base Rate Revolving Loans); and
(D) the duration of the Interest Period for
LIBOR Revolving Loans (and if not specified, it shall be deemed a request for an
Interest Period of one month);
provided, however, that with respect to the Borrowing to be made on the Closing
Date, such Borrowings will consist of Base Rate Revolving Loans only.
(2) In lieu of delivering a Notice of Borrowing, the
Borrower may give the Agent telephonic notice of such request by the required
time for advances to the Designated Account. The Agent at all times shall be
entitled to rely on such telephonic notice in making such Revolving Loans,
regardless of whether any written confirmation is received.
(3) The Borrower shall have no right to request LIBOR
Rate Loans while a Default or Event of Default has occurred and is continuing.
(c) Reliance upon Authority. Prior to the Closing Date, the
Borrower shall deliver to the Agent, a notice setting forth the account of the
Borrower ("Designated Account") to which the Agent is authorized to transfer the
proceeds of the Revolving Loans requested hereunder. The Borrower may designate
a replacement account from time to time by written notice. All such Designated
Accounts must be reasonably satisfactory to the Agent. The Agent is entitled to
rely conclusively on any person's request for Revolving Loans on behalf of the
Borrower, so long as the proceeds thereof are to be transferred to the
Designated Account. The Agent has no duty to verify the identity of any
individual representing himself or herself as a person authorized by the
Borrower to make such requests on its behalf.
(d) No Liability. The Agent shall not incur any liability to
the Borrower as a result of acting upon any notice referred to in Sections
1.2(b) and (c), which the Agent believes in good faith to have been given by an
officer or other person duly authorized by the Borrower to request Revolving
Loans on its behalf. The crediting of Revolving Loans to the Designated Account
conclusively establishes the obligation of the Borrower to repay such Revolving
Loans as provided herein.
(e) Notice Irrevocable. Any Notice of Borrowing (or telephonic
notice in lieu thereof) made pursuant to Section 1.2(b) must be irrevocable. The
Borrower shall be bound to borrow the funds requested therein in accordance
therewith.
(f) Agent's Election. Promptly after receipt of a Notice of
Borrowing (or telephonic notice in lieu thereof), the Agent shall elect to have
the terms of Section 1.2(g) or the terms of Section 1.2(h) apply to such
requested Borrowing. If the Bank declines in its sole discretion to make a
Non-Ratable Loan pursuant to Section 1.2(h), the terms of Section 1.2(g) shall
apply to the requested Borrowing.
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(g) Making of Revolving Loans. If Agent elects to have the
terms of this Section 1.2(g) apply to a requested Borrowing, then promptly after
receipt of a Notice of Borrowing or telephonic notice in lieu thereof, the Agent
shall notify the Lenders by telecopy, telephone or e-mail of the requested
Borrowing. Each Lender shall transfer its Pro Rata Share of the requested
Borrowing to the Agent in immediately available funds, to the account from time
to time designated by Agent, not later than noon (Chicago time) on the
applicable Funding Date. After the Agent's receipt of all proceeds of such
Revolving Loans, the Agent shall make the proceeds of such Revolving Loans
available to the Borrower on the applicable Funding Date by transferring same
day funds to the Designated Account; provided, however, that the amount of
Revolving Loans so made on any date shall not exceed the Availability on such
date.
(h) Making of Non-Ratable Loans. (A) If Agent elects, with the
consent of the Bank, to have the terms of this Section 1.2(h) apply to a
requested Borrowing, the Bank shall make a Revolving Loan in the amount of that
Borrowing available to the Borrower on the applicable Funding Date by
transferring same day funds to Borrower's Designated Account. Each Revolving
Loan made solely by the Bank pursuant to this Section is herein referred to as a
"Non-Ratable Loan", and such Revolving Loans are collectively referred to as the
"Non-Ratable Loans." Each Non-Ratable Loan shall be subject to all the terms and
conditions applicable to other Revolving Loans except that all payments thereon
shall be payable to the Bank solely for its own account. The aggregate amount of
Non-Ratable Loans outstanding at any time shall not exceed $5,000,000. The Agent
shall not request the Bank to make any Non-Ratable Loan if (1) the Agent has
received written notice from any Lender that one or more of the applicable
conditions precedent set forth in Article 8 will not be satisfied on the
requested Funding Date for the applicable Borrowing, or (2) the requested
Borrowing would exceed Availability on that Funding Date. The Agent shall not
otherwise be required to determine whether the applicable conditions precedent
set forth in Article 8 have been satisfied or the requested Borrowing would
exceed the Availability on that Funding Date applicable thereto prior to
requesting the Bank to make a Non-Ratable Loan.
(B) The Non-Ratable Loans shall be secured by the Agent's
Liens in and to the Collateral and shall constitute Base Rate Revolving Loans
and Obligations hereunder.
(i) Agent Advances. (A) Subject to the limitations set forth
below, the Agent is authorized by the Borrower and the Lenders, from time to
time in the Agent's sole discretion, (A) after the occurrence of a Default or an
Event of Default, or (B) at any time that any of the other conditions precedent
set forth in Article 8 have not been satisfied, to make Base Rate Revolving
Loans to the Borrower on behalf of the Lenders in an aggregate amount
outstanding at any time not to exceed 10% of the Borrowing Base which the Agent,
in its reasonable business judgment, deems necessary or desirable (1) to
preserve or protect the Collateral, or any portion thereof, (2) to enhance the
likelihood of, or maximize the amount of, repayment of the Loans and other
Obligations, or (3) to pay any other amount chargeable to the Borrower pursuant
to the terms of this Agreement, including costs, fees and expenses as described
in Section 13.7 (any of such advances are herein referred to as "Agent
Advances"); provided, that the Majority Lenders may at any time revoke the
Agent's authorization to make Agent Advances. Any such revocation must be in
writing and shall become effective prospectively upon the Agent's receipt
thereof. The Agent shall notify each Lender in writing of each Agent Advance.
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(B) The Agent Advances shall be secured by Agent's Liens in
and to the Collateral and shall constitute Base Rate Revolving Loans and
Obligations hereunder.
1.3 Term Loans.
(a) Amounts of Term Loans. Each Lender severally agrees to
make a term loan (any such term loan being referred to as a "Term Loan" and such
term loans being referred to collectively as the "Term Loans") to the Borrower
on the Closing Date, upon the satisfaction of the conditions precedent set forth
in Article 8, in an amount equal to such Lender's Pro Rata Share of $35,000,000.
The Term Loans shall initially be Base Rate Term Loans.
(b) Making of Term Loans. Each Lender shall make the amount of
such Lender's Term Loan available to the Agent in same day funds, to Agent's
designated account, not later than noon (Chicago time) on the Closing Date.
After the Agent's receipt of the proceeds of such Term Loans and upon
satisfaction of the conditions precedent set forth in Article 8, the Agent shall
make the proceeds of such Term Loans available to the Borrower on such Funding
Date by transferring same day funds equal to the proceeds of such Term Loans
received by the Agent to the Borrower's Designated Account or as the Borrower
shall otherwise instruct in writing.
(c) Term Loan Notes. The Borrower shall execute and deliver to
the Agent on behalf of each Lender, on the Closing Date, a promissory note,
substantially in the form of Exhibit A-2 attached hereto and made a part hereof
(such promissory notes, together with any new notes issued pursuant to Section
11.2 upon the assignment of any portion of any Lender's Term Loan, being
hereinafter referred to collectively as the "Term Loan Notes" and each of such
promissory notes being hereinafter referred to individually as a "Term Loan
Note"). The Term Loan Notes shall evidence each Lender's Term Loan, in an
original principal amount equal to that Lender's Pro Rata Share of $35,000,000
and with other appropriate insertions. Each Term Loan Note shall be dated the
Closing Date and stated to amortize in sixty-one (61) monthly installments. Each
of the first sixty (60) installments of principal shall be in an amount equal to
such Lender's Pro Rata Share of $448,717.95 and shall be payable on the first
day of each month, commencing on February 1, 2001. The final installment of
principal shall be in such Lender's Pro Rata Share of the amount of
$8,076,923.00 or otherwise in an amount equal to each Lender's Pro Rata Share of
the then remaining principal balance of the Term Loans and shall be payable on
the Stated Termination Date. Each such installment shall be payable to the Agent
for the account of the applicable Lender. The Term Loans shall be payable in
full on the Termination Date. Payments or prepayments of the Term Loans may not
be reborrowed.
1.4 Letters of Credit.
(a) Agreement to Issue or Cause To Issue. Subject to the terms
and conditions of this Agreement, the Agent agrees (i) to cause the Letter of
Credit Issuer to issue for the account of the Borrower one or more
commercial/documentary and standby letters of credit ("Letter of Credit") and/or
(ii) to provide credit support or other enhancement to a Letter of Credit Issuer
acceptable to Agent, which issues a Letter of Credit for the account of the
Borrower (any such credit support or enhancement being herein referred to as a
"Credit Support") from time to time during the term of this Agreement.
5
(b) Amounts; Outside Expiration Date. The Agent shall not have
any obligation to issue or cause to be issued any Letter of Credit or to provide
Credit Support for any Letter of Credit at any time if: (i) the maximum face
amount of the requested Letter of Credit is greater than the Unused Letter of
Credit Subfacility at such time; (ii) the maximum undrawn amount of the
requested Letter of Credit and all commissions, fees, and charges due from the
Borrower in connection with the opening thereof exceed Availability at such
time; or (iii) such Letter of Credit has an expiration date less than 30 days
prior to the Stated Termination Date or more than 12 months from the date of
issuance for standby letters of credit and 180 days for documentary letters of
credit. With respect to any Letter of Credit which contains any "evergreen" or
automatic renewal provision, each Lender shall be deemed to have consented to
any such extension or renewal unless any such Lender shall have provided to the
Agent, written notice that it declines to consent to any such extension or
renewal at least thirty (30) days prior to the date on which the Letter of
Credit Issuer is entitled to decline to extend or renew the Letter of Credit. If
all of the requirements of this Section 1.4 are met and no Default or Event of
Default has occurred and is continuing, no Lender shall decline to consent to
any such extension or renewal.
(c) Other Conditions. In addition to conditions precedent
contained in Article 8, the obligation of the Agent to issue or to cause to be
issued any Letter of Credit or to provide Credit Support for any Letter of
Credit is subject to the following conditions precedent having been satisfied in
a manner reasonably satisfactory to the Agent:
(1) The Borrower shall have delivered to the Letter
of Credit Issuer, at such times and in such manner as such Letter of Credit
Issuer may prescribe, an application in form and substance satisfactory to such
Letter of Credit Issuer and reasonably satisfactory to the Agent for the
issuance of the Letter of Credit and such other documents as may be required
pursuant to the terms thereof, and the form and terms of the proposed Letter of
Credit shall be reasonably satisfactory to the Agent and the Letter of Credit
Issuer; and
(2) As of the date of issuance, no order of any
court, arbitrator or Governmental Authority shall purport by its terms to enjoin
or restrain money center banks generally from issuing letters of credit of the
type and in the amount of the proposed Letter of Credit, and no law, rule or
regulation applicable to money center banks generally and no request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over money center banks generally shall prohibit, or
request that the proposed Letter of Credit Issuer refrain from, the issuance of
letters of credit generally or the issuance of such Letters of Credit.
(d) Issuance of Letters of Credit.
(1) Request for Issuance. Borrower must notify the
Agent of a requested Letter of Credit at least three (3) Business Days prior to
the proposed issuance date. Such notice shall be irrevocable and must specify
the original face amount of the Letter of Credit requested, the Business Day of
issuance of such requested Letter of Credit, whether such Letter of Credit may
be drawn in a single or in partial draws, the Business Day on which the
requested Letter of Credit is to expire, the purpose for which such Letter of
Credit is to be issued, and the
6
beneficiary of the requested Letter of Credit. The Borrower shall attach to such
notice the proposed form of the Letter of Credit.
(2) Responsibilities of the Agent; Issuance. As of
the Business Day immediately preceding the requested issuance date of the Letter
of Credit, the Agent shall determine the amount of the applicable Unused Letter
of Credit Subfacility and Availability. If (i) the face amount of the requested
Letter of Credit is less than the Unused Letter of Credit Subfacility and (ii)
the amount of such requested Letter of Credit and all commissions, fees, and
charges due from the Borrower in connection with the opening thereof would not
exceed Availability, the Agent shall cause the Letter of Credit Issuer to issue
the requested Letter of Credit on the requested issuance date so long as the
other conditions hereof are met.
(3) No Extensions or Amendment. The Agent shall not
be obligated to cause the Letter of Credit Issuer to extend or amend any Letter
of Credit issued pursuant hereto unless the requirements of this Section 1.4 are
met as though a new Letter of Credit were being requested and issued.
(e) Payments Pursuant to Letters of Credit.
The Borrower agrees to reimburse immediately the
Letter of Credit Issuer for any draw under any Letter of Credit and the Agent
for the account of the Lenders upon any payment pursuant to any Credit Support,
and to pay the Letter of Credit Issuer the amount of all other charges and fees
payable to the Letter of Credit Issuer in connection with any Letter of Credit
immediately when due, irrespective of any claim, setoff, defense or other right
which the Borrower may have at any time against the Letter of Credit Issuer or
any other Person. Each drawing under any Letter of Credit shall constitute a
request by the Borrower to the Agent for a Borrowing of a Base Rate Revolving
Loan in the amount of such drawing. The Funding Date with respect to such
borrowing shall be the date of such drawing.
(f) Indemnification; Exoneration; Power of Attorney
(1) Indemnification. In addition to amounts payable
as elsewhere provided in this Section 1.4, the Borrower agrees to protect,
indemnify, pay and save the Lenders and the Agent harmless from and against any
and all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees) which any Lender or the Agent
(other than the Bank in its capacity as Letter of Credit Issuer) may incur or be
subject to as a consequence, direct or indirect, of the issuance of any Letter
of Credit or the provision of any Credit Support or enhancement in connection
therewith; provided that the Borrower shall not be liable for any of the
foregoing to the extent it arises from the gross negligence or willful
misconduct of the Person to be indemnified. The Borrower's obligations under
this Section shall survive payment of all other Obligations.
(2) Assumption of Risk by the Borrower. As among the
Borrower, the Lenders, and the Agent, the Borrower assumes all risks of the acts
and omissions of, or misuse of any of the Letters of Credit by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, the Lenders and the Agent shall not be responsible for: (A) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
7
document submitted by any Person in connection with the application for and
issuance of and presentation of drafts with respect to any of the Letters of
Credit, even if it should prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign
any Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (C) the failure of the beneficiary of any Letter of Credit to comply
duly with conditions required in order to draw upon such Letter of Credit; (D)
errors, omissions, interruptions, or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they be
in cipher; (E) errors in interpretation of technical terms; (F) any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any Letter of Credit or of the proceeds thereof; (G) the
misapplication by the beneficiary of any Letter of Credit of the proceeds of any
drawing under such Letter of Credit; (H) any consequences arising from causes
beyond the control of the Lenders or the Agent, including any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
Governmental Authority or (I) the Letter of Credit Issuer's honor of a draw for
which the draw or any certificate fails to comply in any respect with the terms
of the Letter of Credit. None of the foregoing shall affect, impair or prevent
the vesting of any rights or powers of the Agent or any Lender under this
Section 1.4(f).
(3) Exoneration. Without limiting the foregoing,
no action or omission whatsoever by Agent or any Lender (excluding any Lender in
its capacity as a Letter of Credit Issuer) shall result in any liability of
Agent or and Lender to the Borrower, or relieve the Borrower of any of its
obligations hereunder to any such Person.
(4) Rights Against Letter of Credit Issuer.
Nothing contained in this Agreement is intended to limit the Borrower's rights,
if any, with respect to the Letter of Credit Issuer which arise as a result of
the letter of credit application and related documents executed by and between
the Borrower and the Letter of Credit Issuer.
(5) Indemnification by Lenders. To the extent
not reimbursed by the Borrower and without limiting the obligations of the
Borrower hereunder, the Lenders agree to indemnify the Letter of Credit Issuer
ratably in accordance with their respective Pro Rata Shares, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including attorneys' fees) or disbursements of any kind and
nature whatsoever that may be imposed on, incurred by or asserted against the
Letter of Credit Issuer in any way relating to or arising out of any Letter of
Credit or the transactions contemplated thereby or any action taken or omitted
by the Letter of Credit Issuer under any Letter of Credit or any Loan Document
in connection therewith; provided that no Lender shall be liable for any of the
foregoing to the extent it arises from the gross negligence or willful
misconduct of the Person to be indemnified. Without limitation of the foregoing,
each Lender agrees to reimburse the Letter of Credit Issuer promptly upon demand
for its Pro Rata Share of any costs or expenses payable by the Borrower to the
Letter of Credit Issuer, to the extent that the Letter of Credit Issuer is not
promptly reimbursed for such costs and expenses by the Borrower. The agreement
contained in this Section shall survive payment in full of all other
Obligations.
(6) Account Party. The Borrower hereby
authorizes and directs any Letter of Credit Issuer to name the Borrower as the
"Account Party" therein and to deliver to the
8
Agent all instruments, documents and other writings and property received by the
Letter of Credit Issuer pursuant to the Letter of Credit, and to accept and rely
upon the Agent's instructions and agreements with respect to all matters arising
in connection with the Letter of Credit or the application therefor.
(g) Supporting Letter of Credit; Cash Collateral. If,
notwithstanding the provisions of Section 1.4(b) and Section 10.1, any Letter of
Credit or Credit Support is outstanding upon the termination of this Agreement,
then upon such termination the Borrower shall deposit with the Agent, for the
ratable benefit of the Agent and the Lenders, with respect to each Letter of
Credit or Credit Support then outstanding, a standby letter of credit (a
"Supporting Letter of Credit") in form and substance satisfactory to the Agent,
issued by an issuer satisfactory to the Agent in an amount equal to the greatest
amount for which such Letter of Credit or such Credit Support may be drawn plus
any fees and expenses associated with such Letter of Credit or such Credit
Support, under which Supporting Letter of Credit the Agent is entitled to draw
amounts necessary to reimburse the Agent and the Lenders for payments to be made
by the Agent and the Lenders under such Letter of Credit or Credit Support and
any fees and expenses associated with such Letter of Credit or Credit Support.
Such Supporting Letter of Credit shall be held by the Agent, for the ratable
benefit of the Agent and the Lenders, as security for, and to provide for the
payment of, the aggregate undrawn amount of such Letters of Credit or such
Credit Support remaining outstanding.
1.5 Bank Products.
The Borrower may request and the Bank may, in its sole and
absolute discretion, arrange for the Borrower to obtain from the Bank or the
Bank's Affiliates Bank Products although the Borrower is not required to obtain
such products from the Bank. If Bank Products are provided by an Affiliate of
the Bank, the Borrower agrees to indemnify and hold the Bank and the Lenders
harmless from any and all costs and obligations now or hereafter incurred by the
Bank or any of the Lenders which arise from any indemnity given by the Bank to
its Affiliates related to such Bank Products; provided, however, nothing
contained herein is intended to limit the Borrower's rights, with respect to the
Bank or its Affiliates, if any, which arise as a result of the execution of
documents by and between the Borrower and the Bank which relate to Bank
Products. The agreement contained in this Section shall survive termination of
this Agreement. The Borrower acknowledges and agrees that the obtaining of Bank
Products from the Bank or the Bank's Affiliates (a) is in the sole and absolute
discretion of the Bank or the Bank's Affiliates, and (b) is subject to all rules
and regulations of the Bank or the Bank's Affiliates.
1.6 Effect On Prior Loans; Prior Credit Agreement.
The Prior Loans and Liens securing payment thereof shall in
all respects be continuing, and this Agreement shall not be deemed to evidence
or result in a novation or repayment and reborrowing of the Prior Loans. This
Agreement shall supersede the Prior Credit Agreement. From and after the date
hereof, this Agreement shall govern the terms of the Prior Loans. To the extent
not replaced by Loan Documents dated as of the date hereof, Loan Documents
executed in connection with the Prior Credit Agreement (other than any such Loan
Document that is specifically terminated by the parties thereto) shall continue
to be effective, and
9
all references in those prior Loan Documents to the "Credit Agreement" shall be
deemed to refer to this Agreement without further amendment thereof.
1.7 Loan Account. The Agent shall record the principal amount of the Loans
owing to each Lender, the undrawn face amount of all outstanding Letters of
Credit and the aggregate amount of unpaid reimbursement obligations outstanding
with respect to the Letters of Credit from time to time on its books. In
addition, each Lender may note the date and amount of each payment or prepayment
of principal of such Lender's Loans in its books and records. Such books and
records shall constitute rebuttably presumptive evidence, absent manifest error,
of the accuracy of the information contained therein. Failure by Agent or any
Lender to make such notation shall not affect the obligations of the Borrower
with respect to the Loans or the Letters of Credit.
ARTICLE 2
INTEREST AND FEES
2.1 Interest.
(a) Interest Rates. All outstanding Obligations shall bear
interest on the unpaid principal amount thereof (including, to the extent
permitted by law, on interest thereon not paid when due) from the date made
until paid in full in cash at a rate determined by reference to the Base Rate or
the LIBOR Rate plus the Applicable Margins as set forth below, but not to exceed
the Maximum Rate. If at any time Loans are outstanding with respect to which the
Borrower has not delivered to the Agent a notice specifying the basis for
determining the interest rate applicable thereto in accordance herewith, those
Loans shall bear interest at a rate determined by reference to the Base Rate
until notice to the contrary has been given to the Agent in accordance with this
Agreement and such notice has become effective. Except as otherwise provided
herein, the outstanding Obligations shall bear interest as follows:
(i) For all Base Rate Term Loans at a fluctuating
per annum rate equal to the Base Rate plus the Applicable Margin;
(ii) For all Base Rate Revolving Loans and other
Obligations (other than Base Rate Term Loans and LIBOR Rate Loans) at a
fluctuating per annum rate equal to the Base Rate plus the Applicable Margin;
(iii) For all LIBOR Term Loans at a per annum rate
equal to the LIBOR Rate plus the Applicable Margin; and
(iv) For all LIBOR Revolving Loans at a per annum
rate equal to the LIBOR Rate plus the Applicable Margin.
Each change in the Base Rate shall be reflected in the interest rate applicable
to Base Rate Loans on the effective date of such change. All interest charges
shall be computed on the basis of a year of 360 days and actual days elapsed
(which results in more interest being paid than if computed on the basis of a
365-day year). The Borrower shall pay to the Agent, for the ratable
10
benefit of Lenders, interest accrued on all Base Rate Loans in arrears on the
first day of each month hereafter and on the Termination Date. The Borrower
shall pay to the Agent, for the ratable benefit of Lenders, interest on all
LIBOR Rate Loans in arrears on each LIBOR Interest Payment Date.
(b) Default Rate. If any Default or Event of Default occurs
and is continuing and the Agent or the Required Lenders in their discretion so
elect, then, while any such Default or Event of Default is continuing, all of
the Obligations shall bear interest at the Default Rate applicable thereto.
2.2 Continuation and Conversion Elections. (a) The Borrower may:
(i) elect, as of any Business Day, in the case
of Base Rate Loans to convert any Base Rate Loans (or any part thereof in an
amount not less than $1,000,000, or that is in an integral multiple of $250,000
in excess thereof) into LIBOR Rate Loans; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any LIBOR Rate Loans having Interest Periods
expiring on such day (or any part thereof in an amount not less than $1,000,000,
or that is in an integral multiple of $250,000 in excess thereof) or to convert
the same to Base Rate Loans;
provided, that if at any time the aggregate amount of LIBOR Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $2,000,000, such LIBOR Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Borrower to continue such Loans as, and convert such Loans into, LIBOR
Rate Loans, as the case may be, shall terminate, and provided further that if
the notice shall fail to specify the duration of the Interest Period, such
Interest Period shall be one month.
(b) The Borrower shall deliver a notice of
continuation/conversion ("Notice of Continuation/Conversion") to the Agent not
later than 12:00 p.m. (Chicago, Illinois time) at least three (3) Business Days
in advance of the Continuation/Conversion Date, if the Loans are to be converted
into or continued as LIBOR Rate Loans and specifying:
(i) the proposed Continuation/Conversion Date;
(ii) the aggregate amount of Loans to be
converted or renewed;
(iii) the type of Loans resulting from the
proposed conversion or continuation; and
(iv) the duration of the requested Interest
Period, provided, however, the Borrower may not select an Interest Period that
ends after the Stated Termination Date.
(c) If upon the expiration of any Interest Period applicable
to LIBOR Rate Loans, the Borrower has failed to select timely a new Interest
Period to be applicable to LIBOR Rate Loans or if any Default or Event of
Default then exists, the Borrower shall be deemed to
11
have elected to convert such LIBOR Rate Loans into Base Rate Loans effective as
of the expiration date of such Interest Period.
(d) The Agent will promptly notify each Lender of its receipt
of a Notice of Continuation/Conversion. All conversions and continuations shall
be made ratably according to the respective outstanding principal amounts of the
Loans with respect to which the notice was given held by each Lender.
(e) There may not be more than eight (8) different LIBOR Rate
Loans in effect hereunder at any time.
2.3 Maximum Interest Rate. In no event shall any interest rate provided for
hereunder exceed the maximum rate legally chargeable by any Lender under
applicable law for such Lender with respect to loans of the type provided for
hereunder (the "Maximum Rate"). If, in any month, any interest rate, absent such
limitation, would have exceeded the Maximum Rate, then the interest rate for
that month shall be the Maximum Rate, and, if in future months, that interest
rate would otherwise be less than the Maximum Rate, then that 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 the event that, upon payment in
full of the 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,
but for this Section 2.3, have been paid or accrued if the interest rate
otherwise set forth in this Agreement had at all times been in effect, then the
Borrower shall, to the extent permitted by applicable law, pay the Agent, for
the account of the Lenders, an amount equal to the excess of (a) the lesser of
(i) the amount of interest which would have been charged if the Maximum Rate
had, at all times, been in effect or (ii) the amount of interest which would
have accrued had the interest rate otherwise set forth in this Agreement, at all
times, been in effect over (b) the amount of interest actually paid or accrued
under this Agreement. If a court of competent jurisdiction determines that the
Agent and/or any Lender has received interest and other charges hereunder in
excess of the Maximum Rate, such excess shall be deemed received on account of,
and shall automatically be applied to reduce, the Obligations other than
interest, in the inverse order of maturity, and if there are no Obligations
outstanding, the Agent and/or such Lender shall refund to the Borrower such
excess.
2.4 Closing Fee. The Borrower agrees to pay the Agent on the Closing Date a
closing fee (the "Closing Fee") as set forth in the fee letter dated as of the
date hereof between the Agent and Borrower.
2.5 Unused Line Fee. On the first day of each month and on the Termination
Date the Borrower agrees to pay to the Agent, for the account of the Lenders, in
accordance with their respective Pro Rata Shares, an unused line fee (the
"Unused Line Fee") equal to one-half of one percent (.50%) per annum times the
amount by which the Maximum Revolver Amount exceeded the sum of the average
daily outstanding amount of Revolving Loans and the average daily undrawn face
amount of outstanding Letters of Credit, during the immediately preceding month
or shorter period if calculated on the Termination Date. The Unused Line Fee
shall be computed on the basis of a 360-day year for the actual number of days
elapsed. All payments received by the Agent shall be deemed to be credited to
the Borrower's Loan Account immediately upon receipt for purposes of calculating
the Unused Line Fee pursuant to this Section 2.5.
12
2.6 Letter of Credit Fee. The Borrower agrees to pay to the Agent, for the
account of the Lenders, in accordance with their respective Pro Rata Shares, for
each Letter of Credit, a fee (the "Letter of Credit Fee") equal to one and
one-half percent (1 1/2%) per annum and to Agent for the benefit of the Letter
of Credit Issuer a fronting fee of one-half of one percent (0.5%) per annum of
the undrawn face amount of each Letter of Credit, and to the Letter of Credit
Issuer, all out-of-pocket costs, fees and expenses incurred by the Letter of
Credit Issuer in connection with the application for, processing of, issuance
of, or amendment to any Letter of Credit, which costs, fees and expenses shall
include, without duplication, the "fronting fee" payable to the Letter of Credit
Issuer. The Letter of Credit Fee shall be payable monthly in arrears on the
first day of each month following any month in which a Letter of Credit is
outstanding and on the Termination Date. The Letter of Credit Fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed.
ARTICLE 3
PAYMENTS AND PREPAYMENTS
3.1 Revolving Loans. (a) The Borrower shall repay the outstanding principal
balance of the Revolving Loans, plus all accrued but unpaid interest thereon, on
the Termination Date. The Borrower may prepay Revolving Loans at any time, and
reborrow subject to the terms of this Agreement; provided, however, that with
respect to any LIBOR Revolving Loans prepaid by the Borrower prior to the
expiration date of the Interest Period applicable thereto, the Borrower shall
pay to the Agent for account of the Lenders the amounts described in Section
4.4.
(b) In addition, and without limiting the generality of the foregoing, upon
demand the Borrower shall pay to the Agent, for account of the Lenders, the
amount, without duplication, by which the Aggregate Revolver Outstandings
exceeds the Borrowing Base.
