EXHIBIT 10.11
CREDIT AGREEMENT
Dated as of December 26, 2001
among
MODTECH HOLDINGS, INC.,
as Borrower,
THE LENDERS NAMED HEREIN
and
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent
TABLE OF CONTENTS
Page
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Article 1. DEFINITIONS AND ACCOUNTING TERMS.............................................. 1
1.1 Defined Terms................................................................. 1
1.2 Use of Defined Terms..........................................................31
1.3 Accounting Terms; Covenant Calculations.......................................31
1.4 Rounding......................................................................31
1.5 Exhibits and Schedules........................................................31
1.6 References to "Borrower and its Subsidiaries".................................31
1.7 Miscellaneous Terms...........................................................31
Article 2. ADVANCES AND LETTERS OF CREDIT................................................32
2.1 Advances-General..............................................................32
2.2 Alternate Base Rate Advances..................................................33
2.3 Eurodollar Rate Advances......................................................34
2.4 Conversion and Continuation of Advances.......................................34
(a) Optional Conversion...........................................................34
(b) Certain Mandatory Conversions.................................................35
(c) Continuations.................................................................35
2.5 Letters of Credit.............................................................36
2.6 Termination or Reduction of the Commitments...................................39
(a) Optional......................................................................39
(b) Mandatory.....................................................................39
(c) Reduction Pro Rata; No Reinstatements.........................................40
2.7 Administrative Agent's Right to Assume Funds Available for Advances...........40
2.8 Swing Line....................................................................40
2.9 Collateral....................................................................42
Article 3. PAYMENTS AND FEES.............................................................43
3.1 Principal and Interest........................................................43
3.2 Unused Revolving Facility Commitment Fee......................................44
3.3 Closing Fee; Agency Fee etc...................................................44
3.4 Letter of Credit Fees.........................................................45
3.5 Increased Commitment Costs....................................................45
3.6 Eurodollar Costs and Related Matters..........................................46
3.7 Late Payments and Default Rate................................................49
3.8 Computation of Interest and Fees..............................................50
3.9 Non-Banking Days..............................................................50
3.10 Manner and Treatment of Payments..............................................50
3.11 Funding Sources...............................................................51
3.12 Failure to Charge Not Subsequent Waiver.......................................51
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3.13 Administrative Agent's Right to Assume Payments Will be Made..................52
3.14 Fee Determination Detail......................................................52
3.15 Survivability.................................................................52
Article 4. REPRESENTATIONS AND WARRANTIES................................................53
4.1 Existence and Qualification; Power; Compliance With Laws......................53
4.2 Authority; Compliance With Other Agreements and Instruments and Government
Regulations...................................................................53
4.3 No Governmental Approvals Required............................................54
4.4 Subsidiaries..................................................................54
4.5 Financial Statements..........................................................55
4.6 No Other Liabilities; No Material Adverse Changes.............................55
4.7 Title to and Location of Property.............................................55
4.8 Intangible Assets.............................................................55
4.9 Public Utility Holding Company Act............................................56
4.10 Litigation....................................................................56
4.11 Binding Obligations...........................................................56
4.12 No Default....................................................................56
4.13 ERISA.........................................................................56
4.14 Regulation U; Investment Company Act..........................................57
4.15 Disclosure....................................................................57
4.16 Tax Liability.................................................................57
4.17 Projections...................................................................58
4.18 Hazardous Materials...........................................................58
4.19 Security Interests............................................................58
4.20 Employee Matters..............................................................58
4.21 Fiscal Year...................................................................59
4.22 Solvency......................................................................59
4.23 Trac Modular..................................................................59
Article 5. AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS).....60
5.1 Payment of Taxes and Other Potential Liens....................................60
5.2 Preservation of Existence.....................................................60
5.3 Maintenance of Properties.....................................................60
5.4 Maintenance of Insurance......................................................60
5.5 Compliance With Laws..........................................................61
5.6 Inspection Rights.............................................................62
5.7 Keeping of Records and Books of Account.......................................62
5.8 Compliance With Agreements....................................................62
5.9 Use of Proceeds...............................................................62
5.10 Hazardous Materials Laws......................................................62
5.11 Future Subsidiaries; Additional Security Documentation........................63
5.12 Intercompany Notes............................................................63
5.13 Syndication Process...........................................................63
5.14 Interest Rate Protection Agreements...........................................63
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5.15 Landlord Waivers and Consents.................................................63
Article 6. NEGATIVE COVENANTS............................................................65
6.1 Prepayment of Indebtedness....................................................65
6.2 Prepayment of Subordinated Obligations........................................65
6.3 Disposition of Property.......................................................65
6.4 Mergers.......................................................................65
6.5 Hostile Tender Offers.........................................................66
6.6 Distributions.................................................................66
6.7 ERISA.........................................................................66
6.8 Change in Nature of Business..................................................66
6.9 Liens and Negative Pledges....................................................66
6.10 Indebtedness and Guaranty Obligations.........................................67
6.11 Transactions with Affiliates..................................................68
6.12 Funded Debt Ratio.............................................................68
6.13 Fixed Charge Coverage Ratio...................................................68
6.14 Current Ratio.................................................................68
6.15 Tangible Net Worth............................................................68
6.16 Investments and Acquisitions..................................................68
6.17 Capital Expenditures..........................................................69
6.18 Operating Leases..............................................................69
6.19 Subsidiary Indebtedness.......................................................69
6.20 Amendments....................................................................69
6.21 Change in Location of Chief Executive Offices, Jurisdiction of
Organization and Assets.......................................................69
6.22 Use of Lender's Name..........................................................70
6.23 Change of Fiscal Periods......................................................70
6.24 Certain Other Restricted Payments.............................................70
6.25 Deposits and Investment Accounts..............................................70
Article 7. INFORMATION AND REPORTING REQUIREMENTS........................................71
7.1 Financial and Business Information............................................71
7.2 Compliance Certificates.......................................................74
Article 8. CONDITIONS....................................................................75
8.1 Initial Advances..............................................................75
8.2 Any Advance...................................................................78
Article 9. EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT..........................79
9.1 Events of Default.............................................................79
9.2 Remedies Upon Event of Default................................................81
Article 10. THE ADMINISTRATIVE AGENT.....................................................84
10.1 Appointment and Authorization.................................................84
10.2 Administrative Agent and Affiliates...........................................84
10.3 Proportionate Interest in any Collateral......................................84
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10.4 Lenders' Credit Decisions.....................................................84
10.5 Action by Administrative Agent................................................85
10.6 Liability of Administrative Agent.............................................86
10.7 Indemnification...............................................................87
10.8 Successor Administrative Agent................................................87
10.9 No Obligations of Borrower....................................................88
Article 11. MISCELLANEOUS................................................................89
11.1 Cumulative Remedies; No Waiver................................................89
11.2 Amendments; Consents..........................................................89
11.3 Costs, Expenses and Taxes.....................................................90
11.4 Nature of Lenders' Obligations................................................91
11.5 Survival of Representations and Warranties....................................91
11.6 Notices.......................................................................91
11.7 Execution of Loan Documents...................................................91
11.8 Binding Effect; Assignment....................................................92
11.9 Right of Setoff...............................................................94
11.10 Sharing of Setoffs............................................................94
11.11 Indemnity by Borrower.........................................................95
11.12 Nonliability of the Lenders...................................................96
11.13 No Third Parties Benefited....................................................97
11.14 Confidentiality...............................................................97
11.15 Further Assurances............................................................98
11.16 Integration...................................................................98
11.17 Governing Law.................................................................98
11.18 Severability of Provisions....................................................99
11.19 Headings......................................................................99
11.20 Time of the Essence...........................................................99
11.21 Foreign Lenders and Participants..............................................99
11.22 Hazardous Material Indemnity.................................................100
11.23 Waiver of Right to Trial by Jury.............................................100
11.24 Purported Oral Amendments....................................................101
EXHIBITS
A - Assignment and Acceptance
B - Commercial Letter of Credit Agreement
C - Compliance Certificate
D - Opinion of Counsel
E - [Reserved]
F - Pledge Agreement
G - Pricing Certificate
H - Request for Borrowing
I - Request for Continuation/Conversion
J - Request for Letter of Credit
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K - Revolving Note
L - Security Agreement
M - Standby Letter of Credit Agreement
N - Subsidiary Guaranty
O - Term Note
SCHEDULES
1.1 Lender Commitments/Pro Rata Shares
1.2 Material Contracts
4.4 Subsidiaries
4/7A Existing Liens, Negative Pledges and Rights of Others
4.7B Location of Property
4.8 Intangible Assets; Restrictions on Use
4.10 Material Litigation
4.17 Projections
4.18 Hazardous Materials Matters
6.10 Existing Indebtedness and Guaranty Obligations
6.16 Existing Investments
6.21 Locations of Chief Executive Offices and Assets
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CREDIT AGREEMENT
Dated as of December 26, 2001
This CREDIT AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this "Agreement") is entered into by and among
MODTECH HOLDINGS, INC., a Delaware corporation ("Borrower"), each lender whose
name is set forth on the signature pages of this Agreement and each lender that
may hereafter become a party to this Agreement pursuant to Section 11.8 (each a
"Lender" and collectively, "Lenders"), and ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, as Administrative Agent.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
Article 1.
DEFINITIONS AND ACCOUNTING TERMS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Account Debtor" means any Person who is obligated under an
Account.
"Accounts" means all "accounts," as such term is defined in the
UCC, now owned or hereafter acquired by any Person, including (a) all
accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by "chattel
paper," "documents" or "instruments" (as such terms are defined in the
UCC)), whether arising out of goods sold or services rendered by it or
from any other transaction (including any such obligations that may be
characterized as an account or contract right under the UCC), (b) all
purchase orders or receipts for goods or services, (c) all rights to any
goods represented by any of the foregoing (including unpaid sellers'
rights of rescission, replevin, reclamation and stoppage in transit and
rights to returned, reclaimed or repossessed goods), (d) all monies due
or to become due to such Person under all purchase orders and contracts
for the sale of goods or the performance of services or both by such
Person or in connection with any other transaction (whether or not yet
earned by performance on the part of such Person) now or hereafter in
existence, including the right to receive the proceeds of said purchase
orders and contracts, and (e) all collateral security and guaranties of
any kind, now or hereafter in existence, given by any Person with
respect to any of the foregoing.
"Acquired Person" means (a) any Person that is the subject of an
Acquisition after the Closing Date and (b) any assets constituting a
discrete business or operation unit that is the subject of an
Acquisition after the Closing Date.
"Acquisition" means any transaction, or any series of related
transactions, consummated after the Closing Date, by which Borrower or
any of its Subsidiaries
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directly or indirectly (a) acquires any ongoing business or all or
substantially all of the assets of any firm, partnership, joint venture,
limited liability company, corporation or division thereof, whether
through purchase of assets, merger or otherwise, (b) acquires in one
transaction or as the most recent transaction in a series of
transactions control of securities of a Person engaged in an ongoing
business representing more than 50% of the ordinary voting power for the
election of directors or other governing position if the business
affairs of such Person are managed by a board of directors or other
governing body or (c) acquires control of more than 50% of the ownership
interest in any partnership, joint venture, limited liability company,
business trust or other Person that is not managed by a board of
directors or other governing body.
"Administrative Agent" means ▇▇▇▇▇ Fargo when acting in its
capacity as the Administrative Agent under any of the Loan Documents, or
any successor Administrative Agent.
"Administrative Agent's Office" means the Administrative Agent's
address as set forth on the signature pages of this Agreement, or such
other address as the Administrative Agent hereafter may designate by
written notice to Borrower and the Lenders.
"Advance" means any advance made or to be made by any Lender to
Borrower as provided in Article 2, and includes each Revolving Advance
and Term Advance.
"Affiliate" means, as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (and
the correlative terms, "controlled by" and "under common control with")
shall mean possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership
of securities or partnership or other ownership interests, by contract
or otherwise); provided that, in any event, any Person that owns,
directly or indirectly, 10% or more of the securities having ordinary
voting power for the election of directors or other governing body of a
corporation that has more than 100 record holders of such securities, or
10% or more of the partnership or other ownership interests of any other
Person that has more than 100 record holders of such interests, will be
deemed to be an Affiliate of such corporation, partnership or other
Person.
"Aggregate Effective Amount" means, as of any date of
determination and with respect to all Letters of Credit then
outstanding, the sum of (a) the aggregate effective face amounts of all
such Letters of Credit not then paid by Issuing Lender plus (b) the
aggregate amounts paid by Issuing Lender under such Letters of Credit
not then reimbursed to Issuing Lender by Borrower pursuant to Section
2.5(d) and not the subject of one or more Advances made pursuant to
Section 2.5(e) or (f).
"Alternate Base Rate" means, as of any date of determination, the
rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%)
equal to the higher of
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(a) the Prime Rate in effect on such date and (b) the Federal Funds Rate
in effect on such date plus 1/2 of 1% (50 basis points).
"Alternate Base Rate Advance" means an Advance that bears
interest in relation to the Alternate Base Rate as provided in Section
3.1(b).
"Amortization Date" means, with respect to Term Borrowings, March
31, 2002, each Quarterly Payment Date thereafter through the Term
Maturity Date, and the Term Maturity Date.
"Applicable Alternate Base Rate Margin" means, with respect to
any Alternate Base Rate Advance, (a) for the Initial Pricing Period,
0.25% (25 basis points) per annum with respect to each and (b) for each
other Pricing Period, the interest rate margin set forth below
(expressed in basis points per annum) opposite the Applicable Pricing
Level for that Pricing Period:
Applicable
Pricing
Level Margin
---------- ------
I 0
II 25
III 50
"Applicable Commitment Fee Margin" means, (a) for the Initial
Pricing Period, 0.375% (37.5 basis points) per annum, and (b) for each
other Pricing Period, the margin set forth below (expressed in basis
points per annum) opposite the Applicable Pricing Level for that Pricing
Period:
Applicable
Pricing
Level Margin
---------- ------
I 25
II 37.5
III 37.5
"Applicable Eurodollar Rate Margin" means, with respect to any
Eurodollar Rate Advance, (a) for the Initial Pricing Period, 1.50% (150
basis points) per annum and (b) for each other Pricing Period, the
interest rate margin set forth below (expressed in basis points per
annum) opposite the Applicable Pricing Level for that Pricing Period:
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Applicable
Pricing
Level Margin
---------- ------
I 125
II 150
III 175
"Applicable Pricing Level" means, for each Pricing Period
subsequent to the Initial Pricing Period, the pricing level set forth
below opposite the Leverage Ratio as of the last day of the Fiscal
Quarter most recently ended prior to the commencement of that Pricing
Period:
Pricing Level Funded Debt Ratio
------------- -----------------
I Less than 1.00 to 1.00
II Greater than or equal to 1.00 to 1.00,
but less than 1.50 to 1.00
III Greater than or equal to 1.50 to 1.00
provided that (i) in the event that Borrower does not deliver a Pricing
Certificate with respect to any Pricing Period prior to the commencement
of such Pricing Period, then until (but only until) such Pricing
Certificate is delivered the Applicable Pricing Level for that Pricing
Period shall be Pricing Level V, and, subject to clause (iii) of this
proviso, if upon delivery of such Pricing Certificate a change is
warranted in the Applicable Pricing Level for such Pricing Period, such
change shall be effective on the first Banking Day of the first calendar
month beginning after delivery of such Pricing Certificate, and (iii) if
any Pricing Certificate is subsequently determined to be in error, then
any resulting change in the Applicable Pricing Level shall be made
retroactively to the beginning of the relevant Pricing Period. Changes
in the Applicable Pricing Level shall occur irrespective of the presence
or absence of an Event of Default, and the changes resulting from time
to time in the Applicable Eurodollar Rate Margin or the Applicable
Alternate Base Rate Margin shall apply and be payable cumulatively with,
not in lieu of, any Default Rate then applicable.
"Applicable Standby Letter of Credit Fee Rate" means, as of any
date of determination, the then effective Applicable Eurodollar Rate
Margin.
"Approved Interest Rate Protection Agreements" means one or more
Interest Rate Protection Agreements between Borrower and one or more of
the Lenders, with respect to the Indebtedness evidenced by the Term
Notes, which Interest Rate Protection Agreements, in each case, shall be
on terms mutually acceptable to Borrower, the Lender or Lenders party
thereto, and the Administrative Agent.
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"Approved Shareholders" means, collectively, Infrastructure and
Environmental Private Equity Fund III, L.P. and its Affiliates,
Environmental & Information Technology Private Equity Fund III, L.P. and
its Affiliates, Proactive Partners, L.P. and its Affiliates, KRG Capital
Partners, LLC and its members and NationsCredit Commercial Corporation
and its Affiliates.
"Arranger" means ▇▇▇▇▇ Fargo Bank, National Association.
"Assignment and Acceptance" means an assignment and acceptance
agreement substantially in the form of Exhibit A.
"Banking Day" means any Monday, Tuesday, Wednesday, Thursday or
Friday, other than a day on which banks are authorized or required to be
closed in California, or New York.
"BofA Credit Facilities" means the credit facilities provided to
Borrower pursuant to that certain Credit Agreement dated as of February
16, 1999 among Borrower, certain Subsidiaries of Borrower named therein,
the Lenders party thereto, Nationsbanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC, as
Sole Lead Arranger and Sole Book Manager, and Bank of America, N.A.,
(formerly Nationsbank, N.A.), as Administrative Agent, as such Credit
Agreement may have been amended, supplemented or otherwise modified
prior to the Closing Date.
"Borrowing" means a Revolving Borrowing or a Term Borrowing.
"Capital Expenditure" means any expenditure that is treated as a
capital expenditure under GAAP, including any expenditure that is
required to be capitalized in accordance with GAAP that relates to an
asset subject to a Capital Lease.
"Capital Lease" means, as to any Person, a lease of any Property
by that Person as lessee that is, or should be in accordance with GAAP
(including Financial Accounting Standards Board Statement No. 13, as
amended or superseded from time to time), recorded as a "capital lease"
on the balance sheet of that Person prepared in accordance with GAAP.
"Capital Lease Obligations" means all monetary obligations of a
Person under any Capital Lease.
"Cash" means, when used in connection with any Person, all
monetary and non-monetary items owned by that Person that are treated as
cash in accordance with GAAP, consistently applied.
"Cash Equivalents" means, when used in connection with any
Person, that Person's Investments in:
(a) Government Securities due within one year after the
date of the making of the Investment;
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(b) readily marketable direct obligations of any State of
the United States of America or any political subdivision of any such
State or any public agency or instrumentality thereof given on the date
of such Investment a credit rating of at least Aa by ▇▇▇▇▇'▇ Investors
Service, Inc. or AA by Standard & Poor's Rating Group (a division of
▇▇▇▇▇▇-▇▇▇▇, Inc.), in each case due within one year from the making of
the Investment;
(c) certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers' acceptances of, and repurchase
agreements covering Government Securities executed by any Lender or any
bank incorporated under the Laws of the United States of America, any
State thereof or the District of Columbia and having on the date of such
Investment combined capital, surplus and undivided profits of at least
$250,000,000, or total assets of at least $5,000,000,000, in each case
due within one year after the date of the making of the Investment
(d) certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers' acceptances of, and repurchase
agreements covering Government Securities executed by any Lender or any
branch or office located in the United States of America of a bank
incorporated under the Laws of any jurisdiction outside the United
States of America having on the date of such Investment combined
capital, surplus and undivided profits of at least $500,000,000, or
total assets of at least $15,000,000,000, in each case due within one
year after the date of the making of the Investment;
(e) repurchase agreements covering Government Securities
executed by a broker or dealer registered under Section 15(b) of the
Securities Exchange Act of 1934, as amended, having on the date of the
Investment capital of at least $50,000,000, due within 90 days after the
date of the making of the Investment; provided that the maker of the
Investment receives written confirmation of the transfer to it of record
ownership of the Government Securities on the books of a "primary
dealer" in such Government Securities or on the books of such registered
broker or dealer, as soon as practicable after the making of the
Investment;
(f) readily marketable commercial paper or other debt
securities issued by corporations doing business in and incorporated
under the Laws of the United States of America or any State thereof or
of any corporation that is the holding company for a bank described in
clause (c) or (d) above given on the date of such Investment a credit
rating of at least P-1 by ▇▇▇▇▇'▇ Investors Service, Inc. or A-1 by
Standard & Poor's Rating Group (a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.), in
each case due within one year after the date of the making of the
Investment;
(g) "money market preferred stock" issued by a
corporation incorporated under the Laws of the United States of America
or any State thereof (i) given on the date of such Investment a credit
rating of at least Aa by ▇▇▇▇▇'▇ Investors Service, Inc. and AA by
Standard & Poor's Rating Group (a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.), in
each case having an investment period not exceeding 50 days
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or (ii) to the extent that investors therein have the benefit of a
standby letter of credit issued by Lender or a bank described in clauses
(c) or (d) above; provided that (y) the amount of all such Investments
issued by the same issuer does not exceed $5,000,000 and (z) the
aggregate amount of all such Investments does not exceed $15,000,000;
(h) a readily redeemable "money market mutual fund"
sponsored by a bank described in clause (c) or (d) hereof, or a
registered broker or dealer described in clause (e) hereof, that has and
maintains an investment policy limiting its investments primarily to
instruments of the types described in clauses (a) through (g) hereof and
given on the date of such Investment a credit rating of at least Aa by
▇▇▇▇▇'▇ Investors Service, Inc. and AA by Standard & Poor's Rating Group
(a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.); and
(i) corporate notes or bonds having an original term to
maturity of not more than one year issued by a corporation incorporated
under the Laws of the United States of America, or a participation
interest therein; provided that (i) commercial paper issued by such
corporation is given on the date of such Investment a credit rating of
at least Aa by ▇▇▇▇▇'▇ Investors Service, Inc. and AA by Standard &
Poor's Rating Group (a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.), (ii) the amount
of all such Investments issued by the same issuer does not exceed
$5,000,000 and (iii) the aggregate amount of all such Investments does
not exceed $15,000,000.
"Cash Taxes" means, with respect to any fiscal period, the
aggregate of all taxes, as determined in accordance with GAAP, of
Borrower and its Subsidiaries, to the extent the same are paid in Cash
during such period.
"category", when used with respect to any Advance, means the
designation of whether such Advance is a Revolving Advance or a Term
Advance.
"Certificate" means a certificate signed by a Senior Officer or
Responsible Official (as applicable) of the Person providing the
certificate.