3.2 Termination of Facility. The Borrower may terminate this Agreement upon
at least five (5) days' notice to the Agent and the Lenders, upon (a) the
payment in full of all outstanding Revolving Loans, together with accrued
interest thereon, and the cancellation and return of all outstanding Letters of
Credit, (b) the prepayment in full of the Term Loans, together with accrued and
unpaid interest thereon, (c) the payment of the early termination fee, if any,
set forth below, (d) the payment in full in cash of all reimbursable expenses
and other Obligations, and (e) with respect to any LIBOR Rate Loans prepaid in
connection with such termination prior to the expiration date of the Interest
Period applicable thereto, the payment of the amounts described in Section 4.4.
If this Agreement is terminated at any time prior to the third Anniversary Date,
whether pursuant to this Section or pursuant to Section 9.2 and unless the Loans
are refinanced by Agent or any Affiliate of Agent, the Borrower shall pay to the
Agent, for the account of the Lenders, an early termination fee determined in
accordance with the following table:
13
PERIOD DURING WHICH
EARLY TERMINATION EARLY TERMINATION
OCCURS FEE
------------------- -----------------
On or prior to the first Anniversary 1.0% of the Total Facility
Date
After the first Anniversary Date but 0.50% of the Total Facility
on or prior to the second
Anniversary Date
After the second Anniversary Date 0.25% of the Total Facility
but prior to the third Anniversary
Date
3.3 Repayment of the Term Loans. The Borrower agrees to repay the principal
of the Term Loans to the Agent, for the account of the Lenders as set forth in
Section 1.3.
3.4 Prepayments of the Loans. (a) The Borrower may voluntarily prepay the
principal of the Term Loans in whole or in part, at any time and from time to
time upon at least five (5) Business Days' prior written notice to the Agent and
the Lenders. All voluntary prepayments of the principal of the Term Loans shall
be accompanied by the payment of all accrued but unpaid interest on the Term
Loans to the date of prepayment. Any voluntary prepayment of less than all of
the outstanding principal of the Term Loans shall be applied to the installments
of principal of the Term Loans in the inverse order of maturity. Amounts prepaid
in respect of the Term Loans may not be reborrowed. The Borrower may voluntarily
reduce the Revolving Loan Commitments from $50,000,000 to $45,000,000 upon
written notice to the Agent within ninety (90) days following the Closing Date,
and upon such reduction the Agent shall refund to the Borrower a pro rata
portion of the Closing Fee.
(b) Immediately upon receipt by Borrower or its Subsidiaries of proceeds of
any Asset Sale (excluding proceeds of Asset Sales permitted by Section 7.9(a)),
including any sale of the stock of any Subsidiary of Holdings, Borrower shall
prepay the Loans or redeem or repurchase the Senior Notes in an amount equal to
all such proceeds, net of (A) commissions and other reasonable and customary
transaction costs, fees and expenses properly attributable to such transaction
and payable by Borrower in connection therewith (in each case, paid to
non-Affiliates), (B) transfer taxes, (C) amounts payable to holders of senior
Liens (to the extent such Liens constitute Liens under paragraphs (a), (b), (c),
(d), (e), (f), (h) and (i) of the definition of Permitted Liens hereunder), or,
in the case of an Asset Sale constituting a sale of the Stock or assets of ▇▇▇▇
France and its Subsidiaries or ▇▇▇▇ UK, Debt owed to lenders providing working
capital loans to ▇▇▇▇ France and its Subsidiaries or ▇▇▇▇ UK, if any, and (D) an
appropriate reserve for income taxes in accordance with GAAP in connection
therewith ("Net Proceeds"). Any such prepayment, redemption or repurchase shall
be applied in accordance with Section 3.4(c).
(c) Prepayments in accordance with Section 3.4(b) shall be applied as
follows:
14
(i) Net Proceeds of an Asset Sale consisting of sales of
Domestic Assets (including, without limitation, the Domestic Assets of the
Cosmetics Division) shall be applied in the following order of priority: first,
to the Revolving Loans in an amount equal to the sum of 85% of the book value of
Eligible Accounts, 50% of the book value of Eligible Inventory consisting of
finished goods and raw materials and 25% of the book value of Eligible Inventory
consisting of work-in-process in each case, as included in such Asset Sale;
second, to the Term Loans in an amount equal to 75% of the fair market value of
Real Estate and 80% of the orderly liquidation value of Equipment included in
such Asset Sale; in each case, as determined by reference to the Appraisals;
third, to the repurchase or prepayment of the Senior Notes until the Senior
Notes have been paid in full; and fourth, one-half to the Revolving Loans and
one-half to the Term Loans. All prepayments of the Term Loans described above
shall be applied to scheduled installments thereof in inverse order of maturity.
Prepayments of the Revolving Loans shall not result in a reduction of the
Revolving Loan Commitments.
(ii) Net Proceeds of Asset Sales consisting of sales of
Foreign Assets (including, without limitation, the Foreign Assets of the
Cosmetics Division) shall be applied in the following order of priority: first,
to redeem or repurchase the Senior Notes until the same have been paid in full,
and second, one-half to the Term Loans and one-half to the Revolving Loans.
Prepayments of the Term Loans shall be applied to scheduled installments thereof
in inverse order of maturity. Notwithstanding the ordering of priorities
described in clause second of this Section 3.4(c)(ii), the first $10,000,000 of
excess Net Proceeds of a sale of the Cosmetics Division shall be applied to the
Term Loans, $7,000,000 of which shall be applied to scheduled installments of
the Term Loans, pro rata, and $3,000,000 of which shall be applied to scheduled
installments of the Term Loans in inverse order of maturity. Net Proceeds of a
sale of the Cosmetics Division in excess of the amount necessary to pay the
Senior Notes in full and in excess of the $10,000,000 applied to the Term Loans
shall be applied to the Revolving Loans. Prepayments of the Revolving Loans
shall not result in a reduction of the Revolving Loan Commitments.
(iii) Net Proceeds used by the Borrower to repurchase or
prepay the Senior Notes shall be applied to such repurchase or prepayment at a
price equal to (1) 85% of the principal amount thereof if the contract for the
applicable Asset Sale is entered into on or prior to December 31, 2000 and such
Asset Sale is consummated on or prior to March 31, 2001 or (2) 100% if the
contract for the applicable Asset Sale is entered into after December 31, 2000
or such Asset Sale is consummated after March 31, 2001.
(d) No provision of Section 3.4 shall be deemed to constitute a consent to
the sale of any assets of Borrower or the Stock or assets of any Subsidiary that
is not otherwise permitted under the terms of this Agreement.
3.5 LIBOR Rate Loan Prepayments. In connection with any prepayment, if any
LIBOR Rate Loans are prepaid prior to the expiration date of the Interest Period
applicable thereto, the Borrower shall pay to the Lenders the amounts described
in Section 4.4.
3.6 Payments by the Borrower. (a) All payments to be made by the Borrower
shall be made without set-off, recoupment or counterclaim. Except as otherwise
expressly provided herein, all payments by the Borrower shall be made to the
Agent for the account of the Lenders,
15
at the account designated by the Agent and shall be made in Dollars and in
immediately available funds, no later than 1:00 p.m. (Chicago time) on the date
specified herein. Any payment received by the Agent later than 1:00 p.m.
(Chicago time) shall be deemed to have been received on the following Business
Day and any applicable interest or fee shall continue to accrue. Solely for
purposes of calculating interest payable hereunder, all payments received by the
Agent in its collection account shall be deemed to have been received on the
Business Day following the date of actual deposit of such payment in immediately
available funds in the Agent's collection account. The additional day's interest
earned is solely for the account of Agent.
(b) Subject to the provisions set forth in the definition of
"Interest Period", whenever any payment is due on a day other than a Business
Day, such payment shall be due on the following Business Day, and such extension
of time shall in such case be included in the computation of interest or fees,
as the case may be.
3.7 Payments as Revolving Loans. At the election of Agent, all payments of
principal, interest, reimbursement obligations in connection with Letters of
Credit and Credit Support for Letters of Credit, fees, premiums, reimbursable
expenses and other sums payable hereunder, may be paid from the proceeds of
Revolving Loans made hereunder. The Borrower hereby irrevocably authorizes the
Agent to charge the Loan Account for the purpose of paying all amounts from time
to time due hereunder and agrees that all such amounts charged shall constitute
Revolving Loans (including Non-Ratable Loans and Agent Advances).
3.8 Apportionment, Application and Reversal of Payments. Principal and
interest payments shall be apportioned ratably among the Lenders (according to
the unpaid principal balance of the Loans to which such payments relate held by
each Lender) and payments of the fees shall, as applicable, be apportioned
ratably among the Lenders, except for fees payable solely to Agent and the
Letter of Credit Issuer and except as provided in Section 11.1(b). All payments
shall be remitted to the Agent and all such payments not relating to principal
or interest of specific Loans, or not constituting payment of specific fees, and
all proceeds of Accounts or other Collateral received by the Agent, shall be
applied, ratably, subject to the provisions of this Agreement, first, to pay any
fees, indemnities or expense reimbursements, including any amounts relating to
Bank Products, then due to the Agent from the Borrower; second, to pay any fees
or expense reimbursements then due to the Lenders from the Borrower; third, to
pay interest due in respect of all Revolving Loans, including Non-Ratable Loans
and Agent Advances; fourth, to pay or prepay principal of the Non-Ratable Loans
and Agent Advances; fifth, to pay or prepay principal of the Revolving Loans
(other than Non-Ratable Loans and Agent Advances) and unpaid reimbursement
obligations in respect of Letters of Credit; sixth, to pay or prepay principal
of the Term Loans; and seventh, to the payment of any other Obligation due to
the Agent or any Lender by the Borrower. Notwithstanding anything to the
contrary contained in this Agreement, unless so directed by the Borrower, or
unless an Event of Default has occurred and is continuing, neither the Agent nor
any Lender shall apply any payments which it receives to any LIBOR Rate Loan,
except (a) on the expiration date of the Interest Period applicable to any such
LIBOR Rate Loan, or (b) in the event, and only to the extent, that there are no
outstanding Base Rate Loans and, in any event, the Borrower shall pay LIBOR
breakage losses in accordance with Section 4.4. The Agent and the Lenders shall
have the continuing and exclusive right to apply and reverse and reapply any and
all such proceeds and payments to any portion of the Obligations.
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3.9 Indemnity for Returned Payments. If after receipt of any payment which
is applied to the payment of all or any part of the Obligations, the Agent or
any Lender is for any reason compelled to surrender such payment or proceeds to
any Person because such payment or application of proceeds is invalidated,
declared fraudulent, set aside, determined to be void or voidable as a
preference, impermissible setoff, or a diversion of trust funds, or for any
other reason, then the Obligations or part thereof intended to be satisfied
shall be revived and continued and this Agreement shall continue in full force
as if such payment or proceeds had not been received by the Agent or such Lender
and the Borrower shall be liable to pay to the Agent and the Lenders, and hereby
does indemnify the Agent and the Lenders and hold the Agent and the Lenders
harmless for the amount of such payment or proceeds surrendered. The provisions
of this Section 3.9 shall be and remain effective notwithstanding any contrary
action which may have been taken by the Agent or any Lender in reliance upon
such payment or application of proceeds, and any such contrary action so taken
shall be without prejudice to the Agent's and the Lenders' rights under this
Agreement and shall be deemed to have been conditioned upon such payment or
application of proceeds having become final and irrevocable. The provisions of
this Section 3.9 shall survive the termination of this Agreement.
3.10 Agent's and Lenders' Books and Records; Monthly Statements. The
Borrower agrees that the Agent's and each Lender's books and records showing the
Obligations and the transactions pursuant to this Agreement and the other Loan
Documents shall be admissible in any action or proceeding arising therefrom, and
shall constitute rebuttably presumptive proof thereof, irrespective of whether
any Obligation is also evidenced by a promissory note or other instrument. The
Agent will provide to the Borrower a monthly statement of Loans, payments, and
other transactions pursuant to this Agreement. Such statement shall be deemed
correct, accurate, and binding on the Borrower and an account stated (except for
reversals and reapplications of payments made as provided in Section 3.8 and
corrections of errors discovered by the Agent), unless the Borrower notifies the
Agent in writing to the contrary within thirty (30) days after such statement is
rendered. In the event a timely written notice of objections is given by the
Borrower, only the items to which exception is expressly made will be considered
to be disputed by the Borrower absent manifest error.
ARTICLE 4
TAXES, YIELD PROTECTION AND ILLEGALITY
4.1 Taxes. (a) Any and all payments by the Borrower to each Lender or the
Agent under this Agreement and any other Loan Document shall be made free and
clear of, and without deduction or withholding for any Taxes. In addition, the
Borrower shall pay all Other Taxes.
(b) The Borrower agrees to indemnify and hold harmless each
Lender and the Agent for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section) arising out of or relating to this Agreement or the Obligations
hereunder paid by any Lender or the Agent and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Payment
17
under this indemnification shall be made within 30 days after the date such
Lender or the Agent makes written demand therefor.
(c) If the Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Lender or the Agent, then:
(i) the sum payable shall be increased as
necessary so that after making all required deductions and withholdings
(including deductions and withholdings applicable to additional sums payable
under this Section) such Lender or the Agent, as the case may be, receives an
amount equal to the sum it would have received had no such deductions or
withholdings been made;
(ii) the Borrower shall make such deductions and
withholdings;
(iii) the Borrower shall pay the full amount
deducted or withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) the Borrower shall also pay to each Lender
or the Agent for the account of such Lender, at the time interest is paid, all
additional amounts which the respective Lender specifies as necessary to
preserve the after-tax yield such Lender would have received if such Taxes or
Other Taxes had not been imposed.
(d) At the Agent's request, within thirty (30) days after the
date of any payment by the Borrower of Taxes or Other Taxes, the Borrower shall
furnish the Agent the original or a certified copy of a receipt evidencing
payment thereof, or other evidence of payment satisfactory to the Agent.
(e) If the Borrower is required to pay additional amounts to
any Lender or the Agent pursuant to subsection (c) of this Section, then such
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its lending office so as to
eliminate any such additional payment by the Borrower which may thereafter
accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
4.2 Illegality. (a) If any Lender determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Lender or its applicable lending office to make
LIBOR Rate Loans, then, on notice thereof by that Lender to the Borrower through
the Agent, any obligation of that Lender to make LIBOR Rate Loans shall be
suspended until that Lender notifies the Agent and the Borrower that the
circumstances giving rise to such determination no longer exist.
(b) If a Lender determines that it is unlawful to maintain any
LIBOR Rate Loan, the Borrower shall, upon its receipt of notice of such fact and
demand from such Lender (with a copy to the Agent), prepay in full such LIBOR
Rate Loans of that Lender then outstanding, together with interest accrued
thereon and amounts required under Section 4.4, either on the last day of the
Interest Period thereof, if that Lender may lawfully continue to
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maintain such LIBOR Rate Loans to such day, or immediately, if that Lender may
not lawfully continue to maintain such LIBOR Rate Loans. If the Borrower is
required to so prepay any LIBOR Rate Loans, then concurrently with such
prepayment, the Borrower shall borrow from the affected Lender, in the amount of
such repayment, a Base Rate Loan.
4.3 Increased Costs and Reduction of Return. (a) If any Lender
determines that due to either (i) the introduction of or any change in the
interpretation of any law or regulation after the date of this Agreement or
(ii) the compliance by that Lender with any guideline or request from any
central bank or other Governmental Authority (whether or not having the force
of law) effective after the date of this Agreement, there shall be any
increase in the cost to such Lender of agreeing to make or making, funding or
maintaining any LIBOR Rate Loans, then the Borrower shall be liable for, and
shall from time to time, upon demand (with a copy of such demand to be sent
to the Agent), pay to the Agent for the account of such Lender, additional
amounts as are sufficient to compensate such Lender for such increased costs.
(b) If any Lender shall have determined that (i) the
introduction of any Capital Adequacy Regulation after the date of this
Agreement, (ii) any change in any Capital Adequacy Regulation after the date of
this Agreement, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof after the date of this
Agreement, or (iv) compliance by such Lender or any corporation or other entity
controlling such Lender with any Capital Adequacy Regulation effective after the
date of this Agreement, affects or would affect the amount of capital required
or expected to be maintained by such Lender or any corporation or other entity
controlling such Lender and (taking into consideration such Lender's or such
corporation's or other entity's policies with respect to capital adequacy and
such Lender's desired return on capital) determines that the amount of such
capital is increased as a consequence of its Commitments, loans, credits or
obligations under this Agreement, then, upon demand of such Lender to the
Borrower through the Agent, the Borrower shall pay to such Lender, from time to
time as specified by such Lender, additional amounts sufficient to compensate
such Lender for such increase.
4.4 Funding Losses. The Borrower shall reimburse each Lender and hold each
Lender harmless from any loss or expense which such Lender may sustain or incur
as a consequence of:
(a) the failure of the Borrower to make on a timely basis any
payment of principal of any LIBOR Rate Loan;
(b) the failure of the Borrower to borrow, continue or convert
a Loan after the Borrower has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Continuation/Conversion; or
(c) the prepayment or other payment (including after
acceleration thereof) of any LIBOR Rate Loans on a day that is not the last day
of the relevant Interest Period;
including any such loss of anticipated profit and any loss or expense arising
from the liquidation or reemployment of funds obtained by it to maintain its
LIBOR Rate Loans or from fees payable
19
to terminate the deposits from which such funds were obtained. Borrower shall
also pay any customary administrative fees charged by any Lender in connection
with the foregoing.
4.5 Inability to Determine Rates. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the LIBOR Rate
for any requested Interest Period with respect to a proposed LIBOR Rate Loan, or
that the LIBOR Rate for any requested Interest Period with respect to a proposed
LIBOR Rate Loan does not adequately and fairly reflect the cost to the Lenders
of funding such Loan, the Agent will promptly so notify the Borrower and each
Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR Rate
Loans hereunder shall be suspended until the Agent revokes such notice in
writing. Upon receipt of such notice, the Borrower may revoke any Notice of
Borrowing or Notice of Continuation/Conversion then submitted by it. If the
Borrower does not revoke such Notice, the Lenders shall make, convert or
continue the Loans, as proposed by the Borrower, in the amount specified in the
applicable notice submitted by the Borrower, but such Loans shall be made,
converted or continued as Base Rate Loans instead of LIBOR Rate Loans.
4.6 Certificates of Agent. If any Lender claims reimbursement or
compensation under this Article 4, Agent shall determine the amount thereof and
shall deliver to the Borrower (with a copy to the affected Lender) a certificate
setting forth in reasonable detail the amount payable to the affected Lender,
and such certificate shall be conclusive and binding on the Borrower in the
absence of manifest error.
4.7 Survival. The agreements and obligations of the Borrower in this
Article 4 shall survive the payment of all other Obligations.
ARTICLE 5
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
5.1 Books and Records. The Borrower shall maintain, at all times, correct
and complete books, records and accounts in which complete, correct and timely
entries are made of its transactions in accordance with GAAP applied
consistently with the audited Financial Statements required to be delivered
pursuant to Section 5.2(a). The Borrower shall, by means of appropriate entries,
reflect in such accounts and in all Financial Statements proper liabilities and
reserves for all taxes and proper provision for depreciation and amortization of
property and bad debts, all in accordance with GAAP. The Borrower shall maintain
at all times books and records pertaining to the Collateral in such detail, form
and scope as the Agent or any Lender shall reasonably require, including, but
not limited to, records of (a) all payments received and all credits and
extensions granted with respect to the Accounts; (b) the return, rejection,
repossession, stoppage in transit, loss, damage, or destruction of any
Inventory; and (c) all other dealings affecting the Collateral.
5.2 Financial Information. The Borrower shall promptly furnish to each
Lender, all such financial information as the Agent shall reasonably request.
Without limiting the foregoing, the Borrower will furnish to the Agent, in
sufficient copies for distribution by the Agent to each Lender, in such detail
as the Agent or the Lenders shall request, the following:
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(a) As soon as available, but in any event not later than
ninety (90) days after the close of each Fiscal Year (subject to extensions of
up to fifteen (15) days if the filing of the Borrower's (or Holdings') 10-K
filing is similarly extended), consolidated audited and consolidating unaudited
balance sheets, and income statements, cash flow statements and changes in
stockholders' equity for Holdings and its Subsidiaries for such Fiscal Year, and
the accompanying notes thereto, setting forth in each case in comparative form
figures for the previous Fiscal Year, all in reasonable detail, fairly
presenting the financial position and the results of operations of Holdings and
its consolidated Subsidiaries as at the date thereof and for the Fiscal Year
then ended, and prepared in accordance with GAAP. Such statements shall be
examined in accordance with generally accepted auditing standards by and, in the
case of such statements performed on a consolidated basis, accompanied by a
report thereon unqualified in any material respect of independent certified
public accountants selected by the Borrower and reasonably satisfactory to the
Agent. The Borrower, simultaneously with retaining such independent public
accountants to conduct such annual audit, shall send a letter to such
accountants, with a copy to the Agent and the Lenders, notifying such
accountants that one of the primary purposes for retaining such accountants'
services and having audited financial statements prepared by them is for use by
the Agent and the Lenders. The Borrower hereby authorizes the Agent to
communicate directly with its certified public accountants and, by this
provision, authorizes those accountants to disclose to the Agent any and all
financial statements and other supporting financial documents and schedules
relating to the Borrower and to discuss directly with the Agent the finances and
affairs of the Borrower; provided that a representative of the Borrower shall be
a party to such communications and discussions.
(b) As soon as available, but in any event not later than
thirty (30) days after the end of each month, consolidated and consolidating
unaudited balance sheets of Holdings and its consolidated Subsidiaries as at the
end of such month, and consolidated and consolidating unaudited income
statements and cash flow statements for Holdings and its consolidated
Subsidiaries for such month and for the period from the beginning of the Fiscal
Year to the end of such month, all in reasonable detail, fairly presenting the
financial position and results of operations of Holdings and its consolidated
Subsidiaries as at the date thereof and for such periods, and in each case, in
comparative form, figures for the corresponding period in the previous Fiscal
Year and in the budget, and prepared in accordance with GAAP applied
consistently with the audited Financial Statements required to be delivered
pursuant to Section 5.2(a) absent footnotes. Notwithstanding the foregoing, cash
flow statements shall be delivered quarterly within forty-five (45) days after
the last day of each fiscal quarter ending on or prior to December 31, 2000 and
monthly thereafter. The Borrower shall certify by a certificate signed by its
chief financial officer that all such statements have been prepared in
accordance with GAAP and present fairly Holdings' and the Borrower's financial
position as at the dates thereof and its results of operations for the periods
then ended, subject to normal year-end adjustments.
(c) With each of the audited Financial Statements delivered
pursuant to Section 5.2(a), a certificate of the independent certified public
accountants that examined such statement to the effect that they have reviewed
and are familiar with this Agreement and that, in examining such Financial
Statements, they did not become aware of any fact or condition which then
constituted a Default or Event of Default with respect to a financial covenant,
except for those, if any, described in reasonable detail in such certificate.
21
(d) With each of the Financial Statements delivered pursuant
to Sections 5.2(a) and 5.2(b), a certificate of the chief financial officer of
the Borrower (i) setting forth in reasonable detail the calculations required to
establish that the Borrower was in compliance with the covenants set forth in
Sections 7.22 and 7.23 during the period covered in such Financial Statements
and as at the end thereof (and within thirty (30) days after the last month of
each fiscal quarter, a certificate including the covenant in Section 7.24), and
(ii) stating that, except as explained in reasonable detail in such certificate,
(A) all of the representations and warranties of the Borrower contained in this
Agreement and the other Loan Documents are correct and complete in all material
respects as at the date of such certificate as if made at such time, except for
those that speak as of a particular date, (B) the Borrower is, at the date of
such certificate, in compliance in all material respects with all of its
respective covenants and agreements in this Agreement and the other Loan
Documents, (C) no Default or Event of Default then exists or existed during the
period covered by such Financial Statements, (D) describing and analyzing in
reasonable detail all material trends, changes, and developments in each and all
Financial Statements; and (E) explaining the variances of the figures in the
corresponding budgets and prior Fiscal Year financial statements. If such
certificate discloses that a representation or warranty is not correct or
complete, or that a covenant has not been complied with, or that a Default or
Event of Default existed or exists, such certificate shall set forth what action
the Borrower has taken or proposes to take with respect thereto.
(e) As soon as available, but in any event not later than (i)
fifteen (15) days after the end of each month, a monthly Borrowing Base
Certificate and all information and documentation that support the calculations
set forth in such Borrowing Base Certificate as set forth in Exhibit B; provided
that commencing sixty (60) days after the Closing Date, Borrower shall deliver a
Borrowing Base Certificate (with all supporting documentation) on each Business
Day for the preceding Business Day, (ii) with each Borrowing Base Certificate, a
schedule of the Borrower's Accounts created, credits given, cash collected and
other adjustments to Accounts since the last such schedule; (iii) on a monthly
basis, by the 15th day of the following month, or more frequently if requested
by the Agent, an aging of the Borrower's Accounts, together with a
reconciliation to the corresponding Borrowing Base Certificate and to the
Borrower's general ledger; (iv) on a monthly basis by the 15th day of the
following month, or more frequently if requested by the Agent, an aging of the
Borrower's accounts payable; (v) on a monthly basis by the 15th day of the
following month (or more frequently if requested by Agent), a detailed
calculation of Eligible Accounts and Eligible Inventory; (vi) on a monthly basis
by the 15th day of the following month (or more frequently if requested by the
Agent), Inventory reports by category and location, together with a
reconciliation to the corresponding Borrowing Base Certificate and the
Borrower's general ledger; (vii) upon request, copies of invoices in connection
with the Borrower's Accounts, customer statements, credit memos, remittance
advices and reports, deposit slips, shipping and delivery documents in
connection with the Borrower's Accounts and for Inventory and Equipment acquired
by the Borrower, purchase orders and invoices; (viii) upon request, a statement
of the balance of each of the Intercompany Accounts; (ix) such other reports as
to the Collateral of the Borrower as the Agent shall reasonably request from
time to time; and (x) with the delivery of each of the foregoing, a certificate
of the Borrower executed by an officer thereof certifying as to the accuracy and
completeness of the foregoing. If any of the Borrower's records or reports of
the Collateral are prepared by an accounting service or other agent, the
Borrower hereby authorizes such service or agent to deliver such records,
reports, and related documents to the Agent, for distribution to the Lenders.
22
(f) No sooner than sixty (60) days and not less than fifteen
(15) days prior to the beginning of each Fiscal Year, annual forecasts (to
include forecasted consolidated and consolidating balance sheets, income
statements and cash flow statements) for Holdings and its consolidated
Subsidiaries as at the end of and for each month of such Fiscal Year.
(g) Promptly after filing with the PBGC and the IRS, a copy of
each annual report or other filing filed with respect to each Plan of the
Borrower.
(h) Promptly upon the filing thereof, copies of all reports,
if any, to or other documents filed by Holdings, the Borrower or any of its
Subsidiaries with the Securities and Exchange Commission under the Exchange Act,
and all reports, notices, or statements sent or received by Holdings, the
Borrower or any of its Subsidiaries to or from the holders of any equity
interests of Holdings, Holdings' parent, the Borrower (other than routine
non-material correspondence sent by shareholders of the Borrower to the
Borrower) or any such Subsidiary or of any Debt of Holdings or the Borrower or
any of its Subsidiaries registered under the Securities Act of 1933 or to or
from the trustee under any indenture under which the same is issued.
(i) As soon as available, but in any event not later than 15
days after the Borrower's receipt thereof, a copy of all management reports and
management letters prepared for the Borrower by any independent certified public
accountants of the Borrower.
(j) Promptly after their preparation, copies of any and all
proxy statements, financial statements, and reports which Holdings, Holdings'
parent or the Borrower makes available to its shareholders.
(k) If requested by the Agent, promptly after filing with the
IRS, a copy of each tax return filed by Holdings or by any of its Subsidiaries.
(l) Such additional information as the Agent and/or any Lender
may from time to time reasonably request regarding the financial and business
affairs of Holdings, the Borrower or any Subsidiary.
5.3 Notices to the Lenders. The Borrower shall notify the Agent and the
Lenders in writing of the following matters at the following times:
(a) Immediately after becoming aware of any Default or Event
of Default;
(b) Immediately after becoming aware of the assertion by the
holder of any capital stock of the Borrower or of any Debt of the Borrower or
any Subsidiary in a face amount in excess of $500,000 or the holder of the
Parent Notes that a default exists with respect thereto or that the Borrower or
such Subsidiary or the Parent is not in compliance with the terms thereof, or
the threat or commencement by such holder of any enforcement action because of
such asserted default or non-compliance;
23
(c) Immediately after becoming aware of any event or
circumstance which could reasonably be expected to have a Material Adverse
Effect;
(d) Immediately after becoming aware of any pending or
threatened action, suit, or proceeding, by any Person, or any pending or
threatened investigation by a Governmental Authority, which could reasonably be
expected to have a Material Adverse Effect;
(e) Immediately after becoming aware of any pending or
threatened strike, work stoppage, unfair labor practice claim, or other labor
dispute affecting the Borrower or any of its Subsidiaries in a manner which
could reasonably be expected to have a Material Adverse Effect;
(f) Immediately after becoming aware of any violation of any
law, statute, regulation, or ordinance of a Governmental Authority affecting the
Borrower or any Subsidiary which could reasonably be expected to have a Material
Adverse Effect;
(g) Immediately after receipt of any notice of any violation
by the Borrower or any of its Subsidiaries of any Environmental Law which could
reasonably be expected to have a Material Adverse Effect or that any
Governmental Authority has asserted in writing that the Borrower or any
Subsidiary is not in compliance with any Environmental Law or is investigating
the Borrower's or such Subsidiary's compliance therewith;
(h) Immediately after receipt of any written notice that the
Borrower or any of its Subsidiaries is or may be liable to any Person as a
result of the Release or threatened Release of any Contaminant or that the
Borrower or any Subsidiary is subject to investigation by any Governmental
Authority evaluating whether any remedial action is needed to respond to the
Release or threatened Release of any Contaminant which, in either case, is
reasonably likely to give rise to liability in excess of $500,000;
(i) Immediately after receipt of any written notice of the
imposition of any Environmental Lien against any property of the Borrower or any
of its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect;
(j) Any change in the Borrower's name, state of organization,
locations of Collateral, or form of organization, trade names under which the
Borrower will sell Inventory or create Accounts, or to which instruments in
payment of Accounts may be made payable, in each case at least thirty (30) days
prior thereto;
(k) Within ten (10) Business Days after the Borrower or any
ERISA Affiliate knows or has reason to know, that an ERISA Event or a prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the Code) which
could reasonably be expected to have a Material Adverse Effect has occurred,
and, when known, any action taken or threatened by the IRS, the DOL or the PBGC
with respect thereto;
(l) Upon request, or, in the event that such filing reflects a
significant change with respect to the matters covered thereby, within three (3)
Business Days after the filing thereof with the PBGC, the DOL or the IRS, as
applicable, copies of the following: (i) each annual report (form 5500 series),
including Schedule B thereto, filed with the PBGC, the DOL or
24
the IRS with respect to each Plan, (ii) a copy of each funding waiver request
filed with the PBGC, the DOL or the IRS with respect to any Plan and all
communications received by the Borrower or any ERISA Affiliate from the PBGC,
the DOL or the IRS with respect to such request, and (iii) a copy of each other
filing or notice filed with the PBGC, the DOL or the IRS, with respect to each
Plan by either the Borrower or any ERISA Affiliate;
(m) Upon request, copies of each actuarial report for any Plan
or Multi-employer Plan and annual report for any Multi-employer Plan; and within
three (3) Business Days after receipt thereof by the Borrower or any ERISA
Affiliate, copies of the following: (i) any notices of the PBGC's intention to
terminate a Plan or to have a trustee appointed to administer such Plan; (ii)
any favorable or unfavorable determination letter from the IRS regarding the
qualification of a Plan under Section 401(a) of the Code; or (iii) any notice
from a Multi-employer Plan regarding the imposition of withdrawal liability;
(n) Within three (3) Business Days after the occurrence
thereof: (i) any changes in the benefits of any existing Plan which increase the
Borrower's annual costs with respect thereto by an amount in excess of $500,000,
or the establishment of any new Plan or the commencement of contributions to any
Plan to which the Borrower or any ERISA Affiliate was not previously
contributing, in each case, with annual costs in excess of $500,000; or (ii) any
failure by the Borrower or any ERISA Affiliate to make a required installment or
any other required payment in an amount in excess of $500,000 under Section 412
of the Code on or before the due date for such installment or payment; or
(o) Within three (3) Business Days after the Borrower or any
ERISA Affiliate knows or has reason to know that any of the following events has
or will occur: (i) a Multi-employer Plan has been or will be terminated; (ii)
the administrator or plan sponsor of a Multi-employer Plan intends to terminate
a Multi-employer Plan; or (iii) the PBGC has instituted or will institute
proceedings under Section 4042 of ERISA to terminate a Multi-employer Plan.
Each notice given under this Section shall describe the
subject matter thereof in reasonable detail, and shall set forth the action that
the Borrower, its Subsidiary, or any ERISA Affiliate, as applicable, has taken
or proposes to take with respect thereto.
ARTICLE 6
GENERAL WARRANTIES AND REPRESENTATIONS
The Borrower warrants and represents to the Agent and the Lenders that
except as hereafter disclosed to and accepted by the Agent and the Required
Lenders in writing:
6.1 Authorization, Validity, and Enforceability of this Agreement and the
Loan Documents. The Borrower has the power and authority to execute, deliver and
perform this Agreement and the other Loan Documents to which it is a party, to
incur the Obligations, and to grant to the Agent Liens upon and security
interests in the Collateral. The Borrower has taken all necessary action
(including obtaining approval of its stockholders if necessary) to authorize its
execution, delivery, and performance of this Agreement and the other Loan
Documents to which
25
it is a party. This Agreement and the other Loan Documents to which it is a
party have been duly executed and delivered by the Borrower, and constitute the
legal, valid and binding obligations of the Borrower, enforceable against it in
accordance with their respective terms. The Borrower's execution, delivery, and
performance of this Agreement and the other Loan Documents to which it is a
party do not and will not conflict with, or constitute a violation or breach of,
or result in the imposition of any Lien upon the property of the Borrower or any
of its Subsidiaries, by reason of the terms of (a) any contract, mortgage (other
than the Texas Mortgage and the Florida Mortgage), lease, agreement, indenture,
or instrument to which the Borrower is a party or which is binding upon it, (b)
any Requirement of Law applicable to the Borrower or any of its Subsidiaries, or
(c) the certificate or articles of incorporation or by-laws or the limited
liability company or limited partnership agreement of the Borrower or any of its
Subsidiaries.
6.2 Validity and Priority of Security Interest. The provisions of this
Agreement, the Mortgage(s), and the other Loan Documents create legal and valid
Liens on all the Collateral in favor of the Agent, for the ratable benefit of
the Agent and the Lenders, and such Liens constitute perfected and continuing
Liens on all the Collateral, having priority over all other Liens on the
Collateral, except for those Liens identified in clauses (c), (d), (e), (h) and
(i) of the definition of Permitted Liens securing all the Obligations, and
enforceable against the Borrower and all third parties.
6.3 Organization and Qualification. The Borrower (a) is duly organized or
incorporated and validly existing in good standing under the laws of the state
of its organization or incorporation, (b) is qualified to do business and is in
good standing in the jurisdictions set forth on Schedule 6.3 which are the only
jurisdictions in which qualification is necessary in order for it to own or
lease its property and conduct its business except where the failure to be so
qualified would not have a Material Adverse Effect and (c) has all requisite
power and authority to conduct its business and to own its property.
6.4 Corporate Name; Prior Transactions. Except as set forth on Schedule
6.4, the Borrower has not, during the past five (5) years, been known by or used
any other corporate or fictitious name, or been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any Person,
or acquired any of its property outside of the ordinary course of business.
6.5 Subsidiaries and Affiliates. Schedule 6.5 is a correct and complete
list of the name and relationship to the Borrower of each and all of the
Borrower's Subsidiaries and other Affiliates. Each Subsidiary is (a) duly
incorporated or organized and validly existing in good standing under the laws
of its state or country of incorporation or organization set forth on Schedule
6.5, and (b) qualified to do business and in good standing in each jurisdiction
in which the failure to so qualify or be in good standing could reasonably be
expected to have a material adverse effect on any such Subsidiary's business,
operations, prospects, property, or condition (financial or otherwise) and (c)
has all requisite power and authority to conduct its business and own its
property.
6.6 Financial Statements and Projections. (a) The Borrower has delivered to
the Agent and the Lenders the audited balance sheet and related statements of
income, retained earnings,
26
cash flows, and changes in stockholders equity for the Borrower and its
consolidated Subsidiaries as of December 31, 1999, and for the Fiscal Year then
ended, accompanied by the report thereon of the Borrower's independent certified
public accountants, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP. The Borrower has also delivered to the
Agent and the Lenders the unaudited balance sheet and related statements of
income and cash flows for the Borrower and its consolidated Subsidiaries as of
May 27, 2000. Such financial statements are attached hereto as Exhibit C. All
such financial statements have been prepared in accordance with GAAP and present
accurately and fairly in all material respects the financial position of the
Borrower and its consolidated Subsidiaries as at the dates thereof and their
results of operations for the periods then ended.
(b) The Latest Projections when submitted to the Lenders as
required herein represent the Borrower's best estimate of the future financial
performance of the Borrower and its consolidated Subsidiaries for the periods
set forth therein. The Latest Projections have been prepared on the basis of the
assumptions set forth therein, which the Borrower believes are fair and
reasonable in light of current and reasonably foreseeable business conditions at
the time submitted to the Lenders.
6.7 Capitalization. The Borrower's authorized capital stock consists of
3,000 shares of common stock, par value $.01 per share, of which 100 shares are
validly issued and outstanding, fully paid and non-assessable.
6.8 Solvency. The Borrower is Solvent prior to and after giving effect to
the Borrowings to be made on the Closing Date and the issuance of the Letters of
Credit to be issued on the Closing Date, and shall remain Solvent during the
term of this Agreement.
6.9 Debt. After giving effect to the making of the Term Loans and the
Revolving Loans to be made on the Closing Date, the Borrower and its
Subsidiaries have no Debt, except (a) the Obligations, and (b) Debt described on
Schedule 6.9.
6.10 Distributions. Since July 1, 1998, no Distribution has been declared,
paid, or made upon or in respect of any capital stock or other securities of the
Borrower or any of its Subsidiaries, except as set forth on Schedule 6.10.
6.11 Real Estate; Leases. Schedule 6.11 sets forth, as of the Closing Date,
a correct and complete list of all Real Estate owned by the Borrower and all
Real Estate owned by any of its Subsidiaries, all leases and subleases of real
or personal property held by the Borrower as lessee or sublessee (other than
leases of personal property as to which the Borrower is lessee or sublessee for
which the value of such personal property in the aggregate is less than
$50,000), and all leases and subleases of real or personal property held by the
Borrower as lessor, or sublessor. Each of such leases and subleases is valid and
enforceable in accordance with its terms and is in full force and effect, and no
default by any party to any such lease or sublease exists. Except as set forth
on Schedule 6.11, the Borrower has good and marketable title in fee simple to
the Real Estate identified on Schedule 6.11 as owned by the Borrower, or valid
leasehold interests in all Real Estate designated therein as "leased" by the
Borrower and the Borrower has good, indefeasible, and merchantable title to all
of its other property reflected on the May 31, 1999 Financial Statements
delivered to the Agent and the Lenders, except as disposed of in the ordinary
course of business since the date thereof, free of all Liens except Permitted
Liens.
27
6.12 Proprietary Rights. Schedule 6.12 sets forth a correct and complete
list of all of the Borrower's Proprietary Rights. None of the Proprietary Rights
is subject to any licensing agreement or similar arrangement except as set forth
on Schedule 6.12. To the best of the Borrower's knowledge, none of the
Proprietary Rights infringes on or conflicts with any other Person's property,
and no other Person's property infringes on or conflicts with the Proprietary
Rights. The Proprietary Rights described on Schedule 6.12 constitute all of the
property of such type necessary to the current and anticipated future conduct of
the Borrower's business.
6.13 Trade Names. All trade names or styles under which the Borrower or any
of its Subsidiaries will sell Inventory or create Accounts, or to which
instruments in payment of Accounts may be made payable, are listed on Schedule
6.13.
6.14 Litigation. Except as set forth on Schedule 6.14, there is no pending,
or to the best of the Borrower's knowledge threatened, action, suit, proceeding,
or counterclaim by any Person, or to the best of the Borrower's knowledge,
investigation by any Governmental Authority, or any basis for any of the
foregoing, which could reasonably be expected to have a Material Adverse Effect.
6.15 Labor Disputes. Except as set forth on Schedule 6.15, as of the
Closing Date (a) there is no collective bargaining agreement or other labor
contract covering employees of the Borrower or any of its Subsidiaries, (b) no
such collective bargaining agreement or other labor contract is scheduled to
expire during the term of this Agreement, (c) no union or other labor
organization is seeking to organize, or to be recognized as, a collective
bargaining unit of employees of the Borrower or any of its Subsidiaries or for
any similar purpose, and (d) there is no pending or (to the best of the
Borrower's knowledge) threatened, strike, work stoppage, material unfair labor
practice claim, or other material labor dispute against or affecting the
Borrower or its Subsidiaries or their employees.
6.16 Environmental Laws. Except as otherwise disclosed on Schedule 6.16:
(a) The Borrower and its Subsidiaries have complied in all
material respects with all Environmental Laws and neither the Borrower nor any
Subsidiary nor any of its presently owned real property or presently conducted
operations, nor its previously owned real property or prior operations, is
subject to any enforcement order from or liability agreement with any
Governmental Authority or private Person respecting (i) compliance with any
Environmental Law or (ii) any potential liabilities and costs or remedial action
arising from the Release or threatened Release of a Contaminant.
(b) The Borrower and its Subsidiaries have obtained all
permits necessary for their current operations under Environmental Laws, and all
such permits are in good standing and the Borrower and its Subsidiaries are in
compliance with all material terms and conditions of such permits.
28
(c) Neither the Borrower nor any of its Subsidiaries, nor, to
the best of the Borrower's knowledge, any of its predecessors in interest, has
in violation of applicable law stored, treated or disposed of any hazardous
waste.
(d) Neither the Borrower nor any of its Subsidiaries has
received any summons, complaint, order or similar written notice indicating that
it is not currently in compliance with, or that any Governmental Authority is
investigating its compliance with, any Environmental Laws or that it is or may
be liable to any other Person as a result of a Release or threatened Release of
a Contaminant.
(e) To the best of the Borrower's knowledge, none of the
present or past operations of the Borrower and its Subsidiaries is the subject
of any investigation by any Governmental Authority evaluating whether any
remedial action is needed to respond to a Release or threatened Release of a
Contaminant.
(f) There is not now, nor to the best of the Borrower's
knowledge has there ever been on or in the Real Estate:
(1) any underground storage tanks or surface
impoundments,
(2) any asbestos-containing material, or
(3) any polychlorinated biphenyls (PCBs) used
in hydraulic oils, electrical transformers or other equipment.
(g) Neither the Borrower nor any of its Subsidiaries has filed
any notice under any requirement of Environmental Law reporting a spill or
accidental and unpermitted Release or discharge of a Contaminant into the
environment.
(h) Neither the Borrower nor any of its Subsidiaries has
entered into any negotiations or settlement agreements with any Person
(including the prior owner of its property) imposing material obligations or
liabilities on the Borrower or any of its Subsidiaries with respect to any
remedial action in response to the Release of a Contaminant or environmentally
related claim.
(i) None of the products manufactured, distributed or sold by
the Borrower or any of its Subsidiaries contain asbestos containing material.
(j) No Environmental Lien has attached to the Real Estate.
6.17 No Violation of Law. Neither the Borrower nor any of its Subsidiaries
is in violation of any law, statute, regulation, ordinance, judgment, order, or
decree applicable to it which violation could reasonably be expected to have a
Material Adverse Effect.
6.18 No Default. Neither the Borrower nor any of its Subsidiaries is in
default with respect to any note, indenture, loan agreement, mortgage, lease,
deed, or other agreement to which the Borrower or such Subsidiary is a party or
by which it is bound, which default could reasonably be expected to have a
Material Adverse Effect.
29
6.19 ERISA Compliance. Except as specifically disclosed in Schedule 6.19:
(a) Each Plan is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other federal or state law.
Each Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS and to the best knowledge
of the Borrower, nothing has occurred which would cause the loss of such
qualification. The Borrower and each ERISA Affiliate has made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of
Borrower, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected
to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Section 4201 or 4243 of ERISA with respect to a Multi-employer Plan; and (v)
neither the Borrower nor any ERISA Affiliate has engaged in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
6.20 Taxes. The Borrower and its Subsidiaries have filed all federal and
other tax returns and reports required to be filed, and have paid all federal
and other taxes, assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise due and
payable unless such unpaid taxes and assessments would constitute a Permitted
Lien.
6.21 Regulated Entities. None of the Borrower, any Person controlling the
Borrower, or any Subsidiary, is an "Investment Company" within the meaning of
the Investment Company Act of 1940. The Borrower is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code or law, or any other
federal or state statute or regulation limiting its ability to incur
indebtedness.
6.22 Use of Proceeds; Margin Regulations. The proceeds of the Loans are to
be used solely for (i) refinancing existing senior debt, (ii) financing the
Tender Offer and (iii) working capital purposes. Neither the Borrower nor any
Subsidiary is engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
30
6.23 Copyrights, Patents, Trademarks and Licenses, etc. The Borrower owns
or is licensed or otherwise has the right to use all of the patents, trademarks,
service marks, trade names, copyrights, contractual franchises, licenses, rights
of way, authorizations and other rights that are reasonably necessary for the
operation of its businesses, without conflict with the rights of any other
Person. To the best knowledge of the Borrower, no slogan or other advertising
device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by the Borrower or any Subsidiary
infringes upon any rights held by any other Person. No claim or litigation
regarding any of the foregoing is pending or threatened, and no patent,
invention, device, application, principle or any statute, law, rule, regulation,
standard or code is pending or, to the knowledge of the Borrower, proposed,
which, in either case, could reasonably be expected to have a Material Adverse
Effect.
6.24 No Material Adverse Change. No material adverse change has occurred in
the Borrower's property, business, operations, or conditions (financial or
otherwise) since the date of the Financial Statements delivered to the Lenders.
6.25 Full Disclosure. None of the representations or warranties made by the
Borrower or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Borrower or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Borrower to the Lenders prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
6.26 Material Agreements. Schedule 6.26 hereto sets forth as of the Closing
Date all agreements and contracts to which the Borrower is a party or is bound
as of the date hereof and requiring annual payments by Borrower in excess of
$1,000,000 or requiring annual payments to Borrower in excess of $1,000,000.
6.27 Bank Accounts. Schedule 6.27 contains as of the Closing Date a
complete and accurate list of all bank accounts maintained by the Borrower with
any bank or other financial institution.
6.28 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or other Person is necessary or required in connection
with the execution, delivery or performance by, or enforcement against, the
Borrower or any of its Subsidiaries of this Agreement or any other Loan
Document.
31
ARTICLE 7
AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower covenants to the Agent and each Lender that so
long as any of the Obligations remain outstanding or this Agreement is in
effect:
7.1 Taxes and Other Obligations. The Borrower shall, and shall cause each
of its Subsidiaries to, (a) file when due all tax returns and other reports
which it is required to file; (b) pay, or provide for the payment, when due, of
all taxes, fees, assessments and other governmental charges against it or upon
its property, income and franchises, make all required withholding and other tax
deposits, and establish adequate reserves for the payment of all such items, and
provide to the Agent and the Lenders, upon request, satisfactory evidence of its
timely compliance with the foregoing; and (c) pay when due all claims of
materialmen, mechanics, carriers, warehousemen, landlords, processors and other
like Persons, and all other indebtedness owed by it and perform and discharge in
a timely manner all other obligations undertaken by it; provided, however, so
long as the Borrower has notified the Agent in writing, neither the Borrower nor
any of its Subsidiaries need pay any tax, fee, assessment, or governmental
charge (i) it is contesting in good faith by appropriate proceedings diligently
pursued, (ii) as to which the Borrower or its Subsidiary, as the case may be,
has established proper reserves as required under GAAP, and (iii) the nonpayment
of which does not result in the imposition of a Lien (other than a Permitted
Lien).
7.2 Legal Existence and Good Standing. The Borrower shall, and shall cause
each of its Subsidiaries to, maintain its legal existence and its qualification
and good standing in all jurisdictions in which the failure to maintain such
existence and qualification or good standing could reasonably be expected to
have a Material Adverse Effect.
7.3 Compliance with Law and Agreements; Maintenance of Licenses. The
Borrower shall comply, and shall cause each Subsidiary to comply, in all
material respects with all Requirements of Law of any Governmental Authority
having jurisdiction over it or its business (including the Federal Fair Labor
Standards Act and all Environmental Laws). The Borrower shall, and shall cause
each of its Subsidiaries to, obtain and maintain all licenses, permits,
franchises, and governmental authorizations necessary to own its property and to
conduct its business as conducted on the Closing Date. The Borrower shall not
modify, amend or alter its certificate or articles of incorporation, or its
limited liability company operating agreement or limited partnership agreement,
as applicable, other than in a manner which does not adversely affect the rights
of the Lenders or the Agent.
7.4 Maintenance of Property; Inspection of Property. (a) The Borrower
shall, and shall cause each of its Subsidiaries to, maintain all of its property
necessary and useful in the conduct of its business, in good operating condition
and repair, ordinary wear and tear excepted.
(b) The Borrower shall permit representatives and independent
contractors of the Agent (at the expense of the Borrower not to exceed four (4)
times per year unless an Event of Default has occurred and is continuing) to
visit and inspect any of its properties, to examine its corporate, financial and
operating records, and make copies thereof or abstracts therefrom and to
32
discuss its affairs, finances and accounts with its directors, officers and
independent public accountants, at such reasonable times during normal business
hours and as soon as may be reasonably desired, upon reasonable advance notice
to the Borrower's; provided, however, when an Event of Default exists, the Agent
or any Lender may do any of the foregoing at the expense of the Borrower at any
time during normal business hours and without advance notice.
7.5 Insurance. (a) The Borrower shall maintain, and shall cause each of its
Subsidiaries to maintain, with financially sound and reputable insurers having a
rating of at least A+ or better by Best Rating Guide, insurance against loss or
damage by fire with extended coverage; theft, burglary, pilferage and loss in
transit; public liability and third party property damage; larceny, embezzlement
or other criminal liability; business interruption; public liability and third
party property damage; and such other hazards or of such other types as is
customary for Persons engaged in the same or similar business, as the Agent, in
its discretion, or acting at the direction of the Required Lenders, shall
specify, in amounts, and under policies acceptable to the Agent and the Required
Lenders. Without limiting the foregoing, the Borrower shall also maintain, and
shall cause each of its Subsidiaries to maintain, flood insurance, in the event
of a designation of the area in which any Real Estate covered by the Mortgages
and any of the Equipment and Inventory located on such Real Estate is located as
"flood prone" or a "flood risk area," (hereinafter "SFHA") as defined by the
Flood Disaster Protection Act of 1973, in an amount to be reasonably determined
by the Agent, and shall comply with the additional requirements of the National
Flood Insurance Program as set forth in said Act. The Borrower shall also
maintain flood insurance for its Inventory and Equipment which is, at any time,
located in a SFHA.
(b) The Borrower shall cause the Agent, for the ratable
benefit of the Agent and the Lenders, to be named as secured party or mortgagee
and sole loss payee or additional insured, in a manner acceptable to the Agent.
Each policy of insurance shall contain a clause or endorsement requiring the
insurer to give not less than ten (10) days' prior written notice to the Agent
in the event of cancellation of the policy for any reason whatsoever and a
clause or endorsement stating that the interest of the Agent shall not be
impaired or invalidated by any act or neglect of the Borrower or any of its
Subsidiaries or the owner of any Real Estate for purposes more hazardous than
are permitted by such policy. All premiums for such insurance shall be paid by
the Borrower when due, and certificates of insurance and photocopies of the
policies shall be delivered to the Agent, in each case in sufficient quantity
for distribution by the Agent to each of the Lenders. If the Borrower fails to
procure such insurance or to pay the premiums therefor when due, the Agent may,
and at the direction of the Required Lenders shall, do so from the proceeds of
Revolving Loans.
7.6 Insurance and Condemnation Proceeds. The Borrower shall promptly notify
the Agent and the Lenders of any loss, damage, or destruction to the Collateral
with a value exceeding $500,000, whether or not covered by insurance. The Agent
is hereby authorized to collect all insurance and condemnation proceeds in
respect of Collateral directly and to apply or remit them as follows:
(i) With respect to insurance and condemnation
proceeds relating to Collateral other than Fixed Assets, after deducting from
such proceeds the reasonable expenses, if any, incurred by the Agent in the
collection or handling thereof, the Agent shall apply such proceeds, ratably, to
the reduction of the Obligations in the order provided for in Section 3.8.
33
(ii) With respect to insurance and condemnation
proceeds relating to Collateral consisting of Fixed Assets, the Agent shall
permit or require the Borrower to use such proceeds, or any part thereof, to
replace, repair, restore or rebuild the relevant Fixed Assets in a diligent and
expeditious manner with materials and workmanship of substantially the same
quality as existed before the loss, damage or destruction; so long as (1) no
Default or Event of Default has occurred and is continuing, (2) the aggregate
proceeds do not exceed $1,000,000 and (3) the Borrower first (i) provides the
Agent and the Required Lenders with plans and specifications for any such repair
or restoration which shall be reasonably satisfactory to the Agent and the
Required Lenders and (ii) demonstrates to the reasonable satisfaction of the
Agent and the Required Lenders that the funds available to it will be sufficient
to complete such project in the manner provided therein. In all other
circumstances, the Agent shall apply such insurance and condemnation proceeds to
the Loans in accordance with Sections 3.4(b) and 3.4(c).
7.7 Environmental Laws. (a) The Borrower shall, and shall cause each of its
Subsidiaries to, conduct its business in compliance with all Environmental Laws
applicable to it, including those relating to the generation, handling, use,
storage, and disposal of any Contaminant. The Borrower shall, and shall cause
each of its Subsidiaries to, take prompt and appropriate action to respond to
any non-compliance with Environmental Laws and shall regularly report to the
Agent on such response.
(b) Without limiting the generality of the foregoing, the
Borrower shall submit to the Agent and the Lenders annually, commencing on the
first Anniversary Date, and on each Anniversary Date thereafter, an update of
the status of each material environmental compliance or liability issue. The
Agent or any Lender may request copies of technical reports prepared by the
Borrower and its communications with any Governmental Authority to determine
whether the Borrower or any of its Subsidiaries is proceeding reasonably to
correct, cure or contest in good faith any alleged material non-compliance or
environmental liability. The Borrower shall, at the Agent's or the Required
Lenders' request and at the Borrower's expense, (i) retain an independent
environmental engineer acceptable to the Agent to evaluate the site, including
tests if appropriate, where the material non-compliance or alleged
non-compliance with Environmental Laws has occurred and prepare and deliver to
the Agent, in sufficient quantity for distribution by the Agent to the Lenders,
a report setting forth the results of such evaluation, a proposed plan for
responding to any environmental problems described therein, and an estimate of
the costs thereof, and (ii) provide to the Agent and the Lenders a supplemental
report of such engineer whenever the scope of the environmental problems, or the
response thereto or the estimated costs thereof, shall increase in any material
respect.
(c) The Agent and its representatives will have the right at
any reasonable time to enter and visit the Real Estate and any other place where
any property of the Borrower is located for the purposes of observing the Real
Estate, taking and removing soil or groundwater samples, and conducting tests on
any part of the Real Estate if the Agent reasonably believes that such Real
Estate is not in compliance with Environmental Laws. The Agent is under no duty,
however, to visit or observe the Real Estate or to conduct tests, and any such
acts by the Agent will be solely for the purposes of protecting the Agent's
Liens and preserving the Agent and the Lenders' rights under the Credit
Agreement. No site visit, observation or testing by the Agent and the Lenders
will result in a waiver of any default of the Borrower or impose any liability
on the Agent or the Lenders. In no event will any site visit, observation or
testing by the Agent be a
34
representation that hazardous substances are or are not present in, on or under
the Real Estate, or that there has been or will be compliance with any
Environmental Law. Neither the Borrower nor any other party is entitled to rely
on any site visit, observation or testing by the Agent. The Agent and the
Lenders owe no duty of care to protect the Borrower or any other party against,
or to inform the Borrower or any other party of, any hazardous substances or any
other adverse condition affecting the Real Estate. The Agent may in its
discretion disclose to the Borrower or to any other party and shall disclose to
each such party if so required by law any report or findings made as a result
of, or in connection with, any site visit, observation or testing by the Agent.
The Borrower understands and agrees that the Agent makes no warranty or
representation to the Borrower or any other party regarding the truth, accuracy
or completeness of any such report or findings that may be disclosed. The
Borrower also understands that depending on the results of any site visit,
observation or testing by the Agent and disclosed to the Borrower, the Borrower
may have a legal obligation to notify one or more environmental agencies of the
results, that such reporting requirements are site-specific, and are to be
evaluated by the Borrower without advice or assistance from the Agent. In each
instance, the Agent will give the Borrower reasonable notice before entering the
Real Estate or any other place the Agent is permitted to enter under this
Section 7.7(c). The Agent will make reasonable efforts to avoid interfering with
the Borrower's use of the Real Estate or any other property in exercising any
rights provided hereunder.