"Change in Control" means any of the following events: (a) the
sale, lease, transfer or other disposition (other than by way of merger
or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of Borrower and its Subsidiaries taken
as a whole to any "person" or "group" (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act), (b) Borrower shall
fail to own, directly or indirectly, 100% of the outstanding capital
stock or other equity interests of any Guarantor (other than Trac
Modular Manufacturing, Inc.) or at least 80% of the outstanding capital
stock or other equity interests of Trac Modular Manufacturing, Inc., (c)
any Person or two or more Persons acting in concert (in each case other
than the Approved Shareholders) shall have acquired beneficial
ownership, directly or indirectly, of, or shall have acquired by
contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their
acquisition of, control over, 33 1/3% or more of the capital stock or
other equity interests of Borrower, (d) during any period of up to 24
consecutive months,
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commencing after the Closing Date, individuals who at the beginning of
such 24-month period were directors of Borrower (together with any new
director whose election by Borrower's Board of Directors or whose
nomination for election by Borrower's shareholders was approved by a
vote of at least two-thirds of the directors then still in office who
either were directors at the beginning of such period or whose election
or nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors of Borrower then in
office or (e) any transaction or series of related transactions
constituting a "change in control" or similar occurrence under
documentation evidencing or governing Indebtedness of Borrower and/or
any of its Subsidiaries of $1,000,000 or more, which gives the holder(s)
of such Indebtedness the right to accelerate or otherwise require
payment of such Indebtedness prior to the maturity date thereof. As used
herein, "beneficial ownership" shall have the meaning provided in Rule
13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act.
"Closing Date" means the time and Banking Day on which the
conditions set forth in Section 8.1 are satisfied or waived. The
Administrative Agent shall notify Borrower and the Lenders of the date
that is the Closing Date.
"Closing Date Lenders" means ▇▇▇▇▇ Fargo, Union Bank of
California, N.A., Comerica Bank-California and any other lender party to
this Agreement as of the Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended or
replaced and as in effect from time to time.
"Collateral" means all of the collateral covered by the
Collateral Documents.
"Collateral Documents" means, collectively, the Security
Agreement, the Pledge Agreement, and any other security agreement,
pledge agreement, deed of trust, mortgage, notice to or acknowledgment
of a registrar or depositary institution, control agreement or other
collateral security agreement executed and delivered by Borrower, any of
its Subsidiaries or any other Person (and executed by any third party
whose signature is necessary) to secure the Obligations.
"Commercial Letter of Credit" means each Letter of Credit issued
to support the purchase of goods by Borrower or any of its Subsidiaries
which is determined to be a commercial letter of credit by Issuing
Lender.
"Commercial Letter of Credit Agreement" means the commercial
letter of credit agreement to be executed by Borrower, in the form of
Exhibit B, either as originally executed or as it may from time to time
be supplemented, modified, amended, extended, restated or supplanted.
"Commitment" means a Revolving Commitment or a Term Commitment.
-8-
"Compliance Certificate" means a certificate in the form of
Exhibit C, properly completed and signed by the chief financial officer
of Borrower.
"Continuation," "Continue" and "Continued" each refers to a
continuation of Eurodollar Rate Advances from one Eurodollar Period to
the next Eurodollar Period pursuant to Section 2.4(c).
"Contractual Obligation" means, as to any Person, any provision
of any outstanding security issued by that Person or of any material
agreement, instrument or undertaking to which that Person is a party or
by which it or any of its Property is bound.
"Control Account Agreement" has the meaning set forth in the
Security Agreement.
"Conversion," "Convert" and "Converted" each refers to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.4(a) or 2.4(b).
"Current Ratio" means, as of any date of determination, without
duplication, the ratio of current assets of the Borrower and its
Subsidiaries to current liabilities (including Revolving Credit Facility
Usage as of such date) of Borrower and its Subsidiaries.
"Debtor Relief Laws" means the Bankruptcy Code of the United
States of America, as amended from time to time, and all other
applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws from time to time in effect affecting the rights of
creditors generally.
"Default" means any event that, with the giving of any applicable
notice or passage of time specified in Section 9.1, or both, would be an
Event of Default.
"Default Rate" means the interest rate prescribed in Section 3.7.
"Designated Deposit Account" means a deposit account to be
maintained by Borrower with ▇▇▇▇▇ Fargo or one of its Affiliates, as
from time to time designated by Borrower by written notification to the
Administrative Agent.
"Designated Eurodollar Market" means, with respect to any
Eurodollar Rate Advance, the London Eurodollar Market.
"Disqualified Stock" means any capital stock, warrants, options
or other rights to acquire capital stock (but excluding any debt
security which is convertible, or exchangeable, for capital stock),
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of
any event, matures or is mandatorily redeemable, pursuant to a sinking
fund obligation
-9-
or otherwise, or is redeemable at the option of the holder thereof, in
whole or in part, on or prior to any Revolving Facility Maturity Date.
"Disposition" means the sale, transfer or other disposition in
any single transaction or series of related transactions of any asset,
or group of related assets, of Borrower or any Subsidiary other than (a)
Cash, Cash Equivalents, Investments (other than Investments in a
Subsidiary), Inventory or other assets sold or otherwise disposed of in
the ordinary course of business of Borrower or any Subsidiary, (b)
equipment sold or otherwise disposed of where substantially similar
equipment in replacement thereof has theretofore been acquired, or
thereafter within 90 days is acquired, by Borrower or any Subsidiary and
(c) obsolete assets no longer useful in the business of Borrower or any
Subsidiary whose carrying value on the books of Borrower or such
Subsidiary is less than $100,000.
"Distribution" means, with respect to any equity interest or
Security issued by a Person, or any warrant or right to acquire any
equity interest or Security of a Person, (a) the retirement, redemption,
purchase, or other acquisition for value by such Person of any such
equity interest or Security, (b) the declaration or (without
duplication) payment by such Person of any dividend in Cash or in
Property (other than in common stock or common member interests, as the
case may be, of such Person) on or with respect to any such equity
interest or Security, (c) any Investment by such Person in the holder of
any such equity interest or Security, and (d) any other payment by such
Person constituting a distribution under applicable Laws with respect to
such equity interest or Security.
"Dollars" or "$" means United States of America dollars.
"EBITDA" means, with respect to any fiscal period, the sum of (a)
Net Income for that period, plus (b) any extraordinary loss reflected in
such Net Income, minus (c) any extraordinary gain reflected in such Net
Income, plus (d) Interest Expense of Borrower and its Subsidiaries for
that period, plus (e) the aggregate amount of federal and state taxes on
or measured by income of Borrower and its Subsidiaries for that period
(whether or not payable during that period), plus (f) depreciation and
amortization expense of Borrower and its Subsidiaries for that period,
plus (g) all other non-cash, extraordinary expenses of Borrower and its
Subsidiaries for that period, in each case as determined in accordance
with GAAP, consistently applied and, in the case of items (d), (e), (f),
and (g) only to the extent reflected in the determination of Net Income
for that period.
"Eligible Assignee" means (a) another Lender, (b) with respect to
any Lender, any Affiliate of that Lender, (c) any commercial bank having
total assets of $250,000,000 or more, (d) any (i) savings bank, savings
and loan association or similar financial institution or (ii) insurance
company engaged in the business of writing insurance which, in either
case (A) has total assets of $250,000,000 or more, (B) is engaged in the
business of lending money and extending credit under credit facilities
similar to those extended under this Agreement and (C) is operationally
and
-10-
procedurally able to meet the obligations of a Lender hereunder to the
same degree as a commercial bank and (e) any other financial institution
(including a mutual fund or other fund) having total assets of
$250,000,000 or more which meets the requirements set forth in
subclauses (B) and (C) of clause (d) above; provided that each Eligible
Assignee must either (x) be organized under the Laws of the United
States of America, any State thereof or the District of Columbia or (y)
be organized under the Laws of the Cayman Islands or any country which
is a member of the Organization for Economic Cooperation and
Development, or a political subdivision of such a country, and (1) act
hereunder through a branch, agency or funding office located in the
United States of America and (2) be exempt from withholding of tax on
interest and deliver the documents related thereto pursuant to Section
11.21.
"ERISA" means the Employee Retirement Income Security Act of
1974, and any regulations issued pursuant thereto, as amended or
replaced and as in effect from time to time.
"ERISA Affiliate" means, with respect to any Person, any Person
(or any trade or business, whether or not incorporated) that is under
common control with that Person within the meaning of Section 414 of the
Code.
"Eurodollar Banking Day" means any Banking Day on which dealings
in Dollar deposits are conducted by and among banks in the Designated
Eurodollar Market.
"Eurodollar Base Rate" means with respect to any Eurodollar Rate
Advance compromising part of the same Borrowing, the interest rate per
annum (rounded upward, if necessary, to the nearest 1/16th of 1%) at
which deposits in Dollars are offered by the Eurodollar Reference Lender
to prime banks in the Designated Eurodollar Market at or about 10:00
a.m. local time in the Designated Eurodollar Market, two (2) Eurodollar
Banking Days before the first day of the applicable Eurodollar Period in
an aggregate amount approximately equal to the amount of the Advance to
be made by the Eurodollar Reference Lender compromising part of such
Borrowing and for a period of time comparable to the number of days in
the applicable Eurodollar Period. The determination of the Eurodollar
Base Rate by the Administrative Agent shall be conclusive in the absence
of manifest error.
"Eurodollar Lending Office" means, as to each Lender, its office
or branch so designated by written notice to Borrower and the
Administrative Agent as its Eurodollar Lending Office. If no Eurodollar
Lending Office is designated by a Lender, its Eurodollar Lending Office
shall be its office at its address for purposes of notices hereunder.
"Eurodollar Market" means a regular established market located
outside the United States of America by and among banks for the
solicitation, offer and acceptance of Dollar deposits in such banks.
-11-
"Eurodollar Obligations" means eurocurrency liabilities, as
defined in Regulation D or any comparable regulation of any Governmental
Agency having jurisdiction over any Lender.
"Eurodollar Period" means, as to each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the date
specified by Borrower pursuant to Section 2.1(c) and ending 1, 2, 3 or 6
months (or, with the written consent of all of the Lenders, any other
period) thereafter, as specified by Borrower in the applicable Request
for Borrowing or Request for Continuation/Conversion provided that:
(a) The first day of any Eurodollar Period shall be a
Eurodollar Banking Day;
(b) Any Eurodollar Period that would otherwise end on a
day that is not a Eurodollar Banking Day shall be extended to the
immediately succeeding Eurodollar Banking Day unless such
Eurodollar Banking Day falls in another calendar month, in which
case such Eurodollar Period shall end on the immediately
preceding Eurodollar Banking Day;
(c) With respect to Term Advances, Borrower shall not
specify a Eurodollar Period that extends beyond any Amortization
Date applicable thereto unless, after giving effect thereto, the
aggregate principal amount of the Term Advances having Eurodollar
Periods ending after such Amortization Date shall be equal to or
less than the aggregate principal amount of Term Advances
scheduled to be outstanding after giving effect to the Term
Amortization Amount required to be paid on such Amortization
Date; and
(d) No Eurodollar Period for any Eurodollar Rate Advance
shall extend beyond the Maturity Date applicable to such
Eurodollar Rate Advance.
"Eurodollar Rate" means, with respect to any Eurodollar Rate
Advance comprising part of the same Borrowing, an interest rate per
annum (rounded upward, if necessary, to the nearest 1/16 of one percent)
determined pursuant to the following formula:
Eurodollar Base Rate
--------------------
Eurodollar
Rate = 1.00-Eurodollar Reserve
Percentage
"Eurodollar Rate Advance" means an Advance that bears interest in
relation to the Eurodollar Rate as provided in Section 3.1(c).
"Eurodollar Reference Lender" means ▇▇▇▇▇ Fargo or the
Administrative Agent if ▇▇▇▇▇ Fargo is no longer the Administrative
Agent.
-12-
"Eurodollar Reserve Percentage" means, with respect to any
Eurodollar Rate Advance comprising part of the same Borrowing, the
maximum reserve percentage (expressed as a decimal, rounded upward, if
necessary, to the nearest 1/100 of one percent) in effect on the date
the Eurodollar Base Rate for the Borrowing of which such Eurodollar Rate
Advance is a part is determined (whether or not such reserve percentage
is applicable to any Lender) 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") having a term comparable to
the Eurodollar Period for such Eurodollar Rate Advance. The
determination by the Administrative Agent of any applicable Eurodollar
Reserve Percentage shall be conclusive in the absence of manifest error.
"Event of Default" shall have the meaning provided in Section
9.1.
"Facility" means the Revolving Facility or the Term Facility, as
the context may require.
"Federal Funds Rate" means, as of any date of determination, the
rate set forth in the weekly statistical release designated as
H.15(519), or any successor publication, published by the Federal
Reserve Board (including any such successor, "H.15(519)") for such date
opposite the caption "Federal Funds (Effective)". If for any relevant
date such rate is not yet published in H.15(519), the rate for such date
will be the rate set forth in the daily statistical release designated
as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or
any successor publication, published by the Federal Reserve Bank of New
York (including any such successor, the "Composite 3:30 p.m. Quotation")
for such date under the caption "Federal Funds Effective Rate". If on
any relevant date the appropriate rate for such date is not yet
published in either H.15(519) or the Composite 3:30 p.m. Quotations, the
rate for such date will be the arithmetic mean of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that date by each of three leading brokers of Federal
funds transactions in New York City selected by the Administrative
Agent. For purposes of this Agreement, any change in the Alternate Base
Rate due to a change in the Federal Funds Rate shall be effective as of
the opening of business on the effective date of such change.
"Fiscal Quarter" means the fiscal quarter of Borrower and its
Subsidiaries ending on each March 31, June 30, September 30 and December
31.
"Fiscal Year" means the fiscal year of Borrower and its
Subsidiaries ending on each December 31.
"Fixed Charge Coverage Ratio" means, as of the last day of any
Fiscal Quarter, the ratio of (a) the sum of (i) EBITDA for the Rolling
Period ending on that date; provided that if Borrower or any of its
Subsidiaries has made an Acquisition during the Rolling Period ended on
that date, such ratio shall be calculated as if the
-13-
Acquisition had been made on the first day of such Rolling Period,
taking into account the results of operations of the Acquired Person
that was the subject of the Acquisition for purposes of calculating
Indebtedness and EBITDA adjusted, however, to exclude as an expense in
the calculation of EBITDA any expense item that has been eliminated as a
result of the Acquisition and not replaced by Borrower and/or its
Subsidiaries (excluding expense reductions attributed to or contemplated
by general increases in efficiency, scale of operations, discounts or
more favorable inventory and merchandising purchasing terms, etc.),
minus (ii) Capital Expenditures made during such Rolling Period, minus
(iii) Cash Taxes for such Rolling Period to (b) the sum of (i) Interest
Expense for such Rolling Period plus (ii) Scheduled Funded Debt Payments
for such Rolling Period.
"Funded Debt" means, as of any date of determination, without
duplication, the sum of (a) all principal Indebtedness of Borrower and
its Subsidiaries for borrowed money (including Subordinated Obligations
and any other subordinated indebtedness, debt Securities issued by
Borrower and any of its Subsidiaries, the aggregate principal
Indebtedness outstanding under the Notes and the Aggregate Effective
Amount of all outstanding Letters of Credit) on that date plus (b) the
aggregate amount of the principal portion of all Capital Lease
Obligations of Borrower and its Subsidiaries plus (c) any Guaranty
Obligations of Borrower and its Subsidiaries with respect to the
Indebtedness of others of the types referred to in (a) and (b) above.
"Funded Debt Ratio" means, as of the last day of any Fiscal
Quarter, the ratio of (a) Funded Debt as of such date to (b) EBITDA for
the Rolling Period ending on that date; provided that if Borrower or any
of its Subsidiaries has made an Acquisition during the Rolling Period
ended on that date, such ratio shall be calculated as if the Acquisition
had been made on the first day of such Rolling Period, taking into
account the results of operations of the Acquired Person that was the
subject of the Acquisition for purposes of calculating Indebtedness and
EBITDA adjusted, however, to exclude as an expense in the calculation of
EBITDA any expense item that has been eliminated as a result of the
Acquisition and not replaced by Borrower and/or its Subsidiaries
(excluding expense reductions attributed to or contemplated by general
increases in efficiency, scale of operations, discounts or more
favorable inventory and merchandising purchasing terms, etc.).
"GAAP" means, as of any date of determination, accounting
principles (a) set forth as generally accepted in then currently
effective Opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants, (b) set forth as generally
accepted in then currently effective Statements of the Financial
Accounting Standards Board or (c) that are then approved by such other
entity as may be approved by a significant segment of the accounting
profession in the United States of America. The term "consistently
applied," as used in connection therewith, means that the accounting
principles applied are consistent in all material respects with those
applied at prior dates or for prior periods.
-14-
"Government Securities" means readily marketable (a) direct full
faith and credit obligations of the United States of America or
obligations guaranteed by the full faith and credit of the United States
of America and (b) obligations of an agency or instrumentality of, or
corporation owned, controlled or sponsored by, the United States of
America that are generally considered in the securities industry to be
implicit obligations of the United States of America.
"Governmental Agency" means (a) any international, foreign,
federal, state, county or municipal government, or political subdivision
thereof, (b) any governmental or quasi-governmental agency, authority,
board, bureau, commission, department, instrumentality or public body or
(c) any court or administrative tribunal of competent jurisdiction.
"Guarantors" means, collectively, each Subsidiary of Borrower.
"Guaranty Obligation" means, as to any Person, any (a) guarantee
by that Person of Indebtedness of, or other obligation performable by,
any other Person or (b) assurance given by that Person to an obligee of
any other Person with respect to the performance of an obligation by, or
the financial condition of, such other Person, whether direct, indirect
or contingent, including any purchase or repurchase agreement covering
such obligation or any collateral security therefor, any agreement to
provide funds (by means of loans, capital contributions or otherwise) to
such other Person, any agreement to support the solvency or level of any
balance sheet item of such other Person or any "keep-well" or other
arrangement of whatever nature given for the purpose of assuring or
holding harmless such obligee against loss with respect to any
obligation of such other Person; provided, however, that the term
Guaranty Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of
any Guaranty Obligation in respect of Indebtedness shall be deemed to be
an amount equal to the stated or determinable amount of the related
Indebtedness (unless the Guaranty Obligation is limited by its terms to
a lesser amount, in which case to the extent of such amount) or, if not
stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by the Person in good faith. The amount of
any other Guaranty Obligation shall be deemed to be zero unless and
until the amount thereof has been (or in accordance with Financial
Accounting Standards Board Statement No. 5 should be) quantified and
reflected or disclosed in the consolidated financial statements (or
notes thereto) of Borrower and its Subsidiaries.
"Hazardous Materials" means oil or petrochemical products,
poly-chlorinated biphenyls, asbestos, urea formaldehyde, flammable
explosives, radioactive materials, hazardous wastes, toxic substances or
related materials, including any substances considered "hazardous
substances," "hazardous wastes," "hazardous materials," "infectious
wastes", "pollutant substances", "solid waste" or "toxic substances"
under any Hazardous Materials Laws.
-15-
"Hazardous Materials Laws" means all Laws pertaining to the
treatment, transportation or disposal of Hazardous Materials on or about
any Real Property owned or leased by Borrower or any Subsidiary thereof,
or any portion thereof, including without limitation the following: the
Federal Water Pollution Control Act (33 U.S.C. Section 1251, et seq.),
the Federal Resource Conservation and Recovery Act of 1976 (42 U.S.C.
Section 6901, et seq.), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Section
9601, et seq.) and the Superfund Amendments and Reauthorization Act of
1986, the Hazardous Materials Transportation Act, as amended (44 U.S.C.
Section 1801, et seq.), the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq., the California Health and Safety Code (Section
25100, et seq.), the California Water Code and the California
Administrative Code, in each case as such Laws are amended from time to
time.
"Indebtedness" means, as to any Person (without duplication), (a)
indebtedness of such Person for borrowed money or for the deferred
purchase price of Property (excluding trade and other accounts payable
in the ordinary course of business in accordance with ordinary trade
terms), including any Guaranty Obligation for any such indebtedness, (b)
indebtedness of such Person of the nature described in clause (a) that
is non-recourse to the credit of such Person but is secured by assets of
such Person, to the extent of the fair market value of such assets as
determined in good faith by such Person, (c) Capital Lease Obligations
of such Person, (d) indebtedness of such Person arising under bankers'
acceptance facilities or under facilities for the discount of accounts
receivable of such Person, (e) any direct or contingent obligations of
such Person under letters of credit issued for the account of such
Person and (f) any net obligations of such Person under Interest Rate
Protection Agreements.
"Initial Pricing Period" means the period from and including the
Closing Date through and including February 15, 2002.
"Intangible Assets" means assets that are considered intangible
assets under GAAP, including customer lists, goodwill, covenants not to
compete, copyrights, trade names, trademarks and patents.
"Intercompany Notes" means, collectively, the intercompany
promissory notes required pursuant to Section 5.12.
"Interest Expense" means, with respect to any Person and as of
the last day of any fiscal period, the sum of (a) all interest, fees,
charges and related expenses (in each case as such expenses are
calculated according to GAAP) paid or payable (without duplication) for
that fiscal period by that Person to a lender in connection with
borrowed money (including any obligations for fees, charges and related
expenses payable to the issuer of any letter of credit) or the deferred
purchase price of assets that are considered "interest expense" under
GAAP plus (b) the portion of rent paid or payable (without duplication)
for that fiscal period by that Person under Capital Lease Obligations
that should be treated as interest in accordance with Financial
Accounting Standards Board Statement No. 13.
-16-
"Interest Rate Protection Agreement" means a written agreement
between Borrower and one or more financial institutions providing for
"swap", "cap", "collar" or other interest rate protection with respect
to any Indebtedness.
"Inventory" means all "inventory," as such term is defined in the
UCC, now owned or hereafter acquired by any Person, wherever located,
including all goods, merchandise and other personal property held for
sale or lease by any such Person, or which is furnished by such Person
under any contract of service or is held by such Person as raw
materials, work or goods in process, materials and supplies of every
nature used or consumed or to be used or consumed by such Person in the
ordinary course of its business, whether now owned or hereafter acquired
by such Person.
"Investment" means, when used in connection with any Person, any
investment by or of that Person, whether by means of purchase or other
acquisition of stock or other Securities of any other Person or by means
of a loan, advance creating a debt, capital contribution, guaranty or
other debt or equity participation or interest in any other Person,
including any partnership, limited liability company and joint venture
interests of such Person. The amount of any Investment shall be the
amount actually invested (minus any return of capital with respect to
such Investment which has actually been received in Cash or has been
converted into Cash), without adjustment for subsequent increases or
decreases in the value of such Investment.
"Issuing Lender" means ▇▇▇▇▇ Fargo, when acting in its capacity
as Issuing Lender under any of the Loan Documents (including such other
Persons that may act as agent for and on behalf of ▇▇▇▇▇ Fargo) or any
successor Issuing Lender.