7.8 Compliance with ERISA. The Borrower shall, and shall cause each of its
ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; (c) make all required contributions to any
Plan subject to Section 412 of the Code; (d) not engage in a prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan; and (e) not engage in a transaction that could be subject to Section
4069 or 4212(c) of ERISA.
7.9 Mergers, Consolidations or Sales. (a) Neither Holdings, the Borrower
nor any of its Subsidiaries shall enter into any transaction of merger,
reorganization, or consolidation, engage in any Asset Sale, or wind up,
liquidate or dissolve, or agree to do any of the foregoing, except (i) for sales
of Inventory in the ordinary course of its business, (ii) for the factoring of
their respective accounts receivable by ▇▇▇▇ France and its Subsidiaries and
▇▇▇▇ UK and (iii) for sales or other dispositions of Equipment in the ordinary
course of business that are obsolete or no longer useable by the Borrower or its
Subsidiaries in their businesses with an orderly liquidation value not to exceed
$1,000,000 in any Fiscal Year. Within 120 days following each such Equipment
sale or disposition, the Borrower shall either (i) reinvest the proceeds of that
sale or disposition in other Equipment or (ii) apply such proceeds to the Loans
in accordance with Sections 3.4(b) and (c). All Equipment purchased with such
proceeds shall be free and clear of all Liens, except the Agent's Liens.
(b) Notwithstanding the foregoing, the Borrower may transfer,
sell, or otherwise dispose of all or any part of the Cosmetics Division within
three years following the Closing Date; provided that, unless otherwise approved
by Required Lenders, (a) no event has occurred and is continuing, or would
result from such disposition or the application of the Net Proceeds thereof,
which constitutes a Default or an Event of Default, (b) after giving effect to
such Asset Sale and the application of the Net Proceeds thereof, Borrower shall
have no less than
35
$7,500,000 of Availability with respect to an Asset Sale consummated during the
period from the Closing Date through April 30, 2001 or $5,000,000 of
Availability with respect to an Asset Sale consummated thereafter, (in each
case, with accounts payable being paid consistent with past practices), (c) the
Borrower shall receive no less than $63,000,000 of Net Proceeds from the
Cosmetics Division, (d) the sale of the Cosmetics Division will not include
Equipment located in the United States with a book value in excess of
$1,400,000, and (e) the Net Proceeds from such a disposition shall be applied in
accordance with Sections 3.4(b) and 3.4(c) hereof.
(c) Except as provided in Sections 7.9(a) and (b), all Asset
Sales are subject to the prior written consent of the Required Lenders;
provided, that prior to the payment in full of the Senior Notes, all Assets
Sales, other than those described in Sections 7.9(a) and (b), are subject to the
prior written consent of all Lenders. Without limiting the discretion of the
Lenders to consent or withhold their consent to Asset Sales, all Asset Sales
other than those described in Sections 7.9(a) and (b), shall be subject to the
following conditions:
(i) No Default or Event of Default shall have
occurred and be continuing at the time of such Asset Sale or would result after
giving effect thereto or the application of the Net Proceeds thereof and the
Borrower shall have delivered an officer's certificate to the Agent so stating;
(ii) After giving effect to any such Asset Sale and
the application of the Net Proceeds thereof, the Borrower shall have at least
$7,500,000 of Availability with respect to an Asset Sale consummated during the
period from the Closing Date through April 30, 2001 or $5,000,000 of
Availability with respect to an Asset Sale consummated thereafter (in each case,
with accounts payable being paid consistent with past practices); and
(iii) Concurrently with any Asset Sale consisting of
a sale or other disposition of Domestic Assets, the Agent shall have received
for the ratable benefit of Lenders a payment to be applied in accordance with
Section 3.4(c) in an amount equal to:
(1) 85% of the book value of Eligible
Accounts included in such Asset Sale;
(2) 50% of the book value of Eligible
Inventory consisting of finished goods and raw materials
included in such Asset Sale;
(3) 25% of the book value of Eligible
Inventory consisting of work-in-process included in such Asset
Sale;
(4) 75% of the fair market value of the Real
Estate included in such Asset Sale, as determined by reference
to the Appraisals; and
(5) 80% of the orderly liquidation value of
the Equipment included in such Asset Sale, as determined by
reference to the Appraisals.
(iv) after giving effect to the application of
subsection 7.9(c)(i), (ii) and (iii), any excess Net Proceeds shall be used by
Borrower to repurchase the Senior Notes in an amount not to exceed either (a)
$42,500,000 in the aggregate if the contract pertaining to such
36
Asset Sale is entered into on or prior to December 31, 2000 and the sale is
consummated on or prior to March 31, 2001 or (b) $50,000,000 if the contract
pertaining to such Asset Sale is entered into after December 31, 2000 or the
sale is consummated after March 31, 2001. After giving effect to any such
repurchase, any excess Net Proceeds shall be paid to the Agent, for the ratable
benefit of Lenders, to be applied in accordance with Section 3.4(c).
7.10 Distributions; Capital Change; Restricted Investments. Neither
Holdings, the Borrower nor any of its Subsidiaries shall (i) directly or
indirectly declare or make, or incur any liability to make, any Distribution,
except Distributions to the Borrower by its Subsidiaries, (ii) make any change
in its capital structure which could have a Material Adverse Effect or (iii)
make any Restricted Investment. The Borrower shall not make any contributions to
the capital of, or loans or other transfers of assets to, any of its
Subsidiaries; provided that the Borrower and its Subsidiaries may invest up to
$1,000,000 (in the aggregate) in Subsidiaries to be formed in Brazil, which
Subsidiaries shall execute and deliver to the Agent a Guaranty of the
Obligations.
7.11 Transactions Affecting Collateral or Obligations. Neither Holdings,
the Borrower nor any of its Subsidiaries shall enter into any transaction which
would be reasonably expected to have a Material Adverse Effect.
7.12 Guaranties. Except as listed on Schedule 7.12, neither Holdings, the
Borrower nor any of its Subsidiaries shall make, issue, or become liable on any
Guaranty, except Guaranties of the Obligations in favor of the Agent.
7.13 Debt. Neither Holdings, the Borrower nor any of its Subsidiaries shall
incur or maintain any Debt, other than: (a) the Obligations; (b) Debt described
on Schedule 6.9; provided that Debt of any Subsidiary of the Borrower described
on Schedule 6.9 may not be guaranteed by the Borrower or any other Subsidiary of
the Borrower; (c) Capital Leases of Equipment and purchase money secured Debt
incurred to purchase Equipment provided that (i) Liens securing the same attach
only to the Equipment acquired by the incurrence of such Debt, and (ii) the
aggregate amount of such Debt (including Capital Leases) outstanding does not
exceed $10,000,000 at any time; (d) Debt evidencing a refunding, renewal or
extension of the Debt described on Schedule 6.9; provided that (i) the principal
amount thereof is not increased, (ii) the Liens, if any, securing such refunded,
renewed or extended Debt do not attach to any assets in addition to those
assets, if any, securing the Debt to be refunded, renewed or extended, (iii) no
Person that is not an obligor or guarantor of such Debt as of the Closing Date
shall become an obligor or guarantor thereof, and (iv) the terms of such
refunding, renewal or extension are no less favorable to the Borrower, the Agent
or the Lenders than the original Debt and (e) Debt to be incurred by Brazilian
Subsidiaries of the Borrower to be formed; provided that such Debt shall not be
guaranteed by Borrower or any other Subsidiary.
7.14 Prepayment. Neither Holdings, the Borrower nor any of its Subsidiaries
shall voluntarily prepay any Debt, except (a) the Senior Notes with Net Proceeds
of Asset Sales in accordance with the terms of this Agreement, (b) the
Obligations and (c) up to $185,000 of the mortgage loans secured by the Florida
Mortgage and Texas Mortgage.
7.15 Transactions with Affiliates. Except as set forth below, neither
Holdings, the Borrower nor any of its Subsidiaries shall, sell, transfer,
distribute, or pay any money or
37
property, including, but not limited to, any fees or expenses of any nature
(including, but not limited to, any fees or expenses for management services),
to any Affiliate, or lend or advance money or property to any Affiliate, or
invest in (by capital contribution or otherwise) or purchase or repurchase any
stock or indebtedness, or any property, of any Affiliate, or become liable on
any Guaranty of the indebtedness, dividends, or other obligations of any
Affiliate. Notwithstanding the foregoing, while no Event of Default has occurred
and is continuing, or would occur as a result thereof, Holdings, the Borrower
and its Subsidiaries may (i) engage in transactions with Affiliates in the
ordinary course of business consistent with past practices, in amounts and upon
terms fully disclosed to the Agent and the Lenders, and no less favorable to
Holdings, the Borrower and its Subsidiaries than would be obtained in a
comparable arm's-length transaction with a third party who is not an Affiliate,
(ii) pay management fees to Affiliates in an aggregate amount not to exceed
$200,000 in any Fiscal Year, (iii) capitalize inter-company Debt existing as of
the Closing Date owing to the Borrower by ▇▇▇▇ France in an amount not to exceed
$20,000,000, (iv) out-of-pocket expenses of Galt Industries, Inc. incurred for
the benefit of the Borrower and (v) make scheduled payments in connection with
the lease of real property in Paderborn, Germany between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ GmbH
& Co. and G & R Grundverwaltung GmbH in an amount not to exceed $1,800,000 in
the aggregate; provided that no such lease payments in excess of $300,000 shall
be made if Borrower has less than $5,000,000 of Availability.
7.16 Investment Banking and Finder's Fees. Neither Holdings, the Borrower
nor any of its Subsidiaries shall pay or agree to pay, or reimburse any other
party with respect to, any investment banking or similar or related fee,
underwriter's fee, finder's fee, or broker's fee to any Person in connection
with this Agreement, except as set forth on Schedule 7.16. The Borrower shall
defend and indemnify the Agent and the Lenders against and hold them harmless
from all claims of any Person that the Borrower is obligated to pay for any such
fees, and all costs and expenses (including attorneys' fees) incurred by the
Agent and/or any Lender in connection therewith.
7.17 Business Conducted. The Borrower shall not and shall not permit any of
its Subsidiaries to, engage directly or indirectly, in any line of business
other than the businesses in which the Borrower and its Subsidiaries are engaged
on the Closing Date and businesses directly related thereto.
7.18 Liens. Neither Holdings, the Borrower nor any of its Subsidiaries
shall create, incur, assume, or permit to exist any Lien on any property now
owned or hereafter acquired by any of them, except Permitted Liens, and Liens,
if any, described in Schedule 6.9 in effect as of the Closing Date securing Debt
described in Schedule 6.9 and Liens securing Capital Leases and purchase money
Debt permitted in Section 7.13(c).
7.19 Sale and Leaseback Transactions. Neither Holdings, the Borrower nor
any of its Subsidiaries shall, directly or indirectly, enter into any
arrangement with any Person providing for Holdings, the Borrower or such
Subsidiary to lease or rent property that Holdings, the Borrower or such
Subsidiary has sold or will sell or otherwise transfer to such Person.
38
7.20 New Subsidiaries. The Borrower shall not, directly or indirectly,
organize, create, acquire or permit to exist any Subsidiary other than those
listed on Schedule 6.5 and Subsidiaries to be formed in Brazil.
7.21 Fiscal Year. The Borrower shall not change its Fiscal Year.
7.22 Capital Expenditures. Neither Holdings, the Borrower nor any of its
Subsidiaries shall make or incur any Capital Expenditure if, after giving effect
thereto, the aggregate amount of all Capital Expenditures by Holdings, the
Borrower and its Subsidiaries on a consolidated basis would exceed the following
amounts during the following Fiscal Years:
Fiscal Year Amount
----------- ------
2000 $7,500,000
2001 $10,100,000
2002 and each year thereafter $16,800,000
provided, however, that the amount of permitted Capital Expenditures referenced
above will be increased in any period by the positive amount equal to the lesser
of (i) 50% of the amount of permitted Capital Expenditures for the immediately
prior period, and (ii) the amount (if any), equal to the difference obtained by
taking the Capital Expenditures limit specified above for the immediately prior
period minus the actual amount of any Capital Expenditures expended during such
prior period (the "Carry Over Amount"), and for purposes of measuring compliance
herewith, the Carry Over Amount shall be deemed to be the last amount spent on
Capital Expenditures in that succeeding year.
7.23 Operating Lease Obligations. Neither Holdings, the Borrower nor any of
its Subsidiaries shall enter into, or suffer to exist, any lease of real or
personal property as lessee or sublessee (other than a Capital Lease), if, after
giving effect thereto, the aggregate amount of Rentals (as hereinafter defined)
payable by Holdings, the Borrower and its Subsidiaries on a consolidated basis
in any Fiscal Year in respect of such lease and all other such leases would
exceed $15,000,000 (such amount being referred to herein as "Permitted
Rentals"). The term "Rentals" means all payments due from the lessee or
sublessee under a lease, including, without limitation, basic rent, percentage
rent, property taxes, utility or maintenance costs, and insurance premiums.
7.24 Fixed Charge Coverage Ratio. The Borrower will maintain a Fixed Charge
Coverage Ratio for each period of four consecutive fiscal quarters ended on the
last day of each fiscal quarter set forth below of not less than the ratio set
forth below opposite such fiscal quarter (provided that the measurement period
ending September 30, 2000, shall be the one fiscal quarter then ended and the
measurement period ending December 31, 2000, shall be the one fiscal quarter
then ended):
Period Ending Ratio
------------- -----
September 30, 2000 .90
December 31, 2000 .95
39
March 31, 2001 1.00
June 30, 2001 1.00
September 30, 2001 1.00
December 31, 2001 1.00
March 31, 2002 1.05
June 30, 2002 1.05
September 30, 2002 1.10
December 31, 2002 1.10
March 31, 2003 and the last day 1.15
of each fiscal quarter thereafter
7.25 Availability. The Borrower shall maintain Availability of at least
$7,500,000 from the Closing Date through April 30, 2001 (with accounts payable
being paid in a manner consistent with past practices).
7.26 Use of Proceeds. The Borrower shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Borrower or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
7.27 Distributions to Fund Prepayments. If any Subsidiary shall engage in
any transaction as a result of which Borrower is required to make a mandatory
prepayment in accordance with Section 3.4(b), Borrower shall cause such
Subsidiary to distribute to the Borrower an amount equal to the mandatory
prepayment.
7.28 Florida Mortgage/Texas Mortgage. Within ninety (90) days following the
Closing Date, the Borrower shall either refinance the Debt secured by the
Florida Mortgage and the Texas Mortgage with lenders that consent to second
mortgages in favor of the Agent on the affected properties or obtain the consent
of the existing lenders to those second mortgages.
7.29 Further Assurances. The Borrower shall execute and deliver, or cause
to be executed and delivered, to the Agent and/or the Lenders such documents and
agreements, and shall take or cause to be taken such actions, as the Agent or
any Lender may, from time to time, request to carry out the terms and conditions
of this Agreement and the other Loan Documents.
40
ARTICLE 8
CONDITIONS OF LENDING
8.1 Conditions Precedent to Making of Loans on the Closing Date. The
obligation of the Lenders to make the initial Revolving Loans and the Term Loans
on the Closing Date, and the obligation of the Agent to cause the Letter of
Credit Issuer to issue any Letter of Credit on the Closing Date, are subject to
the following conditions precedent having been satisfied in a manner
satisfactory to the Agent and each Lender:
(a) This Agreement and the other Loan Documents shall have
been executed by each party thereto and the Borrower shall have performed and
complied with all covenants, agreements and conditions contained herein and the
other Loan Documents which are required to be performed or complied with by the
Borrower before or on such Closing Date.
(b) Upon making the Revolving Loans (including such Revolving
Loans made to finance the Closing Fee or otherwise as reimbursement for fees,
costs and expenses then payable under this Agreement) and with all its
obligations current, the Borrower shall have Availability of at least
$9,000,000.
(c) All representations and warranties made hereunder and in
the other Loan Documents shall be true and correct as if made on such date.
(d) No Default or Event of Default shall have occurred and be
continuing after giving effect to the Loans to be made and the Letters of Credit
to be issued on the Closing Date.
(e) The Agent and the Lenders shall have received such
opinions of counsel for the Borrower and its Subsidiaries as the Agent or any
Lender shall request, each such opinion to be in a form, scope, and substance
satisfactory to the Agent, the Lenders, and their respective counsel.
(f) The Agent shall have received title policies, in form and
substance acceptable to Agent, with respect to the Mortgages.
(g) The Agent shall have received:
(i) acknowledgment copies of proper financing
statements, duly filed on or before the Closing Date under the UCC of all
jurisdictions that the Agent may deem necessary or desirable in order to perfect
the Agent's Liens; and
(ii) duly executed UCC-3 Termination Statements and
such other instruments, in form and substance satisfactory to the Agent, as
shall be necessary to terminate and satisfy all Liens on the Property of
Holdings, the Borrower and its Subsidiaries except Permitted Liens.
(h) The Borrower shall have paid all fees and expenses of the
Agent and the Attorney Costs incurred in connection with any of the Loan
Documents and the transactions contemplated thereby to the extent invoiced.
41
(i) The Agent shall have received evidence, in form, scope,
and substance, reasonably satisfactory to the Agent, of all insurance coverage
as required by this Agreement.
(j) The Agent and the Lenders shall have had an opportunity,
if they so choose, to examine the books of account and other records and files
of the Borrower and to make copies thereof, and to conduct a pre-closing audit
which shall include, without limitation, verification of Inventory, Accounts,
and the Borrowing Base, and the results of such examination and audit shall have
been satisfactory to the Agent and the Lenders in all respects.
(k) All proceedings taken in connection with the execution of
this Agreement, the Term Loan Notes, all other Loan Documents and all documents
and papers relating thereto shall be satisfactory in form, scope, and substance
to the Agent and the Lenders.
(l) The Borrower shall execute and deliver an interest rate
Hedge Agreement with respect to at least $25,000,000 of the Loans, in form and
substance acceptable to Agent.
(m) The Agent shall have received an executed Blocked Account
Agreement that provides for the collection and remittance of all proceeds of
Accounts and other collections to Agent on a daily basis to be applied against
the outstanding balance of the Revolving Loans, in form and substance acceptable
to Agent.
The acceptance by the Borrower of any Loans made or Letters of Credit
issued on the Closing Date shall be deemed to be a representation and warranty
made by the Borrower to the effect that all of the conditions precedent to the
making of such Loans or the issuance of such Letters of Credit have been
satisfied, with the same effect as delivery to the Agent and the Lenders of a
certificate signed by a Responsible Officer of the Borrower, dated the Closing
Date, to such effect.
Execution and delivery to the Agent by a Lender of a counterpart of
this Agreement shall be deemed confirmation by such Lender that (i) all
conditions precedent in this Section 8.1 have been fulfilled to the satisfaction
of such Lender, (ii) the decision of such Lender to execute and deliver to the
Agent an executed counterpart of this Agreement was made by such Lender
independently and without reliance on the Agent or any other Lender as to the
satisfaction of any condition precedent set forth in this Section 8.1, and (iii)
all documents sent to such Lender for approval consent, or satisfaction were
acceptable to such Lender.
8.2 Conditions Precedent to Each Loan. The obligation of the Lenders to
make each Loan, including the initial Revolving Loans on the Closing Date and
the Term Loans, and the obligation of the Agent to cause the Letter of Credit
Issuer to issue any Letter of Credit shall be subject to the further conditions
precedent that on and as of the date of any such extension of credit:
(a) the following statements shall be true, and the acceptance
by the Borrower of any extension of credit shall be deemed to be a statement to
the effect set forth in clauses (i) and (ii), with the same effect as the
delivery to the Agent and the Lenders of a certificate signed by a Responsible
Officer, dated the date of such extension of credit, stating that:
42
(i) The representations and warranties contained in
this Agreement and the other Loan Documents are correct in all material respects
on and as of the date of such extension of credit as though made on and as of
such date, other than any such representation or warranty which relates to a
specified prior date and except to the extent the Agent and the Lenders have
been notified by the Borrower that any representation or warranty is not correct
and the Required Lenders have explicitly waived in writing compliance with such
representation or warranty; and
(ii) No event has occurred and is continuing, or
would result from such extension of credit, which constitutes a Default or an
Event of Default; and
(iii) No event has occurred and is continuing, or
would result from such extension of credit, which would have a Material
Adverse Effect.
(b) The amount of the Borrowing Base shall be sufficient to
make such Revolving Loans or issue such Letters of Credit without exceeding the
Availability, provided, however, that the foregoing conditions precedent are not
conditions to each Lender participating in or reimbursing the Bank or the Agent
for such Lenders' Pro Rata Share of any Non-Ratable Loan or Agent Advance made
in accordance with the provisions of Sections 1.2(h) and (i).
ARTICLE 9
DEFAULT; REMEDIES
9.1 Events of Default. It shall constitute an event of default ("Event of
Default") if any one or more of the following shall occur for any reason:
(a) any failure by the Borrower to pay the principal of or
interest or premium on any of the Obligations or any fee or other amount owing
hereunder when due, whether upon demand or otherwise;
(b) any representation or warranty made or deemed made by the
Borrower in this Agreement or by the Borrower or any of its Subsidiaries in any
of the other Loan Documents, any Financial Statement, or any certificate
furnished by the Borrower or any of its Subsidiaries at any time to the Agent or
any Lender shall prove to be untrue in any material respect as of the date on
which made, deemed made, or furnished;
(c) (i) any default shall occur in the observance or
performance of any of the covenants and agreements contained in Sections 7.2,
7.5 or 7.9-7.28 or, so long as Borrowing Base Certificates are delivered
monthly, Section 5.2(e), or Section 11 of the Security Agreement, (ii) any
default shall occur in the observance or performance of any of the covenants and
agreements contained in Sections 5.2 (other than 5.2(e)) or 5.3 and such default
shall continue for three (3) Business Days or more; (iii) so long as Borrowing
Base Certificates are delivered daily, any default shall occur in the observance
of the covenant contained in Section 5.2(e) and such default shall continue for
two (2) Business Days or more; or (iv) any default shall occur in the observance
or performance of any of the other covenants or agreements contained in any
other Section of this Agreement or any other Loan Document, any other Loan
Documents, or any
43
other agreement entered into at any time to which the Borrower or any Subsidiary
and the Agent or any Lender are party (including in respect of any Bank
Products) and such default shall continue for ten (10) days or more;
(d) any default shall occur with respect to any Debt (other
than the Obligations) of the Borrower or any of its Subsidiaries in an
outstanding principal amount which exceeds $500,000, (excluding the Florida
Mortgage and the Texas Mortgage during the first ninety (90) days following the
Closing Date) or under any agreement or instrument under or pursuant to which
any such Debt may have been issued, created, assumed, or guaranteed by the
Borrower or any of its Subsidiaries, and such default shall continue for more
than the period of grace, if any, therein specified, if the effect thereof (with
or without the giving of notice or further lapse of time or both) is to
accelerate, or to permit the holders of any such Debt to accelerate, the
maturity of any such Debt; or any such Debt shall be declared due and payable or
be required to be prepaid (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof;
(e) the Borrower or any of its Subsidiaries shall (i) file a
voluntary petition in bankruptcy or file a voluntary petition or an answer or
otherwise commence any action or proceeding seeking reorganization, arrangement
or readjustment of its debts or for any other relief under the federal
Bankruptcy Code, as amended, or under any other bankruptcy or insolvency act or
law, state or federal, now or hereafter existing, or consent to, approve of, or
acquiesce in, any such petition, action or proceeding; (ii) apply for or
acquiesce in the appointment of a receiver, assignee, liquidator, sequestrator,
custodian, monitor, trustee or similar officer for it or for all or any part of
its property; (iii) make an assignment for the benefit of creditors; or (iv) be
unable generally to pay its debts as they become due;
(f) an involuntary petition shall be filed or an action or
proceeding otherwise commenced seeking reorganization, arrangement,
consolidation or readjustment of the debts of the Borrower or any of its
Subsidiaries or for any other relief under the federal Bankruptcy Code, as
amended, or under any other bankruptcy or insolvency act or law, state or
federal, now or hereafter existing and such petition or proceeding shall not be
dismissed within sixty (60) days after the filing or commencement thereof or an
order of relief shall be entered with respect thereto;
(g) a receiver, assignee, liquidator, sequestrator, custodian,
monitor, trustee or similar officer for the Borrower or any of its Subsidiaries
or for all or any part of its property shall be appointed or a warrant of
attachment, execution or similar process shall be issued against any part of the
property of the Borrower or any of its Subsidiaries;
(h) the Borrower or any of its Subsidiaries shall file a
certificate of dissolution under applicable state law or shall be liquidated,
dissolved or wound-up or shall commence or have commenced against it any action
or proceeding for dissolution, winding-up or liquidation, or shall take any
corporate action in furtherance thereof;
(i) all or any material part of the property of the Borrower
or any of its Subsidiaries shall be nationalized, expropriated or condemned,
seized or otherwise appropriated, or custody or control of such property or of
the Borrower or such Subsidiary shall be assumed by
44
any Governmental Authority or any court of competent jurisdiction at the
instance of any Governmental Authority, except where contested in good faith by
proper proceedings diligently pursued where a stay of enforcement is in effect;
(j) any Loan Document shall be terminated, revoked or declared
void or invalid or unenforceable;
(k) one or more judgments, orders, decrees or arbitration
awards is entered against the Borrower involving in the aggregate liability (to
the extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or related or unrelated
series of transactions, incidents or conditions, of $500,000 or more, and the
same shall remain unsatisfied, unvacated and unstayed pending appeal for a
period of thirty (30) days after the entry thereof;
(l) any loss, theft, damage or destruction of any item or
items of Collateral or other property of the Borrower or any Subsidiary occurs
which could reasonably be expected to cause a Material Adverse Effect and is not
adequately covered by insurance;
(m) there is filed against the Borrower or any of its
Subsidiaries any action, suit or proceeding under any federal or state
racketeering statute (including the Racketeer Influenced and Corrupt
Organization Act of 1970), which action, suit or proceeding (i) is not dismissed
within one hundred twenty (120) days, and (ii) could reasonably be expected to
result in the confiscation or forfeiture of any material portion of the
Collateral;
(n) for any reason other than the failure of the Agent to take
any action available to it to maintain perfection of the Agent's Liens, pursuant
to the Loan Documents, any Loan Document ceases to be in full force and effect
or any Lien with respect to any material portion of the Collateral intended to
be secured thereby ceases to be, or is not, valid, perfected and prior to all
other Liens (other than Permitted Liens) or is terminated, revoked or declared
void;
(o) an ERISA Event shall occur with respect to a Pension Plan
or Multi-employer Plan which has resulted or could reasonably be expected to
result in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multi-employer Plan or the PBGC in an aggregate amount in excess of $500,000;
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceeds $500,000; or (iii) the Borrower or any ERISA Affiliate shall
fail to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multi-employer Plan in an aggregate amount in excess of
$500,000;
(p) there occurs a Change of Control;
(q) there occurs a Material Adverse Effect; or
(r) the Borrower fails to sell the Stock and all or
substantially all of the assets constituting the Cosmetics Division, subject to
the terms hereof, including, without limitation, Section 7.9(b), within three
(3) years of the Closing Date.
45
9.2 Remedies. (a) If a Default or an Event of Default exists, the Agent
may, in its discretion, and shall, at the direction of the Required Lenders, do
one or more of the following at any time or times and in any order, without
notice to or demand on the Borrower: (i) reduce the Maximum Revolver Amount, or
the advance rates against Eligible Accounts and/or Eligible Inventory used in
computing the Borrowing Base, or reduce one or more of the other elements used
in computing the Borrowing Base; (ii) restrict the amount of or refuse to make
Revolving Loans; and (iii) restrict or refuse to provide Letters of Credit or
Credit Support. If an Event of Default exists, the Agent shall, at the direction
of the Required Lenders, do one or more of the following, in addition to the
actions described in the preceding sentence, at any time or times and in any
order, without notice to or demand on the Borrower: (A) terminate the
Commitments and this Agreement; (B) declare any or all Obligations to be
immediately due and payable; provided, however, that upon the occurrence of any
Event of Default described in Sections 9.1(e), 9.1(f), 9.1(g), or 9.1(h), the
Commitments shall automatically and immediately expire and all Obligations shall
automatically become immediately due and payable without notice or demand of any
kind; and (C) pursue its other rights and remedies under the Loan Documents and
applicable law.
(b) If an Event of Default has occurred and is continuing: (i)
the Agent shall have for the benefit of the Lenders, in addition to all other
rights of the Agent and the Lenders, the rights and remedies of a secured party
under the Loan Documents and the UCC; (ii) the Agent may, at any time, take
possession of the Collateral and keep it on the Borrower's premises, at no cost
to the Agent or any Lender, or remove any part of it to such other place or
places as the Agent may desire, or the Borrower shall, upon the Agent's demand,
at the Borrower's cost, assemble the Collateral and make it available to the
Agent at a place reasonably convenient to the Agent; and (iii) the Agent may
sell and deliver any Collateral at public or private sales, for cash, upon
credit or otherwise, at such prices and upon such terms as the Agent deems
advisable, in its sole discretion, and may, if the Agent deems it reasonable,
postpone or adjourn any sale of the Collateral by an announcement at the time
and place of sale or of such postponed or adjourned sale without giving a new
notice of sale. Without in any way requiring notice to be given in the following
manner, the Borrower agrees that any notice by the Agent of sale, disposition or
other intended action hereunder or in connection herewith, whether required by
the UCC or otherwise, shall constitute reasonable notice to the Borrower if such
notice is mailed by registered or certified mail, return receipt requested,
postage prepaid, or is delivered personally against receipt, at least ten (10)
days prior to such action to the Borrower's address specified in or pursuant to
Section 13.8. If any Collateral is sold on terms other than payment in full at
the time of sale, no credit shall be given against the Obligations until the
Agent or the Lenders receive payment, and if the buyer defaults in payment, the
Agent may resell the Collateral without further notice to the Borrower. In the
event the Agent seeks to take possession of all or any portion of the Collateral
by judicial process, the Borrower irrevocably waives: (A) the posting of any
bond, surety or security with respect thereto which might otherwise be required;
(B) any demand for possession prior to the commencement of any suit or action to
recover the Collateral; and (C) any requirement that the Agent retain possession
and not dispose of any Collateral until after trial or final judgment. The
Borrower agrees that the Agent has no obligation to preserve rights to the
Collateral or marshal any Collateral for the benefit of any Person. The Agent is
hereby granted a license or other right to use, without charge, the Borrower's
labels, patents, copyrights, name, trade secrets, trade names, trademarks, and
advertising matter, or any similar property, in completing production of,
advertising or selling
46
any Collateral, and the Borrower's rights under all licenses and all franchise
agreements shall inure to the Agent's benefit for such purpose. The proceeds of
sale shall be applied first to all expenses of sale, including attorneys' fees,
and then to the Obligations. The Agent will return any excess to the Borrower
and the Borrower shall remain liable for any deficiency.
(c) If an Event of Default occurs and is continuing, the
Borrower hereby waives all rights to notice and hearing prior to the exercise by
the Agent of the Agent's rights to repossess the Collateral without judicial
process or to reply, attach or levy upon the Collateral without notice or
hearing.
ARTICLE 10
TERM AND TERMINATION
10.1 Term and Termination. The term of this Agreement shall end on the
Stated Termination Date unless sooner terminated in accordance with the terms
hereof. The Agent upon direction from the Required Lenders may terminate this
Agreement without notice upon the occurrence and during the continuance of an
Event of Default. Upon the effective date of termination of this Agreement for
any reason whatsoever, all Obligations (including all unpaid principal, accrued
and unpaid interest and any early termination or prepayment fees or penalties)
shall become immediately due and payable and the Borrower shall immediately
arrange for the cancellation and return of Letters of Credit then outstanding.
Notwithstanding the termination of this Agreement, until all Obligations are
indefeasibly paid and performed in full in cash, the Borrower shall remain bound
by the terms of this Agreement and shall not be relieved of any of its
Obligations hereunder or under any other Loan Document, and the Agent and the
Lenders shall retain all their rights and remedies hereunder (including the
Agent's Liens in and all rights and remedies with respect to all then existing
and after-arising Collateral).
ARTICLE 11
AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
11.1 Amendments and Waivers. (a) No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Required Lenders (or by the Agent at the written
request of the Required Lenders) and the Borrower and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment, or
consent shall, unless in writing and signed by all the Lenders and the Borrower
and acknowledged by the Agent, do any of the following:
(i) increase or extend the Commitment of any Lender;
(ii) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or other
amounts due to the Lenders (or
47
any of them) hereunder or under any other Loan Document (provided that any
mandatory prepayment may be deferred or waived with the consent of Required
Lenders);
(iii) reduce the principal of, or the rate of interest
specified herein on any Loan, or any fees or other amounts payable hereunder or
under any other Loan Document;
(iv) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the Lenders
or any of them to take any action hereunder;
(v) increase any of the percentages set forth in the
definition of the Borrowing Base;
(vi) amend this Section or any provision of this Agreement
providing for consent or other action by all Lenders;
(vii) release Collateral other than as permitted by Section
12.11;
(viii) change the definitions of "Majority Lenders" or
"Required Lenders";
(ix) increase the Maximum Revolver Amount and Letter of Credit
Subfacility; or
(x) permit the consummation of Asset Sales in accordance with
Section 7.9(c) prior to the payment in full of the Senior Notes;
provided, however, the Agent may, in its sole discretion and notwithstanding the
limitations contained in clauses (e) and (i) above and any other terms of this
Agreement, make Agent Advances in accordance herewith and, provided further,
that no amendment, waiver or consent shall, unless in writing and signed by the
Agent, affect the rights or duties of the Agent under this Agreement or any
other Loan Document and provided further, that Schedule 1.2 hereto (Commitments)
may be amended from time to time by Agent alone to reflect assignments of
Commitments in accordance herewith.
(b) If any fees are paid to the Lenders as consideration for
amendments, waivers or consents with respect to this Agreement, at Agent's
election, such fees may be paid only to those Lenders that agree to such
amendments, waivers or consents within the time specified for submission
thereof.
(c) If, in connection with any proposed amendment, waiver or consent (a
"Proposed Change"):
(i) requiring the consent of all Lenders, the consent of
Required Lenders is obtained, but the consent of other Lenders is not obtained
(any such Lender whose consent is not obtained as described in this clause (i)
and in clause (ii) below being referred to as a "Non-Consenting Lender"), or
48
(ii) requiring the consent of Required Lenders, the consent of
Majority Lenders is obtained,
then, so long as the Agent is not a Non-Consenting Lender, at the Borrower's
request, the Agent or an Eligible Assignee shall have the right (but not the
obligation) with the Agent's approval, to purchase from the Non-Consenting
Lenders, and the Non-Consenting Lenders agree that they shall sell, all the
Non-Consenting Lenders' Commitments for an amount equal to the principal
balances thereof and all accrued interest and fees with respect thereto through
the date of sale pursuant to Assignment and Acceptance Agreement(s), without
premium or discount.
11.2 Assignments; Participations.
(a) Any Lender may, with the written consent of the Agent and,
absent an Event of Default, the Borrower (which consents shall not be
unreasonably withheld or delayed), assign and delegate to one or more Eligible
Assignees (provided that no consent of the Agent shall be required in connection
with any assignment and delegation by a Lender to an Affiliate of such Lender)
(each an "Assignee") all, or any ratable part of all, of the Loans, the
Commitments and the other rights and obligations of such Lender hereunder, in a
minimum amount of $5,000,000 (provided that, unless an assignor Lender has
assigned and delegated all of its Loans and Commitments, no such assignment
and/or delegation shall be permitted unless, after giving effect thereto, such
assignor Lender retains a Commitment in a minimum amount of $5,000,000);
provided, however, that the Borrower and the Agent may continue to deal solely
and directly with such Lender in connection with the interest so assigned to an
Assignee until (i) written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee,
shall have been given to the Borrower and the Agent by such Lender and the
Assignee; (ii) such Lender and its Assignee shall have delivered to the Borrower
and the Agent an Assignment and Acceptance in the form of Exhibit F ("Assignment
and Acceptance") together with any note or notes subject to such assignment and
(iii) the assignor Lender or Assignee has paid to the Agent a processing fee in
the amount of $3,500. The Borrower agrees to promptly execute and deliver new
promissory notes and replacement promissory notes as reasonably requested by the
Agent to evidence assignments of the Loans and Commitments in accordance
herewith.
(b) From and after the date that the Agent notifies the
assignor Lender that it has received an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations,
including, but not limited to, the obligation to participate in Letters of
Credit and Credit Support have been assigned to it pursuant to such Assignment
and Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assignor Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the
49
other parties hereto as follows: (i) other than as provided in such Assignment
and Acceptance, such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Loan Document furnished pursuant hereto or the
attachment, perfection, or priority of any Lien granted by the Borrower to the
Agent or any Lender in the Collateral; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto; (iii) such Assignee confirms that it has
received a copy of this Agreement, together with such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such Assignee will,
independently and without reliance upon the Agent, such assigning Lender or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such Assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers, including the discretionary rights and
incidental power, as are reasonably incidental thereto; and (vi) such Assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) Immediately upon satisfaction of the requirements of
Section 11.2(a), this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Lender
pro tanto.
(e) Any Lender may at any time sell to one or more commercial
banks, financial institutions, or other Persons not Affiliates of the Borrower
(a "Participant") participating interests in any Loans, the Commitment of that
Lender and the other interests of that Lender (the "originating Lender")
hereunder and under the other Loan Documents; provided, however, that (i) the
originating Lender's obligations under this Agreement shall remain unchanged,
(ii) the originating Lender shall remain solely responsible for the performance
of such obligations, (iii) the Borrower and the Agent shall continue to deal
solely and directly with the originating Lender in connection with the
originating Lender's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Lender shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan
Document, and all amounts payable by the Borrower hereunder shall be determined
as if such Lender had not sold such participation; except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have become due
and payable upon the occurrence of an Event of Default, each Participant shall
be deemed to have the right of set-off in respect of its participating interest
in amounts owing under this Agreement to the same extent and subject to the same
limitation as if the amount of its participating interest were owing directly to
it as a Lender under this Agreement.
50
(f) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury
Regulation 31 CFR ss.203.14, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.
ARTICLE 12
THE AGENT
12.1 Appointment and Authorization. Each Lender hereby designates and
appoints Bank as its Agent under this Agreement and the other Loan Documents and
each Lender hereby irrevocably authorizes the Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to it
by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. The Agent agrees to act as such on
the express conditions contained in this Article 12. The provisions of this
Article 12 are solely for the benefit of the Agent and the Lenders and the
Borrower shall have no rights as a third party beneficiary of any of the
provisions contained herein. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties. Except as expressly otherwise provided in this Agreement,
the Agent shall have and may use its sole discretion with respect to exercising
or refraining from exercising any discretionary rights or taking or refraining
from taking any actions which the Agent is expressly entitled to take or assert
under this Agreement and the other Loan Documents, including (a) the
determination of the applicability of ineligibility criteria with respect to the
calculation of the Borrowing Base, (b) the making of Agent Advances pursuant to
Section 1.2(i), and (c) the exercise of remedies pursuant to Section 9.2, and
any action so taken or not taken shall be deemed consented to by the Lenders.
12.2 Delegation of Duties. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
12.3 Liability of Agent. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross
51
negligence or willful misconduct), or (ii) be responsible in any manner to any
of the Lenders for any recital, statement, representation or warranty made by
the Borrower or any Subsidiary or Affiliate of the Borrower, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of the Borrower or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Borrower or any of the Borrower's Subsidiaries or Affiliates.
12.4 Reliance by Agent. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Borrower), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the Required
Lenders (or all Lenders if so required by Section 11.1) and such request and any
action taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.
12.5 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, unless the Agent
shall have received written notice from a Lender or the Borrower referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default." The Agent will notify the Lenders of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Required Lenders in
accordance with Section 9; provided, however, that unless and until the Agent
has received any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable.
12.6 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrower and its Affiliates, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Affiliates, and all
52
applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Borrower. Each Lender also represents that it will, independently
and without reliance upon any Agent-Related Person and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the Agent,
the Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of the Borrower
which may come into the possession of any of the Agent-Related Persons.
12.7 Indemnification. Whether or not the transactions contemplated hereby
are consummated, the Lenders shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Borrower and
without limiting the obligation of the Borrower to do so), pro rata, from and
against any and all Indemnified Liabilities as such term is defined in Section
13.11; provided, however, that no Lender shall be liable for the payment to the
Agent-Related Persons of any portion of such Indemnified Liabilities resulting
solely from such Person's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender shall reimburse the Agent upon demand
for its ratable share of any costs or out-of-pocket expenses (including Attorney
Costs) incurred by the Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that the Agent is not reimbursed for such expenses by or on behalf of the
Borrower. The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of the Agent.
12.8 Agent in Individual Capacity. The Bank and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Borrower and its
Subsidiaries and Affiliates as though the Bank were not the Agent hereunder and
without notice to or consent of the Lenders. The Bank or its Affiliates may
receive information regarding the Borrower, its Affiliates and Account Debtors
(including information that may be subject to confidentiality obligations in
favor of the Borrower or such Subsidiary) and acknowledge that the Agent and the
Bank shall be under no obligation to provide such information to them. With
respect to its Loans, the Bank shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Agent, and the terms "Lender" and "Lenders" include the Bank in its
individual capacity.
12.9 Successor Agent. The Agent may resign as Agent upon at least 30 days'
prior notice to the Lenders and the Borrower, such resignation to be effective
upon the acceptance of a successor agent to its appointment as Agent. In the
event the Bank sells all of its Commitment and Revolving Loans as part of a
sale, transfer or other disposition by the Bank of substantially all of its loan
portfolio, the Bank shall resign as Agent and such purchaser or transferee shall
53
become the successor Agent hereunder. Subject to the foregoing, if the Agent
resigns under this Agreement, the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders. If no successor agent is appointed
prior to the effective date of the resignation of the Agent, the Agent may
appoint, after consulting with the Lenders and the Borrower, a successor agent
from among the Lenders. Upon the acceptance of its appointment as successor
agent hereunder, such successor agent shall succeed to all the rights, powers
and duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article 12 shall continue to inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.
12.10 Withholding Tax. (a) If any Lender is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Lender claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Lender agrees with and in favor of the Agent, to deliver
to the Agent:
(i) if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States of America tax treaty,
properly completed IRS Forms W-8BEN and W-8ECI before the payment of any
interest in the first calendar year and before the payment of any interest in
each third succeeding calendar year during which interest may be paid under this
Agreement;
(ii) if such Lender claims that interest paid under
this Agreement is exempt from United States of America withholding tax because
it is effectively connected with a United States of America trade or business of
such Lender, two properly completed and executed copies of IRS Form W-8ECI
before the payment of any interest is due in the first taxable year of such
Lender and in each succeeding taxable year of such Lender during which interest
may be paid under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required
under the Code or other laws of the United States of America as a condition to
exemption from, or reduction of, United States of America withholding tax.
Such Lender agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States of America tax treaty by providing IRS
Form FW-8BEN and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations owing to such Lender, such
Lender agrees to notify the Agent of the percentage amount in which it is no
longer the beneficial owner of Obligations of the Borrower to such Lender. To
the extent of such percentage amount, the Agent will treat such Lender's IRS
Form W-8BEN as no longer valid.
(c) If any Lender claiming exemption from United States of
America withholding tax by filing IRS Form W-8ECI with the Agent sells, assigns,
grants a participation
54
in, or otherwise transfers all or part of the Obligations owing to such Lender,
such Lender agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the
United States of America or other jurisdiction asserts a claim that the Agent
did not properly withhold tax from amounts paid to or for the account of any
Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this Section,
together with all costs and expenses (including Attorney Costs). The obligation
of the Lenders under this subsection shall survive the payment of all
Obligations and the resignation or replacement of the Agent.
12.11 Collateral Matters.
(a) The Lenders hereby irrevocably authorize and direct the
Agent, at its option and in its sole discretion, to promptly release any Agent's
Liens upon any Collateral (i) upon the termination of the Commitments and
payment and satisfaction in full by Borrower of all Loans and reimbursement
obligations in respect of Letters of Credit and Credit Support, and the
termination of all outstanding Letters of Credit (whether or not any of such
obligations are due) and all other Obligations; (ii) constituting property being
sold or disposed of if the Borrower certifies to the Agent that the sale or
disposition is made in compliance with Section 7.9 (and the Agent may rely
conclusively on any such certificate, without further inquiry); (iii)
constituting property in which the Borrower owned no interest at the time the
Lien was granted or at any time thereafter; or (iv) constituting property leased
to the Borrower under a lease which has expired or been terminated in a
transaction permitted under this Agreement. Except as provided above, the Agent
will not release any of the Agent's Liens without the prior written
authorization of the Lenders; provided that the Agent may, in its discretion,
release the Agent's Liens on Collateral valued in the aggregate not in excess of
$500,000 during each Fiscal Year without the prior written authorization of the
Lenders and the Agent may release the Agent's Liens on Collateral valued in the
aggregate not in excess of $1,000,000 during each Fiscal Year with the prior
written authorization of Required Lenders. Upon request by the Agent or the
Borrower at any time, the Lenders will confirm in writing the Agent's authority
to release any Agent's Liens upon particular types or items of Collateral
pursuant to this Section 12.11.
(b) Upon receipt by the Agent of any authorization required
pursuant to Section 12.11(a) from the Lenders of the Agent's authority to
release Agent's Liens upon
55
particular types or items of Collateral, and upon at least five (5) Business
Days prior written request by the Borrower, the Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Agent's Liens upon such Collateral;
provided, however, that (i) the Agent shall not be required to execute any such
document on terms which, in the Agent's opinion, would expose the Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Obligations or any Liens
(other than those expressly being released) upon (or obligations of the Borrower
in respect of) all interests retained by the Borrower, including the proceeds of
any sale, all of which shall continue to constitute part of the Collateral.
(c) The Agent shall have no obligation whatsoever to any of
the Lenders to assure that the Collateral exists or is owned by the Borrower or
is cared for, protected or insured or has been encumbered, or that the Agent's
Liens have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority, or to exercise
at all or in any particular manner or under any duty of care, disclosure or
fidelity, or to continue exercising, any of the rights, authorities and powers
granted or available to the Agent pursuant to any of the Loan Documents, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Agent may act in any manner it may deem
appropriate, in its sole discretion given the Agent's own interest in the
Collateral in its capacity as one of the Lenders and that the Agent shall have
no other duty or liability whatsoever to any Lender as to any of the foregoing.
12.12 Restrictions on Actions by Lenders; Sharing of Payments. (a) Each of
the Lenders agrees that it shall not, without the express consent of all
Lenders, and that it shall, to the extent it is lawfully entitled to do so, upon
the request of all Lenders, set off against the Obligations, any amounts owing
by such Lender to the Borrower or any accounts of the Borrower now or hereafter
maintained with such Lender. Each of the Lenders further agrees that it shall
not, unless specifically requested to do so by the Agent, take or cause to be
taken any action to enforce its rights under this Agreement or against the
Borrower, including the commencement of any legal or equitable proceedings, to
foreclose any Lien on, or otherwise enforce any security interest in, any of the
Collateral.
(b) If at any time or times any Lender shall receive (i) by
payment, foreclosure, setoff or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations of the Borrower to such Lender arising
under, or relating to, this Agreement or the other Loan Documents, except for
any such proceeds or payments received by such Lender from the Agent pursuant to
the terms of this Agreement, or (ii) payments from the Agent in excess of such
Lender's ratable portion of all such distributions by the Agent, such Lender
shall promptly (1) turn the same over to the Agent, in kind, and with such
endorsements as may be required to negotiate the same to the Agent, or in same
day funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (2) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other Lenders so that
such excess payment received shall be applied ratably as among the Lenders in
accordance with their Pro Rata Shares; provided, however, that if all or part of
such excess payment received by the purchasing party is thereafter recovered
from it, those purchases of participations shall be rescinded in whole or in
56
part, as applicable, and the applicable portion of the purchase price paid
therefor shall be returned to such purchasing party, but without interest except
to the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
12.13 Agency for Perfection. Each Lender hereby appoints each other Lender
as agent for the purpose of perfecting the Lenders' security interest in assets
which, in accordance with Article 9 of the UCC can be perfected only by
possession. Should any Lender (other than the Agent) obtain possession of any
such Collateral, such Lender shall notify the Agent thereof, and, promptly upon
the Agent's request therefor shall deliver such Collateral to the Agent or in
accordance with the Agent's instructions.
12.14 Payments by Agent to Lenders. All payments to be made by the Agent to
the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds to each Lender pursuant to wire transfer
instructions delivered in writing to the Agent on or prior to the Closing Date
(or if such Lender is an Assignee, on the applicable Assignment and Acceptance),
or pursuant to such other wire transfer instructions as each party may designate
for itself by written notice to the Agent. Concurrently with each such payment,
the Agent shall identify whether such payment (or any portion thereof)
represents principal, premium or interest on the Revolving Loans, Term Loans or
otherwise. Unless the Agent receives notice from the Borrower prior to the date
on which any payment is due to the Lenders that the Borrower will not make such
payment in full as and when required, the Agent may assume that the Borrower has
made such payment in full to the Agent on such date in immediately available
funds and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrower has not made such
payment in full to the Agent, each Lender shall repay to the Agent on demand
such amount distributed to such Lender, together with interest thereon at the
Federal Funds Rate for each day from the date such amount is distributed to such
Lender until the date repaid.
12.15 Settlement. (a) (i) Each Lender's funded portion of the Revolving
Loans is intended by the Lenders to be equal at all times to such Lender's Pro
Rata Share of the outstanding Revolving Loans. Notwithstanding such agreement,
the Agent, the Bank, and the other Lenders agree (which agreement shall not be
for the benefit of or enforceable by the Borrower) that in order to facilitate
the administration of this Agreement and the other Loan Documents, settlement
among them as to the Revolving Loans, the Non-Ratable Loans and the Agent
Advances shall take place on a periodic basis in accordance with the following
provisions:
(ii) The Agent shall request settlement
("Settlement") with the Lenders on at least a weekly basis, or on a more
frequent basis at Agent's election, (A) on behalf of the Bank, with respect to
each outstanding Non-Ratable Loan, (B) for itself, with respect to each Agent
Advance, and (C) with respect to collections received, in each case, by
notifying the Lenders of such requested Settlement by telecopy, telephone or
other similar form of transmission, of such requested Settlement, no later than
noon (Chicago time) on the date of such requested Settlement (the "Settlement
Date"). Each Lender (other than the Bank, in the case of Non-Ratable Loans and
the Agent in the case of Agent Advances) shall transfer the amount of such
Lender's Pro Rata Share of the outstanding principal amount of the Non-Ratable
Loans and Agent Advances with respect to each Settlement to the Agent, to
Agent's account, not later than
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2:00 p.m. (Chicago time), on the Settlement Date applicable thereto. Settlements
may occur during the continuation of a Default or an Event of Default and
whether or not the applicable conditions precedent set forth in Article 8 have
then been satisfied. Such amounts made available to the Agent shall be applied
against the amounts of the applicable Non-Ratable Loan or Agent Advance and,
together with the portion of such Non-Ratable Loan or Agent Advance representing
the Bank's Pro Rata Share thereof, shall constitute Revolving Loans of such
Lenders. If any such amount is not transferred to the Agent by any Lender on the
Settlement Date applicable thereto, the Agent shall be entitled to recover such
amount on demand from such Lender together with interest thereon at the Federal
Funds Rate for the first three (3) days from and after the Settlement Date and
thereafter at the Interest Rate then applicable to the Revolving Loans (A) on
behalf of the Bank, with respect to each outstanding Non-Ratable Loan, and (B)
for itself, with respect to each Agent Advance.
(iii) Notwithstanding the foregoing, not more than
one (1) Business Day after demand is made by the Agent (whether before or after
the occurrence of a Default or an Event of Default and regardless of whether the
Agent has requested a Settlement with respect to a Non-Ratable Loan or Agent
Advance), each other Lender (A) shall irrevocably and unconditionally purchase
and receive from the Bank or the Agent, as applicable, without recourse or
warranty, an undivided interest and participation in such Non-Ratable Loan or
Agent Advance equal to such Lender's Pro Rata Share of such Non-Ratable Loan or
Agent Advance and (B) if Settlement has not previously occurred with respect to
such Non-Ratable Loans or Agent Advances, upon demand by Bank or Agent, as
applicable, shall pay to Bank or Agent, as applicable, as the purchase price of
such participation an amount equal to one-hundred percent (100%) of such
Lender's Pro Rata Share of such Non-Ratable Loans or Agent Advances. If such
amount is not in fact made available to the Agent by any Lender, the Agent shall
be entitled to recover such amount on demand from such Lender together with
interest thereon at the Federal Funds Rate for the first three (3) days from and
after such demand and thereafter at the Interest Rate then applicable to Base
Rate Revolving Loans.
(iv) From and after the date, if any, on which any
Lender purchases an undivided interest and participation in any Non-Ratable Loan
or Agent Advance pursuant to clause (iii) above, the Agent shall promptly
distribute to such Lender, such Lender's Pro Rata Share of all payments of
principal and interest and all proceeds of Collateral received by the Agent in
respect of such Non-Ratable Loan or Agent Advance.
(v) Between Settlement Dates, the Agent, to the
extent no Agent Advances are outstanding, may pay over to the Bank any payments
received by the Agent, which in accordance with the terms of this Agreement
would be applied to the reduction of the Revolving Loans, for application to the
Bank's Revolving Loans including Non-Ratable Loans. If, as of any Settlement
Date, collections received since the then immediately preceding Settlement Date
have been applied to the Bank's Revolving Loans (other than to Non-Ratable Loans
or Agent Advances in which such Lender has not yet funded its purchase of a
participation pursuant to clause (iii) above), as provided for in the previous
sentence, the Bank shall pay to the Agent for the accounts of the Lenders, to be
applied to the outstanding Revolving Loans of such Lenders, an amount such that
each Lender shall, upon receipt of such amount, have, as of such Settlement
Date, its Pro Rata Share of the Revolving Loans. During the period between
Settlement Dates, the Bank with respect to Non-Ratable Loans, the Agent with
respect to Agent
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Advances, and each Lender with respect to the Revolving Loans other than
Non-Ratable Loans and Agent Advances, shall be entitled to interest at the
applicable rate or rates payable under this Agreement on the actual average
daily amount of funds employed by the Bank, the Agent and the other Lenders.
(b) Notation. The Agent shall record on its books the
principal amount of the Revolving Loans owing to each Lender, including the
Non-Ratable Loans owing to the Bank, and the Agent Advances owing to the Agent,
from time to time. In addition, each Lender is authorized, at such Lender's
option, to note the date and amount of each payment or prepayment of principal
of such Lender's Revolving Loans in its books and records, including computer
records, such books and records constituting presumptive evidence, absent
manifest error, of the accuracy of the information contained therein.
(c) Lenders' Failure to Perform. All Revolving Loans (other
than Non-Ratable Loans and Agent Advances) shall be made by the Lenders
simultaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Revolving Loans hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligation to make any Revolving Loans
hereunder, (ii) no failure by any Lender to perform its obligation to make any
Revolving Loans hereunder shall excuse any other Lender from its obligation to
make any Revolving Loans hereunder, and (iii) the obligations of each Lender
hereunder shall be several, not joint and several.
(d) Defaulting Lenders. Unless the Agent receives notice from
a Lender on or prior to the Closing Date or, with respect to any Borrowing after
the Closing Date, at least one Business Day prior to the date of such Borrowing,
that such Lender will not make available as and when required hereunder to the
Agent that Lender's Pro Rata Share of a Borrowing, the Agent may assume that
each Lender has made such amount available to the Agent in immediately available
funds on the Funding Date. Furthermore, the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If any Lender has not transferred its full Pro Rata Share to the Agent in
immediately available funds and the Agent has transferred corresponding amount
to the Borrower on the Business Day following such Funding Date that Lender
shall make such amount available to the Agent, together with interest at the
Federal Funds Rate for that day. A notice by the Agent submitted to any Lender
with respect to amounts owing shall be conclusive, absent manifest error. If
each Lender's full Pro Rata Share is transferred to the Agent as required, the
amount transferred to the Agent shall constitute that Lender's Revolving Loan
for all purposes of this Agreement. If that amount is not transferred to the
Agent on the Business Day following the Funding Date, the Agent will notify the
Borrower of such failure to fund and, upon demand by the Agent, the Borrower
shall pay such amount to the Agent for the Agent's account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the Interest Rate applicable at the time to the
Revolving Loans comprising that particular Borrowing. The failure of any Lender
to make any Revolving Loan on any Funding Date (any such Lender, prior to the
cure of such failure, being hereinafter referred to as a "Defaulting Lender")
shall not relieve any other Lender of its obligation hereunder to make a
Revolving Loan on that Funding Date. No Lender shall be responsible for any
other Lender's failure to advance such other Lenders' Pro Rata Share of any
Borrowing.
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(e) Retention of Defaulting Lenders' Payments. The Agent shall
not be obligated to transfer to a Defaulting Lender any payments made by
Borrower to the Agent for the Defaulting Lender's benefit; nor shall a
Defaulting Lender be entitled to the sharing of any payments hereunder. Amounts
payable to a Defaulting Lender shall instead be paid to or retained by the
Agent. In its discretion, the Agent may loan Borrower the amount of all such
payments received or retained by it for the account of such Defaulting Lender.
Any amounts so loaned to the Borrower shall bear interest at the rate applicable
to Base Rate Revolving Loans and for all other purposes of this Agreement shall
be treated as if they were Revolving Loans, provided, however, that for purposes
of voting or consenting to matters with respect to the Loan Documents and
determining Pro Rata Shares, such Defaulting Lender shall be deemed not to be a
"Lender". Until a Defaulting Lender cures its failure to fund its Pro Rata Share
of any Borrowing (A) such Defaulting Lender shall not be entitled to any portion
of the Unused Line Fee and (B) the Unused Line Fee shall accrue in favor of the
Lenders which have funded their respective Pro Rata Shares of such requested
Borrowing and shall be allocated among such performing Lenders ratably based
upon their relative Commitments. This Section shall remain effective with
respect to such Lender until such time as the Defaulting Lender shall no longer
be in default of any of its obligations under this Agreement. The terms of this
Section shall not be construed to increase or otherwise affect the Commitment of
any Lender, or relieve or excuse the performance by the Borrower of its duties
and obligations hereunder.