"Laws" means, collectively, all international, foreign, federal,
state and local statutes, treaties, rules, regulations, ordinances,
codes and administrative or judicial precedents.
"Lender" means each Closing Date Lender and each lender that may
hereafter become a party to this Agreement pursuant to Section 11.8.
When reference is made in this Agreement or any other Loan Document to
any "relevant" Lender in connection with any of the Facilities, such
reference shall be deemed to refer to a Lender that has a Commitment or
outstanding Advances under such Facility.
"Letter of Credit" means any of the Commercial Letters of Credit
or Standby Letters of Credit issued by the Issuing Lender under the
Revolving Facility pursuant to Section 2.5, either as originally issued
or as the same may be supplemented, modified, amended, extended,
restated or supplanted.
"Letter of Credit Agreements" means, collectively, the Standby
Letter of Credit Agreement, the Commercial Letter of Credit Agreement
and any and all similar documents executed and delivered by Borrower in
connection with the Issuing Lender's issuance of Letters of Credit.
-17-
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment for security, security interest, encumbrance, lien or charge
of any kind, whether voluntarily incurred or arising by operation of Law
or otherwise, affecting any Property, including any conditional sale or
other title retention agreement, any lease in the nature of a security
interest, and/or the filing of any financing statement (other than a
precautionary financing statement with respect to a lease that is not in
the nature of a security interest) under the UCC or comparable Law of
any jurisdiction with respect to any Property.
"Loan Documents" means, collectively, this Agreement, the Notes,
the Subsidiary Guaranty, the Collateral Documents, the Letter of Credit
Agreements, any Request for Borrowing, any Request for Letter of Credit
(and any corresponding application and/or reimbursement agreement with
respect to any Letter of Credit), any Compliance Certificate, any
Pricing Certificate, any Approved Interest Rate Protection Agreement and
any other agreements of any type or nature hereafter executed and
delivered by Borrower or any Subsidiary to the Administrative Agent or
to any Lender in any way relating to or in furtherance of this
Agreement, in each case either as originally executed or as the same may
from time to time be supplemented, modified, amended, restated, extended
or supplanted.
"Margin Stock" means "margin stock" as such term is defined in
Regulation U.
"Material Adverse Effect" means any set of circumstances or
events which (a) has had or would reasonably be expected to have any
material adverse effect whatsoever upon the validity or enforceability
of any Loan Document, (b) has been or would reasonably be expected to be
material and adverse to the business or condition (financial or
otherwise) of Borrower and its Subsidiaries, taken as a whole, (c) has
materially impaired or would reasonably be expected to materially impair
the ability of Borrower to perform the Obligations, or (d) has
materially impaired or would reasonably be expected to materially impair
the ability of the Obligors, taken as a whole, to perform their
collective Obligations under the Loan Documents.
"Material Contracts" means, collectively, (a) the agreements
identified on Schedule 1.2 attached hereto and (b) any other agreement
that would, if terminated, materially affect the condition, financial or
otherwise of Borrower and its Subsidiaries, taken as a whole.
"Maturity Date" means, as the context may require, the Revolving
Facility Maturity Date or the Term Maturity Date.
"Maximum Revolving Credit Amount" means $40,000,000.00.
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA to which Borrower or any of its
ERISA Affiliates contributes or is obligated to contribute.
-18-
"Negative Pledge" means a Contractual Obligation which contains a
covenant binding on Borrower or any Subsidiary that prohibits Liens on
any of its Property, other than (a) any such covenant contained in a
Contractual Obligation granting or relating to a particular Lien which
affects only the Property that is the subject of such Lien and (b) any
such covenant that does not apply to Liens securing the Obligations.
"Net Cash Issuance Proceeds" means, with respect to the issuance
of any equity Security by Borrower or any Subsidiary, the Cash proceeds
received by or for the account of Borrower or such Subsidiary in
consideration of such issuance net of (a) underwriting discounts and
commissions actually paid to any Person not an Affiliate of Borrower and
(b) professional fees and disbursements actually paid in connection
therewith.
"Net Cash Sales Proceeds" means, with respect to any Disposition,
the sum of (a) the Cash proceeds received by or for the account of
Borrower and its Subsidiaries from such Disposition plus (b) the amount
of Cash received by or for the account of Borrower and its Subsidiaries
upon the sale, collection or other liquidation of any proceeds that are
not Cash from such Disposition, in each case net of (i) any amount
required to be paid to any Person owning an interest in the assets
disposed of, (ii) any amount applied to the repayment of Indebtedness
secured by a Lien permitted under Section 6.9 on the asset disposed of,
(iii) any transfer, income or other taxes payable as a result of such
Disposition, (iv) professional fees and expenses, fees due to any
Governmental Agency, broker's commissions and other out-of-pocket costs
of sale actually paid to any Person that is not an Affiliate of Borrower
attributable to such Disposition, (v) professional fees and expenses and
other commissions and out of pocket costs of sale attributable to such
Disposition and actually paid to ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ & Co., Inc. and/or KRG
Capital Partners, LLC, each an Affiliate of Borrower, in an aggregate
amount not to exceed two percent (2%) of the sales price with respect to
such Disposition; (vi) any reserves established in accordance with GAAP
in connection with such Disposition
"Net Income" means, with respect to any fiscal period, the
consolidated net income of Borrower and its Subsidiaries for that
period, determined in accordance with GAAP, consistently applied.
"Note" means any of the Revolving Notes or the Term Notes and
"Notes" means, collectively, the Revolving Notes and the Term Notes.
"Obligations" means all present and future obligations of every
kind or nature of any Obligor at any time and from time to time owed to
the Lenders, the Administrative Agent and the Issuing Lender, under any
one or more of the Loan Documents, whether due or to become due, matured
or unmatured, liquidated or unliquidated, or contingent or
noncontingent, including obligations of performance as well as
obligations of payment, and including interest that accrues after the
commencement of any proceeding under any Debtor Relief Law by or against
any Obligor.
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"Obligors" means, collectively, Borrower and its Subsidiaries
and, in each case where any of the foregoing is a partnership, each
general partner thereof.
"Opinion of Counsel" means the favorable written legal opinion of
▇▇▇▇▇▇ & Zepfel LLP, special counsel to the Obligors, substantially in
the form of Exhibit D.
"Party" means any Person other than Lenders and/or Administrative
Agent, which now or hereafter is a party to any of the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereof established under ERISA.
"Pension Plan" means any "employee pension benefit plan" (as such
term is defined in Section 3(2) of ERISA), other than a Multiemployer
Plan, which is subject to Title IV of ERISA and is maintained by
Borrower or to which Borrower contributes or has an obligation to
contribute.
"Permitted Acquisition" means an Acquisition by Borrower or any
wholly-owned Subsidiary of Borrower of all or substantially all of the
assets of, or all of the capital stock or other equity interests of, an
Acquired Person engaged in the same line(s) of business as Borrower and
its Subsidiaries, taken as a whole, provided, that:
(a) if such Acquisition is of all of the capital stock or
other equity interests of the Acquired Person, such Acquired Person is
merged with and into Borrower or such Subsidiary substantially
simultaneously with such party's acquisition of such capital stock or
other equity interests or becomes a wholly-owned Subsidiary of Borrower
or such Subsidiary;
(b) in connection with such Acquisition, the
Administrative Agent shall have received each document, instrument,
Certificate or item of Collateral required to be delivered pursuant to
Section 5.11;
(c) in the case of the Acquisition of the capital stock
or other equity interest of an Acquired Person, the board of directors
(or comparable governing body) shall have duly approved such
Acquisition;
(d) the Borrower shall have delivered a pro-forma
Compliance Certificate for the most recently completed Rolling Period,
demonstrating that, upon giving effect to the proposed Acquisition as of
the first day of such Rolling Period, the Borrower and its Subsidiaries
shall be in compliance with the covenants set forth in Sections 6.12,
6.13, 6.14 and 6.15.
(e) such Acquired Person shall have had a positive
"EBITDA" for the twelve-month fiscal period immediately preceding the
date of such Acquisition (with EBITDA calculated for such Acquired
Person in a manner consistent with the calculation of EBITDA for
Borrower and its Subsidiaries specified herein);
-20-
(f) at the time of such Acquisition, each of the
representations and warranties contained in the Loan Documents shall be
true and correct in all material respects (except to the extent such
representations and warranties expressly relate to and earlier date), no
Default or Event of Default shall have occurred and remain in effect and
after giving effect to such Acquisition, on a pro forma combined basis,
(i) no Default of Event of Default would have occurred at any time
during the twelve-month fiscal period immediately preceding the date of
such Acquisition assuming that such Acquisition had occurred on the
first day of such period and (ii) Borrower and its Subsidiaries, on a
projected basis, will be in compliance with Section 6.12, 6.13, 6.14 and
6.15 as of each of the four Fiscal Quarters ending after the date of the
Acquisition, as reflected in updated projections provided by Borrower to
the Administrative Agent and the Lenders prior to the effective date of
such Acquisition;
(g) if such Acquisition involves the purchase of an
interest in a partnership between the Borrower (or a Subsidiary of the
Borrower) as a general partner and entities unaffiliated with the
Borrower or such Subsidiary as the other partners, such transaction
shall be effected by having such equity interest acquired by a corporate
holding company directly or indirectly wholly-owned by the Borrower new
formed for the sole purpose of effecting such transaction;
(h) after giving effect to such Acquisition, there shall
be at least $7,500,000 of availability under the Revolving Facility;
(i) the Indebtedness assumed or consideration paid or
payable in cash in connection with such Acquisition shall not exceed the
greater of (x) $2,000,000 and (y) the fair market value thereof; and
(j) the Indebtedness assumed or consideration paid or
payable in cash in connection with such Acquisition, when taken together
with each other Permitted Acquisitions consummated since the Closing
Date shall not exceed $10,000,000 in the aggregate.
"Permitted Encumbrances" means:
(a) Inchoate Liens incident to construction on or
maintenance of Property; or Liens incident to construction on or
maintenance of Property now or hereafter filed of record for which
adequate reserves have been set aside (or deposits made pursuant to
applicable Law) and which are being contested in good faith by
appropriate proceedings and have not proceeded to judgment, provided
that, by reason of nonpayment of the obligations secured by such Liens,
no such Property is subject to an impending risk of loss or forfeiture;
(b) Liens for taxes and assessments on Property which are
not yet past due; or Liens for taxes and assessments on Property for
which adequate reserves have been set aside and are being contested in
good faith by appropriate proceedings and have not proceeded to
judgment, provided that, by reason of nonpayment of the
-21-
obligations secured by such Liens, no such Property is subject to an
impending risk of loss or forfeiture;
(c) defects and irregularities in title to any Property
which in the aggregate do not materially impair the fair market value or
use of the Property for the purposes for which it is or may reasonably
be expected to be held;
(d) easements, exceptions, reservations, or other
agreements for the purpose of pipelines, conduits, cables, wire
communication lines, power lines and substations, streets, trails,
walkways, drainage, irrigation, water, and sewerage purposes, dikes,
canals, ditches, the removal of oil, gas, coal, or other minerals, and
other like purposes affecting Property which in the aggregate do not
materially burden or impair the fair market value or use of such
Property for the purposes for which it is or may reasonably be expected
to be held;
(e) easements, exceptions, reservations, or other
agreements for the purpose of facilitating the joint or common use of
Property in or adjacent to a shopping center or similar project
affecting Property which in the aggregate do not materially burden or
impair the fair market value or use of such Property for the purposes
for which it is or may reasonably be expected to be held;
(f) rights reserved to or vested in any Governmental
Agency to control or regulate, or obligations or duties to any
Governmental Agency with respect to, the use of any Property;
(g) rights reserved to or vested in any Governmental
Agency to control or regulate, or obligations or duties to any
Governmental Agency with respect to, any right, power, franchise, grant,
license, or permit;
(h) present or future zoning laws and ordinances or other
laws and ordinances restricting the occupancy, use, or enjoyment of
Property;
(i) statutory Liens, other than those described in
clauses (a) or (b) above, arising in the ordinary course of business
with respect to obligations which are not delinquent or are being
contested in good faith, provided that, if delinquent, adequate reserves
have been set aside with respect thereto and, by reason of nonpayment,
no Property is subject to an impending risk of loss or forfeiture;
(j) covenants, conditions, and restrictions affecting the
use of Property which in the aggregate do not materially impair the fair
market value or use of the Property for the purposes for which it is or
may reasonably be expected to be held;
(k) rights of tenants under leases and rental agreements
covering Property entered into in the ordinary course of business of the
Person owning such Property;
-22-
(l) Liens consisting of pledges or deposits to secure
obligations under workers' compensation laws or similar legislation,
including Liens of judgments thereunder which are not currently
dischargeable;
(m) Liens consisting of pledges or deposits of Property
to secure performance in connection with operating leases made in the
ordinary course of business, provided the aggregate value of all such
pledges and deposits (excluding the property subject to such lease) in
connection with any such lease does not at any time exceed 10% of the
annual fixed rentals payable under such lease;
(n) Liens consisting of deposits of Property to secure
bids made with respect to, or performance of, contracts (other than
contracts creating or evidencing an extension of credit to the
depositor);
(o) Liens consisting of any right of offset, or statutory
bankers' lien, on bank deposit accounts maintained in the ordinary
course of business so long as such bank deposit accounts are not
established or maintained for the purpose of providing such right of
offset or bankers' lien;
(p) Liens consisting of deposits of Property to secure
statutory obligations of Borrower;
(q) Liens consisting of deposits of Property to secure
(or in lieu of) surety, appeal or customs bonds; and
(r) Liens created by or resulting from any litigation or
legal proceeding in the ordinary course of business which is currently
being contested in good faith by appropriate proceedings, provided that,
adequate reserves have been set aside and no material Property is
subject to an impending risk of loss or forfeiture.
"Permitted Right of Others" means a Right of Others consisting of
(a) an interest (other than a legal or equitable co-ownership interest,
an option or right to acquire a legal or equitable co-ownership interest
and any interest of a ground lessor under a ground lease), that does not
materially impair the fair market value or use of Property for the
purposes for which it is or may reasonably be expected to be held, (b)
an option or right to acquire a Lien that would be a Permitted
Encumbrance or other encumbrance permitted pursuant to Section 6.9, (c)
the subordination of a lease or sublease in favor of a financing entity
and (d) a license, or similar right, of or to Intangible Assets granted
in the ordinary course of business.
"Person" means any individual or entity, including a trustee,
corporation, limited liability company, general partnership, limited
partnership, joint stock company, trust, estate, unincorporated
organization, business association, firm, joint venture, Governmental
Agency, or other entity.
"Pledge Agreement" means the pledge agreement to be executed and
delivered pursuant Article 8 by the Pledgors, in the form of Exhibit F,
either as originally
-23-
executed or as it may from time to time be supplemented, modified,
amended, extended or supplanted.
"Pledged Collateral" means the certificates evidencing (a) all of
the equity interests now or hereafter held by Borrower in all
Subsidiaries of Borrower and (b) the Intercompany Notes.
"Pledgors" means, collectively, Borrower and all Subsidiaries
that have any ownership interest in any other Subsidiary or are the
payee of an Intercompany Note.
"Pricing Certificate" means a certificate in the form of Exhibit
G, properly completed and signed by the president or chief financial
officer of Borrower.
"Pricing Period" means (a) the Initial Pricing Period and (b),
subsequent to the Initial Pricing Period, (i) the period commencing on
each February 16 and ending on the next following May 15, (c) the period
commencing on each May 16 and ending on the next following August 15,
(d) the period commencing on each August 16 and ending on the next
following November 15 and (e) the period commencing on each November 16
and ending on the next following February 15.
"Prime Rate" means the rate of interest most recently announced
within ▇▇▇▇▇ Fargo, at its principal office in San Francisco,
California, as its "prime rate." The "prime rate" is one of several base
rates used by ▇▇▇▇▇ Fargo and serves as the basis upon which effective
rates of interest are calculated for loans and other credits making
reference thereto. The "prime rate" is evidenced by the recording
thereof after its announcement in such internal publication or
publications as ▇▇▇▇▇ Fargo may designate. Any change in the Prime Rate
shall take effect on the day the change is announced within ▇▇▇▇▇ Fargo.
"Projections" means the financial projections of Borrower and its
Subsidiaries heretofore distributed by or on behalf of Borrower to
Lender, a true and correct copy of which is attached to the Certificate
of Senior Officer described in Section 8.1(a)(13).
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Pro Rata Share" of any amount means, with respect to any Lender
under any Facility at any time, the product of (a) a fraction the
numerator of which is the amount of such Lender's Commitment under such
Facility (or, if such Commitment shall have expired or been terminated,
the amount of such Lender's Advances under such Facility), and the
denominator of which is the aggregate Commitments or Advances, as the
case may be, under such Facility at such time, multiplied by (b) such
amount. Schedule 1.1 sets forth the Pro Rata Shares of the Closing Date
Lenders as of the Closing Date for each of the Facilities.
-24-
"Quarterly Payment Date" means each March 31, June 30, September
30 and December 31.
"Real Property" means, as of any date of determination, all real
property then or theretofore owned, leased or occupied by Borrower or
any Subsidiary.
"Regulation D" means Regulation D, as at any time amended, of the
Board of Governors of the Federal Reserve System, or any other
regulation in substance substituted therefor.
"Regulation U" means Regulation U, as at any time amended, of the
Board of Governors of the Federal Reserve System, or any other
regulation in substance substituted therefor.
"Request for Borrowing" means a written request for a Borrowing
substantially in the form of Exhibit H, signed by a Responsible Official
of Borrower, and properly completed to provide all information required
to be included therein.
"Request for Continuation/Conversion" means a written request to
Continue or Convert a Borrowing substantially in the form of Exhibit I,
signed by a Responsible Official of Borrower, and properly completed to
provide all information required to be included therein.
"Request for Letter of Credit" means a written request for a
Letter of Credit substantially in the form of Exhibit J, signed by a
Responsible Official of Borrower, and properly completed to provide all
information required to be included therein.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any Law, or judgment, award,
decree, writ or determination of a Governmental Agency, in each case
applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Requisite Lenders" means at any time Lenders owed or holding in
the aggregate 66.67% or more of the sum of (a) the then aggregate unpaid
principal amount of the Advances plus (b) the then Aggregate Effective
Amount (to the extent not then included as Advances) plus (c) the then
aggregate unused portion of the Revolving Commitments; provided,
however, that so long as the Closing Date Lenders, or any one or more of
them, are the only Lenders, Requisite Lenders shall mean all of the
Lenders.
"Responsible Official" means, as to any Person, (a) any Senior
Officer of such Person and (b) any other responsible official of such
Person so designated in a written notice thereof from a Senior Officer
of such Person to the Administrative Agent, on behalf of the Lenders.
The Lenders shall be entitled to conclusively rely upon any document or
certificate that is signed or executed by a Responsible Official of
Borrower or any Subsidiary as having been authorized by all necessary
corporate,
-25-
partnership, limited liability company and/or other action on the part
of Borrower or such Subsidiary.
"Revolving Advance" means an Advance made pursuant to Section
2.1(a).
"Revolving Borrowing" means a borrowing consisting of
simultaneous Revolving Advances of the same Type.
"Revolving Commitment" means, with respect to each relevant
Lender, the commitment, if any, of such Lender to make Revolving
Advances (expressed as the maximum aggregate amount of the Revolving
Advances to be made by such Lender hereunder), as such commitment may be
(a) reduced from time to time pursuant to Section 2.6 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 11.8. The initial amount of each relevant Lender's
Revolving Commitment is set forth on Schedule 1.1 or in the Assignment
and Acceptance pursuant to which such Lender shall have assumed its
Revolving Commitment, as applicable. The initial aggregate amount of the
Lenders' Revolving Commitments is $40,000,000.
"Revolving Credit Facility Usage" means, as of any date of
determination, the sum of (a) the aggregate principal amount of funded
Indebtedness then outstanding under the Revolving Notes plus (b) the
Aggregate Effective Amount under all outstanding Letters of Credit plus
(c) the Swing Line Outstandings.
"Revolving Facility" means the revolving credit facility provided
hereunder in respect of the aggregate Revolving Commitments.
"Revolving Facility Maturity Date" means the earlier of (a)
December 31, 2006 and (b) the termination or cancellation of the
Revolving Facility (and all of the Revolving Commitments pertaining
thereto) pursuant to the terms of this Agreement.
"Revolving Note" means any of the promissory notes made by
Borrower to a Lender evidencing Advances under that Lender's Revolving
Commitment, substantially in the form of Exhibit K, either as originally
executed or as the same may from time to time be supplemented, modified,
amended, renewed, extended or supplanted.
"Right of Others" means, as to any Property in which a Person has
an interest, any legal or equitable right, title or other interest
(other than a Lien) held by any other Person in that Property, and any
option or right held by any other Person to acquire any such right,
title or other interest in that Property, including any option or right
to acquire a Lien; provided, however, that (a) no covenant restricting
the use or disposition of Property of such Person contained in any
Contractual Obligation of such Person and (b) no provision contained in
a contract creating a right of payment or performance in favor of a
Person that conditions, limits, restricts, diminishes, transfers or
terminates such right shall be deemed to constitute a Right of Others.
-26-
"Rolling Period" means any period of four consecutive Fiscal
Quarters of Borrower and its Subsidiaries.
"Scheduled Funded Debt Payments" means, as to any Person with
respect to any fiscal period, the sum of all scheduled payments of
principal on Funded Debt (including the principal component of payments
due on Capital Lease Obligations); it being understood that Scheduled
Funded Debt Payments shall not include voluntary prepayments or the
mandatory prepayments required pursuant to Section 3.1(e).
"Security" means any capital stock, share, voting trust
certificate, bond, debenture, note or other evidence of Indebtedness,
limited partnership interest, member interest, or any warrant, option or
other right to purchase or acquire any of the foregoing.
"Security Agreement" means the security agreement to be executed
and delivered pursuant to Article 8 by Borrower and its Subsidiaries, in
the form of Exhibit L, either as originally executed or as it may from
time to time be supplemented, modified, amended, extended or supplanted.
"Senior Officer" means (a) the chief executive officer, (b) the
president, (c) any executive vice president, (d) the chief financial
officer or (e) the treasurer, in each case of any Person.
"series", when used with respect to any Note, means the
designation of all issued and outstanding Revolving Notes or Term Notes,
as applicable and as the context may require.
"Solvent" means, as of any date of determination, and as to any
Person, that on such date: (a) the fair valuation of the assets of such
Person is greater than the fair valuation of such Person's probable
liability in respect of existing debts; (b) such Person does not intend
to, and does not believe that it will, incur debts beyond such Person's
ability to pay as such debts mature; (c) such Person is not engaged in a
business or transaction, and is not about to engage in a business or
transaction, which would leave such Person with assets remaining which
would constitute unreasonably small capital after giving effect to the
nature of the particular business or transaction (including, in the case
of Borrower, the transactions occurring on the Closing Date); and (d)
such Person is generally paying its debts as they become due. For
purposes of the foregoing (1) the "fair valuation" of any assets means
the amount realizable within a reasonable time, either through
collection or sale, of such assets at their regular market value, which
is the amount obtainable by a capable and diligent businessman from an
interested buyer willing to purchase such assets within a reasonable
time under ordinary circumstances; and (2) the term "debts" includes any
legal liability whether matured or unmatured, liquidated or
unliquidated, absolute, fixed, or contingent.
-27-
"Special Eurodollar Circumstance" means the application or
adoption after the Closing Date of any Law or interpretation, or any
change therein or thereof, or any change in the interpretation or
administration thereof by any Governmental Agency, central bank or
comparable authority charged with the interpretation or administration
thereof, or compliance by any Lender or its Eurodollar Lending Office
with any request or directive (whether or not having the force of Law)
of any such Governmental Agency, central bank or comparable authority.
"Standby Letter of Credit" means each Letter of Credit that is
not a Commercial Letter of Credit.
"Standby Letter of Credit Agreement" means the standby letter of
credit agreement to be executed by Borrower, in the form of Exhibit M,
either as originally executed or as it may from time to time be
supplemented, modified, amended, extended, restated or supplanted.
"Stockholders' Equity" means, as of any date of determination and
with respect to any Person, the consolidated stockholders' equity of
that Person as of that date determined in accordance with GAAP; provided
that there shall be excluded from Stockholders' Equity any amount
attributable to Disqualified Stock.
"Swing Line" means the revolving line of credit established by
the Swing Line Lender in favor of Borrower pursuant to Section 2.8.
"Swing Line Documents" means the promissory note and any other
documents executed by Borrower in favor of the Swing Line Lender in
connection with the Swing Line.
"Swing Line Lender" means ▇▇▇▇▇ Fargo.
"Swing Line Loans" means loans made by the Swing Line Lender to
Borrower pursuant to Section 2.8.
"Swing Line Outstandings" means, as of any date of determination,
the aggregate principal Indebtedness of Borrower on all Swing Line Loans
then outstanding.
"Subordinated Obligations" means, as of any date of determination
(without duplication), any Indebtedness of Borrower or any Subsidiary on
that date which has been subordinated in right of payment to the
Obligations in a manner reasonably satisfactory to the Administrative
Agent and the Requisite Lenders and contains such other protective terms
with respect to senior debt (such as payment blockage) as the
Administrative Agent and the Requisite Lenders may reasonably require.
"Subsidiary" means, as of any date of determination and with
respect to any Person, any corporation, limited liability company or
partnership (whether or not, in any case, characterized as such or as a
"joint venture"), whether now existing or
-28-
hereafter organized or acquired: (a) in the case of a corporation or
limited liability company, of which a majority of the securities having
ordinary voting power for the election of directors or other governing
body (other than securities having such power only by reason of the
happening of a contingency) are at the time beneficially owned by such
Person and/or one or more Subsidiaries of such Person, or (b) in the
case of a partnership, of which a majority of the partnership or other
ownership interests are at the time beneficially owned by such Person
and/or one or more of its Subsidiaries. Any reference to a "Subsidiary"
or "Subsidiaries" shall, unless otherwise provided, be deemed to be a
reference to a Subsidiary (or Subsidiaries, as the case may be) of
Borrower.
"Subsidiary Guaranty" means the continuing guaranty of the
Obligations to be executed and delivered pursuant to Article 8 by the
Guarantors, in the form of Exhibit N, either as originally executed or
as it may from time to time be supplemented, modified, amended, extended
or supplanted.
"Tangible Net Worth" means, as of any date of determination, the
sum of (a) Stockholders' Equity of Borrower and its Subsidiaries on that
date minus (b) the aggregate Intangible Assets of Borrower and its
Subsidiaries on that date that, in accordance with GAAP, are required to
be reflected on the consolidated balance sheet of Borrower and its
Subsidiaries as "intangible assets" plus (c) the aggregate outstanding
principal amount of all Subordinated Obligations.
"Term Advance" means an advance made pursuant to Section 2.1(b).
"Term Amortization Amount" means, with respect to each
Amortization Date described below, the amount set forth below opposite
that Amortization Date:
Amortization Date Amount
----------------- ------
3/31/02, 6/30/02, 9/30/02, $1,750,000
12/31/02, 3/31/03, 6/30/03,
9/30/03 and 12/31/03
3/31/04, 6/30/04, 9/30/04 and $1,500,000
12/31/04
3/31/05, 6/30/05, 9/30/05 and $1,000,000
12/31/05
3/31/06, 6/30/06, 9/30/06 and $500,000
the Term Facility Maturity Date
"Term Borrowing" means a borrowing consisting of simultaneous
Term Advances of the same Type.
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"Term Commitment" means, with respect to each Closing Date
Lender, the commitment, if any, of such Closing Date Lender to make a
Term Advance on the Closing Date (expressed as the maximum principal
amount of the Term Advances to be made by such Lender hereunder), as
such commitment may be reduced pursuant to Section 2.6. The amount of
each Closing Date Lender's Term Commitment is set forth on Schedule 1.1.
The aggregate amount of the Closing Date Lenders' Term Commitments is
$26,000,000.
"Term Facility" means the term loan facility provided hereunder
in respect of the aggregate Term Advances.
"Term Maturity Date" means December 31, 2006.
"Term Note" means any of the promissory notes made by Borrower to
a Lender evidencing Term Advances by that Lender, substantially in the
form of Exhibit O, either as originally executed or as the same may from
time to time be supplemented, modified, amended, renewed, extended or
supplanted.
"Termination Date" means the date on which the Advances and all
other Obligations under this Agreement and the other Loan Documents are
indefeasibly paid in full, in Cash, and Borrower shall have no further
right to borrow any moneys or obtain other credit extensions or
financial accommodations under this Agreement or any of the other Loan
Documents.
"to the best knowledge of" means, when modifying a
representation, warranty or other statement of any Person, that the fact
or situation described therein is known by the Person (or, in the case
of a Person other than a natural Person, known by a Responsible Official
of that Person) making the representation, warranty or other statement,
or with the exercise of reasonable due diligence under the circumstances
(in accordance with the standard of what a reasonable Person in similar
circumstances would have done) would have been known by the Person (or,
in the case of a Person other than a natural Person, would have been
known by a Responsible Official of that Person).
"Type" refers to the distinction between Advances bearing
interest at the Alternate Base Rate and Advances bearing interest at the
Eurodollar Rate.
"UCC" means the Uniform Commercial Code as the same may from time
to time be enacted and in effect in the State of California; provided
that, in the event by reason of mandatory provisions of law, any or all
of the attachment, perfection or priority of Lender's Lien on any
Collateral is governed by the Uniform Commercial Code as enacted and in
effect in a jurisdiction other than the State of California, the term
"UCC" shall mean the Uniform Commercial Code as enacted and in effect in
such other jurisdiction solely for purposes of the provisions hereof
relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.
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"▇▇▇▇▇ Fargo" means ▇▇▇▇▇ Fargo Bank, National Association.
1.2 Use of Defined Terms. Any defined term used in the plural
shall refer to all members of the relevant class, and any defined term used in
the singular shall refer to any one or more of the members of the relevant
class.
1.3 Accounting Terms; Covenant Calculations. All accounting terms
not specifically defined in this Agreement shall be construed in conformity
with, and all financial data required to be submitted by this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, except as
otherwise specifically prescribed herein. In the event that GAAP changes during
the term of this Agreement such that the covenants contained in Sections 6.12,
6.13, 6.14 and 6.15 would then be calculated in a different manner or with
different components, (i) Borrower and the Lenders agree to amend this Agreement
in such respects as are necessary to conform those covenants as criteria for
evaluating Borrower's financial condition to substantially the same criteria as
were effective prior to such change in GAAP and (ii) Borrower shall be deemed to
be in compliance with the covenants contained in the aforesaid Sections if and
to the extent that Borrower would have been in compliance therewith under GAAP
as in effect immediately prior to such change, but shall have the obligation to
deliver each of the materials described in Article 7 to the Administrative Agent
and the Lenders, on the dates therein specified, with financial data presented
in a manner which conforms with GAAP as in effect immediately prior to such
change.
1.4 Rounding. Any financial ratios required to be maintained by
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed in this
Agreement and rounding the result up or down to the nearest number (with a
round-up if there is no nearest number) to the number of places by which such
ratio is expressed in this Agreement.
1.5 Exhibits and Schedules. All Exhibits and Schedules to this
Agreement, either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.
1.6 References to "Borrower and its Subsidiaries". Any reference
herein to "Borrower and its Subsidiaries" or the like shall refer solely to
Borrower during such times, if any, as Borrower shall have no Subsidiaries.
1.7 Miscellaneous Terms. The term "or" is disjunctive; the term
"and" is conjunctive. The term "shall" is mandatory; the term "may" is
permissive. Masculine terms also apply to females; feminine terms also apply to
males. The term "including" is by way of example and not limitation.
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Article 2.
ADVANCES AND LETTERS OF CREDIT
2.1 Advances-General.
(a) Subject to the terms and conditions set forth in this
Agreement, from time to time on any Banking Day during the period from
the Closing Date through the Revolving Facility Maturity Date, each
relevant Lender severally agrees to make Advances ("Revolving Advances")
to Borrower under the Revolving Facility in such amounts as Borrower may
request provided that, after giving effect to such Advances, (i)
Revolving Credit Facility Usage does not exceed the Maximum Revolving
Credit Amount and (ii) as to each relevant Lender, such Lender's Pro
Rata Share of Revolving Credit Facility Usage does not exceed such
Lender's Revolving Commitment. All Revolving Advances shall be made by
the Lenders ratably according to their respective Revolving Commitments.
Within the limits of each Lender's Revolving Commitment
in effect from time to time and subject to the foregoing, Borrower may
borrow under this Section 2.1(a), prepay Revolving Advances pursuant to
Section 3.1 and reborrow under this Section 2.1(a).
(b) Subject to the terms and conditions set forth in this
Agreement, each relevant Lender severally agrees to make an Advance
(collectively, the "Term Advances") to Borrower on the Closing Date in
an aggregate amount not to exceed such Lender's Term Commitment, and, as
to all Lenders, in an aggregate amount not to exceed $26,000,000. All
Term Advances shall be made by the Lenders ratably according to their
respective Term Commitments. Term Advances once repaid may not be
reborrowed.
(c) Subject to the next sentence, each Borrowing shall be
made pursuant to a Request for Borrowing which shall specify (i) the
date of such requested Borrowing, (ii) the Facility under which such
Borrowing is to be made, (iii) the Type of Advances comprising such
Borrowing, (iv) the amount of such Borrowing, and (v) in the case of a
Borrowing consisting of Eurodollar Rate Advances, the Eurodollar Period
therefor. Unless the Administrative Agent has notified, in its sole and
absolute discretion, Borrower to the contrary not less than three (3)
days prior to the date of any Borrowing, a Borrowing may be requested by
telephone by a Responsible Official of Borrower, in which case Borrower
shall confirm such request by promptly delivering a Request for
Borrowing (conforming to the preceding sentence) in person or by
telecopier to the Administrative Agent. The Administrative Agent shall
incur no liability whatsoever hereunder in acting upon any telephonic
request for a Borrowing purportedly made by a Responsible Official of
Borrower, and Borrower hereby agrees to indemnify the Administrative
Agent from any loss, cost, expense or liability as a result of so
acting.
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(d) Promptly following receipt of a Request for
Borrowing, the Administrative Agent shall notify each Lender by
telephone or telecopier (and if by telephone, promptly confirmed by
telecopier) of the date of the requested Borrowing, the Facility under
which such Borrowing is to be made, the Type of Advances comprising such
Borrowing, the Eurodollar Period (if applicable), and the amount
corresponding to that Lender's ratable share of the Borrowing. Not later
than 1:00 p.m., California time, on the date specified for any Borrowing
(which must be a Banking Day), each Lender shall make its ratable share
of the Borrowing in immediately available funds available to the
Administrative Agent at the Administrative Agent's Office. Upon
satisfaction or waiver of the applicable conditions set forth in Article
8, all Advances shall be credited on that date in immediately available
funds to the Designated Deposit Account.
(e) Anything in paragraph (c) above to the contrary
notwithstanding, Borrower may not (a) request Alternate Base Rate
Advances for any Borrowing if the aggregate amount of such Borrowing is
less than $100,000 (and any such Borrowing exceeding such minimum amount
shall be in an integral multiple of $50,000), provided that the
foregoing minimum amount shall not apply to an Alternate Base Rate
Advance that causes the aggregate amount borrowed under any Facility to
equal the full amount available for Advances thereunder, or (b) elect
Eurodollar Rate Advances for any Borrowing (i) if the aggregate amount
of such Borrowing is less than $1,000,000 (and any such Borrowing
exceeding such minimum amount shall be in an integral multiple of
$250,000) or (ii) if the obligation of the relevant Lenders to make
Eurodollar Rate Advances shall then be suspended pursuant to Section
2.4, 3.5 or 3.6.
(f) The Advances made by each Lender under its Revolving
Commitment shall be evidenced by that Lender's Revolving Note. The
Advances made by each Lender under its Term Commitment shall be
evidenced by that Lender's Term Note.
(g) A Request for Borrowing shall be irrevocable upon the
Administrative Agent's first notification thereof.
(h) The Administrative Agent, on behalf of the Lenders,
is hereby authorized to make Borrowings available to Borrower upon
fulfillment of the applicable conditions set forth in Article 8, and, if
applicable, Section 2.1(d). Upon fulfillment of such applicable
conditions, the proceeds of Borrowings shall either be credited in
immediately available funds to the Designated Deposit Account or
remitted directly to one or more third parties, as directed by Borrower
and approved by the Administrative Agent. The proceeds of any Borrowing
consisting of Eurodollar Rate Advances shall be so credited or remitted
on the first day of the applicable Eurodollar Period for such
Borrowings.
2.2 Alternate Base Rate Advances. Each request by Borrower for a
Borrowing comprised of Alternate Base Rate Advances shall be made pursuant to a
Request
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for Borrowing (or telephonic or other request for Borrowing referred to in the
second sentence of Section 2.1(c), if applicable) received by the Administrative
Agent, at the Administrative Agent's Office, not later than 9:00 a.m. California
time, on the date of the requested Borrowing, provided such date is a Banking
Day. All Advances shall constitute Alternate Base Rate Advances unless properly
designated as a Eurodollar Rate Advance pursuant to Section 2.3 or 2.4.
2.3 Eurodollar Rate Advances.
(a) Each request by Borrower for a Borrowing comprised of
Eurodollar Rate Advances shall be made pursuant to a Request for
Borrowing (or telephonic or other request for Borrowing referred to in
the second sentence of Section 2.1(c), if applicable) received by the
Administrative Agent, at the Administrative Agent's Office, not later
than 9:00 a.m., California time, at least three (3) Eurodollar Banking
Days before the first day of the applicable Eurodollar Period.
(b) On the date which is two (2) Eurodollar Banking Days
before the first day of the applicable Eurodollar Period, the
Administrative Agent shall confirm its determination of the applicable
Eurodollar Rate (which determination shall be conclusive in the absence
of manifest error) and promptly shall give notice of the same to
Borrower and the Lenders by telephone or telecopier (and if by
telephone, promptly confirmed by telecopier).
(c) Unless the Administrative Agent and the Requisite
Lenders otherwise consent, Eurodollar Rate Advances may not be
outstanding under more than the (10) separate Eurodollar Periods (with
respect to all of the Facilities) at any one time.
(d) No Borrowing comprised of Eurodollar Rate Advances
may be requested during the continuation of a Default or Event of
Default.
(e) Nothing contained herein shall require any Lender to
fund any Eurodollar Rate Advance in the Designated Eurodollar Market.
2.4 Conversion and Continuation of Advances.
(a) Optional Conversion. Borrower may on any Banking Day,
upon notice given to the Administrative Agent not later than 9:00 a.m.
(California time) on the third Eurodollar Banking Day prior to the date of a
proposed Conversion if the Conversion is into Eurodollar Rate Advances, or one
Banking Day prior to the date of a proposed Conversion if the Conversion is into
Alternate Base Rate Advances, and subject to the provisions of Sections 3.5 and
3.6, Convert all or any portion of the Advances of one Type outstanding under a
Facility (and, in the case of Eurodollar Rate Advances, having the same
Eurodollar Period) into Advances of the other Type under such Facility; provided
that any Conversion of Eurodollar Rate Advances into Alternate Base Rate
Advances on other than the last day of a Eurodollar Period for such Eurodollar
Rate Advances shall be subject to
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Section 3.6(e), any Conversion of Alternate Base Rate Advances into Eurodollar
Rate Advances shall be in an amount not less than $1,000,000 or integral
multiples of $500,000 in excess thereof and no Conversion of any Advances shall
result in more than ten (10) separate Eurodollar Periods being outstanding under
all of the Facilities. Each such notice of Conversion shall be made pursuant to
a Request for Continuation/Conversion and shall, within the restrictions
specified above, specify (i) the date of such Conversion, (ii) the aggregate
amount, Type and category of the Advances (and, in the case of Eurodollar Rate
Advances, the Eurodollar Period therefor) to be Converted and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Eurodollar Period for such Advances. Each request for Conversion shall be
irrevocable and binding on Borrower.
(b) Certain Mandatory Conversions.
(i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising
any Borrowing shall be reduced, by payment or prepayment
or otherwise, to less than $1,000,000 such Advances shall
automatically Convert into Alternate Base Rate Advances.
(ii) If Borrower shall fail to select the
duration of any Eurodollar Period for any outstanding
Eurodollar Rate Advances in accordance with the
provisions contained in Section 2.1(c) and in clause (a)
or (c) of this Section 2.4, each such Eurodollar Rate
Advance will automatically, on the last day of the then
existing Eurodollar Period therefor, Convert into an
Alternate Base Rate Advance.
(iii) Upon the occurrence and during the
continuance of any Event of Default and upon notice from
the Administrative Agent to Borrower at the request of
the Requisite Lenders, (x) each Eurodollar Rate Advance
will automatically, on the last day of the then existing
Eurodollar Period therefor, Convert into an Alternate
Base Rate Advance and (y) the obligation of the Lenders
to make, or to Convert Advances into, or to Continue,
Eurodollar Rate Advances shall be suspended.
(c) Continuations. Borrower may, on any Eurodollar Banking Day,
upon notice given to the Administrative Agent not later than 9:00 a.m.
(California time) on the third Eurodollar Banking Day prior to the date of the
proposed Continuation and subject to the provisions of Sections 3.5 and 3.6,
Continue all or any portion of the Eurodollar Rate Advances outstanding under a
Facility having the same Eurodollar Period; provided that any such Continuation
shall be made only on the last day of a Eurodollar Period for such Eurodollar
Rate Advances, no Continuation of Eurodollar Rate Advances shall be in an amount
less than $1,000,000 and no Continuation of any Eurodollar Rate Advances shall
result in more than ten (10) separate Eurodollar Periods being outstanding under
all of the Facilities. Each such notice of Continuation shall be made pursuant
to a Request for Continuation/Conversion and shall, within the restrictions
specified above, specify (i) the date of such Continuation, (ii) the aggregate
amount and category of, and the Eurodollar Period for, the Advances being
Continued and (iii) the duration of the initial Eurodollar Period for
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the Eurodollar Rate Advances subject to such Continuation. Each notice of
Continuation shall be irrevocable and binding on Borrower.
2.5 Letters of Credit.
(a) Subject to the terms and conditions hereof, at any
time and from time to time from the Closing Date through the Revolving
Facility Maturity Date, the Issuing Lender shall issue such Letters of
Credit under the Revolving Facility as Borrower may request by a Request
for Letter of Credit; provided that giving effect to all such Letters of
Credit, (i) Revolving Credit Facility Usage does not exceed the Maximum
Revolving Credit Amount, (ii) the Aggregate Effective Amount under all
outstanding Letters of Credit shall not exceed $5,000,000, and (iii) as
to each relevant Lender, such Lender's Pro Rata Share of Revolving
Credit Facility Usage does not exceed such Lender's Revolving
Commitment. Each Letter of Credit shall be in a form reasonably
acceptable to the Issuing Lender. Unless the Issuing Lender and the
Requisite Lenders otherwise consent, neither the term of any Commercial
Letter of Credit nor the term of any Standby Letter of Credit shall
exceed 365 days. Unless all the Lenders otherwise consent in a writing
delivered to the Administrative Agent, the term of any Letter of Credit
shall not extend beyond the Revolving Facility Maturity Date. A Request
for Letter of Credit shall be irrevocable absent the consent of the
Issuing Lender.
(b) Each Request for Letter of Credit shall be submitted
to the Issuing Lender, with a copy to the Administrative Agent, at least
three (3) Banking Days prior to the date upon which the related Letter
of Credit is proposed to be issued. The Administrative Agent shall
promptly notify the Issuing Lender whether such request, and the
issuance of a Letter of Credit pursuant thereto, conforms to the
requirements of this Agreement. Upon issuance of a Letter of Credit, the
Issuing Lender shall promptly notify the Administrative Agent of the
amount and terms thereof. Unless the Issuing Lender has notified, in its
sole and absolute discretion, Borrower to the contrary not less than
three (3) days prior to the date of any Request for Letter of Credit, a
Request for Letter of Credit may be delivered to the Issuing Lender by
facsimile by a Responsible Official of Borrower, in which case Borrower
shall confirm such request by promptly delivering a Request for Letter
of Credit (conforming to the preceding sentence) in person to the
Issuing Lender. The Issuing Lender shall incur no liability whatsoever
hereunder in acting upon any Request for Letter of Credit received by
facsimile purportedly made by a Responsible Official of Borrower, and
Borrower hereby agrees to indemnify the Issuing Lender from any loss,
cost, expense or liability as a result of so acting.
(c) Upon issuance of a Letter of Credit, each Lender
shall be deemed to have purchased a pro rata participation in such
Letter of Credit from the Issuing Lender in proportion to that Lender's
Pro Rata Share of the Revolving Facility. Without limiting the scope and
nature of each Lender's participation in any Letter of Credit, to the
extent that the Issuing Lender has not been reimbursed by Borrower for
any payment required to be made by the Issuing Lender under any Letter
of Credit,
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each Lender shall, pro rata according to its Pro Rata Share of the
Revolving Facility, reimburse the Issuing Lender through the
Administrative Agent promptly upon demand for the amount of such
payment. The obligation of each Lender to so reimburse the Issuing
Lender shall be absolute and unconditional and shall not be affected by
the occurrence of an Event of Default or any other occurrence or event.