(f) Removal of Defaulting Lender. At the Borrower's request,
the Agent or an Eligible Assignee reasonably acceptable to the Agent and the
Borrower shall have the right (but not the obligation) to purchase from any
Defaulting Lender, and each Defaulting Lender shall, upon such request, sell and
assign to the Agent or such Eligible Assignee, all of the Defaulting Lender's
outstanding Commitments hereunder. Such sale shall be consummated promptly after
Agent has arranged for a purchase by Agent or an Eligible Assignee pursuant to
an Assignment and Acceptance, and at a price equal to the outstanding principal
balance of the Defaulting Lender's Loans, plus accrued interest and fees,
without premium or discount.
12.16 Letters of Credit; Intra-Lender Issues.
(a) On each Settlement Date the Agent shall notify each Lender
of the issuance of all Letters of Credit since the prior Settlement Date.
(b) Participations in Letters of Credit.
(i) Purchase of Participations. Immediately upon issuance
of any Letter of Credit in accordance with Section 1.4(d), each Lender shall be
deemed to have irrevocably and unconditionally purchased and received without
recourse or warranty, an undivided interest and participation equal to such
Lender's Pro Rata Share of the face amount of such Letter of Credit or the
Credit Support provided through the Agent to the Letter of Credit Issuer, if not
the Agent, in connection with the issuance of such Letter of Credit (including
all obligations of the Borrower with respect thereto, and any security therefor
or guaranty pertaining thereto).
(ii) Sharing of Reimbursement Obligation Payments.
Whenever the Agent receives a payment from the Borrower on account of
reimbursement obligations in respect
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of a Letter of Credit or Credit Support as to which the Agent has previously
received for the account of the Letter of Credit Issuer thereof payment from a
Lender, the Agent shall promptly pay to such Lender such Lender's Pro Rata Share
of such payment from the Borrower. Each such payment shall be made by the Agent
on the next Settlement Date.
(iii) Documentation. Upon the request of any Lender,
the Agent shall furnish to such Lender copies of any Letter of Credit, Credit
Support for any Letter of Credit, reimbursement agreements executed in
connection therewith, applications for any Letter of Credit, and such other
documentation as may reasonably be requested by such Lender.
(iv) Obligations Irrevocable. The obligations of
each Lender to make payments to the Agent with respect to any Letter of Credit
or with respect to their participation therein or with respect to any Credit
Support for any Letter of Credit or with respect to the Revolving Loans made as
a result of a drawing under a Letter of Credit and the obligations of the
Borrower for whose account the Letter of Credit or Credit Support was issued to
make payments to the Agent, for the account of the Lenders, shall be irrevocable
and shall not be subject to any qualification or exception whatsoever ,
including any of the following circumstances:
(1) any lack of validity or
enforceability of this Agreement or any of the other Loan Documents;
(2) the existence of any claim, setoff,
defense or other right which the Borrower may have at any time against a
beneficiary named in a Letter of Credit or any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), any Lender,
the Agent, the issuer of such Letter of Credit, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transactions between the Borrower or any other Person and the beneficiary named
in any Letter of Credit);
(3) any draft, certificate or any other
document presented under the Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(4) the surrender or impairment of any
security for the performance or observance of any of the terms of any of the
Loan Documents;
(5) the occurrence of any Default or
Event of Default; or
(6) the failure of the Borrower to
satisfy the applicable conditions precedent set forth in Article 8.
(c) Recovery or Avoidance of Payments; Refund of Payments in
Error. In the event any payment by or on behalf of the Borrower received by the
Agent with respect to any Letter of Credit or Credit Support provided for any
Letter of Credit and distributed by the Agent to the Lenders on account of their
respective participations therein is thereafter set aside, avoided or recovered
from the Agent in connection with any receivership, liquidation or bankruptcy
proceeding, the Lenders shall, upon demand by the Agent, pay to the Agent their
respective Pro Rata Shares of such amount set aside, avoided or recovered,
together with interest at the rate
61
required to be paid by the Agent upon the amount required to be repaid by it.
Unless the Agent receives notice from the Borrower prior to the date on which
any payment is due to the Lenders that the Borrower will not make such payment
in full as and when required, the Agent may assume that the Borrower has made
such payment in full to the Agent on such date in immediately available funds
and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrower has not made such
payment in full to the Agent, each Lender shall repay to the Agent on demand
such amount distributed to such Lender, together with interest thereon at the
Federal Funds Rate for each day from the date such amount is distributed to such
Lender until the date repaid.
12.17 Concerning the Collateral and the Related Loan Documents. Each Lender
authorizes and directs the Agent to enter into the other Loan Documents, for the
ratable benefit and obligation of the Agent and the Lenders. Each Lender agrees
that any action taken by the Agent, Majority Lenders or Required Lenders, as
applicable, in accordance with the terms of this Agreement or the other Loan
Documents, and the exercise by the Agent, the Majority Lenders, or the Required
Lenders, as applicable, of their respective powers set forth therein or herein,
together with such other powers that are reasonably incidental thereto, shall be
binding upon all of the Lenders. The Lenders acknowledge that the Revolving
Loans, Term Loans, Agent Advances, Non-Ratable Loans, Hedge Agreements, Bank
Products and all interest, fees and expenses hereunder constitute one Debt,
secured pari passu by all of the Collateral.
12.18 Field Audit and Examination Reports; Disclaimer by Lenders. By
signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by the
Agent;
(b) expressly agrees and acknowledges that neither the Bank
nor the Agent (i) makes any representation or warranty as to the accuracy of any
Report, or (ii) shall be liable for any information contained in any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent or the Bank or other party
performing any audit or examination will inspect only specific information
regarding the Borrower and will rely significantly upon the Borrower's books and
records, as well as on representations of the Borrower's personnel;
(d) agrees to keep all Reports confidential and strictly for
its internal use, and not to distribute except to its participants, or use any
Report in any other manner; and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold the
Agent and any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to the Borrower, or
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the indemnifying Lender's participation in, or the indemnifying Lender's
purchase of, a loan or loans of the Borrower; and (ii) to pay and protect, and
indemnify, defend and hold the Agent and any such other Lender preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses and other amounts (including Attorney Costs) incurred by the
Agent and any such other Lender preparing a Report as the direct or indirect
result of any third parties who might obtain all or part of any Report through
the indemnifying Lender.
12.19 Relation Among Lenders. The Lenders are not partners or co-venturers,
and no Lender shall be liable for the acts or omissions of, or (except as
otherwise set forth herein in case of the Agent) authorized to act for, any
other Lender.
ARTICLE 13
MISCELLANEOUS
13.1 No Waivers; Cumulative Remedies. No failure by the Agent or any Lender
to exercise any right, remedy, or option under this Agreement or any present or
future supplement thereto, or in any other agreement between or among the
Borrower and the Agent and/or any Lender, or delay by the Agent or any Lender in
exercising the same, will operate as a waiver thereof. No waiver by the Agent or
any Lender will be effective unless it is in writing, and then only to the
extent specifically stated. No waiver by the Agent or the Lenders on any
occasion shall affect or diminish the Agent's and each Lender's rights
thereafter to require strict performance by the Borrower of any provision of
this Agreement. The Agent and the Lenders may proceed directly to collect the
Obligations without any prior recourse to the Collateral. The Agent's and each
Lender's rights under this Agreement will be cumulative and not exclusive of any
other right or remedy which the Agent or any Lender may have.
13.2 Severability. The illegality or unenforceability of any provision of
this Agreement or any Loan Document or any instrument or agreement required
hereunder shall not in any way affect or impair the legality or enforceability
of the remaining provisions of this Agreement or any instrument or agreement
required hereunder.
13.3 Governing Law; Choice of Forum; Service of Process. (a) THIS AGREEMENT
SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO
DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF
LAWS PROVISIONS PROVIDED THAT PERFECTION ISSUES WITH RESPECT TO ARTICLE 9 OF THE
UCC MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT OF LAW RULES SET FORTH IN
ARTICLE 9 OF THE UCC) OF THE STATE OF ILLINOIS; PROVIDED THAT THE AGENT AND THE
LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF ILLINOIS OR OF THE UNITED STATES OF AMERICA LOCATED IN ▇▇▇▇ COUNTY, ILLINOIS,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER, THE AGENT
AND THE LENDERS
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CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER, THE AGENT AND THE LENDERS
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. NOTWITHSTANDING THE FOREGOING:
(1) THE AGENT AND THE LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION OR
PROCEEDING AGAINST THE BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION THE AGENT OR THE LENDERS DEEM NECESSARY OR APPROPRIATE IN ORDER TO
REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS AND (2) EACH OF
THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN
THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE THOSE JURISDICTIONS.
(c) THE BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY
REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER AT ITS
ADDRESS SET FORTH IN SECTION 13.8 AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S.
MAILS POSTAGE PREPAID. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF AGENT
OR THE LENDERS TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.
13.4 WAIVER OF JURY TRIAL. THE BORROWER, THE LENDERS AND THE AGENT EACH
IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE
BORROWER, THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
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13.5 Survival of Representations and Warranties. All of the Borrower's
representations and warranties contained in this Agreement shall survive the
execution, delivery, and acceptance thereof by the parties, notwithstanding any
investigation by the Agent or the Lenders or their respective agents.
13.6 Other Security and Guaranties. The Agent, may, without notice or
demand and without affecting the Borrower's obligations hereunder, from time to
time: (a) take from any Person and hold collateral (other than the Collateral)
for the payment of all or any part of the Obligations and exchange, enforce or
release such collateral or any part thereof; and (b) accept and hold any
endorsement or guaranty of payment of all or any part of the Obligations and
release or substitute any such endorser or guarantor, or any Person who has
given any Lien in any other collateral as security for the payment of all or any
part of the Obligations, or any other Person in any way obligated to pay all or
any part of the Obligations.
13.7 Fees and Expenses. The Borrower agrees to pay to the Agent, for its
benefit, on demand, all costs and expenses that Agent pays or incurs in
connection with the negotiation, preparation, syndication, consummation,
administration, enforcement, and termination of this Agreement or any of the
other Loan Documents, including: (a) Attorney Costs; (b) costs and expenses
(including reasonable attorneys' and paralegals' fees and disbursements) for any
amendment, supplement, waiver, consent, or subsequent closing in connection with
the Loan Documents and the transactions contemplated thereby; (c) costs and
expenses of lien and title searches and title insurance; (d) taxes, fees and
other charges for recording the Mortgages, filing financing statements and
continuations, and other actions to perfect, protect, and continue the Agent's
Liens (including costs and expenses paid or incurred by the Agent in connection
with the consummation of Agreement); (e) sums paid or incurred to pay any amount
or take any action required of the Borrower under the Loan Documents that the
Borrower fails to pay or take; (f) costs of appraisals, inspections, and
verifications of the Collateral, including travel, lodging, and meals for
inspections of the Collateral and the Borrower's operations by the Agent plus
the Agent's then customary charge for field examinations and audits and the
preparation of reports thereof (such charge is currently $650 per day (or
portion thereof) for each agent or employee of the Agent with respect to each
field examination or audit); (g) costs and expenses of forwarding loan proceeds,
collecting checks and other items of payment, and establishing and maintaining
Payment Accounts and lock boxes; (h) costs and expenses of preserving and
protecting the Collateral; and (i) costs and expenses (including Attorneys'
Costs) paid or incurred to obtain payment of the Obligations, enforce the
Agent's Liens, sell or otherwise realize upon the Collateral, and otherwise
enforce the provisions of the Loan Documents, or to defend any claims made or
threatened against the Agent or any Lender arising out of the transactions
contemplated hereby (including preparations for and consultations concerning any
such matters). 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. All of the foregoing costs and expenses shall be charged to the
Borrower's Loan Account as Revolving Loans as described in Section 3.7.
13.8 Notices. Except as otherwise provided herein, all notices, demands and
requests that any party is required or elects to give to any other shall be in
writing, or by a telecommunications device capable of creating a written record,
and any such notice shall become effective (a) upon personal delivery thereof,
including, but not limited to, delivery by
65
overnight mail and courier service, (b) four (4) days after it shall have been
mailed by United States mail, first class, certified or registered, with postage
prepaid, or (c) in the case of notice by such a telecommunications device, when
properly transmitted, in each case addressed to the party to be notified as
follows:
If to the Agent or to the Bank:
Bank of America, N.A.
Business Credit
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Account Executive - ▇▇▇▇ Industries
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Borrower:
▇▇▇▇ Industries, Inc.
Tyson Place, Suite 200
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇, Hall & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons designated above to
receive copies shall not adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
66
13.9 Waiver of Notices. Unless otherwise expressly provided herein, the
Borrower waives presentment, and notice of demand or dishonor and protest as to
any instrument, notice of intent to accelerate the Obligations and notice of
acceleration of the Obligations, as well as any and all other notices to which
it might otherwise be entitled. No notice to or demand on the Borrower which the
Agent or any Lender may elect to give shall entitle the Borrower to any or
further notice or demand in the same, similar or other circumstances.
13.10 Binding Effect. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective representatives, successors, and
assigns of the parties hereto; provided, however, that no interest herein may be
assigned by the Borrower without prior written consent of the Agent and each
Lender. The rights and benefits of the Agent and the Lenders hereunder shall, if
such Persons so agree, inure to any party acquiring any interest in the
Obligations or any part thereof.
13.11 Indemnity of the Agent and the Lenders by the Borrower.
(a) The Borrower agrees to defend, indemnify and hold the
Agent-Related Persons, and each Lender and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Agent or replacement of any Lender) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement
or any document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of this Agreement, any other
Loan Document, or the Loans or the use of the proceeds thereof, whether or not
any Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that the Borrower shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities
resulting solely from the gross negligence or willful misconduct of such
Indemnified Person. The agreements in this Section shall survive payment of all
other Obligations.
(b) The Borrower agrees to indemnify, defend and hold harmless
the Agent and the Lenders from any loss or liability directly or indirectly
arising out of the use, generation, manufacture, production, storage, release,
threatened release, discharge, disposal or presence of a hazardous substance
relating to the Borrower's operations, business or property. This indemnity will
apply whether the hazardous substance is on, under or about the Borrower's
property or operations or property leased to the Borrower. The indemnity
includes but is not limited to Attorneys Costs. The indemnity extends to the
Agent and the Lenders, their parents, affiliates, subsidiaries and all of their
directors, officers, employees, agents, successors, attorneys and assigns.
"Hazardous substances" means any substance, material or waste that is or becomes
designated or regulated as "toxic," "hazardous," "pollutant," or "contaminant"
or a similar designation or regulation under any federal, state or local law
(whether under common law,
67
statute, regulation or otherwise) or judicial or administrative interpretation
of such, including petroleum or natural gas. This indemnity will survive
repayment of all other Obligations.
13.12 Limitation of Liability. NO CLAIM MAY BE MADE BY THE BORROWER, ANY
LENDER OR OTHER PERSON AGAINST THE AGENT, ANY LENDER, OR THE AFFILIATES,
DIRECTORS, OFFICERS, EMPLOYEES, OR AGENTS OF ANY OF THEM FOR ANY SPECIAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH
OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, AND THE BORROWER AND
EACH LENDER HEREBY WAIVE, RELEASE AND AGREE NOT TO ▇▇▇ UPON ANY CLAIM FOR SUCH
DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST
IN ITS FAVOR.
13.13 Final Agreement. This Agreement and the other Loan Documents are
intended by the Borrower, the Agent and the Lenders to be the final, complete,
and exclusive expression of the agreement between them. This Agreement
supersedes any and all prior oral or written agreements relating to the subject
matter hereof except for that certain "fee letter" dated as of the Closing Date,
between the Borrower and the Agent. No modification, rescission, waiver,
release, or amendment of any provision of this Agreement or any other Loan
Document shall be made, except by a written agreement signed by the Borrower and
a duly authorized officer of each of the Agent and the requisite Lenders.
13.14 Counterparts. This Agreement may be executed in any number of
counterparts, and by the Agent, each Lender and the Borrower in separate
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement; signature pages may be detached
from multiple separate counterparts and attached to a single counterpart so that
all signature pages are physically attached to the same document.
13.15 Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.
13.16 Right of Setoff. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Borrower, any such notice being waived by the
Borrower to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender to or for
the credit or the account of the Borrower against any and all Obligations owing
to such Lender, now or hereafter existing, irrespective of whether or not the
Agent or such Lender shall have made demand under this Agreement or any Loan
Document and although such Obligations may be contingent or unmatured. Each
Lender agrees promptly to notify the Borrower and the Agent after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE ANY RIGHT
OF SET-OFF, BANKER'S
68
LIEN, OR THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF THE BORROWER HELD
OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN UNANIMOUS CONSENT OF THE
LENDERS.
13.17 Confidentiality. (a) The Borrower hereby consents that the Agent and
each Lender may issue and disseminate to the public general information
describing the credit accommodation entered into pursuant to this Agreement,
including the name and address of the Borrower and a general description of the
Borrower's business and may use the Borrower's name in advertising and other
promotional material.
(b) Each Lender severally agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" or "secret" by the Borrower and
provided to the Agent or such Lender by or on behalf of the Borrower, under this
Agreement or any other Loan Document, except to the extent that such information
(i) was or becomes generally available to the public other than as a result of
disclosure by the Agent or such Lender, or (ii) was or becomes available on a
nonconfidential basis from a source other than the Borrower, provided that such
source is not bound by a confidentiality agreement with the Borrower known to
the Agent or such Lender; provided, however, that the Agent and any Lender may
disclose such information (1) at the request or pursuant to any requirement of
any Governmental Authority to which the Agent or such Lender is subject or in
connection with an examination of the Agent or such Lender by any such
Governmental Authority; (2) pursuant to subpoena or other court process; (3)
when required to do so in accordance with the provisions of any applicable
Requirement of Law; (4) to the extent reasonably required in connection with any
litigation or proceeding (including, but not limited to, any bankruptcy
proceeding) to which the Agent, any Lender or their respective Affiliates may be
party; (5) to the extent reasonably required in connection with the exercise of
any remedy hereunder or under any other Loan Document; (6) to the Agent's or
such Lender's independent auditors, accountants, attorneys and other
professional advisors who agree to be bound by these provisions; (7) to any
prospective Participant or Assignee under any Assignment and Acceptance, actual
or potential, provided that such prospective Participant or Assignee agrees to
keep such information confidential to the same extent required of the Agent and
the Lenders hereunder; (8) as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the Borrower is party
or is deemed party with the Agent or such Lender, and (9) to its Affiliates.
13.18 Conflicts with Other Loan Documents. Unless otherwise expressly
provided in this Agreement (or in another Loan Document by specific reference to
the applicable provision contained in this Agreement), if any provision
contained in this Agreement conflicts with any provision of any other Loan
Document, the provision contained in this Agreement shall govern and control.
69
IN WITNESS WHEREOF, the parties have entered into this
Agreement on the date first above written.
"BORROWER"
▇▇▇▇ INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer and Assistant
Secretary
"AGENT"
Bank of America, N.A., as the Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
"LENDERS"
Bank of America, N.A., as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Vice President
[Signature Page to ▇▇▇▇ Industries, Inc. Amended and Restated Credit Agreement]
ANNEX A
to
Credit Agreement
Definitions
Capitalized terms used in the Loan Documents shall have the following
respective meanings (unless otherwise defined therein), and all section
references in the following definitions shall refer to sections of the
Agreement:
"Accounts" means all of the Borrower's now owned or hereafter
acquired or arising accounts, as defined in the UCC, including any rights to
payment for the sale or lease of goods or rendition of services, whether or not
they have been earned by performance, and all medical receivables.
"Account Debtor" means each Person obligated in any way on or
in connection with an Account.
"ACH Transactions" means any cash management or related
services including the automatic clearing house transfer of funds by the Bank
for the account of the Borrower pursuant to agreement or overdrafts.
"Adjusted Net Earnings from Operations" means, with respect to
any fiscal period of the Borrower, the net income of the Borrower and its
Subsidiaries on a consolidated basis after provision for income taxes for such
fiscal period, as determined in accordance with GAAP and reported on the
Financial Statements for such period, excluding any and all of the following
included in such net income: (a) gain or loss arising from the sale of any
capital assets; (b) gain arising from any write-up in the book value of any
asset; (c) earnings of any Person, substantially all the assets of which have
been acquired by the Borrower and its Subsidiaries in any manner, to the extent
realized by such other Person prior to the date of acquisition; (d) earnings of
any Person in which the Borrower and its Subsidiaries has an ownership interest
unless (and only to the extent) such earnings shall actually have been received
by the Borrower and its Subsidiaries in the form of cash distributions; (e)
earnings of any Person to which assets of the Borrower shall have been sold,
transferred or disposed of, or into which the Borrower and its Subsidiaries
shall have been merged, or which has been a party with the Borrower and its
Subsidiaries to any consolidation or other form of reorganization, prior to the
date of such transaction; (f) gain arising from the acquisition of debt or
equity securities of the Borrower and its Subsidiaries or from cancellation or
forgiveness of Debt; (g) gain arising from extraordinary items, as determined in
accordance with GAAP, or from any other non-recurring transaction, including,
without limitation, the sale or liquidation of any division; or (h) net income
of any Subsidiary if distributions to the Borrower by such Subsidiary are
restricted or prohibited by law or contract.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person or which owns, directly or indirectly, five percent
(5%) or more of the outstanding equity interest of such Person. A Person shall
be deemed to control another Person if the controlling Person possesses,
directly
1
or indirectly, the power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership of voting
securities, by contract, or otherwise.
"Agent" means the Bank, solely in its capacity as agent for
the Lenders, and any successor agent.
"Agent Advances" has the meaning specified in Section 1.2(i).
"Agent's Liens" means the Liens in the Collateral granted to
the Agent, for the benefit of the Lenders, Bank, and Agent pursuant to this
Agreement and the other Loan Documents.
"Agent-Related Persons" means the Agent, together with its
Affiliates, and the officers, directors, employees, agents and attorneys-in-fact
of the Agent and such Affiliates.
"Aggregate Revolver Outstandings" means, at any date of
determination: the sum of (a) the unpaid balance of Revolving Loans, (b) the
aggregate amount of Pending Revolving Loans, (c) one hundred percent (100%) of
the aggregate undrawn face amount of all outstanding Letters of Credit, and (d)
the aggregate amount of any unpaid reimbursement obligations in respect of
Letters of Credit.
"Agreement" means the Credit Agreement to which this Annex A
is attached, as from time to time amended, modified or restated.
"Anniversary Date" means each anniversary of the Closing Date.
"Applicable Margin" means
(i) with respect to Base Rate Revolving Loans and all
other Obligations (other than Base Rate Term Loans
and LIBOR Rate Loans), 0.5%;
(ii) with respect to Base Rate Term Loans, 0.75%;
(iii) with respect to LIBOR Revolving Loans, 2.50%; and
(iv) with respect to LIBOR Term Loans, 2.75%.
"Appraisals" means the appraisals by the following appraisal
firms dated as of the following dates:
MB Valuation Services, Inc. 07/12/00 Equipment OLV Various locations
▇▇▇▇ & Associates, Inc. 07/21/00 Real Estate FMV Ft. ▇▇▇▇▇, AR
RSP and Associations, LLC 07/13/00 Real Estate FMV Newberg, OR
▇▇▇▇▇, ▇▇▇▇▇ and ▇▇▇▇▇▇▇, Inc. 06/30/00 Real Estate FMV Perinton, NY
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, LLP 07/03/00 Real Estate FMV Harlingen, TX
2
▇▇▇▇▇ Appraisals 06/21/00 Real Estate FMV Davie, FL
▇▇▇▇ Appraisal Associates 06/29/00 Real Estate FMV Seagrove, NC
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 07/05/00 Real Estate FMV Morristown, TN (DeSoto)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 07/05/00 Real Estate FMV Morristown, TN (▇▇▇▇▇)
▇▇▇▇▇▇ & Company 06/22/00 Real Estate FMV Nashville, TN
The Aegis Group, Inc. 06/26/00 Real Estate FMV Austin, TX
The Aegis Group, Inc. 06/28/00 Real Estate FMV Round Rock, TX
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by way of a
sale and leaseback) by the Borrower or any Subsidiary and (ii) the issue or sale
by the Borrower or any of Subsidiaries of Stock of any Subsidiary.
"Assignee" has the meaning specified in Section 11.2(a).
"Assignment and Acceptance" has the meaning specified in
Section 11.2(a).
"Attorney Costs" means and includes all reasonable fees,
expenses and disbursements of any law firm or other counsel engaged by the Agent
or the reasonably allocated costs and expenses of internal legal services of the
Agent.
"Availability" means, at any time the lesser of (a) the
Maximum Revolver Amount or (b) the Borrowing Base minus (c) in each case, the
Aggregate Revolver Outstandings.
"Bank" means Bank of America, N.A., a national banking
association, or any successor entity thereto.
"Bank Products" means any one or more of the following types
of services or facilities extended to the Borrower by the Bank or any affiliate
of the Bank in reliance on the Bank's agreement to indemnify such affiliate: (i)
credit cards; (ii) ACH Transactions; (iii) cash management services, including
controlled disbursement services; and (iv) Hedge Agreements.
"Bank Product Reserves" means all reserves which the Agent
from time to time establishes in its reasonable discretion for the Bank Products
then provided or outstanding.
"Bankruptcy Code" means Title 11 of the United States Code
(11 U.S.C. ss. 101 et seq.).
"Base Rate" means, for any day, the rate of interest in effect
for such day as publicly announced from time to time by the Bank in Charlotte,
North Carolina as its "prime rate" (the "prime rate" being a rate set by the
Bank based upon various factors including the Bank's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
3
rate). Any change in the prime rate announced by the Bank shall take effect at
the opening of business on the day specified in the public announcement of such
change. Each Interest Rate based upon the Base Rate shall be adjusted
simultaneously with any change in the Base Rate.
"Base Rate Loans" means, collectively, the Base Rate Revolving
Loans and the Base Rate Term Loans.
"Base Rate Revolving Loan" means a Revolving Loan during any
period in which it bears interest based on the Base Rate.
"Base Rate Term Loan" means any portion of a Term Loan during
any period in which such portion bears interest based on the Base Rate.
"Blocked Account Agreement" means an agreement among the
Borrower, the Agent and a Clearing Bank, in form and substance reasonably
satisfactory to the Agent, concerning the collection of payments which represent
the proceeds of Accounts or of any other Collateral.
"Borrowing" means a borrowing hereunder consisting of
Revolving Loans or Term Loans made on the same day by the Lenders to the
Borrower or by Bank in the case of a Borrowing funded by Non-Ratable Loans or by
the Agent in the case of a Borrowing consisting of an Agent Advance, or the
issuance of Letters of Credit hereunder.
"Borrowing Base" means, at any time, an amount equal to (a)
the lesser of (i) the Maximum Revolver Amount or (ii) the sum of (A) eighty-five
percent (85%) of the Net Amount of Eligible Accounts; plus (B) fifty percent
(50%) of the value of Eligible Inventory consisting of raw materials and
finished goods inventory; plus (C) twenty-five percent (25%) of the value of
Eligible Inventory consisting of work-in-process inventory; minus (b) Reserves
from time to time established by the Agent in its reasonable credit judgment;
provided that (i) aggregate Borrowings advanced against Eligible Accounts and
Eligible Inventory that are assets associated with the Cosmetics Division shall
not exceed $4,000,000 at any time; (ii) aggregate Borrowings advanced against
Eligible Inventory consisting of work-in-process shall not exceed $2,000,000 at
any time; and (iii) aggregate Borrowings advanced against Eligible Inventory of
all kinds shall not exceed $25,000,000 at any time.
"Borrowing Base Certificate" means a certificate by a
Responsible Officer of the Borrower, substantially in the form of Exhibit B (or
another form acceptable to the Agent) setting forth the calculation of the
Borrowing Base, including a calculation of each component thereof, all in such
detail as shall be reasonably satisfactory to the Agent. All calculations of the
Borrowing Base in connection with the preparation of any Borrowing Base
Certificate shall originally be made by the Borrower and certified to the Agent;
provided, that the Agent shall have the right to review and adjust, in the
exercise of its reasonable credit judgment, any such calculation (1) to reflect
its reasonable estimate of declines in value of any of the Collateral described
therein, and (2) to the extent that such calculation is not in accordance with
this Agreement.
"Business Day" means (a) any day that is not a Saturday,
Sunday, or a day on which banks in Chicago, Illinois or Charlotte, North
Carolina are required or permitted to be
4
closed, and (b) with respect to all notices, determinations, fundings and
payments in connection with the LIBOR Rate or LIBOR Rate Loans, any day that is
a Business Day pursuant to clause (a) above and that is also a day on which
trading in Dollars is carried on by and between banks in the London interbank
market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a bank.