Any such reimbursement shall not relieve or otherwise impair the
obligation of Borrower to reimburse the Issuing Lender for the amount of
any payment made by the Issuing Lender under any Letter of Credit
together with interest as hereinafter provided.
(d) Borrower agrees to pay to the Issuing Lender through
the Administrative Agent an amount equal to any payment made by the
Issuing Lender with respect to each Letter of Credit within one (1)
Banking Day after demand made by the Issuing Lender therefor, together
with interest on such amount from the date of any payment made by the
Issuing Lender at the rate applicable to Alternate Base Rate Advances
under the Revolving Facility for the period commencing on the date of
any such payment and continuing through the first Banking Day following
such demand and thereafter at the Default Rate. The principal amount of
any such payment shall be used to reimburse the Issuing Lender for the
payment made by it under the Letter of Credit. Each Lender that has
reimbursed the Issuing Lender pursuant to Section 2.5(c) for its Pro
Rata Share of any payment made by the Issuing Lender under a Letter of
Credit shall thereupon acquire a pro rata participation, to the extent
of such reimbursement, in the claim of the Issuing Lender against
Borrower under this Section 2.5(d) and shall share, in accordance with
that pro rata participation, in any payment made by Borrower with
respect to such claim. Upon receipt of any such reimbursement from
Borrower, the Issuing Lender shall pay to the Administrative Agent, for
the ratable benefit of those Lenders that had reimbursed the Issuing
Lender pursuant to Section 2.5(c) for their respective Pro Rata Shares
of any payment made by the Issuing Lender under a Letter of Credit to
which such reimbursement applies, the amount of such reimbursement.
(e) Borrower may, pursuant to a Request for Borrowing,
request that Advances be made pursuant to Section 2.1(a) to provide
funds for the payment required by Section 2.5(d). The proceeds of such
Advances shall be paid directly to the Issuing Lender to reimburse it
for the payment made by it under the Letter of Credit.
(f) If Borrower fails to make the payment required by
Section 2.5(d) within the time period therein set forth, in lieu of the
reimbursement to the Issuing Lender under Section 2.5(c) the Issuing
Lender may (but is not required to), without notice to or the consent of
Borrower, instruct the Administrative Agent to cause Revolving Advances
to be made by the Lenders under the Revolving Facility in an aggregate
amount equal to the amount paid by the Issuing Lender with respect to
that Letter of Credit and, for this purpose, the conditions precedent
set forth in Article 8 shall not apply. The proceeds of such Advances
shall be paid to the Issuing Lender to reimburse it for the payment made
by it under the Letter of Credit.
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(g) The issuance of any supplement, modification,
amendment, renewal, or extension to or of any Letter of Credit shall be
treated in all respects the same as the issuance of a new Letter of
Credit.
(h) The obligation of Borrower to pay to the Issuing
Lender the amount of any payment made by the Issuing Lender under any
Letter of Credit shall be absolute, unconditional, and irrevocable,
subject only to performance by the Issuing Lender of its obligations to
Borrower under Section 5108 of the UCC. Without limiting the foregoing,
Borrower's obligations shall not be affected by any of the following
circumstances:
(i) any lack of validity or enforceability of the
Letter of Credit, this Agreement, or any other agreement
or instrument relating thereto;
(ii) any amendment or waiver of or any consent to
departure from the Letter of Credit, this Agreement, or
any other agreement or instrument relating thereto, with
the written consent of Borrower executed by a Responsible
Official of Borrower;
(iii) the existence of any claim, setoff,
defense, or other rights that Borrower may have at any
time against the Issuing Lender, the Administrative Agent
or any Lender, any beneficiary of the Letter of Credit
(or any Persons for whom any such beneficiary may be
acting) or any other Person, whether in connection with
the Letter of Credit, this Agreement, or any other
agreement or instrument relating thereto, or any
unrelated transactions;
(iv) any demand, statement, 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 whatsoever so long as any such
document reasonably appeared to comply with the terms of
the Letter of Credit;
(v) payment by the Issuing Lender in good faith
under the Letter of Credit against presentation of a
draft or any accompanying document which does not
strictly comply with the terms of the Letter of Credit;
(vi) the existence, character, quality, quantity,
condition, packing, value or delivery of any Property
purported to be represented by documents presented in
connection with any Letter of Credit or for any
difference between any such Property and the character,
quality, quantity, condition, or value of such Property
as described in such documents;
(vii) the time, place, manner, order or contents
of shipments or deliveries of Property as described in
documents presented in connection with any Letter of
Credit or the existence, nature and extent of any
insurance relative thereto;
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(viii) the solvency or financial responsibility
of any party issuing any documents in connection with a
Letter of Credit;
(ix) any failure or delay in notice of shipments
or arrival of any Property;
(x) any error in the transmission of any message
relating to a Letter of Credit not caused by the Issuing
Lender, or any delay or interruption in any such message;
(xi) any error, neglect or default of any
correspondent of the Issuing Lender in connection with a
Letter of Credit;
(xii) any consequence arising from acts of God,
war, insurrection, civil unrest, disturbances, labor
disputes, emergency conditions or other causes beyond the
control of the Issuing Lender; and
(xiii) so long as the Issuing Lender in good
faith determines that the contract or document appears to
comply with the terms of the Letter of Credit, the form,
accuracy, genuineness or legal effect of any contract or
document referred to in any document submitted to the
Issuing Lender in connection with a Letter of Credit.
(i) The Issuing Lender shall be entitled to the
protection accorded to the Administrative Agent pursuant to Section 10.6
(subject to the standards set forth therein), mutatis mutandis.
(j) The Uniform Code of Practice for Documentary Credits,
as published in its most current version by the International Chamber of
Commerce, shall be deemed a part of this Section and shall apply to all
Letters of Credit to the extent not inconsistent with applicable Law.
2.6 Termination or Reduction of the Commitments.
(a) Optional. Borrower may at any time or from time to
time, upon not less than three (3) Banking Days' notice to the Administrative
Agent, terminate in whole or reduce in part the Commitments under any Facility,
provided that each partial reduction of the Commitments under any of the
Facilities shall be in an aggregate amount of $250,000 or an integral multiple
of $50,000 in excess thereof.
(b) Mandatory. The Revolving Commitments shall be
automatically and permanently reduced to zero on the Revolving Facility Maturity
Date. The unused Term Commitments shall be automatically and permanently reduced
to zero at the close of business on the Closing Date concurrently with the
Closing Date Lenders' initial Term Advances to be made on such date.
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(c) Reduction Pro Rata; No Reinstatements. Each reduction
of the Commitments under a Facility shall be applied to the respective
Commitments of the relevant Lenders according to their respective Pro Rata
Shares of such Facility. Commitments once terminated or reduced may not be
reinstated.
2.7 Administrative Agent's Right to Assume Funds Available for
Advances. Unless the Administrative Agent shall have been notified by any
relevant Lender no later than 10:00 a.m., California time, on the Banking Day of
the proposed funding by the Administrative Agent of any Borrowing that such
Lender does not intend to make available to the Administrative Agent such
Lender's portion of the total amount of such Borrowing, the Administrative Agent
may assume that such Lender has made such amount available to the Administrative
Agent on the date of the Borrowing and the Administrative Agent may, in reliance
upon such assumption, make available to Borrower a corresponding amount. If the
Administrative Agent has made funds available to Borrower based on such
assumption and such corresponding amount is not in fact made available to the
Administrative Agent by such Lender, the Administrative Agent shall be entitled
to recover such corresponding amount on demand from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent promptly shall notify Borrower and
Borrower shall pay such corresponding amount to the Administrative Agent. The
Administrative Agent also shall be entitled to recover from such Lender interest
on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to Borrower
to the date such corresponding amount is recovered by the Administrative Agent,
at a rate per annum equal to the daily Federal Funds Rate. Nothing herein shall
be deemed to relieve any Lender from its obligation to fulfill its Commitments
or to prejudice any rights which the Administrative Agent or Borrower may have
against any Lender as a result of any default by such Lender hereunder.
2.8 Swing Line.
(a) The Swing Line Lender shall from time to time from
the Closing Date through the day prior to the Revolving Credit Facility
Maturity Date make Swing Line Loans to Borrower in such amounts as
Borrower may request, provided that (a) after giving effect to such
Swing Line Loan, Revolving Credit Facility Usage does not exceed the
Maximum Revolving Credit Amount, (b) after giving effect to such Swing
Line Loan, the Swing Line Outstandings do not exceed $5,000,000 and/or,
(c) without the consent of all of the Lenders, no Swing Line Loan may be
made during the continuation of an Event of Default if written notice of
such Event of Default shall have been provided to Swing Line Lender by
the Administrative Agent or a Lender sufficiently in advance of the
making of such Swing Line Loan. Borrower may borrow, repay and reborrow
under this Section. Borrowings under the Swing Line may be made in
amounts which are integral multiples of $100,000 (or the remaining
availability under the Swing Line) upon telephonic request by a
Responsible Official of Borrower made to the Administrative Agent not
later than 2:00 p.m., California time, on the Banking Day of the
requested borrowing (which telephonic request shall be promptly
confirmed in writing by
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telecopier or electronic mail). Promptly after receipt of such a request
for borrowing, the Administrative Agent shall provide telephonic
verification to the Swing Line Lender that, after giving effect to such
request, availability for Loans will exist under Section 2.1(a) (and
such verification shall be promptly confirmed in writing by telecopier
or electronic mail). Each repayment of a Swing Line Loan shall be in an
amount which is an integral multiple of $100,000 (or the Swing Line
Outstandings). Borrower shall notify the Swing Line Lender of its
intention to make a repayment of a Swing Line Loan not later than 1:00
p.m. California time on the date of repayment. If Borrower instructs the
Swing Line Lender to debit its demand deposit account at the Swing Line
Lender in the amount of any payment with respect to a Swing Line Loan,
or the Swing Line Lender otherwise receives repayment, after 3:00 p.m.,
California time, on a Banking Day, such payment shall be deemed received
on the next Banking Day. The Swing Line Lender shall promptly notify the
Administrative Agent of the Swing Loan Outstandings each time there is a
change therein.
(b) Swing Line Loans shall bear interest at a fluctuating
rate per annum equal to the Alternate Base Rate plus the Applicable
Alternate Base Rate Margin. Interest shall be payable on such dates, not
more frequent than monthly, as may be specified by the Swing Line Lender
and in any event on the Revolving Credit Facility Maturity Date. The
Swing Line Lender shall be responsible for invoicing Borrower for such
interest. The interest payable on Swing Line Loans is solely for the
account of the Swing Line Lender (subject to clause (d) below).
(c) Subject to subsection (e) below, the principal amount
of all Swing Line Loans shall be due and payable on the earlier of (i)
the maturity date agreed to by the Swing Line Lender and Borrower with
respect to such loan (which maturity date shall not be a date more than
five (5) consecutive Banking Days from the date of advance thereof) or
(ii) the Revolving Credit Facility Maturity Date.
(d) Upon the making of a Swing Line Loan, each Lender
shall be deemed to have purchased from the Swing Line Lender a
participation therein in an amount equal to that Lender's Pro Rata Share
of the Revolving Commitment times the amount of the Swing Line Loan.
Upon demand made by the Swing Line Lender, each Lender shall, according
to its Pro Rata Share of the Revolving Commitment, promptly provide to
the Swing Line Lender its purchase price therefor in an amount equal to
its participation therein. The obligation of each Lender to so provide
its purchase price to the Swing Line Lender shall be absolute and
unconditional (except only demand made by the Swing Line Lender) and
shall not be affected by the occurrence of a Default or Event of
Default; provided that no Lender shall be obligated to purchase its Pro
Rata Share of (i) Swing Line Loans to the extent that, after giving
effect to such Swing Line Loan, Revolving Credit Facility Usage exceeds
the Maximum Revolving Credit Amount, (ii) Swing Line Loans to the extent
that, after giving effect to such Swing Line Loan, Swing Line
Outstandings exceed $5,000,000 and (iii) any Swing Line Loan made
(absent the consent of all of the Lenders) during the continuation of an
Event of Default if written notice of such Event of Default shall have
been provided to Swing Line Lender by the Administrative Agent or a
Lender sufficiently in advance of
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the making of such Swing Line Loan. Each Lender that has provided to the
Swing Line Lender the purchase price due for its participation in Swing
Line Loans shall thereupon acquire a pro rata participation, to the
extent of such payment, in the claim of the Swing Line Lender against
Borrower for principal and interest and shall share, in accordance with
that pro rata participation, in any principal payment made by Borrower
with respect to such claim and in any interest payment made by Borrower
(but only with respect to periods subsequent to the date such Lender
paid the Swing Line Lender its purchase price) with respect to such
claim.
(e) In the event that any Swing Line Loan remains
outstanding for ten (10) consecutive Banking Days, then on the next
Banking Day (unless Borrower has made other arrangements acceptable to
the Swing Line Lender to repay such Swing Line Loan, in full), Borrower
shall request a Loan pursuant to Section 2.1(a) sufficient to repay the
aggregate principal amount of such Swing Line Loan together with any and
all accrued and unpaid interest with respect thereto. In addition, the
Swing Line Lender may, at any time, in its sole discretion, by written
notice to the Borrowers and the Lenders, demand payment of the Swing
Line Loans by way of a Revolving Advance in the full amount or any
portion of the Swing Line Outstandings. In each case, the Administrative
Agent shall automatically provide the responsive Advances made by each
Lender to the Swing Line Lender (which the Swing Line Lender shall then
apply to the Swing Line Outstandings). In the event that Borrower fails
to request a Loan within the time specified by Section 2.2 on any such
date, the Administrative Agent may, but is not required to, without
notice to or the consent of Borrower, cause Alternate Base Rate Advances
to be made by the Lenders under the Revolving Commitment in amounts
which are sufficient to reduce the Swing Line Outstandings as required
above. The proceeds of such Advances shall be paid directly to the Swing
Line Lender for application to the Swing Line Outstandings.
2.9 Collateral. The Obligations shall be secured by a first
priority (subject to Liens permitted by Section 6.9) perfected Lien on the
Collateral pursuant to the Collateral Documents.
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Article 3.
PAYMENTS AND FEES
3.1 Principal and Interest.
(a) Interest shall be payable on the outstanding daily
unpaid principal amount of each Advance from the date thereof until
payment in full is made and shall accrue and be payable at the rates set
forth or provided for herein before and after Default, before and after
maturity, before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law, with
interest on overdue interest at the Default Rate to the fullest extent
permitted by applicable Laws.
(b) Interest accrued on each Alternate Base Rate Advance
shall be due and payable on each Quarterly Payment Date. Except as
otherwise provided in Section 3.7, the unpaid principal amount of any
Alternate Base Rate Advance shall bear interest at a fluctuating rate
per annum equal to the Alternate Base Rate plus the Applicable Alternate
Base Rate Margin. Each change in the interest rate under this Section
3.1(b) due to a change in the Alternate Base Rate shall take effect
simultaneously with the corresponding change in the Alternate Base Rate.
(c) Interest accrued on each Eurodollar Rate Advance
which is for a term of three months or less shall be due and payable on
the last day of the related Eurodollar Period. Interest accrued on each
other Eurodollar Rate Advance shall be due and payable on the date which
is three months after the date such Eurodollar Rate Advance was made
(and, in the event that all of the Lenders have approved a Eurodollar
Period of longer than six months, every three months thereafter through
the last day of the Eurodollar Period) and on the last day of the
related Eurodollar Period. Except as otherwise provided in Section 3.7,
the unpaid principal amount of any Eurodollar Rate Advance shall bear
interest at a rate per annum equal to the Eurodollar Rate for that
Eurodollar Rate Advance plus the Applicable Eurodollar Rate Margin.
(d) If not sooner paid, the principal Indebtedness
evidenced by the Notes shall be payable as follows:
(i) the amount, if any, by which the principal
Indebtedness evidenced by the Revolving Note at any time
exceeds the Maximum Revolving Credit Amount shall be
payable immediately;
(ii) the Term Amortization Amount with respect to
each applicable Amortization Date under the Term Notes
shall be payable on such Amortization Date; and
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(iii) the principal Indebtedness evidenced by any
series of Notes shall in any event be payable on the
applicable Maturity Date for such series of Notes.
(e) The principal Indebtedness evidenced by the Notes
shall be prepaid on or before the third Banking Day following the
receipt by Borrower or any Subsidiary of: (i) Net Cash Sales Proceeds
from Dispositions by an amount equal to the amount by which such Net
Cash Sales Proceeds exceed $250,000 per annum; (ii) Net Cash Issuance
Proceeds from the issuance of equity Securities of Borrower or any
Subsidiary by an amount equal to the amount by which such Net Cash
Issuance Proceeds exceed $250,000 per annum. Any prepayment of the Notes
under this subsection shall be applied first, to principal coming due on
the Term Notes in reverse order of maturity and second, to the Revolving
Notes in accordance with the respective principal balances then
outstanding thereunder.
(f) The principal Indebtedness evidenced by the Notes
may, at any time and from time to time, voluntarily be paid or prepaid
in whole or in part without premium or penalty, except that with respect
to any voluntary prepayment under this subsection, (i) any partial
prepayment shall be not less than $2,000,000 and shall be an integral
multiple of $500,000, (ii) the Administrative Agent shall have received
written notice of any prepayment by 9:00 a.m. California time on the
date that is (x) in the case of a Eurodollar Rate Advance three (3)
Banking Days before the date of prepayment and (y) in the case of an
Alternate Base Rate Advance, the date of prepayment, which notice shall
identify the date and amount of the prepayment and the Advance(s) being
prepaid, (iii) each prepayment of principal on any Eurodollar Rate
Advance shall be accompanied by payment of interest accrued to the date
of payment on the amount of principal paid, (iv) any payment or
prepayment of all or any part of any Eurodollar Rate Advance on a day
other than the last day of the applicable Eurodollar Period shall be
subject to Section 3.6(e), and (v) to the extent any prepayment of any
of the Notes under this subsection is in excess of any Term Amortization
Amount then due, such excess shall be applied pro rata to principal
payments coming due first to the Term Notes and second to the Revolving
Notes in accordance with the respective principal balances then
outstanding thereunder.
3.2 Unused Revolving Facility Commitment Fee. From the Closing
Date through the Revolving Facility Maturity Date, Borrower shall pay to the
Administrative Agent, for the ratable accounts of the applicable Lenders in
accordance with their respective Pro Rata Shares, a commitment fee equal to the
Applicable Commitment Fee Margin times the average daily amount by which the
Maximum Revolving Credit Amount exceeds the sum of (a) the aggregate principal
amount of funded Indebtedness then outstanding under the Revolving Notes plus
(b) the Aggregate Effective Amount under all outstanding Standby Letters of
Credit. The commitment fee shall be payable quarterly in arrears on each
Quarterly Payment Date.
3.3 Closing Fee; Agency Fee etc. Borrower shall pay to the
Closing Date Lenders, through the Administrative Agent, the closing fees in the
amount heretofore agreed
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upon by letter agreement among Borrower and each Closing Date Lender. All such
fees shall be fully earned when paid and shall be non-refundable. Fees paid to
the Administrative Agent are solely for its own account and are non-refundable.
3.4 Letter of Credit Fees. With respect to each Letter of Credit,
Borrower shall pay the following fees:
(a) concurrently with the issuance of each Standby Letter
of Credit and on each Quarterly Payment Date thereafter so long as such
Standby Letter of Credit shall remain outstanding, to the Administrative
Agent for the ratable accounts of the Lenders in accordance with their
respective Pro Rata Shares, a standby letter of credit fee in an amount
equal to the product of the then Applicable Standby Letter of Credit Fee
Rate times the then outstanding undrawn amount of such Standby Letter of
Credit, for the period commencing on such payment date and ending on the
next succeeding Quarterly Payment Date or for the remaining term of such
Standby Letter of Credit, whichever is shorter; provided, however, that
the applicable standby letter of credit fee payable in connection with
the original issuance of any Standby Letter of Credit (and on each
anniversary date thereof if such Letter of Credit is renewed or
extended) shall be no less than $350;
(b) concurrently with the issuance of each Commercial
Letter of Credit, a one-time issuance fee equal to 1.00% (100 basis
points) of the face amount of such Commercial Letter of Credit; and
(c) concurrently with the issuance of each Letter of
Credit, and on each Quarterly Payment Date thereafter so long as such
Letter of Credit shall remain outstanding, to the Issuing Lender for its
own account, a fronting fee equal to 0.125% (12.5 basis points) per
annum on the daily average stated amount of such Letter of Credit.
In addition to the foregoing, in connection with a Letter of Credit and activity
relating thereto, Borrower also shall pay amendment, transfer, issuance,
negotiation and such other fees as the Issuing Lender normally charges, in the
amounts set forth from time to time as the Issuing Lender's published scheduled
fees for such services. Each of the fees payable with respect to Letters of
Credit under this Section is earned when due and is nonrefundable.
3.5 Increased Commitment Costs. If any Lender shall determine in
good faith that the introduction after the Closing Date of any applicable law,
rule, regulation or guideline regarding capital adequacy, or any change therein
or any change in the interpretation or administration thereof by any central
bank or other Governmental Agency charged with the interpretation or
administration thereof, or compliance by such Lender (or its Eurodollar Lending
Office) or any corporation controlling such Lender, with any request, guideline
or directive regarding capital adequacy (whether or not having the force of Law)
of any such central bank or other authority not imposed as a result of such
Lender's or such corporation's failure to comply with any other Laws, affects or
would affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling
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such Lender and (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy and such Lender's desired return on
capital) determines in good faith that the amount of such capital is increased,
or the rate of return on capital is reduced, as a consequence of its obligations
under this Agreement, then, within ten (10) days after demand of such Lender,
Borrower shall pay to such Lender, from time to time as specified in good faith
by such Lender, additional amounts sufficient to compensate such Lender in light
of such circumstances, to the extent reasonably allocable to such obligations
under this Agreement, provided that Borrower, shall not be obligated to pay any
such amount which arose prior to the date which is one year preceding the date
of such demand or is attributable to periods prior to the date which is one year
preceding the date of such demand. Each Lender's determination of such amounts
shall be conclusive in the absence of manifest error.
3.6 Eurodollar Costs and Related Matters.
(a) In the event that any Governmental Agency imposes on any
Lender any reserve or comparable requirement (including any emergency,
supplemental or other reserve) with respect to the Eurodollar
Obligations of that Lender, Borrower shall pay that Lender within ten
(10) days after demand all amounts necessary to compensate such Lender
(determined as though such Lender's Eurodollar Lending Office had funded
100% of its Eurodollar Rate Advances in the Designated Eurodollar
Market) in respect of the imposition of such reserve requirements
(provided that Borrower shall not be obligated to pay any such amount
which arose prior to the date which is one year preceding the date of
such demand or is attributable to periods prior to the date which is one
year preceding the date of such demand). Any Lender's determination of
such amount shall be conclusive in the absence of manifest error.
(b) If, after the date hereof, the existence or occurrence of any
Special Eurodollar Circumstance:
(i) shall subject any Lender or its Eurodollar
Lending Office to any tax, duty or other charge or cost
with respect to any Eurodollar Rate Advance, any of its
Notes evidencing Eurodollar Rate Advances or its
obligation to make Eurodollar Rate Advances, or shall
change the basis of taxation of payments to any Lender
attributable to the principal of or interest on any
Eurodollar Rate Advance or any other amounts due under
this Agreement in respect of any Eurodollar Rate Advance,
any of its Notes evidencing Eurodollar Rate Advances or
its obligation to make Eurodollar Rate Advances,
excluding (A) taxes imposed on or measured in whole or in
part by its overall net income by (1) any jurisdiction
(or political subdivision thereof) in which it is
organized or maintains its principal office or Eurodollar
Lending Office or (2) any jurisdiction (or political
subdivision thereof) in which it is "doing business" and
(B) any withholding taxes or other taxes based on gross
income imposed by the United States of America for any
period with respect to which it has failed to provide
Borrower with the appropriate form or
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forms required by Section 11.21, to the extent such
forms are then required by applicable Laws;
(ii) shall impose, modify or deem applicable any
reserve not applicable or deemed applicable on the date
hereof (including any reserve imposed by the Board of
Governors of the Federal Reserve System, special deposit,
capital or similar requirements against assets of,
deposits with or for the account of, or credit extended
by, any Lender or its Eurodollar Lending Office); or
(iii) shall impose on any Lender or its
Eurodollar Lending Office or the Designated Eurodollar
Market any other condition affecting any Eurodollar Rate
Advance, any of its Notes evidencing Eurodollar Rate
Advances, its obligation to make Eurodollar Rate Advances
or this Agreement, or shall otherwise affect any of the
same;
and the result of any of the foregoing, as determined in good faith by
such Lender, increases the cost to such Lender or its Eurodollar Lending
Office of making or maintaining any Eurodollar Rate Advance or in
respect of any Eurodollar Rate Advance, any of its Notes evidencing
Eurodollar Rate Advances or its obligation to make Eurodollar Rate
Advances or reduces the amount of any sum received or receivable by such
Lender or its Eurodollar Lending Office with respect to any Eurodollar
Rate Advance, any of its Notes evidencing Eurodollar Rate Advances or
its obligation to make Eurodollar Rate Advances (assuming such Lender's
Eurodollar Lending Office had funded 100% of its Eurodollar Rate
Advances in the Designated Eurodollar Market), then, within five (5)
Banking Days after demand by such Lender (with a copy to the
Administrative Agent), Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such increased cost
or reduction (determined as though such Lender's Eurodollar Lending
Office had funded 100% of its Eurodollar Rate Advances in the Designated
Eurodollar Market); provided that Borrower shall not be obligated to pay
any such amount which arose prior to the date which is one year
preceding the date of such demand or is attributable to periods prior to
the date which is one year preceding the date of such demand. A
statement of any Lender claiming compensation under this subsection
shall be conclusive in the absence of manifest error.
(c) If, after the date hereof, the existence or
occurrence of any Special Eurodollar Circumstance shall, in the good
faith opinion of any Lender, make it unlawful or impossible for such
Lender or its Eurodollar Lending Office to make, maintain or fund its
portion of any Borrowing consisting of Eurodollar Rate Advances, or
materially restrict the authority of such Lender to purchase or sell, or
to take deposits of, Dollars in the Designated Eurodollar Market, or to
determine or charge interest rates based upon the Eurodollar Rate, then
such Lender's obligation to make Eurodollar Rate Advances shall be
suspended for the duration of such illegality or impossibility and the
Administrative Agent forthwith shall give notice thereof to the other
Lenders and Borrower. Upon receipt of such notice, the outstanding
principal
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amount of such Lender's affected Eurodollar Rate Advances, together with
accrued interest thereon, automatically shall be converted to Alternate
Base Rate Advances on either (i) the last day of the Eurodollar
Period(s) applicable to such Eurodollar Rate Advances if such Lender may
lawfully continue to maintain and fund such Eurodollar Rate Advances to
such day(s) or (ii) immediately if such Lender may not lawfully continue
to fund and maintain such Eurodollar Rate Advances to such day(s),
provided that in such event the conversion shall not be subject to
payment of a prepayment fee under Section 3.6(e). Each Lender agrees to
endeavor promptly to notify Borrower of any event of which it has actual
knowledge, occurring after the Closing Date, which will cause such
Lender to notify Borrower as set forth in the first sentence of this
Section, and agrees to designate a different Eurodollar Lending Office
if such designation will avoid the need for such notice and will not, in
the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender. In the event that any Lender is unable,
for the reasons set forth above, to make, maintain or fund any
Eurodollar Rate Advance, such Lender shall fund such Eurodollar Dollar
Rate Advance as an Alternate Base Rate Advance for the same period of
time, and such amount shall be treated in all respects as an Alternate
Base Rate Advance. In the event that any Lender's obligation to make
Eurodollar Rate Advances has been suspended under this Section, such
Lender shall promptly notify the Administrative Agent and Borrower of
the cessation of the Special Eurodollar Circumstance which gave rise to
such suspension.
(d) If, with respect to any proposed Borrowing comprised
of Eurodollar Rate Advances:
(i) the Administrative Agent reasonably
determines that, by reason of circumstances affecting the
Designated Eurodollar Market generally that are beyond
the reasonable control of the Lenders, deposits in
Dollars (in the applicable amounts) are not being offered
to any Lender in the Designated Eurodollar Market for the
applicable Eurodollar Period; or
(ii) the Requisite Lenders advise the
Administrative Agent that the Eurodollar Rate as
determined by the Administrative Agent (A) does not
represent the effective pricing to such Lenders for
deposits in Dollars in the Designated Eurodollar Market
in the relevant amount for the applicable Eurodollar
Period, or (B) will not adequately and fairly reflect the
cost to such Lenders of making the applicable Eurodollar
Rate Advances;
then the Administrative Agent forthwith shall give notice thereof to
Borrower and the Lenders, whereupon until the Administrative Agent
notifies Borrower that the circumstances giving rise to such suspension
no longer exist, the obligation of the Lenders to make any future
Eurodollar Rate Advances shall be suspended.
(e) Upon payment or prepayment of any Eurodollar Rate
Advance (other than as the result of a conversion required under Section
3.6(c)) on a day other than the last day in the applicable Eurodollar
Period (whether voluntarily,
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involuntarily, by reason of acceleration, or otherwise), or upon the
failure of Borrower (for a reason other than the breach by a Lender of
its obligation pursuant to Section 2.1(a)) to borrow on the date or in
the amount specified for a Borrowing comprised of Eurodollar Rate
Advances in any Request for Borrowing, Borrower shall pay to the
appropriate Lender within five (5) Banking Days after demand a
prepayment fee or failure to borrow fee, as the case may be (determined
as though 100% of the Eurodollar Rate Advance had been funded in the
Designated Eurodollar Market) equal to the sum of:
(1) $250; plus
(2) the amount, if any, by which (i) the
additional interest would have accrued on the amount
prepaid or not borrowed at the Eurodollar Rate plus the
Applicable Eurodollar Rate Margin if that amount had
remained or been outstanding through the last day of the
applicable Eurodollar Period exceeds (ii) the interest
that such Lender could recover by placing such amount on
deposit in the Designated Eurodollar Market for a period
beginning on the date of the prepayment or failure to
borrow and ending on the last day of the applicable
Eurodollar Period (or, if no deposit rate quotation is
available for such period, for the most comparable period
for which a deposit rate quotation may be obtained); plus
(3) all out-of-pocket expenses incurred by such
Lender reasonably attributable to such payment,
prepayment or failure to borrow.
Each Lender's determination of the amount of any prepayment fee payable
under this Section shall be conclusive in the absence of manifest error.
(f) Each Lender agrees to endeavor promptly to notify
Borrower of any event of which it has actual knowledge, occurring after
the Closing Date, which will entitle such Lender to compensation
pursuant to clause (a) or clause (b) of this Section, and agrees to
designate a different Eurodollar Lending Office if such designation will
avoid the need for or reduce the amount of such compensation and will
not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender. Any request for compensation by a Lender
under this Section shall set forth the basis upon which it has been
determined that such an amount is due from Borrower, a calculation of
the amount due, and a certification that the corresponding costs have
been incurred by such Lender.
3.7 Late Payments and Default Rate. If any installment of
principal or interest or any fee or cost or other amount payable under any Loan
Document to the Administrative Agent or any Lender is not paid when due, it
shall thereafter bear interest at a fluctuating interest rate per annum at all
times equal to the sum of the interest rate otherwise applicable thereto
hereunder (or, if no interest rate is otherwise applicable thereto hereunder,
the Alternate Base Rate) plus 2.00% (the "Default Rate"), to the fullest extent
permitted by applicable Laws. While any Event of Default exists or after
acceleration, at the option of the
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Requisite Lenders, Borrower shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by Law) on the principal amount of all
outstanding Obligations, at the Default Rate, to the fullest extent permitted by
Law. Accrued and unpaid interest on past due amounts (including interest on past
due interest) shall be compounded monthly, on the last day of each calendar
month, to the fullest extent permitted by applicable Laws.
3.8 Computation of Interest and Fees. Computation of interest and
fees under this Agreement shall be calculated on the basis of a year of 360 days
and the actual number of days elapsed. Interest shall accrue on each Advance for
the day on which the Advance is made; interest shall not accrue on an Advance,
or any portion thereof, for the day on which the Advance or such portion is
paid. Any Advance that is repaid on the same day on which it is made shall bear
interest for one day. Notwithstanding anything in this Agreement to the
contrary, interest in excess of the maximum amount permitted by applicable Laws
shall not accrue or be payable hereunder or under the Notes, and any amount paid
as interest hereunder or under the Notes which would otherwise be in excess of
such maximum permitted amount shall instead be treated as a payment of
principal.
3.9 Non-Banking Days. If any payment to be made by Borrower or
any other Party under any Loan Document shall come due on a day other than a
Banking Day, payment shall instead be considered due on the next succeeding
Banking Day and the extension of time shall be reflected in computing interest
and fees.
3.10 Manner and Treatment of Payments.
(a) Each payment hereunder (except payments pursuant to
Sections 3.4, 3.5, 11.3, 11.11 and 11.21) or on the Notes or under any
other Loan Document shall be made to the Administrative Agent at the
Administrative Agent's Office, in immediately available funds not later
than 11:00 a.m. California time, on the day of payment (which must be a
Banking Day). All payments received after such time, on any Banking Day,
shall be deemed received on the next succeeding Banking Day. The amount
of all payments received by the Administrative Agent for the account of
each Lender shall be immediately paid by the Administrative Agent to the
applicable Lender in immediately available funds and, if such payment
was received by the Administrative Agent by 11:00 a.m., California time,
on a Banking Day and not so made available to the account of a Lender on
that Banking Day, the Administrative Agent shall reimburse that Lender
for the cost to such Lender of funding the amount of such payment at the
Federal Funds Rate. All payments shall be made in lawful money of the
United States of America.
(b) Borrower hereby authorizes the Administrative Agent
to debit the Designated Deposit Account to effect any payment due to the
Lenders or the Administrative Agent pursuant to this Agreement. Any
resulting overdraft in the Designated Deposit Account shall be payable
by Borrower to the Administrative Agent on the next following Banking
Day.
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(c) Each payment or prepayment on account of any
Borrowing shall be applied pro rata according to the outstanding
Advances made by each Lender comprising such Borrowing.
(d) Each Lender shall use its best efforts to keep a
record (in writing or by an electronic data entry system) of Advances
made by it and payments received by it with respect to each of its Notes
and, subject to Section 10.6(g), such record shall, as against Borrower,
be presumptive evidence of the amounts owing. Notwithstanding the
foregoing sentence, the failure by any Lender to keep such a record
shall not affect Borrower's obligation to pay the Obligations.
(e) Each payment of any amount payable by Borrower or any
other Party to any Lender under this Agreement or any other Loan
Document shall be made free and clear of, and without reduction by
reason of, any taxes, assessments or other charges imposed by any
Governmental Agency, central bank or comparable authority, excluding (i)
taxes imposed on or measured in whole or in part by its overall net
income and franchise taxes imposed in lieu of net income taxes by (A)
any jurisdiction (or political subdivision thereof) in which it is
organized or maintains its principal office or Eurodollar Lending Office
or (B) any jurisdiction (or political subdivision thereof) in which it
is "doing business" and (ii) any withholding taxes or other taxes based
on gross income imposed by the United States of America for any period
with respect to which it has failed to provide Borrower with the
appropriate form or forms required by Section 11.21, to the extent such
forms are then required by applicable Laws (all such non-excluded taxes,
assessments or other charges being hereinafter referred to as "Taxes").
To the extent that Borrower is obligated by applicable Laws to make any
deduction or withholding on account of Taxes from any amount payable to
any Lender under this Agreement, Borrower shall (1) make such deduction
or withholding and pay the same to the relevant Governmental Agency and
(2) pay such additional amount to that Lender as is necessary to result
in that Lender's receiving a net after-Tax amount equal to the amount to
which that Lender would have been entitled under this Agreement absent
such deduction or withholding. If and when receipt of such payment
results in an excess payment or credit to that Lender on account of such
Taxes, that Lender shall promptly refund such excess to Borrower.
3.11 Funding Sources. Nothing in this Agreement shall be deemed
to obligate any Lender to obtain the funds for any Advance in any particular
place or manner or to constitute a representation by any Lender that it has
obtained or will obtain the funds for any Advance in any particular place or
manner.
3.12 Failure to Charge Not Subsequent Waiver. Any decision by the
Administrative Agent or any Lender not to require payment of any interest
(including interest arising under Section 3.7), fee, cost or other amount
payable under any Loan Document, or to calculate any amount payable by a
particular method, on any occasion shall in no way limit or be deemed a waiver
of the Administrative Agent's or such Lender's right to require full payment of
any interest (including interest arising under Section 3.7), fee, cost or other
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amount payable under any Loan Document, or to calculate an amount payable by
another method that is not inconsistent with this Agreement, on any other or
subsequent occasion.
3.13 Administrative Agent's Right to Assume Payments Will be
Made. Unless the Administrative Agent shall have been notified by Borrower prior
to the date on which any payment to be made by Borrower hereunder is due that
Borrower does not intend to remit such payment (or otherwise cause sufficient
funds to be available in the Designated Deposit Account for debit pursuant to
Section 3.10(b)), the Administrative Agent may, in its discretion, assume that
Borrower has remitted such payment (or caused funds sufficient to make such
payment to be available) when so due and the Administrative Agent may, in its
discretion and in reliance upon such assumption, make available to each Lender
on such payment date, an amount equal to such Lender's share of such assumed
payment. If Borrower has not in fact remitted such payment (or caused funds
sufficient to make such payment to be available) to the Administrative Agent,
each Lender shall forthwith on demand repay to the Administrative Agent the
amount of such assumed payment made available to such Lender, together with
interest thereon in respect of each day from and including the date such amount
was made available by the Administrative Agent to such Lender to the date such
amount is repaid to the Administrative Agent at the Federal Funds Rate.
3.14 Fee Determination Detail. The Administrative Agent, and any
Lender, shall provide reasonable detail to Borrower regarding the manner in
which the amount of any payment to the Administrative Agent and the Lenders, or
that Lender, under Article 3 has been determined, concurrently with demand for
such payment.
3.15 Survivability. All of Borrower's obligations under Sections
3.4 and 3.5 shall survive for the one year period following the Termination
Date, and Borrower shall remain obligated thereunder for all claims under such
Sections made by any Lender to Borrower prior to the expiration of such period.
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Article 4.
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Administrative Agent and
each of the Lenders that:
4.1 Existence and Qualification; Power; Compliance With Laws.
Borrower is a corporation duly formed, validly existing and in good standing
under the Laws of the State of Delaware. Borrower is duly qualified or
registered to transact business and is in good standing in the State of
California, and each other jurisdiction in which the conduct of its business or
the ownership or leasing of its Properties makes such qualification or
registration necessary, except where the failure so to qualify or register and
to be in good standing would not constitute a Material Adverse Effect. Borrower,
has all requisite power and authority to conduct its business, to own and lease
its Properties and to execute and deliver each Loan Document to which it is a
Party and to perform its Obligations. The chief executive offices of Borrower is
located in Perris, California. All outstanding capital stock of Borrower, are
duly authorized, validly issued, fully paid and non-assessable, and no holder
thereof has any enforceable right of rescission under any applicable state or
federal securities or other Laws. Borrower is in compliance with all Laws and
other legal requirements applicable to its business, has obtained all
authorizations, consents, approvals, orders, licenses and permits from, and has
accomplished all filings, registrations and qualifications with, or obtained
exemptions from any of the foregoing from, any Governmental Agency that are
necessary for the transaction of its business, except where the failure so to
comply with Laws and other legal requirements applicable to its business, obtain
authorizations, etc., file, register, qualify or obtain exemptions does not
constitute a Material Adverse Effect.
4.2 Authority; Compliance With Other Agreements and Instruments
and Government Regulations. The execution, delivery and performance by Borrower
and the other Obligors of the Loan Documents to which it is a Party have been
duly authorized by all necessary corporate or company action, as applicable, and
do not and will not:
(a) Require any consent or approval not heretofore
obtained of any partner, director, stockholder, member, security holder
or creditor of such Party;
(b) Violate or conflict with any provision of such
Party's charter, articles of incorporation, bylaws, articles or
certificate of organization, operating agreement, or other
organizational documents, as applicable;
(c) Result in or require the creation or imposition of
any Lien (other than pursuant to the Loan Documents) or Right of Others
upon or with respect to any Property now owned or leased or hereafter
acquired by such Party;
(d) Violate any Requirement of Law applicable to such
Party;
(e) Result in a breach of or constitute a default under,
or cause or permit the acceleration of any obligation owed under, any
indenture or loan or credit
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agreement or any other Contractual Obligation to which such Party is a
party or by which such Party or any of its Property is bound or
affected;
and such Party is not in violation of, or default under, any Requirement of Law
or Contractual Obligation, or any indenture, loan or credit agreement described
in Section 4.2(e), in any respect that constitutes a Material Adverse Effect.
4.3 No Governmental Approvals Required. Except as previously
obtained or made, no authorization, consent, approval, order, license or permit
from, or filing, registration or qualification with, any Governmental Agency is
or will be required to authorize or permit under applicable Laws the execution,
delivery and performance by Borrower or any other Obligor of the Loan Documents
to which it is a Party.
4.4 Subsidiaries.
(a) Schedule 4.4 hereto correctly sets forth the names,
form of legal entity, number of shares of capital stock or membership or
other equity interests, as applicable, issued and outstanding, number of
shares of capital stock or membership or other equity interests, as
applicable, owned by Borrower or any Subsidiary of Borrower (specifying
such owner) and jurisdictions of organization of all Subsidiaries of
Borrower. Except as described in Schedule 4.4, Borrower does not own any
capital stock, membership interest, other equity interest or debt
security which is convertible, or exchangeable, for capital stock,
membership interests or other equity interests in any Person. Unless
otherwise indicated in Schedule 4.4, all of the outstanding shares of
capital stock, all of the outstanding membership interests or all of the
units of other equity interest, as the case may be, of each Subsidiary
are owned of record and beneficially by Borrower, there are no
outstanding options, warrants or other rights to purchase capital stock
of any such Subsidiary, and all such shares, membership interests or
other equity interests so owned are duly authorized, validly issued,
fully paid and non-assessable, and were issued in compliance with all
applicable state and federal securities and other Laws, and are free and
clear of all Liens, except for Permitted Encumbrances and other
encumbrances permitted pursuant to Section 6.9.
(b) Each Subsidiary is a legal entity of the type
described in Schedule 4.4 duly formed, validly existing and, if such
concept is legally recognized in such Subsidiary's jurisdiction of
organization, in "good standing" under the Laws of its jurisdiction of
organization, is duly qualified to do business as a foreign organization
and, if such concept is legally recognized in any applicable
jurisdiction, is in "good standing" as such in each jurisdiction in
which the conduct of its business or the ownership or leasing of its
Properties makes such qualification necessary (except where the failure
to be so duly qualified and in good standing does not constitute a
Material Adverse Effect), and has all requisite power and authority to
conduct its business and to own and lease its Properties.
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(c) Each Subsidiary is in compliance with all Laws and
other requirements applicable to its business and has obtained all
authorizations, consents, approvals, orders, licenses, and permits from,
and each such Subsidiary has accomplished all filings, registrations,
and qualifications with, or obtained exemptions from any of the
foregoing from, any Governmental Agency that are necessary for the
transaction of its business, except where the failure to be in such
compliance, obtain such authorizations, consents, approvals, orders,
licenses, and permits, accomplish such filings, registrations, and
qualifications, or obtain such exemptions, does not constitute a
Material Adverse Effect.
4.5 Financial Statements. Borrower has furnished to the Lenders
(a) the audited consolidated financial statements of Borrower and its
Subsidiaries for the Fiscal Year ended December 31, 2000 and (b) the unaudited
balance sheet and statement of operations of Borrower and its Subsidiaries for
the Fiscal Quarter ended September 30, 2001. The financial statements described
in clause (a) fairly present in all material respects the financial condition,
results of operations and changes in financial position, and the balance sheet
and statement of operations described in clause (b) fairly present the financial
condition and results of operations of Borrower and its Subsidiaries, as of such
dates and for such periods in conformity with GAAP consistently applied subject
only to normal year-end accruals and audit adjustments
4.6 No Other Liabilities; No Material Adverse Changes. Borrower
and its Subsidiaries do not have any material liability or material contingent
liability required under GAAP to be reflected or disclosed, and not reflected or
disclosed, in the pro forma balance sheet described in Section 4.5(b), other
than liabilities and contingent liabilities arising in the ordinary course of
business since the date of such balance sheet. As of the Closing Date, no
circumstance or event has occurred that constitutes a Material Adverse Effect
since September 30, 2001.
4.7 Title to and Location of Property. Borrower and its
Subsidiaries have valid title to the Property (other than assets which are the
subject of a Capital Lease Obligation) reflected in the pro forma balance sheet
described in Section 4.5(b), other than items of Property or exceptions to title
which are in each case immaterial and Property subsequently sold or disposed of
in the ordinary course of business. Such Property is free and clear of all Liens
and Rights of Others, other than Liens or Rights of Others described in Schedule
4.7A and Permitted Encumbrances, other encumbrances permitted pursuant to
Section 6.9, and Permitted Rights of Others. All Property of Borrower and its
Subsidiaries is located at one of the locations described in Schedule 4.7B,
which schedule sets forth (a) all office, warehouse and manufacturing and other
space of Borrower and its Subsidiaries where any Property of Borrower or any of
its Subsidiaries is located and (b) all deposit (whether a demand, time,
savings, passbook or similar account) and investment accounts of Borrower and
its Subsidiaries, identifying such account by account number, type, location of
depositary institution and applicable owner thereof.