"Capital Expenditures" means all payments due (whether or not
paid) in respect of the cost of any fixed asset or improvement, or replacement,
substitution, or addition thereto, which has a useful life of more than one
year, including, without limitation, those costs arising in connection with the
direct or indirect acquisition of such asset by way of increased product or
service charges or in connection with a Capital Lease.
"Capital Lease" means any lease of property by the Borrower
which, in accordance with GAAP, should be reflected as a capital lease on the
balance sheet of the Borrower.
"Change of Control" means any event, transaction or occurrence
as a result of which (a) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ cease to own,
directly or indirectly, and control all of the economic and voting rights
associated with ownership of at least sixty percent (60%) of all classes of the
outstanding Stock of Parent on a fully diluted basis, (b) Parent ceases to own
and control all of the economic and voting rights associated with all of the
outstanding Stock of Holdings, (c) Holdings ceases to own and control all of the
economic and voting rights associated with all of the outstanding Stock of
Borrower, (d) Borrower ceases to own and control all of the economic and voting
rights associated with all of the outstanding capital Stock of each of its
Subsidiaries or (e) any "Change of Control" as defined in the Senior Notes
Documents or Subordinated Notes Documents.
"Chattel Paper" means all of the Borrower's now owned or
hereafter acquired chattel paper, as defined in the UCC, including electronic
chattel paper.
"Clearing Bank" means the Bank or any other banking
institution with whom a Payment Account has been established pursuant to a
Blocked Account Agreement.
"Closing Date" means the date of this Agreement.
"Closing Fee" has the meaning ascribed thereto in the fee
letter dated as of the Closing Date between the Agent and the Borrower.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all of the Borrower's real and personal
property and all other assets of any Person from time to time subject to Agent's
Liens securing payment or performance of the Obligations.
5
"Commitment" means, at any time with respect to a Lender, the
principal amount set forth beside such Lender's name under the heading
"Commitment" on Schedule 1.2 attached to the Agreement or on the signature page
of the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 11.2, as such Commitment
may be adjusted from time to time in accordance with the provisions of Section
11.2, and "Commitments" means, collectively, the aggregate amount of the
commitments of all of the Lenders.
"Contaminant" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated biphenyls
("PCBs"), or any constituent of any such substance or waste.
"Continuation/Conversion Date" means the date on which a Loan
is converted into or continued as a LIBOR Rate Loan.
"Cosmetics Division" means the tangible and intangible assets
directly employed by the Borrower and its Subsidiaries in the United States,
Mexico and France in the manufacture, sale and distribution of cosmetic
packaging products consisting of accounts and inventory of the Borrower with a
net book value of less than $8,500,000, equipment of the Borrower with a net
book value of less than $1,400,000 (located at plant C in Morristown, Tennessee
and the Frontier facility in Illinois), equipment of ▇▇▇▇ Bonneval SARL with a
net book value of less than $500,000, equipment of the Borrower located in
Mexico and all of the capital Stock and assets of the Cepillos de ▇▇▇▇▇▇▇▇▇ ▇.▇.
de C.V.
"Credit Support" has the meaning specified in Section 1.4(a).
"Debt" means, without duplication, all liabilities,
obligations and indebtedness of the Borrower to any Person, of any kind or
nature, now or hereafter owing, arising, due or payable, howsoever evidenced,
created, incurred, acquired or owing, whether primary, secondary, direct,
contingent, fixed or otherwise, including, without limitation, (a) all
Obligations; (b) all obligations and liabilities of any Person secured by any
Lien on the Borrower's property, even though the Borrower shall not have assumed
or become liable for the payment thereof; provided, however, that all such
obligations and liabilities which are limited in recourse to such property shall
be included in Debt only to the extent of the book value of such property as
would be shown on a balance sheet of the Borrower prepared in accordance with
GAAP; (c) all obligations or liabilities created or arising under any Capital
Lease or conditional sale or other title retention agreement with respect to
property used or acquired by the Borrower, even if the rights and remedies of
the lessor, seller or lender thereunder are limited to repossession of such
property; provided, however, that all such obligations and liabilities which are
limited in recourse to such property shall be included in Debt only to the
extent of the book value of such property as would be shown on a balance sheet
of the Borrower prepared in accordance with GAAP; (d) all obligations and
liabilities under Guaranties and (e) the present value (discounted at the Base
Rate) of lease payments due under synthetic leases.
6
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured, waived, or
otherwise remedied during such time) constitute an Event of Default.
"Defaulting Lender" has the meaning specified in Section
12.15(d).
"Default Rate" means a per annum interest rate at all times
equal to the sum of (a) the otherwise applicable Interest Rate plus (b) two
percent (2.0%) per annum. Each Default Rate shall be adjusted simultaneously
with any change in the applicable Interest Rate. In addition, the Default Rate
shall result in an increase in the Letter of Credit Fee by two percent (2.0%)
per annum.
"Designated Account" has the meaning specified in Section
1.2(c).
"Distribution" means, in respect of any corporation: (a) the
payment or making of any dividend or other distribution of property in respect
of capital stock (or any options or warrants for, or other rights with respect
to, such stock) of such corporation, other than distributions in capital stock
(or any options or warrants for such stock) of the same class; or (b) the
redemption or other acquisition by such corporation of any capital stock (or any
options or warrants for such stock) of such corporation.
"Documents" means all documents as such term is defined in the
UCC, including bills of lading, warehouse receipts or other documents of title,
now owned or hereafter acquired by the Borrower.
"DOL" means the United States Department of Labor or any
successor department or agency.
"Dollar" and "$" means dollars in the lawful currency of the
United States. Unless otherwise specified, all payments under the Agreements
shall be made in Dollars.
"Domestic Assets" means Accounts, Chattel Paper, Documents,
Equipment, General Intangibles, Investment Property, Instruments, Inventory,
Proprietary Rights and Supporting Obligations and proceeds thereof owned by
Borrower and located or deemed to be located in the United States, excluding the
Stock of Foreign Subsidiaries, but expressly including Accounts owing to the
Borrower by Account Debtors located outside of the United States.
"Domestic Subsidiary" means each Subsidiary of the Borrower
incorporated or organized under the laws of any State in the United States.
"EBITDA" means, with respect to any fiscal period of the
Borrower and its Subsidiaries, Adjusted Net Earnings from Operations, plus, to
the extent deducted in the determination of Adjusted Net Earnings from
Operations for that fiscal period, interest expenses, Federal, State, local and
foreign income taxes, depreciation and amortization.
"Eligible Accounts" means the Accounts which the Agent in the
exercise of its reasonable commercial discretion determines to be Eligible
Accounts. Without limiting the
7
discretion of the Agent to establish other criteria of ineligibility, Eligible
Accounts shall not, unless the Agent in its sole discretion elects, include any
Account:
(a) with respect to which either (i) more than
90 days have elapsed since the date of the original invoice therefor or (ii)
more than 60 days have elapsed since the due date; or with respect to Accounts
owing by Whirlpool Corporation ("Whirlpool"), either (x) more than 120 days have
elapsed since the date of the original invoice therefor or (y) more than 30 days
have elapsed since the due date;
(b) with respect to which any of the
representations, warranties, covenants, and agreements contained in the Security
Agreement are incorrect or have been breached;
(c) with respect to which Account (or any other
Account due from such Account Debtor), in whole or in part, a check, promissory
note, draft, trade acceptance or other instrument for the payment of money has
been received, presented for payment and returned uncollected for any reason;
(d) which represents a progress billing (as
hereinafter defined) or as to which the Borrower or the applicable Domestic
Subsidiary has extended the time for payment without the consent of the Agent;
for the purposes hereof, "progress billing" means any invoice for goods sold or
leased or services rendered under a contract or agreement pursuant to which the
Account Debtor's obligation to pay such invoice is conditioned upon the
Borrower's or the applicable Domestic Subsidiary's completion of any further
performance under the contract or agreement;
(e) with respect to which any one or more of the
following events has occurred to the Account Debtor on such Account: death or
judicial declaration of incompetency of an Account Debtor who is an individual;
the filing by or against (until dismissed) the Account Debtor of a request or
petition for liquidation, reorganization, arrangement, adjustment of debts,
adjudication as a bankrupt, winding-up, or other relief under the bankruptcy,
insolvency, or similar laws of the United States, any state or territory
thereof, or any foreign jurisdiction, now or hereafter in effect; the making of
any general assignment by the Account Debtor for the benefit of creditors; the
appointment of a receiver or trustee for the Account Debtor or for any of the
assets of the Account Debtor, including, without limitation, the appointment of
or taking possession by a "custodian," as defined in the Federal Bankruptcy
Code; the institution by or against the Account Debtor of any other type of
insolvency proceeding (under the bankruptcy laws of the United States or
otherwise) or of any formal or informal proceeding for the dissolution or
liquidation of, settlement of claims against, or winding up of affairs of, the
Account Debtor; the sale, assignment, or transfer of all or any material part of
the assets of the Account Debtor; the nonpayment generally by the Account Debtor
of its debts as they become due; or the cessation of the business of the Account
Debtor as a going concern;
(f) if fifty percent (50%) or more of the
aggregate Dollar amount of outstanding Accounts owed at such time by the Account
Debtor thereon is classified as ineligible under clause (a) above;
8
(g) owed by an Account Debtor which: (i) does
not maintain its chief executive office in the United States of America or
Canada (other than the Province of Newfoundland); or (ii) is not organized under
the laws of the United States of America or Canada or any state or province
thereof; or (iii) is the government of any foreign country or sovereign state,
or of any state, province, municipality, or other political subdivision thereof,
or of any department, agency, public corporation, or other instrumentality
thereof; except to the extent that such Account is secured or payable by a
letter of credit satisfactory to the Agent in its discretion and except that
Eligible Accounts shall include up to $2,000,000 of Accounts owing by foreign
Subsidiaries of domestic "Fortune 500" companies;
(h) owed by an Account Debtor which is an
Affiliate or employee of the Borrower;
(i) except as provided in clause (k) below,
with respect to which either the perfection, enforceability, or validity of the
Agent's Liens in such Account, or the Agent's right or ability to obtain direct
payment to the Agent of the proceeds of such Account, is governed by any
federal, state, or local statutory requirements other than those of the UCC;
(j) owed by an Account Debtor to which the
Borrower or any of its Subsidiaries, is indebted in any way, or which is subject
to any right of setoff or recoupment by the Account Debtor, unless the Account
Debtor has entered into an agreement acceptable to the Agent to waive setoff
rights; or if the Account Debtor thereon has disputed liability or made any
claim with respect to any other Account due from such Account Debtor; but in
each such case only to the extent of such indebtedness, setoff, recoupment,
dispute, or claim;
(k) owed by the government of the United States
of America, or any department, agency, public corporation, or other
instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as
amended (31 U.S.C. ss. 3727 et seq.), and any other steps necessary to perfect
the Agent's Liens therein, have been complied with to the Agent's satisfaction
with respect to such Account;
(l) owed by any state, municipality, or other
political subdivision of the United States of America, or any department,
agency, public corporation, or other instrumentality thereof and as to which the
Agent determines that its Lien therein is not or cannot be perfected;
(m) which represents a sale on a ▇▇▇▇-and-hold,
guaranteed sale, sale and return, sale on approval, consignment, or other
repurchase or return basis;
(n) which is evidenced by a promissory note or
other instrument or by chattel paper;
(o) if the Agent believes, in the exercise of
its reasonable judgment, that the prospect of collection of such Account is
impaired or that the Account may not be paid by reason of the Account Debtor's
financial inability to pay;
(p) with respect to which the Account Debtor is
located in any state requiring the filing of a Notice of Business Activities
Report or similar report in order to permit
9
the Borrower to seek judicial enforcement in such State of payment of such
Account, unless such Borrower has qualified to do business in such state or has
filed a Notice of Business Activities Report or equivalent report for the then
current year;
(q) which arises out of a sale not made in the
ordinary course of the Borrower's business;
(r) with respect to which the goods giving rise
to such Account have not been shipped and delivered to and accepted by the
Account Debtor or the services giving rise to such Account have not been
performed by the Borrower, and, if applicable, accepted by the Account Debtor,
or the Account Debtor revokes its acceptance of such goods or services;
(s) if such Accounts reflect invoices for sales
of tooling, except invoices for the last installment of tooling after delivery
to and acceptance thereof by the Account Debtor;
(t) which is not subject to a first priority and
perfected security interest in favor of the Agent for the benefit of the
Lenders.
If any Account at any time ceases to be an Eligible Account, then such
Account shall promptly be excluded from the calculation of Eligible Accounts.
"Eligible Assignee" means (a) a commercial bank, commercial
finance company or other asset based lender, having total assets in excess of
$1,000,000,000; (b) any Lender listed on the signature page of this Agreement;
(c) any Affiliate of any Lender; and (d) if an Event of Default has occurred and
is continuing, any Person reasonably acceptable to the Agent.
"Eligible Inventory" means Inventory, valued at the lower of
cost (on a first-in, first-out basis) or market, excluding any intercompany
profit, but including capitalized variances of up to $1,500,000, which the
Agent, in its reasonable discretion, determines to be Eligible Inventory.
Without limiting the discretion of the Agent to establish other criteria of
eligibility, Eligible Inventory shall meet all of the following requirements:
(a) such Inventory is owned by the Borrower or a Domestic
Subsidiary;
(b) such Inventory is subject to the Agent's Liens, which are
perfected as to such Inventory, and is subject to no other Lien whatsoever
(other than the Liens described in clause (d) of the definition of Permitted
Liens provided that such Permitted Liens (i) are junior in priority to the
Agent's Liens or subject to Reserves and (ii) do not impair directly or
indirectly the ability of the Agent to realize on or obtain the full benefit of
the Collateral);
(c) such Inventory consists of finished goods, work-in-process
or raw materials;
(d) such Inventory does not consist of chemicals, samples,
prototypes, regrind, supplies, or packing and shipping materials;
10
(e) such Inventory is in good condition, not unmerchantable,
and meets all standards imposed by any Governmental Authority, having regulatory
authority over such goods, their use or sale;
(f) such Inventory is currently either usable or salable, at
prices approximating at least cost, in the normal course of the Borrower's or
the applicable Domestic Subsidiary's business, and is not slow moving or stale;
(g) such Inventory is not obsolete or returned or repossessed
or used goods taken in trade;
(h) such Inventory is located within the United States of
America (and not in-transit from vendors or suppliers);
(i) if such Inventory is located in a public warehouse or in
possession of a bailee or in a facility leased by the Borrower or a Domestic
Subsidiary, the warehouseman, or the bailee, or the lessor has delivered to the
Agent, if requested by the Agent, a subordination agreement in form and
substance satisfactory to the Agent or, if a subordination agreement has not
been obtained, a Reserve for rents or storage charges has been established for
Inventory at that location;
(j) if such Inventory contains or bears any Proprietary Rights
licensed to the Borrower or a Domestic Subsidiary by any Person, the Agent shall
be satisfied that it may sell or otherwise dispose of such Inventory in
accordance with the terms of the Security Agreement and Section 9.2 without
infringing the rights of the licensor of such Proprietary Rights or violating
any contract with such licensor (and without payment of any royalties other than
any royalties due with respect to the sale or disposition of such Inventory
pursuant to the existing license agreement), and, if the Agent deems it
necessary, the Borrower or the applicable Domestic Subsidiary shall deliver to
the Agent a consent or sublicense agreement from such licensor in form and
substance acceptable to the Agent;
(k) such Inventory does not breach any representation or
covenant with respect to Inventory contained in the Loan Documents;
(l) such Inventory is not Inventory placed on consignment; and
(m) such Inventory is not determined by the Agent in its
reasonable discretion, to be ineligible for any other reason.
If any Inventory at any time ceases to be Eligible Inventory,
such Inventory shall promptly be excluded from the calculation of Eligible
Inventory.
"Environmental Claims" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for a Release or
injury to the environment.
"Environmental Compliance Reserve" means any reserve which the
Agent establishes in its reasonable discretion after prior written notice to the
Borrower from time to
11
time for amounts that are reasonably likely to be expended by the Borrower in
order for the Borrower and its operations and property (a) to comply with any
notice from a Governmental Authority asserting material non-compliance with
Environmental Laws, or (b) to correct any such material non-compliance
identified in a report delivered to the Agent and the Lenders pursuant to
Section 7.7.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
relating to environmental, health, safety and land use matters.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (a) any liability under Environmental Laws, or (b) damages arising
from, or costs incurred by such Governmental Authority in response to, a Release
or threatened Release of a Contaminant into the environment.
"Equipment" means all of the Borrower's now owned and
hereafter acquired machinery, equipment, furniture, furnishings, fixtures, and
other tangible personal property (except Inventory), including embedded
software, motor vehicles with respect to which a certificate of title has been
issued, aircraft, dies, tools, jigs, and office equipment, as well as all of
such types of property leased by the Borrower and all of the Borrower's rights
and interests with respect thereto under such leases (including, without
limitation, options to purchase); together with all present and future additions
and accessions thereto, replacements therefor, component and auxiliary parts and
supplies used or to be used in connection therewith, and all substitutes for any
of the foregoing, and all manuals, drawings, instructions, warranties and rights
with respect thereto; wherever any of the foregoing is located.
"ERISA" means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan, (b) a withdrawal by the Borrower or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which it was
a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA, (c) a complete or partial withdrawal by the Borrower or any
ERISA Affiliate from a Multi-employer Plan or notification that a Multi-employer
Plan is in reorganization, (d) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Section 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multi-employer Plan, (e) the occurrence of an event or condition which
might reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multi-employer Plan, or (f) the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.
12
"Event of Default" has the meaning specified in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance Corporation, and
any Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate charged to
the Bank on such day on such transactions as determined by the Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any successor thereto.
"Financial Statements" means, according to the context in
which it is used, the financial statements referred to in Sections 5.2 and 6.6
or any other financial statements required to be given to the Lenders pursuant
to this Agreement.
"Fiscal Year" means the Borrower's fiscal year for financial
accounting purposes. The current Fiscal Year of the Borrower will end on
December 31, 2000.
"Fixed Assets" means the Equipment and Real Estate of the
Borrower.
"Fixed Charge Coverage Ratio" means, with respect to any
fiscal period of Borrower, the ratio of EBITDA to Fixed Charges.
"Fixed Charges" means, with respect to any fiscal period of
the Borrower and its Subsidiaries on a consolidated basis, without duplication,
interest expense, Capital Expenditures (excluding Capital Expenditures funded
with loans other than Revolving Loans, but including (without duplication)
principal payments of such Debt), contributions to the capital of Subsidiaries
formed after the Closing Date in Brazil, scheduled principal payments of Debt,
and Federal, state, local and foreign income taxes, excluding deferred taxes.
"Florida Mortgage" means that certain Modified and Restated
Florida Mortgage and Security Agreement dated May 22, 1997 and effective March
1, 1997, by and between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ in favor of Life
Insurance Company of Georgia, as amended, restated, assigned, modified and
supplemented from time to time.
13
"Foreign Assets" means assets of the Borrower and its Foreign
Subsidiaries, in each case located outside of the United States, including the
Stock of Foreign Subsidiaries.
"Foreign Subsidiary" means each Subsidiary of the Borrower
incorporated or organized under the laws of a jurisdiction outside of the United
States.
"Funding Date" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles and
practices set forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession), which are applicable to the
circumstances as of the Closing Date.
"General Intangibles" means all of the Borrower's now owned or
hereafter acquired general intangibles, choses in action and causes of action
and all other intangible personal property of the Borrower of every kind and
nature (other than Accounts), including, without limitation, all contract
rights, payment intangibles, Proprietary Rights, corporate or other business
records, inventions, designs, blueprints, plans, specifications, patents, patent
applications, trademarks, service marks, trade names, trade secrets, goodwill,
copyrights, computer software, customer lists, registrations, licenses,
franchises, tax refund claims, any funds which may become due to the Borrower in
connection with the termination of any Plan or other employee benefit plan or
any rights thereto and any other amounts payable to the Borrower from any Plan
or other employee benefit plan, rights and claims against carriers and shippers,
rights to indemnification, business interruption insurance and proceeds thereof,
property, casualty or any similar type of insurance and any proceeds thereof,
proceeds of insurance covering the lives of key employees on which the Borrower
is beneficiary, rights to receive dividends, distributions, cash, Instruments
and other property in respect of or in exchange for pledged equity interests or
Investment Property and any letter of credit, guarantee, claim, security
interest or other security held by or granted to the Borrower.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guaranty" means, with respect to any Person, all obligations
of such Person which in any manner directly or indirectly guarantee or assure,
or in effect guarantee or assure, the payment or performance of any
indebtedness, dividend or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including any such obligations
incurred through an agreement, contingent or otherwise: (a) to purchase the
guaranteed obligations or any property constituting security therefor; (b) to
advance or supply funds for the purchase or payment of the guaranteed
obligations or to maintain a working capital or other balance sheet condition;
or (c) to lease property or to purchase any debt or equity securities or other
property or services.
14
"Hedge Agreement" means any and all transactions, agreements
or documents now existing or hereafter entered into, which provides for an
interest rate, credit, commodity or equity swap, cap, floor, collar, forward
foreign exchange transaction, currency swap, cross currency rate swap, currency
option, or any combination of, or option with respect to, these or similar
transactions, for the purpose of hedging the Borrower's exposure to fluctuations
in interest or exchange rates, loan, credit exchange, security or currency
valuations or commodity prices.
"Holdings" has the meaning ascribed thereto in the recitals to
the Agreement.
"Holdings Guaranty" means the Holdings Guaranty executed by
Holdings in favor of Agent for the benefit of the Lenders.
"Instruments" means all instruments as such term is defined in
the UCC, now owned or hereafter acquired by the Borrower.
"Intercompany Accounts" means all assets and liabilities,
however arising, which are due to the Borrower from, which are due from the
Borrower to, or which otherwise arise from any transaction by the Borrower with
any Affiliate of the Borrower.
"Interest Period" means, as to any LIBOR Rate Loan, the period
commencing on the Funding Date of such Loan or on the Continuation/Conversion
Date on which the Loan is converted into or continued as a LIBOR Rate Loan, and
ending on the date one, two, three or six months thereafter as selected by the
Borrower in its Notice of Borrowing, in the form attached hereto as Exhibit D,
or Notice of Continuation/Conversion, in the form attached hereto as Exhibit E,
provided that:
(a) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be extended
to the following Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month, in which
event such Interest Period shall end on the preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Rate
Loan 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 end on the last
Business Day of the calendar month at the end of such Interest Period;
and
(c) no Interest Period shall extend beyond the Stated
Termination Date.
"Interest Rate" means each or any of the interest rates,
including the Default Rate, set forth in Section 2.1.
"Inventory" means all of the Borrower's now owned and
hereafter acquired inventory, goods and merchandise, wherever located, to be
furnished under any contract of service or held for sale or lease, all returned
goods, raw materials, work-in-process, finished goods (including embedded
software), other materials and supplies of any kind, nature or
15
description which are used or consumed in the Borrower's business or used in
connection with the packing, shipping, advertising, selling or finishing of such
goods, merchandise, and all documents of title or other Documents representing
them.
"Investment Property" means all of the Borrower's right title
and interest in and to any and all: (a) securities whether certificated or
uncertificated; (b) securities entitlements; (c) securities accounts; (d)
commodity contracts; or (e) commodity accounts.
"IRS" means the Internal Revenue Service and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Latest Projections" means: (a) on the Closing Date and
thereafter until the Agent receives new projections pursuant to Section 5.2(f),
the projections of the Borrower's financial condition, results of operations,
and cash flows, for the period commencing on June 1, 2000 and ending on December
31, 2002 and delivered to the Agent prior to the Closing Date; and (b)
thereafter, the projections most recently received by the Agent pursuant to
Section 5.2(f).
"Lender" and "Lenders" have the meanings specified in the
introductory paragraph hereof and shall include the Agent to the extent of any
Agent Advance outstanding and the Bank to the extent of any Non-Ratable Loan
outstanding; provided that no such Agent Advance or Non-Ratable Loan shall be
taken into account in determining any Lender's Pro Rata Share.
"Letter of Credit" has the meaning specified in Section
1.4(a).
"Letter of Credit Fee" has the meaning specified in Section
2.6.
"Letter of Credit Issuer" means the Bank, any affiliate of the
Bank or any other financial institution that issues any Letter of Credit
pursuant to this Agreement.
"Letter of Credit Subfacility" means $5,000,000.
"LIBOR Interest Payment Date" means, with respect to a LIBOR
Rate Loan, the Termination Date and the last day of each Interest Period
applicable to such Loan or, with respect to each Interest Period of greater than
three months in duration, the first Business Day of the fourth month of such
Interest Period and the last day of such Interest Period.
"LIBOR Rate" means, for any Interest Period, with respect to
LIBOR Rate Loans, the rate of interest per annum determined pursuant to the
following formula:
LIBOR Rate = Offshore Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Offshore Base Rate" means the rate per annum
appearing on Telerate Page 3750 (or any successor page) as the
London
16
interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable
to such Interest Period. If for any reason such rate is not
available, the Offshore Base Rate shall be, for any Interest
Period, the rate per annum appearing on Reuters Screen LIBOR
Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBOR Page, the
applicable rate shall be the arithmetic mean of all such
rates. If for any reason none of the foregoing rates is
available, the Offshore Base Rate shall be, for any Interest
Period, the rate per annum determined by Agent as the rate of
interest at which dollar deposits in the approximate amount of
the LIBOR Rate Loan comprising part of such Borrowing would be
offered by the Bank's London Branch to major banks in the
offshore dollar market at their request at or about 11:00 a.m.
(London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period.
"Eurodollar Reserve Percentage" means, for any day
during any Interest Period, the reserve percentage (expressed
as a decimal, rounded upward to the next 1/100th of 1%) in
effect on such day applicable to member banks under
regulations issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding
(currently referred to as "Eurocurrency liabilities"). The
Offshore Rate for each outstanding LIBOR Rate Loan shall be
adjusted automatically as of the effective date of any change
in the Eurodollar Reserve Percentage.
"LIBOR Rate Loans" means, collectively, the LIBOR Revolving
Loans and the LIBOR Term Loans.
"LIBOR Revolving Loan" means a Revolving Loan during any
period in which it bears interest based on the LIBOR Rate.
"LIBOR Term Loan" means any portion of a Term Loan during any
period in which such portion bears interest based on the LIBOR Rate.
"Lien" means: (a) any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on the common law, statute, or
contract, and including a security interest, charge, claim, or lien arising from
a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment,
deposit arrangement, agreement, security agreement, conditional sale or trust
receipt or a lease,
17
consignment or bailment for security purposes; (b) to the extent not included
under clause (a), any reservation, exception, encroachment, easement,
right-of-way, covenant, condition, restriction, lease or other title exception
or encumbrance affecting property; and (c) any contingent or other agreement to
provide any of the foregoing.
"Loan Account" means the loan account of the Borrower, which
account shall be maintained by the Agent.
"Loan Documents" means this Agreement, the Term Loan Notes,
the Patent and Trademark Agreements, the Security Agreement, the Mortgages,
Subsidiary Guaranty, Holdings Guaranty and any other agreements, instruments,
and documents heretofore, now or hereafter evidencing, securing, guaranteeing or
otherwise relating to the Obligations, the Collateral, or any other aspect of
the transactions contemplated by this Agreement.
"Loans" means, collectively, all loans and advances provided
for in Article 1.
"Majority Lenders" means at any date of determination Lenders
whose Pro Rata Shares aggregate more than 50% as such percentage is determined
under the definition of Pro Rata Share set forth herein.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the Borrower or the
Collateral; (b) a material impairment of the ability of the Borrower to perform
under any Loan Document to which it is a party and to avoid any Event of
Default; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against the Borrower of any Loan Document to which it
is a party.
"Maximum Rate" has the meaning specified in Section 2.3.
"Maximum Revolver Amount" means $50,000,000.
"▇▇▇▇ France" means ▇▇▇▇ France SARL.
"▇▇▇▇ UK" means, collectively, ▇▇▇▇ Industries UK Ltd., ▇▇▇▇
Industries, Limited and ▇▇▇▇ UK Engineering, Limited.
"Mortgages" means and includes any and all of the mortgages,
deeds of trust, deeds to secure debt, assignments and other instruments executed
and delivered by the Borrower to or for the benefit of the Agent by which the
Agent, on behalf of the Lenders, acquires a Lien on the Real Estate or a
collateral assignment of the Borrower's interest under leases of Real Estate,
and all amendments, modifications and supplements thereto.
"Multi-employer Plan" means a "multi-employer plan" as defined
in Section 4001(a)(3) of ERISA which is or was at any time during the current
year or the immediately preceding six (6) years contributed to by the Borrower
or any ERISA Affiliate.