4.8 Intangible Assets. Borrower and its Subsidiaries own, or
possess the right to use to the extent necessary in their respective businesses,
all material trademarks,
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trade names, copyrights, patents, patent rights, computer software, licenses and
other Intangible Assets that are used in the conduct of their businesses as now
operated, and no such Intangible Asset, to the best knowledge of Borrower,
conflicts with the valid trademark, trade name, copyright, patent, patent right
or Intangible Asset of any other Person to the extent that such conflict
constitutes a Material Adverse Effect. Except as described in Schedule 4.8, in
the enforcement of its rights as a secured creditor, the Administrative Agent
(or any applicable Lender) will not be required to own or otherwise possess the
right to use any patent, trademark or other intellectual property, or any
license to use the same, in order to sell any Inventory of Borrower or any of
its Subsidiaries after the occurrence of an Event of Default. Schedule 4.8 sets
forth all patents, patent applications, trademarks, trade names and trade styles
used by Borrower or any of its Subsidiaries at any time within the five (5) year
period ending on the Closing Date.
4.9 Public Utility Holding Company Act. None of Borrower or any
of the other Obligors is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
4.10 Litigation. Except for (a) any matter fully covered as to
subject matter and amount (subject to applicable deductibles and retentions) by
insurance for which the insurance carrier has not asserted lack of subject
matter coverage or reserved its right to do so, (b) any matter, or series of
related matters, involving a claim against Borrower or any of its Subsidiaries
of less than $250,000, (c) matters of an administrative nature not involving a
claim or charge against Borrower or any Subsidiary of Borrower and (d) matters
set forth in Schedule 4.10, there are no actions, suits, proceedings or
investigations pending as to which Borrower or any of its Subsidiaries have been
served or have received notice or, to the best knowledge of Borrower threatened
against or affecting Borrower or any of its Subsidiaries or any Property of any
of them before any Governmental Agency. None of Borrower, its Subsidiaries, or,
to the best knowledge of Borrower, any executive officer of any such Persons has
been indicted or convicted in connection with or is engaging in any criminal
conduct which constitutes a felony, or is currently subject to any lawsuit or
proceeding or, to the best of Borrower's knowledge, under investigation in
connection with any anti-racketeering or criminal conduct or activity which
constitutes a felony.
4.11 Binding Obligations. Each of the Loan Documents to which
Borrower and any of the other Obligors is a Party will, when executed and
delivered by such Party, constitute the legal, valid and binding obligation of
such Party, enforceable against such Party in accordance with its terms, except
as enforcement may be limited by Debtor Relief Laws or equitable principles
relating to the granting of specific performance and other equitable remedies as
a matter of judicial discretion.
4.12 No Default. No event has occurred and is continuing that is
a Default or Event of Default.
4.13 ERISA.
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(a) With respect to each Pension Plan:
(i) such Pension Plan complies in all material
respects with ERISA and any other applicable Laws to the
extent that noncompliance could reasonably be expected to
have a Material Adverse Effect;
(ii) such Pension Plan has not incurred any
"accumulated funding deficiency" (as defined in Section
302 of ERISA) that could reasonably be expected to have a
Material Adverse Effect;
(iii) no "reportable event" (as defined in
Section 4043 of ERISA, but excluding such events as to
which the PBGC has by regulation waived the requirement
therein contained that it be notified within thirty days
of the occurrence of such event) has occurred that could
reasonably be expected to have a Material Adverse Effect;
and
(iv) neither Borrower nor any of the other
Obligors has engaged in any non-exempt "prohibited
transaction" (as defined in Section 4975 of the Code)
that could reasonably be expected to have a Material
Adverse Effect.
(b) Neither Borrower nor any of the other Obligors have
incurred or expects to incur any withdrawal liability to any
Multiemployer Plan that could reasonably be expected to have a Material
Adverse Effect.
4.14 Regulation U; Investment Company Act. No part of the
proceeds of any Advance hereunder will be used to purchase or carry, or to
extend credit to others for the purpose of purchasing or carrying, any Margin
Stock in violation of Regulation U. Neither Borrower nor any of the other
Obligors is or is required to be registered as an "investment company" under the
Investment Company Act of 1940.
4.15 Disclosure. No written statement made by a Senior Officer of
Borrower to the Administrative Agent or any Lender pursuant to this Agreement,
or in connection with any Advance, as of the date thereof contained any untrue
statement of a material fact or omitted a material fact necessary to make the
statement made not misleading in light of all the circumstances existing at the
date the statement was made.
4.16 Tax Liability. Borrower and the other Obligors have filed
all tax returns which are required to be filed, and have paid, or made provision
for the payment of, all taxes with respect to the periods, Property or
transactions covered by said returns, or pursuant to any assessment received by
Borrower or any of its Subsidiaries, except (a) such taxes, if any, as are being
contested in good faith by appropriate proceedings and as to which adequate
reserves have been established and maintained and (b) immaterial taxes so long
as no material Property of Borrower or any Subsidiary is at impending risk of
being seized, levied upon or forfeited.
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4.17 Projections. As of the Closing Date, to the best knowledge
of Borrower the assumptions set forth in the Projections are reasonable and
consistent with each other and with all facts known to Borrower other than to
the extent the disclosures set forth on Schedule 4.17 would affect such
assumptions, and the Projections are reasonably based on such assumptions.
Nothing in this Section 4.17 shall be construed as a representation or covenant
that the Projections in fact will be achieved.
4.18 Hazardous Materials. Except as described in Schedule 4.18,
(a) neither Borrower nor any of the other Obligors at any time has disposed of,
discharged, released or threatened the release of any Hazardous Materials on,
from or under the Real Property in violation of any Hazardous Materials Law that
would individually or in the aggregate constitute a Material Adverse Effect, (b)
no condition exists that violates any Hazardous Material Law affecting any Real
Property except for such violations that would not individually or in the
aggregate constitute a Material Adverse Effect, (c) no Real Property or any
portion thereof is or has been utilized by any Borrower or any Subsidiary as a
site for the manufacture of any Hazardous Materials and (d) to the extent that
any Hazardous Materials are used, generated or stored by Borrower or any
Subsidiary on any Real Property, or transported to or from such Real Property by
Borrower, or any Subsidiary, such use, generation, storage and transportation
are in compliance in all material respects with all Hazardous Materials Laws.
4.19 Security Interests. Upon the execution and delivery of the
Security Agreement, the Security Agreement will create a valid security interest
in the Collateral described therein securing the Obligations (subject only to
Permitted Encumbrances, Permitted Rights of Others and other matters permitted
by Section 6.9 and to such qualifications and exceptions as are contained in the
UCC with respect to the priority of security interests perfected by means other
than the filing of a financing statement or with respect to the creation of
security interests in Property to which Division 9 of the UCC does not apply)
and all actions necessary to perfect the security interests so created, other
than filing of the UCC-1 financing statements delivered to the Administrative
Agent pursuant to Section 8.1 with the appropriate Governmental Agency, have
been taken and completed. Upon the execution and delivery of any Control Account
Agreement by the depositary institution party thereto and the Borrower or any
applicable Subsidiary, such Control Account Agreement will create a valid
security interest in the Collateral described therein (subject only to Liens
permitted by the terms of such Control Account Agreement and Liens permitted by
Section 6.9) securing the Obligations and all actions necessary to perfect the
security interests so created will have been taken and completed. Upon the
execution and delivery of the Pledge Agreements, each Pledge Agreement will
create a valid first priority security interest in the Pledged Collateral
described therein and upon delivery of the applicable Pledged Collateral to the
Administrative Agent all action necessary to perfect the security interests so
created will have been taken and completed.
4.20 Employee Matters. There is no strike, work stoppage or labor
dispute with any union or group of employees pending or, to the best knowledge
of Borrower overtly threatened involving Borrower or any Subsidiary that would
constitute a Material Adverse Effect.
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4.21 Fiscal Year. Borrower and its Subsidiaries each operate on a
fiscal year ending on December 31.
4.22 Solvency. After giving effect to this Agreement and the
other Loan Documents (including after giving effect to Advances under this
Agreement as of the Closing Date), Borrower shall be Solvent.
4.23 Trac Modular. Trac Modular Manufacturing, Inc. ("Trac
Modular") is a Subsidiary of Borrower with less than $10,000 of total assets.
Trac Modular will be dissolved not greater than ninety (90) subsequent to the
Closing Date.
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Article 5.
AFFIRMATIVE COVENANTS
(OTHER THAN INFORMATION AND
REPORTING REQUIREMENTS)
So long as any Advance remains unpaid, or any other Obligation
remains unpaid, or any portion of any of the Commitments remains in force,
Borrower shall, and shall cause each of the Subsidiaries to, unless the
Administrative Agent (with the written approval of the Requisite Lenders)
otherwise consents:
5.1 Payment of Taxes and Other Potential Liens. Pay and discharge
promptly all taxes, assessments and governmental charges or levies imposed upon
any of them, upon their respective Property or any part thereof and upon their
respective income or profits or any part thereof, except that Borrower and its
Subsidiaries shall not be required to pay or cause to be paid (a) any tax,
assessment, charge or levy that is not yet past due, or is being contested in
good faith by appropriate proceedings so long as the relevant entity has
established and maintains adequate reserves for the payment of the same or (b)
any immaterial tax so long as no material Property of Borrower or any Subsidiary
thereof is at impending risk of being seized, levied upon or forfeited.
5.2 Preservation of Existence. Preserve and maintain their
respective existences (except as permitted by Section 6.4) in the jurisdiction
of their formation and all material authorizations, rights, franchises,
privileges, consents, approvals, orders, licenses, permits, or registrations
from any Governmental Agency that are necessary for the transaction of their
respective business and qualify and remain qualified to transact business in
each jurisdiction in which such qualification is necessary in view of their
respective business or the ownership or leasing of their respective Properties
except where the failure to so qualify or remain qualified would not constitute
a Material Adverse Effect.
5.3 Maintenance of Properties. Maintain, preserve and protect all
of their respective Properties in good order and condition, subject to wear and
tear in the ordinary course of business, and not permit any waste of their
respective Properties, except (i) that the failure to maintain, preserve and
protect a particular item of Property that is at the end of its useful life or
that is not of significant value, either intrinsically or to the operations of
Borrower or any of its Subsidiaries, shall not constitute a violation of this
covenant, and (ii) this covenant shall not be construed to prohibit any
Disposition otherwise permitted pursuant to Section 6.3.
5.4 Maintenance of Insurance.
(a) Maintain insurance on all insurable tangible Property
against fire, casualty and such other hazards (including extended
coverage and workmen's compensation) in such amounts, with such
deductibles and with such insurers (rated "A" or better by "A.M. Best's
Insurance Reports") as are customarily used by companies operating in
the same industry as Borrower and its Subsidiaries and reasonably
acceptable to the Administrative Agent. Prior to the Closing Date,
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Borrower shall furnish the Administrative Agent with a schedule of all
such insurance prepared by their insurance broker, and certificates of
insurance with respect thereto (including the text of the lender's loss
payable clause in favor of the Administrative Agent required below), or
such other evidence of insurance as the Administrative Agent may
require. Borrower shall furnish the Administrative Agent with a copy of
each applicable policy within thirty (30) days after Closing Date. In
the event Borrower fails to procure or cause to be procured any such
insurance or to timely pay or cause to be paid the premium(s) on any
such insurance, the Administrative Agent may do so for Borrower but
Borrower shall continue to be liable for the same. All casualty
insurance policies shall contain standard lender's loss payable clauses
issued in favor of the Administrative Agent (on behalf of the Lenders)
indicating that the Administrative Agent is sole lender loss payee,
under which all losses thereunder shall be paid to the Administrative
Agent (on behalf of the Lenders) as the Administrative Agent's interest
may appear. Such policies shall expressly provide that the requisite
insurance cannot be altered or canceled without thirty (30) days prior
written notice to the Administrative Agent and shall insure the
Administrative Agent notwithstanding the act or neglect of Borrower or
any of its Subsidiaries. Borrower hereby appoints the Administrative
Agent as its attorney-in-fact, exercisable at the Administrative Agent's
option only during the occurrence and continuance of a Default or an
Event of Default, and only to the extent the Obligations are
outstanding, to endorse any check which may be payable to Borrower and
to file proofs of loss with respect to any insurance claims, in order to
collect the proceeds of such insurance and any amount or amounts
collected by the Administrative Agent pursuant to the provisions of this
paragraph may be applied by the Administrative Agent to the Obligations.
Borrower further covenants that all insurance premiums due and owing
under its current casualty policies have been paid. Borrower also agrees
to notify the Administrative Agent, promptly, upon any receipt of a
notice of termination, cancellation, or non-renewal from its insurance
company of any such policy.
(b) Maintain, and deliver to the Administrative Agent
upon the Administrative Agent's request evidence of, public liability,
products liability and business interruption insurance in such amounts
as are reasonably acceptable to the Administrative Agent, but in any
event not more than are customary for companies in the same or similar
businesses located in the same or similar area. The Administrative Agent
(on behalf of the Lenders) shall be named as additional insured with
respect to all such liability insurance. The foregoing insurance shall
be obtained from such insurers (rated "A" or better by "A.M. Best's
Insurance Reports") as are customarily used by companies operating in
the same industry as Borrower and its Subsidiaries and reasonably
acceptable to the Administrative Agent.
5.5 Compliance With Laws. Comply with all Requirements of Law
noncompliance with which constitutes a Material Adverse Effect, except that
Borrower and its Subsidiaries need not comply with a Requirement of Law then
being contested by any of them in good faith by appropriate proceedings.
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5.6 Inspection Rights. Upon reasonable notice, at any time during
regular business hours and, as requested by the Administrative Agent (but not so
as to materially interfere with the business of Borrower or any of the
Subsidiaries) permit the Administrative Agent, or any Lender, or any authorized
employee, agent or representative thereof, to examine, audit and make copies and
abstracts from the records and books of account of (including any software or CD
Rom programs relating thereto), and to visit and inspect the Properties of,
Borrower and its Subsidiaries and to discuss the affairs, finances and accounts
of Borrower and its Subsidiaries with any of their officers, key employees or
accountants and, upon request, furnish promptly to the Administrative Agent or
any Lender true copies of all financial information made available to the board
of directors or audit committee of the board of directors of Borrower. If any of
the Properties, books or records of Borrower or any of the Subsidiaries are in
the possession of a third party, Borrower authorizes that third party to permit
the Administrative Agent or any Lender or any agents thereof to have access to
perform inspections or audits and to respond to the Administrative Agent's or
any Lender's request for information concerning such Properties, books and
records. Notwithstanding the foregoing, no prior notice of any such examination,
audit, visit, inspection or discussion shall be required if an Event of Default
has occurred and remains in effect or if the Administrative Agent has reason to
believe that a Default or Event of Default then exists.
5.7 Keeping of Records and Books of Account. Keep adequate
records and books of account reflecting all financial transactions in conformity
with GAAP, consistently applied, and in material conformity with all applicable
requirements of any Governmental Agency having regulatory jurisdiction over
Borrowers and its Subsidiaries.
5.8 Compliance With Agreements. Promptly and fully comply with
all Contractual Obligations to which any one or more of them is a party, except
for any such Contractual Obligations (a) the performance of which would cause a
Default or (b) then being contested by any of them in good faith by appropriate
proceedings or (c) if the failure to comply does not constitute a Material
Adverse Effect.
5.9 Use of Proceeds. Use the proceeds of all Advances to (a)
refinance certain Indebtedness of Borrower, (ii) finance certain acquisitions
and (c) provide for the working capital and general corporate purpose need of
Borrower and its Subsidiaries.
5.10 Hazardous Materials Laws. Keep and maintain all Real
Property and each portion thereof in compliance in all material respects with
all applicable Hazardous Materials Laws and promptly notify the Administrative
Agent in writing (attaching a copy of any pertinent written material) of (a) any
and all material enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened in writing by a
Governmental Agency pursuant to any applicable Hazardous Materials Laws, (b) any
and all material claims made or threatened in writing by any Person against
Borrower or any Subsidiary relating to damage, contribution, cost recovery,
compensation, loss or injury resulting from any Hazardous Materials and (c)
discovery by any Senior Officer of Borrower of any material occurrence or
condition on any real property adjoining or in the vicinity of such Real
Property that could reasonably be expected to cause such Real Property or any
part
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thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use of such Real Property under any applicable Hazardous
Materials Laws.
5.11 Future Subsidiaries; Additional Security Documentation. (a)
Cause each Subsidiary formed or acquired by Borrower or any Subsidiary of
Borrower after the Closing Date to execute and deliver to the Administrative
Agent (i) an appropriate joinder to the Subsidiary Guaranty, the Security
Agreement and/or the Pledge Agreement (ii) such landlord/mortgage waivers as the
Administrative Agent shall reasonably request and (iii) such other agreements,
financing statements and other documents (including those of the type described
in Sections 8.1(a)(10), (11), and (12)), together with an opinion of counsel
from counsel and in form and substance reasonably acceptable to the
Administrative Agent, and (b) pledge to the Administrative Agent pursuant to the
Pledge Agreement all of the capital stock or other equity interests of any
Subsidiary formed or acquired after the Closing Date. In addition to the
foregoing, Borrower and the Subsidiaries shall cause such documents and
instruments as may be reasonably requested by the Administrative Agent from time
to time to be executed and delivered and do such further acts and things as
reasonably may be required in order for the Administrative Agent to obtain a
fully perfected first priority Lien on all Collateral, subject to Permitted
Encumbrances, Permitted Rights of Others and other matters permitted by Section
6.9.
5.12 Intercompany Notes. Cause each Subsidiary and Affiliate of
Borrower to execute a promissory note (in a form reasonably acceptable to
Administrative Agent) evidencing any Indebtedness of such Subsidiary or
Affiliate to Borrower, or any Subsidiary of Borrower, which is in an amount of
$250,000 or more, and cause each payee of such promissory note to deliver the
same to the Administrative Agent, with an endorsement in blank, as Pledged
Collateral.
5.13 Syndication Process. Cooperate in such respects as may be
reasonably requested by the Arranger in connection with the syndication of the
credit facilities under this Agreement, including the provision of information
(in form and substance acceptable to the Arranger) for inclusion in written
materials furnished to prospective syndicate members and the participation by
Senior Officers of Borrower and its Subsidiaries in meetings with prospective
syndicate members.
5.14 Interest Rate Protection Agreements. Enter into and deliver
to the Administrative Agent one or more Approved Interest Rate Protection
Agreements at the soonest commercially reasonable time following the Closing
Date, which Approved Interest Rate Protection Agreements shall, in the
aggregate, cover at least fifty percent (50%) of the outstanding Term Facility
for a period of not less than thirty-six (36) months.
5.15 Landlord Waivers and Consents. Deliver to the Administrative
Agent a landlord waiver/consent, or other appropriate waiver/consent, in form
and substance reasonably satisfactory to the Administrative Agent from the
owner/lessor of any premises not owned by Borrower or any Subsidiary (other than
the premises listed in Section 8.1(a) (10) hereof) at which any of the
Collateral is now or hereafter located for the purpose of perfecting the
Administrative Agent's (on behalf of Lenders) Liens as first priority Liens in,
and of
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providing access to, such Collateral. Notwithstanding the above, if, after using
commercially reasonable efforts, Borrower is unable to provide a landlord
consent to the Administrative Agent with respect to any applicable real
Property, the Administrative Agent shall have the right, but not the obligation,
at Borrower's reasonable cost and expense, to attempt to obtain such landlord
consent from the applicable party and Borrower shall cooperate with the
Administrative Agent in connection with any such attempt to obtain such landlord
consent. If the Administrative Agent elects to attempt to obtain a landlord
consent, Borrower shall be entitled to participate in any negotiations or other
discussions between the Administrative Agent and the applicable landlord and, if
the Administrative Agent (or its counsel) intends to deliver any written
document (including correspondence and draft landlord consents) to any
applicable landlord, the Administrative Agent shall provide Borrower a
reasonable opportunity to review and comment on such written document prior to
the delivery thereof to the applicable landlord. Notwithstanding the foregoing,
the Administrative Agent shall not have the right to commence an action (or
bring suit) against any landlord for delivery of a landlord consent without the
consent of Borrower. As used in this Section 5.15, "commercially reasonable
efforts" shall not require Borrower to commence suit against or pay any material
sum or to deliver any other material consideration to any landlord refusing to
provide an acceptable landlord consent.
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Article 6.
NEGATIVE COVENANTS
So long as any Advance remains unpaid, or any other Obligation
remains unpaid, or any portion of any of the Commitments remains in force,
Borrower shall not, and shall not permit any of its Subsidiaries to, unless the
Administrative Agent (with the written approval of the Requisite Lenders or, if
required by Section 11.2, all of the Lenders) otherwise consents:
6.1 Prepayment of Indebtedness. Prepay any principal or interest
on any Indebtedness of Borrower or any Subsidiary prior to the date when due, or
make any payment or deposit with any Person that has the effect of providing for
the satisfaction of any Indebtedness of Borrower or any Subsidiary prior to the
date when due, except (a) Indebtedness to the Administrative Agent and the
Lenders under this Agreement and the other Loan Documents, (b) Indebtedness in
an amount not to exceed $200,000 per annum and (c) Indebtedness to other Persons
the prepayment of which is approved in advance by the Requisite Lenders in
writing.
6.2 Prepayment of Subordinated Obligations. Pay any (a) principal
(including sinking fund payments) or any other amount (other than scheduled
interest payments) with respect to any Subordinated Obligation, or purchase or
redeem any Subordinated Obligation or deposit any monies, securities or other
Property with any trustee or other Person to provide assurance that the
principal or any portion thereof of any Subordinated Obligation will be paid
when due or otherwise to provide for the defeasance of any Subordinated
Obligation or (b) scheduled interest on any Subordinated Obligation if the
payment thereof is then prohibited under the terms of the subordination
provisions governing such Subordinated Obligations.