18
"Net Amount of Eligible Accounts" means, at any time, the
gross amount of Eligible Accounts less sales, excise or similar taxes, and less
returns, discounts, claims, credits and allowances, accrued rebates, offsets,
deductions, counterclaims, disputes and other defenses of any nature at any time
issued, owing, granted, outstanding, available or claimed.
"Net Proceeds" has the meaning specified in Section 3.4(b).
"Non-Ratable Loan" and "Non-Ratable Loans" have the meanings
specified in Section 1.2(h).
"Notes" means the Revolving Loan Notes and the Term Loan
Notes.
"Notice of Borrowing" has the meaning specified in Section
1.2(b).
"Notice of Continuation/Conversion" has the meaning specified
in Section 2.2(b).
"Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Borrower to
the Agent and/or any Lender, arising under or pursuant to this Agreement or any
of the other Loan Documents, whether or not evidenced by any note, or other
instrument or document, whether arising from an extension of credit, opening of
a letter of credit, acceptance, loan, guaranty, indemnification or otherwise,
whether direct or indirect, absolute or contingent, due or to become due,
primary or secondary, as principal or guarantor, and including all principal,
interest, charges, expenses, fees, attorneys' fees, filing fees and any other
sums chargeable to the Borrower hereunder or under any of the other Loan
Documents. "Obligations" includes, without limitation, (a) all debts,
liabilities, and obligations now or hereafter arising from or in connection with
the Letters of Credit and (b) all debts, liabilities and obligations now or
hereafter arising from or in connection with Bank Products.
"Other Taxes" means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan
Documents.
"Parent" means AMM Holdings, Inc., a Delaware corporation.
"Parent Notes" means the Series A and Series B 13 1/2% Senior
Discount Notes Due 2009.
"Parent Notes Documents" means the Parent Notes and the
Indenture dated as of June 26, 1998, between Parent and State Street Bank and
Trust Company dated as of June 26, 1998 with respect to the Parent Notes.
"Participant" means any Person who shall have been granted the
right by any Lender to participate in the financing provided by such Lender
under this Agreement, and who shall have entered into a participation agreement
in form and substance satisfactory to such Lender.
19
"Patent and Trademark Agreements" means the Patent Security
Agreement and the Trademark Security Agreement, each dated as of the date
hereof, executed and delivered by the Borrower to the Agent to evidence and
perfect the Agent's security interest in the Borrower's present and future
patents, trademarks, and related licenses and rights, for the benefit of the
Agent and the Lenders.
"Payment Account" means each bank account established pursuant
to the Security Agreement, to which the proceeds of Accounts and other
Collateral are deposited or credited, and which is maintained in the name of the
Agent or the Borrower, as the Agent may determine, on terms acceptable to the
Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.
"Pending Revolving Loans" means, at any time, the aggregate
principal amount of all Revolving Loans requested in any Notice of Borrowing
received by the Agent which have not yet been advanced.
"Pension Plan" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which the Borrower sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a Multi-employer Plan has made contributions at
any time during the immediately preceding five (5) plan years.
"Permitted Liens" means:
(a) Liens for taxes not delinquent or statutory
Liens for taxes in an amount not to exceed $100,000 provided that the payment of
such taxes which are due and payable is being contested in good faith and by
appropriate proceedings diligently pursued and as to which adequate financial
reserves have been established on Borrower's books and records and a stay of
enforcement of any such Lien is in effect;
(b) the Agent's Liens;
(c) Liens consisting of deposits made in the
ordinary course of business in connection with, or to secure payment of,
obligations under worker's compensation, unemployment insurance, social security
and other similar laws, or to secure the performance of bids, tenders or
contracts (other than for the repayment of Debt) or to secure indemnity,
performance or other similar bonds for the performance of bids, tenders or
contracts (other than for the repayment of Debt) or to secure statutory
obligations (other than liens arising under ERISA or Environmental Liens) or
surety or appeal bonds, or to secure indemnity, performance or other similar
bonds;
(d) Liens securing the claims or demands of
materialmen, mechanics, carriers, warehousemen, landlords and other like
Persons, provided that if any such Lien arises from the nonpayment of such
claims or demand when due, such claims or demands do not exceed $100,000 in the
aggregate;
20
(e) Liens constituting encumbrances in the
nature of reservations, exceptions, encroachments, easements, rights of way,
covenants running with the land, and other similar title exceptions or
encumbrances affecting any Real Estate; provided that they do not in the
aggregate materially detract from the value of the Real Estate or materially
interfere with its use in the ordinary conduct of the Borrower's business;
(f) Liens arising from judgments and
attachments in connection with court proceedings provided that the attachment or
enforcement of such Liens would not result in an Event of Default hereunder and
such Liens are being contested in good faith by appropriate proceedings,
adequate reserves have been set aside and no material Property is subject to a
material risk of loss or forfeiture and the claims in respect of such Liens are
fully covered by insurance (subject to ordinary and customary deductibles) and a
stay of execution pending appeal or proceeding for review is in effect;
(g) Subordinated Liens of the holders of the
Senior Notes;
(h) Liens on Real Estate set forth on Schedule
6.11; and
(i) Liens permitted by Section 7.13(c).
"Permitted Rentals" has the meaning specified in Section 7.23.
"Person" means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated
organization, association, corporation, Governmental Authority, or any other
entity.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Borrower sponsors or maintains or to which the Borrower
makes, is making, or is obligated to make contributions and includes any Pension
Plan.
"Prior Credit Agreement" has the meaning specified in the
recitals to the Agreement.
"Prior Loans" has the meaning specified in the recitals to the
Agreement.
"Proprietary Rights" means all of the Borrower's now owned and
hereafter arising or acquired: licenses, franchises, permits, patents, patent
rights, copyrights, works which are the subject matter 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, including those patents, trademarks, service marks, trade names and
copyrights set forth on Schedule 6.12 hereto, 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 infringement of any of the foregoing.
"Pro Rata Share" means, with respect to a Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of such
Lender's Commitment and the denominator of which is the sum of the amounts of
all of the Lenders' Commitments, or if no Commitments are outstanding, a
fraction (expressed as a percentage), the numerator of which is
21
the amount of Obligations owed to such Lender and the denominator of which is
the aggregate amount of the Obligations owed to the Lenders, in each case giving
effect to a Lender's participation in Non-Ratable Loans and Agent Advances.
"Real Estate" means all of the Borrower's now or hereafter
owned or leased estates in real property, including, without limitation, all
fees, leaseholds and future interests, together with all of the Borrower's now
or hereafter owned or leased interests in the improvements thereon, the fixtures
attached thereto and the easements appurtenant thereto.
"Release" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into or out of any Real
Estate or other property, including the movement of Contaminants through or in
the air, soil, surface water, groundwater or Real Estate or other property.
"Rentals" has the meaning specified in Section 7.23.
"Reportable Event" means, any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"Required Lenders" means at any time Lenders whose Pro Rata
Shares aggregate more than 66-2/3% as such percentage is determined under the
definition of Pro Rata Share set forth herein.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of an
arbitrator or of a Governmental Authority, in each case applicable to or binding
upon the Person or any of its property or to which the Person or any of its
property is subject.
"Reserves" means reserves that limit the availability of
credit hereunder, consisting of reserves against Availability, Eligible Accounts
or Eligible Inventory, established by Agent from time to time in Agent's
reasonable credit judgment. Without limiting the generality of the foregoing,
the following Reserves shall be deemed to be a reasonable exercise of Agent's
credit judgment: (a) Bank Product Reserves, (b) a reserve for accrued, unpaid
interest on the Obligations, (c) reserves for rent at leased locations subject
to Statutory or contractual landlord liens, (d) reserves for rental payments,
storage and handling costs of bailees and warehousemen, and (e) Environmental
Compliance Reserves.
"Responsible Officer" means the chief executive officer or the
president of the Borrower, or any other officer having substantially the same
authority and responsibility; or, with respect to compliance with financial
covenants and the preparation of the Borrowing Base Certificate, the chief
financial officer or the treasurer of the Borrower, or any other officer having
substantially the same authority and responsibility.
"Restricted Investment" means, as to the Borrower, any
acquisition of property by the Borrower in exchange for cash or other property,
whether in the form of an acquisition of stock, debt, or other indebtedness or
obligation, or the purchase or acquisition of any other
22
property, or a loan, advance, capital contribution, or subscription, except the
following: (a) acquisitions of Equipment to be used in the business of the
Borrower so long as the acquisition costs thereof constitute Capital
Expenditures permitted hereunder; (b) acquisitions of Inventory in the ordinary
course of business of the Borrower; (c) acquisitions of current assets acquired
in the ordinary course of business of the Borrower; (d) direct obligations of
the United States of America, or any agency thereof, or obligations guaranteed
by the United States of America, provided that such obligations mature within
one year from the date of acquisition thereof; (e) acquisitions of certificates
of deposit maturing within one year from the date of acquisition, bankers'
acceptances, Eurodollar bank deposits, or overnight bank deposits, in each case
issued by, created by, or with a bank or trust company organized under the laws
of the United States of America or any state thereof having capital and surplus
aggregating at least $100,000,000; (f) acquisitions of commercial paper given a
rating of "A2" or better by Standard & Poor's Corporation or "P2" or better by
▇▇▇▇▇'▇ Investors Service, Inc. and maturing not more than 90 days from the date
of creation thereof; and (g) Hedge Agreements.
"Revolving Loans" has the meaning specified in Section 1.2 and
includes each Agent Advance and Non-Ratable Loan.
"Revolving Loan Note" and "Revolving Loan Notes" have the
meanings specified in Section 1.2(a)(ii).
"Security Agreement" means the Security Agreement of even date
herewith among Borrower and Agent for the benefit of Agent and other Lenders.
"Senior Notes" means the 11 3/4% Senior Notes issued by the
Borrower due 2004.
"Senior Notes Documents" means the Senior Notes, the Indenture
dated as of April 2, 1997 between Borrower, Holdings and State Street Bank and
Trust Company (as successor trustee), and all Supplemental Indentures.
"Settlement" and "Settlement Date" have the meanings specified
in Section 12.15(a)(ii).
"Solvent" means when used with respect to any Person that at
the time of determination:
(a) the assets of such Person, at a fair valuation, are in
excess of the total amount of its debts (including contingent
liabilities); and
(b) the present fair saleable value of its assets is greater
than its probable liability on its existing debts as such debts become
absolute and matured; and
(c) it is then able and expects to be able to pay its debts
(including contingent debts and other commitments) as they mature; and
(d) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
23
For purposes of determining whether a Person is Solvent, the amount of any
contingent liability shall be computed as the amount that, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Stated Termination Date" means February 1, 2006, provided
that the Stated Termination Date shall automatically renew for consecutive one
year periods so long as (i) neither Agent nor the Borrower provides the other
party with a termination notice at least sixty (60) days prior to February 1,
2006 or any subsequent applicable termination date and (ii) Lenders obtain
credit approvals for each such one year extension.
"Stock" means all shares, options, warrants, general or
limited partnership interests, membership interests, or other equivalents
(regardless of how designated) of or in a corporation, partnership, limited
liability company or equivalent entity whether voting or nonvoting, including
common stock, preferred stock or any other "equity security" (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934).
"Subordinated Notes" means the 10 1/2% Senior Subordinated
Notes issued by the Borrower due 2008.
"Subordinated Notes Documents" means the Subordinated Notes
and the Indenture dated as of June 26, 1998, between the Borrower and State
Street Bank and Trust Company with respect to the Subordinated Notes.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than fifty percent (50%) of the voting stock or other equity
interests (in the case of Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Borrower.
"Subsidiary Guaranty" means the Subsidiary Guaranty of even
date herewith among certain of Borrower's Subsidiaries in favor of Agent for the
benefit of Lenders.
"Supporting Obligations" means all supporting obligations as
such term is defined in the UCC.
"Taxes" means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by the
Agent's or each Lender's net income in any the jurisdiction (whether federal,
state or local and including any political subdivision thereof) under the laws
of which such Lender or the Agent, as the case may be, is organized or maintains
a lending office.
"Tender Offer" means Borrower's partial tender of
$100,000,000, 11 3/4% Series B Senior Notes due 2004.
24
"Term Loan" and "Term Loans" have the meanings specified in
Section 1.3(a).
"Term Loan Note" and "Term Loan Notes" have the meanings
specified in Section 1.3(c).
"Termination Date" means the earliest to occur of (i) the
Stated Termination Date, (ii) the date the Total Facility is terminated either
by the Borrower pursuant to Section 3.2 or by the Required Lenders pursuant to
Section 9.2, and (iii) the date this Agreement is otherwise terminated for any
reason whatsoever pursuant to the terms of this Agreement.
"Texas Mortgage" means that certain Deed of Trust dated
November 12, 1997, by ▇▇▇▇ Plasticrafters Limited Partnership in favor of ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, ▇▇., as Trustee, for the benefit of MetLife Capital Financial
Corporation, as amended, restated, assigned, modified and otherwise supplemented
from time to time.
"Total Facility" has the meaning specified in Section 1.1.
"UCC" means the Uniform Commercial Code, as in effect from
time to time, of the State of Illinois or of any other state the laws of which
are required as a result thereof to be applied in connection with the issue of
perfection of security interests.
"Unfunded Pension Liability" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"Unused Letter of Credit Subfacility" means an amount equal to
$5,000,000 minus the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit plus, without duplication, (b) the aggregate unpaid
reimbursement obligations with respect to all Letters of Credit.
"Unused Line Fee" has the meaning specified in Section 2.5.
"Working Capital" at any date means Current Assets minus
Current Liabilities.
Accounting Terms. Any accounting term used in the Agreement
shall have, unless otherwise specifically provided herein, the meaning
customarily given in accordance with GAAP, and all financial computations
hereunder shall be computed, unless otherwise specifically provided herein, in
accordance with GAAP as consistently applied and using the same method for
inventory valuation as used in the preparation of the Financial Statements.
Interpretive Provisions. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar
words refer to the Agreement as a whole and not to any particular provision of
the Agreement; and Subsection, Section, Schedule and Exhibit references are to
the Agreement unless otherwise specified.
25
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including," the words "to" and "until" each mean "to but excluding" and the word
"through" means "to and including."
(d) Unless otherwise expressly provided herein, (i) references
to agreements (including the Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications thereto,
but only to the extent such amendments and other modifications are not
prohibited by the terms of any Loan Document, and (ii) references to any statute
or regulation are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting the
statute or regulation.
(e) The captions and headings of the Agreement and the other
Loan Documents are for convenience of reference only and shall not affect the
interpretation of this Agreement.
(f) The Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(g) For purposes of Section 9.1 a breach of a Financial
Covenant contained in Sections 7.22-7.24 shall be deemed to have occurred as of
any date of determination thereof by the Agent or as of the last day of any
specified measuring period, regardless of when the Financial Statements
reflecting such breach are delivered to the Agent.
(h) The Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the Agent, the
Borrower and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders or the Agent merely
because of the Agent's or Lenders' involvement in their preparation.
(i) The term "or" is not intended to exclude any of the
specified alternatives.
(j) Each reference to any statute shall include all
regulations promulgated thereunder and shall mean such statute as amended and
all statutes intended to replace or supersede the specified statute.
26
EXHIBIT A-1
FORM OF REVOLVING LOAN NOTE
EXHIBIT A-2
FORM OF TERM LOAN NOTE
EXHIBIT B
FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C
FINANCIAL STATEMENTS
EXHIBIT D
NOTICE OF BORROWING
Date: ______________, 200_
To: Bank of America, N.A. as Agent for the Lenders who are parties to the
Amended and Restated Credit Agreement dated as of ___________, 200_ (as
extended, renewed, amended or restated from time to time, the "Credit
Agreement") among ▇▇▇▇ Industries, Inc., certain Lenders which are
signatories thereto and Bank of America, N.A., as Agent
Ladies and Gentlemen:
The undersigned, ▇▇▇▇ Industries, Inc. (the "Borrower"), refers to the
Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably of the Borrowing specified
below:
1. The Business Day of the proposed Borrowing is ___________, 200_.
2. The aggregate amount of the proposed Borrowing is $_____________.
3. The Borrowing is to be comprised of $________ of Base Rate and
$_________ of LIBOR Rate Loans.
4. The duration of the Interest Period for the LIBOR Rate Loans,
if any, included in the Borrowing shall be _____ months.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the proposed Borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) The representations and warranties of the Borrower contained in the
Credit Agreement are true and correct as though made on and as of such date;
(b) No Default or Event of Default has occurred and is continuing, or
would result from such proposed Borrowing; and
1
(c) The proposed Borrowing will not cause the aggregate principal
amount of all outstanding Revolving Loans plus the aggregate amount available
for drawing under all outstanding Letters of Credit, to exceed the Borrowing
Base or the combined Commitments of the Lenders.
▇▇▇▇ INDUSTRIES, INC.
By:______________________________
Title:___________________________
2
EXHIBIT E
NOTICE OF CONTINUATION/CONVERSION
Date: ________________, 200_
To: Bank of America, N.A. as Agent for the Lenders to the Amended and Restated
Credit Agreement dated as of , 200_ (as extended, renewed, amended or
restated from time to time, the "Credit Agreement") among ▇▇▇▇ Industries,
Inc., certain Lenders which are signatories thereto and Bank of America,
N.A., as Agent
Ladies and Gentlemen:
The undersigned, ▇▇▇▇ Industries, Inc. (the "Borrower"), refers to the
Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably of the [conversion]
[continuation] of the Loans specified herein, that:
1. The Continuation/Conversion Date is , 200 .
2. The aggregate amount of the Loans to be [converted][continued] is
$________.
3. The Loans are to be [converted into] [continued as] [LIBOR
Rate] [Base Rate] Loans.
4. The duration of the Interest Period for the LIBOR Rate Loans
included in the [conversion] [continuation] shall be months.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the proposed Continuation/Conversion
Date, before and after giving effect thereto and to the application of the
proceeds therefrom:
(a) The representations and warranties of the Borrower
contained in the Credit Agreement are true and correct as though made on and as
of such date;
(b) No Default or Event of Default has occurred and is
continuing, or would result from such proposed [conversion] [continuation]; and
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(c) The proposed conversion-continuation will not cause the
aggregate principal amount of all outstanding Revolving Loans plus the aggregate
amount available for drawing under all outstanding Letters of Credit to exceed
the Borrowing Base or the combined Commitments of the Lenders.
▇▇▇▇ INDUSTRIES, INC.
By: __________________________
Title: _________________________
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EXHIBIT F
[FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of ____________________, 200_ is made between
______________________________ (the "Assignor") and __________________________
(the "Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain Amended and Restated
Credit Agreement dated as of _____________, 200_ (as amended, amended and
restated, modified, supplemented or renewed, the "Credit Agreement") among ▇▇▇▇
Industries, Inc., a Delaware corporation (the "Borrower"), the several financial
institutions from time to time party thereto (including the Assignor, the
"Lenders"), and Bank of America, N. A., as agent for the Lenders (the "Agent").
Any terms defined in the Credit Agreement and not defined in this Assignment and
Acceptance are used herein as defined in the Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor
has committed to making Loans (the "Committed Loans") to the Borrower in an
aggregate amount not to exceed $__________ (the "Commitment");
WHEREAS, the Assignor has made Committed Loans in the
aggregate principal amount of $__________ to the Borrower
WHEREAS, the Assignor has acquired a participation in its pro
rata share of the Lenders' liabilities under Letters of Credit in an aggregate
principal amount of $____________ (the "L/C Obligations") [no Letters of Credit
are outstanding under the Credit Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part
of the] [all] rights and obligations of the Assignor under the Credit Agreement
in respect of its Commitment, together with a corresponding portion of each of
its outstanding Committed Loans and L/C Obligations, in an amount equal to
$__________ (the "Assigned Amount") on the terms and subject to the conditions
set forth herein and the Assignee wishes to accept assignment of such rights and
to assume such obligations from the Assignor on such terms and subject to such
conditions;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes from
the Assignor, without recourse and without representation or warranty (except as
provided in this Assignment and Acceptance) __% (the "Assignee's Percentage
Share") of (A) the Commitment, the Committed Loans and the L/C
1
Obligations of the Assignor and (B) all related rights, benefits, obligations,
liabilities and indemnities of the Assignor under and in connection with the
Credit Agreement and the Loan Documents.
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignee shall be a party to the Credit Agreement and
succeed to all of the rights and be obligated to perform all of the obligations
of a Lender under the Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with a Commitment in an
amount equal to the Assigned Amount. The Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender. It is the
intent of the parties hereto that the Commitment of the Assignor shall, as of
the Effective Date, be reduced by an amount equal to the Assigned Amount and the
Assignor shall relinquish its rights and be released from its obligations under
the Credit Agreement to the extent such obligations have been assumed by the
Assignee; provided, however, the Assignor shall not relinquish its rights under
Sections 3.9 and 13.11 of the Credit Agreement to the extent such rights relate
to the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set
forth herein, on the Effective Date the Assignee's Commitment will be
$__________.
(d) After giving effect to the assignment and assumption set
forth herein, on the Effective Date the Assignor's Commitment will be
$__________.
2. Payments.
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in immediately available funds an amount equal to $__________,
representing the Assignee's Pro Rata Share of the principal amount of all
Committed Loans.
(b) The Assignee further agrees to pay to the Agent a processing fee in the
amount specified in Section 11.2(a) of the Credit Agreement.
3. Reallocation of Payments.
Any interest, fees and other payments accrued to the Effective Date
with respect to the Commitment, and Committed Loans and L/C Obligations shall be
for the account of the Assignor. Any interest, fees and other payments accrued
on and after the Effective Date with respect to the Assigned Amount shall be for
the account of the Assignee. Each of the Assignor and the Assignee agrees that
it will hold in trust for the other party any interest, fees and other amounts
which it may receive to which the other party is entitled pursuant to the
preceding sentence and pay to the other party any such amounts which it may
receive promptly upon receipt.
2
4. Independent Credit Decision.
The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements of the Borrower, and such other documents and
information as it has deemed appropriate to make its own credit and legal
analysis and decision to enter into this Assignment and Acceptance; and (b)
agrees that it will, independently and without reliance upon the Assignor, the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit and legal
decisions in taking or not taking action under the Credit Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the effective
date for this Assignment and Acceptance shall be __________, 200_ (the
"Effective Date"); provided that the following conditions precedent have been
satisfied on or before the Effective Date:
(i) this Assignment and Acceptance shall be
executed and delivered by the Assignor and the Assignee;
(ii) the consent of the Agent required for an
effective assignment of the Assigned Amount by the Assignor to the Assignee
shall have been duly obtained and shall be in full force and effect as of the
Effective Date;
(iii) the Assignee shall pay to the Assignor all
amounts due to the Assignor under this Assignment and Acceptance;
(iv) the Assignee shall have complied with
Section 11.2 of the Credit Agreement (if applicable);
(v) the processing fee referred to in Section
2(b) hereof and in Section 11.2(a) of the Credit Agreement shall have been paid
to the Agent; and
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Borrower and the Agent for
acknowledgment by the Agent, a Notice of Assignment in the form attached hereto
as Schedule 1.
6. [Agent. [INCLUDE ONLY IF ASSIGNOR IS AGENT]
(a) The Assignee hereby appoints and authorizes the Assignor
to take such action as agent on its behalf and to exercise such powers under the
Credit Agreement as are delegated to the Agent by the Lenders pursuant to the
terms of the Credit Agreement.
(b) The Assignee shall assume no duties or obligations held by
the Assignor in its capacity as Agent under the Credit Agreement.]
3
7. Withholding Tax.
The Assignee (a) represents and warrants to the Lender, the Agent and
the Borrower that under applicable law and treaties no tax will be required to
be withheld by the Lender with respect to any payments to be made to the
Assignee hereunder, (b) agrees to furnish (if it is organized under the laws of
any jurisdiction other than the United States or any State thereof) to the Agent
and the Borrower prior to the time that the Agent or Borrower is required to
make any payment of principal, interest or fees hereunder, duplicate executed
originals of either U.S. Internal Revenue Service Form W-8ECI or U.S. Internal
Revenue Service Form W-8BEN (wherein the Assignee claims entitlement to the
benefits of a tax treaty that provides for a complete exemption from U.S.
federal income withholding tax on all payments hereunder) and agrees to provide
new Forms W-8ECI or W-8BEN upon the expiration of any previously delivered form
or comparable statements in accordance with applicable U.S. law and regulations
and amendments thereto, duly executed and completed by the Assignee, and (c)
agrees to comply with all applicable U.S. laws and regulations with regard to
such withholding tax exemption.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any Lien or other adverse claim; (ii) it is duly
organized and existing and it has the full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Credit Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery or performance; and (iv)
this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable
against the Assignor in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition or statements
of the Borrower, or the performance or observance by the Borrower, of any of its
respective obligations under the Credit Agreement or any other instrument or
document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly organized
and existing and it has full power and authority to take, and has taken, all
action necessary to execute and deliver this Assignment and Acceptance and any
other documents required or permitted to
4
be executed or delivered by it in connection with this Assignment and
Acceptance, and to fulfill its obligations hereunder; (ii) no notices to, or
consents, authorizations or approvals of, any Person are required (other than
any already given or obtained) for its due execution, delivery and performance
of this Assignment and Acceptance; and apart from any agreements or undertakings
or filings required by the Credit Agreement, no further action by, or notice to,
or filing with, any Person is required of it for such execution, delivery or
performance; (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignee, enforceable against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; [and (iv) it is an
Eligible Assignee.]
9. Further Assurances.
The Assignor and the Assignee each hereby agree to execute and deliver
such other instruments, and take such other action, as either party may
reasonably request in connection with the transactions contemplated by this
Assignment and Acceptance, including the delivery of any notices or other
documents or instruments to the Borrower or the Agent, which may be required in
connection with the assignment and assumption contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this
Assignment and Acceptance shall be in writing and signed by the parties hereto.
No failure or delay by either party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof and any waiver of any
breach of the provisions of this Assignment and Acceptance shall be without
prejudice to any rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any
set-off or counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs
and expenses incurred in connection with the negotiation, preparation, execution
and performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any
number of counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF ILLINOIS. The Assignor and
the Assignee each irrevocably submits to the non-exclusive jurisdiction of any
State or Federal court sitting in ▇▇▇▇ County, Illinois over any suit, action or
proceeding arising out of or relating to this Assignment and Acceptance and
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such ▇▇▇▇ County, Illinois State or Federal court.
Each party to this Assignment and Acceptance hereby
5
irrevocably waives, to the fullest extent it may effectively do so, the defense
of an inconvenient forum to the maintenance of such action or proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY
RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
STATEMENTS (WHETHER ORAL OR WRITTEN).
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By:______________________________
Title: __________________________
Address:_________________________
[ASSIGNEE]
By:______________________________
Title: __________________________
Address:_________________________
6
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_____________, 200__
Bank of America, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ___________________________
Re: ▇▇▇▇ Industries, Inc., Tyson Place, Suite 200,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We refer to the Amended and Restated Credit Agreement dated as of
_________, 2000 (as amended, amended and restated, modified, supplemented or
renewed from time to time the "Credit Agreement") among ▇▇▇▇ Industries, Inc.
(the "Borrower"), the Lenders referred to therein and Bank of America, N. A., as
agent for the Lenders (the "Agent"). Terms defined in the Credit Agreement are
used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________ (the "Assignor") to _______________ (the
"Assignee") of _____% of the right, title and interest of the Assignor in and to
the Credit Agreement (including the right, title and interest of the Assignor in
and to the Commitments of the Assignor, all outstanding Loans made by the
Assignor and the Assignor's participation in the Letters of Credit pursuant to
the Assignment and Acceptance Agreement attached hereto (the "Assignment and
Acceptance"). We understand and agree that the Assignor's Commitment, as of ,
200 , is $ ___________, the aggregate amount of its outstanding Loans is
$_____________, and its participation in L/C Obligations is $_____________.
2. The Assignee agrees that, upon receiving the consent of the Agent
and, if applicable, the Borrower to such assignment, the Assignee will be bound
by the terms of the Credit Agreement as fully and to the same extent as if the
Assignee were the Lender originally holding such interest in the Credit
Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name: ____________________________
Address:___________________________________
___________________________________
___________________________________
Attention:_________________________________
Telephone: (___)__________________________
Telecopier: (___)_________________________
1
(B) Payment Instructions:
Account No.: ______________________________
At:_______________________________
_______________________________
ABA No. _______________________________
Reference: _______________________________
Attention: _______________________________
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.
2
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:______________________________
Name:____________________________
Title:___________________________
[NAME OF ASSIGNEE]
By:______________________________
Name:____________________________
Title:___________________________
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
Bank of America, N. A.
as Agent
By: _________________________________
Name: _________________________________
Title:_________________________________
▇▇▇▇ Industries, Inc.
By: _________________________________
Name: _________________________________
Title:_________________________________
1
SCHEDULE 1.2
COMMITMENTS
Pro Rata Share
Revolving Loan -------------
Lender Commitment Term Loan Commitment Totals (3 decimals)
------ -------------- -------------------- ------
Bank of America, N.A. $50,000,000.00 $35,000,000.00 $85,000,000.00 100.00%
Totals $50,000,000.00 $35,000,000.00 $85,000,000.00
100.00%
-------