6.3 Disposition of Property. Make any Disposition of its
Property, whether now owned or hereafter acquired, except (a) Dispositions of
obsolete Property or Property with no material remaining useful life, (b)
Dispositions in an aggregate amount not to exceed $200,000 in any Fiscal Year
ending after the Closing Date or $1,000,000 in the aggregate from and after the
Closing Date to the Termination Date and (c) Dispositions of Property permitted
pursuant to the terms of the Security Agreement; provided that (i) at the time
of any such Disposition pursuant to clause (b) only, no Default or Event of
Default shall exist or shall result from such Disposition, (ii) the sales price
relating to a Disposition (pursuant to clause (a) or (b)) shall be paid in Cash
and (iii) with respect to Dispositions pursuant to clause (a) or (b), a Borrower
shall comply with Section 3.1(e) in connection with such Disposition.
6.4 Mergers. Merge or consolidate with or into any Person, except
mergers and consolidations of a Subsidiary into Borrower (with Borrower as the
surviving entity), or of Subsidiaries with each other, provided that (a) no
Default or Event of Default would result therefrom and (b) any such "surviving"
entity shall have executed such amendments to the Loan Documents, if any, as the
Administrative Agent may reasonably determine are appropriate as a result of
such merger.
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6.5 Hostile Tender Offers. Make any offer to purchase or acquire,
or consummate a purchase or acquisition of, five percent (5%) or more of the
voting interest in any corporation or other business entity if the board of
directors or management of such corporation or business entity has notified
Borrower that it opposes such offer or purchase and such notice has not been
withdrawn or superseded.
6.6 Distributions. Declare or pay or make any form of
Distribution, whether from capital, income or otherwise, and whether in Cash or
other Property, except:
(a) Distributions by any Subsidiary to a Borrower or to
any wholly-owned Subsidiary of Borrower;
(b) Distributions consisting of dividends payable solely
in capital stock or rights to purchase capital stock; and
(c) Distributions to any holder of the capital stock of
Borrower for the purpose of repurchasing such capital stock from such
holder; provided that (i) the aggregate amount of all such Distributions
shall not to exceed $5,000,000 and (ii) the aggregate amount of any such
Distribution shall not be greater than the fair market value of the
capital so repurchased;
provided that in each such case, no Default or Event of Default then
exists or would result therefrom.
6.7 ERISA. (a) At any time, permit any Pension Plan to: (i)
engage in any non-exempt "prohibited transaction" (as defined in Section 4975 of
the Code); (ii) fail to comply with ERISA or any other applicable Laws; (iii)
incur any material "accumulated funding deficiency" (as defined in Section 302
of ERISA); or (iv) terminate in any manner, which, with respect to each event
listed above, could reasonably be expected to result in a Material Adverse
Effect or (b) withdraw, completely or partially, from any Multiemployer Plan if
to do so could reasonably be expected to result in a Material Adverse Effect.
6.8 Change in Nature of Business. Make any change in the nature
of the business of Borrower and the other Obligors, taken as a whole, as at
present conducted.
6.9 Liens and Negative Pledges. Create, incur, assume or suffer
to exist any Lien or Negative Pledge of any nature upon or with respect to any
of their respective Properties, or engage in any sale and leaseback transaction
with respect to any of their respective Properties, whether now owned or
hereafter acquired, except:
(a) Liens and Negative Pledges existing on the Closing
Date and disclosed in Schedule 4.7A and any renewals/extensions or
amendments thereof, provided that the obligations secured or benefited
thereby are not increased;
(b) Liens and Negative Pledges under the Loan Documents;
(c) Permitted Encumbrances;
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(d) Liens on Property acquired by Borrower or any
Subsidiary that were in existence at the time of the acquisition of such
Property and were not created in contemplation of such acquisition
provided that the aggregate amount of Indebtedness of Borrower and its
subsidiaries secured by such liens shall not at any time exceed
$250,000; and
(e) Liens securing Indebtedness permitted by Section
6.10(d) on and limited to the capital assets acquired, constructed or
financed with the proceeds of such Indebtedness or with the proceeds of
any Indebtedness directly or indirectly refinanced by such Indebtedness.
6.10 Indebtedness and Guaranty Obligations. Create, incur or
assume any Indebtedness or Guaranty Obligation except:
(a) Indebtedness and Guaranty Obligations existing on the
Closing Date and disclosed in Schedule 6.10, and refinancings, renewals,
extensions or amendments that do not increase the amount thereof;
(b) Indebtedness and Guaranty Obligations under the Loan
Documents;
(c) Indebtedness and Guaranty Obligations owed to
Borrower or any of its domestic Subsidiaries;
(d) Indebtedness consisting of Capital Lease Obligations,
or otherwise incurred to finance the purchase or construction of capital
assets (which shall be deemed to exist if the Indebtedness is incurred
at or within 90 days before or after the purchase or construction of the
capital asset), or to refinance any such Indebtedness, provided that the
aggregate principal amount of such Indebtedness incurred after the
Closing Date shall not exceed $5,000,000 at any one time outstanding (as
determined in accordance with GAAP consistently applied);
(e) unsecured Subordinated Obligations incurred after the
Closing Date by Borrower in favor of a seller of a business acquired in
a Permitted Acquisition; provided the aggregate amount of all such
Subordinated Obligations shall not exceed $2,000,000 at any one time
outstanding;
(f) Subordinated Obligations (other than those described
in clause (e) above) in such amount as may be approved in writing by the
Requisite Lenders;
(g) Indebtedness consisting of Interest Rate Protection
Agreements; and
(h) Indebtedness not described in clauses (a)-(g) above
in an aggregate amount not to exceed $2,000,000 at any one time
outstanding; provided that such Indebtedness is not on terms, whether
with respect to covenants, defaults or otherwise, that are more
restrictive than the terms contained in the Loan Documents.
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6.11 Transactions with Affiliates. Enter into any transaction of
any kind with any Affiliate of Borrower other than (without duplication): (a)
salary, bonus, employee stock option and other compensation arrangements with
directors or officers in the ordinary course of business, (b) Distributions
permitted pursuant to Section 6.6; and (c) transactions on overall terms at
least as favorable to Borrower or its Subsidiaries as would be the case in an
arm's-length transaction between unrelated parties of equal bargaining power.
6.12 Funded Debt Ratio. Permit the Funded Debt Ratio, as of the
last day of any Fiscal Quarter, to be greater than the ratio set forth below
opposite such Fiscal Quarter
Amount Maximum Ratio
------ -------------
Each Fiscal Quarter ending March 31, 2.0:1.0
June 30 or September 30
December 31, 2001 1.25:1.00
Each Fiscal Quarter ending December 31
(other than December 31, 2001) 1.00:1.00
6.13 Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio, as of the last day of any Fiscal Quarter, to be less than
1.40:1.00.
6.14 Current Ratio. Permit the Current Ratio (a) to be less than
1.25:1.00 at any time during any Fiscal Quarter ending March 31, June 30 or
September 30 and (b) to be less than 1.35:1.00 at any time during any Fiscal
Quarter ending December 31.
6.15 Tangible Net Worth. Permit Tangible Net Worth, at any time,
to be less than the sum of (a) $20,072,000, plus (b) an amount equal to 50% of
Net Income earned after the Closing Date (with no deduction for a net loss in
any such Fiscal Quarter) plus (c) an amount equal to 90% of the aggregate
increases in Stockholders' Equity of Borrower and its Subsidiaries after the
Closing Date by reason of the issuance and sale of capital stock of Borrower or
any Subsidiary thereof (including upon any conversion of debt Securities of
Borrower or any Subsidiary thereof into such capital stock).
6.16 Investments and Acquisitions. Make any Acquisition or enter
into any agreement to make any Acquisition unless approved in advance by the
Administrative Agent and the Requisite Lenders in writing, or make or suffer to
exist any Investment, other than:
(a) Permitted Acquisitions;
(b) Investments in existence on the Closing Date and
disclosed on Schedule 6.16;
(c) Investments consisting of Cash Equivalents;
(d) Investments consisting of advances to officers,
directors and employees of Borrower and its Subsidiaries for travel,
entertainment, relocation,
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anticipated bonus and analogous ordinary business purposes provided that
the aggregate amount of such Investments does not exceed $100,000 at any
time outstanding;
(e) Investments in a Subsidiary that is a wholly-owned
Subsidiary of Borrower, provided that each such Subsidiary shall have
executed and delivered to the Administrative Agent, or caused to be
executed and delivered to the Administrative Agent, all such Collateral
Documents and other documents and instruments required by the
Administrative Agent pursuant to Section 5.11;
(f) Investments consisting of the extension of credit to
customers or suppliers of Borrower and its Subsidiaries in the ordinary
course of business and any Investments received in satisfaction or
partial satisfaction thereof;
(g) Investments received in connection with the
settlement of a bona fide dispute with another Person provided that the
aggregate amount of such Investments does not exceed $250,000 at any
time outstanding; and
(h) Investments representing all or a portion of the
sales price of Property sold or services provided to another Person
provided that the aggregate amount of such Investments does not exceed
$250,000 at any time outstanding.
6.17 Capital Expenditures. Make any Capital Expenditure in any
Fiscal Year, if to do so would result in the aggregate of all Capital
Expenditures (calculated on the basis of aggregate exposure) made in such Fiscal
Year to exceed $4,500,000.
6.18 Operating Leases. Incur any obligation to pay rent under an
operating lease in any Fiscal Year if to do so would result in the aggregate
obligation of Borrower and its Subsidiaries to pay rent under all operating
leases in that Fiscal Year to exceed $2,500,000.
6.19 Subsidiary Indebtedness. Permit (whether or not otherwise
permitted under Section 6.10) any Subsidiary to create, incur, assume or suffer
to exist any Indebtedness or Guaranty Obligation, except (a) Indebtedness and
Guaranty Obligations in existence on the Closing Date, (b) a Guaranty Obligation
required by Section 5.11, (c) Indebtedness owed to a Borrower or a Subsidiary
and (d) Capital Lease Obligations and purchase money obligations of any
Subsidiary in respect of Property used by that Subsidiary that comply with the
provisions of Section 6.10(d).
6.20 Amendments. Amend or modify any term or provision of (a) any
indenture, agreement or instrument evidencing or governing any Subordinated
Obligation or (b) any material provision of any Material Contract, if in any
such case such amendment or modification in any respect will or may adversely
affect the interest of the Lenders.
6.21 Change in Location of Chief Executive Offices, Jurisdiction
of Organization and Assets. Relocate the chief executive office, or change the
jurisdiction of organization, of Borrower or any of its Subsidiaries without
first giving the Administrative Agent thirty (30) days' prior written notice of
any relocation or change. Borrower shall move,
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nor shall it permit any Subsidiary to move, any of its respective Property to a
jurisdiction other than any one of the jurisdictions identified in Schedule 6.21
without first giving the Administrative Agent ten (10) calendar days prior
written notice of any such proposed relocation, other than to the extent that
any such Property has been sold pursuant to a sale in the ordinary course of
business.
6.22 Use of Lender's Name. Use any Lender's name (or the name of
any of any Lender's Affiliates) in connection with any of their business
operations except to identify the existence of the Facilities and the names of
the Lenders in the ordinary course of Borrower's business. Nothing contained in
this Agreement is intended to permit or authorize Borrower to make any
commitment or contract on behalf of any Lender or the Administrative Agent.
6.23 Change of Fiscal Periods. Change its Fiscal Year or any
other fiscal period with respect to which it reports financial results hereunder
or otherwise.
6.24 Certain Other Restricted Payments. Pay or otherwise incur
management, consulting or other similar fees to any Affiliate of Borrower,
excluding management, consulting or other similar fees payable to KRG Capital
Partners, LLC in an aggregate amount not to exceed $250,000 per annum.
6.25 Deposits and Investment Accounts. Open, transfer or maintain
any deposit or investment account, other than the accounts specified in Schedule
4.7(b), without giving the Administrative Agent twenty (20) days prior written
notice of the opening of any such account that is to be included as Collateral.
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Article 7.
INFORMATION AND REPORTING REQUIREMENTS
7.1 Financial and Business Information. So long as any Advance
remains unpaid, or any other Obligation remains unpaid, or any portion of any of
the Commitments remains in force, Borrower shall, unless the Administrative
Agent (with the written approval of the Requisite Lenders) otherwise consents,
at Borrower's sole expense, deliver to the Administrative Agent for distribution
by it to the Lenders, a sufficient number of copies for all of the Lenders of
the following:
(a) As soon as practicable, and in any event within
forty-five (45) days after the end of each Fiscal Quarter ending March
31, June 30 and September 30 (commencing with the Fiscal Quarter ending
March 31, 2002), the consolidated balance sheet of Borrower and its
Subsidiaries as at the end of such Fiscal Quarter and the consolidated
statements of income, operations and cash flows for such Fiscal Quarter,
and the portion of the Fiscal Year ended with such Fiscal Quarter, all
in reasonable detail. Such financial statements shall be (i) certified
by the president or chief financial officer of Borrower as fairly
presenting the financial condition, results of operations and cash flows
of Borrower and its Subsidiaries in accordance with GAAP (other than
footnote disclosures), consistently applied, as at such date and for
such periods, subject only to normal year-end accruals and audit
adjustments and (ii) accompanied by a performance budget analysis
reasonably acceptable to the Administrative Agent.
(b) As soon as practicable, and in any event within
ninety (90) days after the end of each Fiscal Year, the consolidated
balance sheet of Borrower and its Subsidiaries as at the end of such
Fiscal Year and the consolidated statements of income, operations,
stockkholders' equity and cash flows, in each case of Borrower and its
Subsidiaries for such Fiscal Year, all in reasonable detail. Such
financial statements shall be prepared in accordance with GAAP,
consistently applied, and such consolidated financial statements shall
be accompanied by a report of KPMG Peat Marwick or other independent
public accountants of recognized standing selected by Borrower and
reasonably satisfactory to the Requisite Lenders (without giving effect
to the proviso in the definition thereof), which report shall be
prepared in accordance with generally accepted auditing standards as at
such date, and shall not be subject to any qualifications or exceptions,
and which report shall specifically disclose any changes discovered by
such accountants in Borrower's or its Subsidiaries' applicable process
of management of Accounts. Such accountants' report shall be accompanied
by a certificate stating that, in making the examination pursuant to
generally accepted auditing standards necessary for the certification of
such financial statements and such report, such accountants have
obtained no knowledge of any Default then existing or, if, in the
opinion of such accountants, any such Default shall exist, stating the
nature and status of such Default, and stating that such accountants
have reviewed Borrower's financial calculations as at the end of such
Fiscal Year (which shall accompany such certificate) under Sections
6.12, 6.13, 6.14 and 6.15, have read such Sections (including the
definitions of all defined terms used therein) and that nothing has come
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to the attention of such accountants in the course of such examination
that would cause them to believe that the same were not calculated by
Borrower in the manner prescribed by this Agreement In addition,
Borrower shall deliver to the Administrative Agent a copy of (i) any
"management letter" prepared by such accountants in conjunction with
preparation of the foregoing report and (ii) a separate report prepared
by such accountants in conjunction with preparation of the foregoing
report, pursuant to which separate report such accountants shall be
required to disclose any material changes discovered by such accountants
in the then current account management process (including the
determination of returns and reserves, inventory management practices,
and accounts receivable management practices).
(c) As soon as practicable, and in any event within 45
days after the end of each Fiscal Quarter, a Pricing Certificate setting
forth a calculation of the Leverage Ratio as of the last day of such
Fiscal Quarter, and providing reasonable detail as to the calculation
thereof, which calculations in the case of the fourth Fiscal Quarter in
any Fiscal Year shall be based on the preliminary unaudited financial
statements of Borrower and its Subsidiaries for such Fiscal Quarter, and
as soon as practicable thereafter, in the event of any material variance
in the actual calculation of the Leverage Ratio from such preliminary
calculation, a revised Pricing Certificate setting forth the actual
calculation thereof;
(d) As soon as practicable, and in any event not later
than thirty (30) days prior to the commencement of each Fiscal Year, a
budget and projection of Borrower and its Subsidiaries setting forth (i)
by Fiscal Quarter for the four (4) Fiscal Quarters of that Fiscal Year
and (ii) on an annual basis for each succeeding Fiscal Year thereafter
through the latest Maturity Date, projected balance sheets, statements
of operations and statements of cash flow, all in reasonable detail;
(e) Within thirty (30) days after filing, but in no event
later than October 15th, copies of Borrower's and each Subsidiary's (to
the extent prepared and filed) filed federal income tax returns for such
year;
(f) Promptly after request by the Administrative Agent or
any Lender, copies of any detailed audit reports, management letters or
recommendations submitted to Borrower by independent accountants in
connection with the accounts or books of Borrower, or any of its
Subsidiaries, or any audit of any of them;
(g) Promptly after the same are available, and in any
event within five (5) Banking Days after filing with the Securities and
Exchange Commission, copies of each annual report, proxy or financial
statement or other report or communication sent to the stockholders of
Borrower or any of its Subsidiaries, and copies of all annual, regular,
periodic and special reports and registration statements which Borrower
or any of its Subsidiaries may file or be required to file with the
Securities and Exchange Commission under Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, and not otherwise required
to be delivered to the Lenders pursuant to other provisions of this
Section 7.1;
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(h) Promptly after request by Lender, copies of any other
report or other document that was filed by Borrower, with any
Governmental Agency;
(i) Promptly upon a Senior Officer of Borrower, becoming
aware, and in any event within five (5) Banking Days after becoming
aware, of the occurrence of any (i) "reportable event" (as such term is
defined in Section 4043 of ERISA, but excluding such events as to which
the PBGC has by regulation waived the requirement therein contained that
it be notified within thirty days of the occurrence of such event) or
(ii) non-exempt "prohibited transaction" (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Pension
Plan or any trust created thereunder, telephonic notice specifying the
nature thereof, and, no more than two (2) Banking Days after such
telephonic notice, written notice again specifying the nature thereof
and specifying what action Borrower is taking or proposes to take with
respect thereto, and, when known, any action taken by the Internal
Revenue Service with respect thereto;
(j) As soon as practicable, and in any event within two
(2) Banking Days after a Senior Officer of Borrower becomes aware of the
existence of any condition or event which constitutes a Default or Event
of Default, telephonic notice specifying the nature and period of
existence thereof, and, no more than two (2) Banking Days after such
telephonic notice, written notice again specifying the nature and period
of existence thereof and specifying what action Borrower is taking or
proposes to take with respect thereto;
(k) Promptly upon a Senior Officer of Borrower becoming
aware that (i) any Person has commenced a legal proceeding with respect
to a claim against Borrower that is $250,000 or more in excess of the
amount thereof that is fully covered by insurance, (ii) any creditor
under a credit agreement involving Indebtedness of $250,000 or more or
any lessor under a lease involving aggregate rent of $250,000 or more
has asserted a default thereunder on the part of Borrower or, (iii) any
Person has commenced a legal proceeding with respect to a claim against
Borrower under a contract that is not a credit agreement or material
lease with respect to a claim of in excess of $250,000 or which
otherwise may reasonably be expected to result in a Material Adverse
Effect, a written notice describing the pertinent facts relating thereto
and what action Borrower is taking or proposes to take with respect
thereto;
(l) Together with the financial statements delivered
pursuant to Sections 7.1(a) and (b), a consolidated statement of the
total project backlog (with work in progress information on major
projects, if requested by the Administrative Agent) of Borrower and its
Subsidiaries; and
(m) Such other data and information as from time to time
may be reasonably requested by the Administrative Agent or the Requisite
Lenders.
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7.2 Compliance Certificates. So long as any Advance remains
unpaid, or any other Obligation remains unpaid or unperformed, or any portion of
any of the Commitments remain outstanding, Borrower shall, at Borrower's sole
expense, deliver to the Administrative Agent for distribution by it to the
Lenders concurrently with the financial statements required pursuant to Sections
7.1(a) and 7.1(b), a Compliance Certificate signed by the president or chief
financial officer of Borrower.
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Article 8.
CONDITIONS
8.1 Initial Advances. The obligation of each Closing Date Lender
to make the initial Advance to be made by it, and the obligation of the Issuing
Lender to issue the initial Letter of Credit (as applicable), is subject to the
following conditions precedent, each of which shall be satisfied prior to the
making of the initial Advances or the issuance of the initial Letter of Credit
(as applicable) (unless all of the Closing Date Lenders, in their sole and
absolute discretion, shall agree otherwise):
(a) The Administrative Agent shall have received all of
the following, each of which shall be originals unless otherwise
specified, each properly executed by a Responsible Official of each
party thereto, each dated as of the Closing Date and each in form and
substance satisfactory to the Administrative Agent and its legal counsel
(unless otherwise specified or, in the case of the date of any of the
following, unless the Administrative Agent otherwise agrees or directs):
(1) at least one (1) executed counterpart of this
Agreement, together with arrangements satisfactory to the
Administrative Agent for additional executed
counterparts, sufficient in number for distribution to
the Closing Date Lenders and Borrower;
(2) Revolving Notes executed by Borrower in favor
of each Closing Date Lender, each in a principal amount
equal to that Lender's Revolving Commitment;
(3) Term Notes executed by Borrower in favor of
each Closing Date Lender, each in a principal amount
equal to that Lender's Term Commitment;
(4) the Subsidiary Guaranty executed by the
Guarantors;
(5) the Pledge Agreement executed by the
Pledgors;
(6) the Pledged Collateral, together with
executed undated stock powers (or the equivalent)
relating thereto and any and all Intercompany Notes,
endorsed in blank;
(7) the Security Agreement executed by Borrower
and its Subsidiaries;
(8) the Swing Line Documents executed by
Borrower;
(9) such financing statements on Form UCC-1
executed by Borrower and its Subsidiaries with respect to
the Collateral Documents as the Administrative Agent may
request;
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(10) a landlord waiver/consent, or other
appropriate waiver/consent with respect to the properties
located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇, in form and substance reasonably
satisfactory to the Administrative Agent;
(11) with respect to Borrower and the
Subsidiaries, such documentation as the Administrative
Agent may reasonably require to establish the due
organization, valid existence and good standing of each
such Person, their qualification to engage in business in
each material jurisdiction in which they are engaged in
business or required to be so qualified, their authority
to execute, deliver and perform the Loan Documents to
which it is a Party (if any), the identity, authority and
capacity of each Responsible Official thereof authorized
to act on its behalf, including certified copies of
articles of incorporation and amendments thereto,
articles of organization and amendments thereto,
operating agreements and amendments thereto, bylaws and
amendments thereto, certificates of good standing and/or
qualification to engage in business, tax clearance
certificates, certificates of corporate resolutions or
limited liability company resolutions or other applicable
authorization document, incumbency certificates,
Certificates of Responsible Officials, and the like;
(12) the Opinions of Counsel;
(13) a Certificate of the president or chief
financial officer of Borrower, certifying that attached
thereto is a true and correct copy of the Projections, a
pro forma Closing Date consolidated balance sheet of
Borrower and its Subsidiaries and a calculation of the
Tangible Net Worth of Borrower and its Subsidiaries as of
the Closing Date and further certifying that the
representation contained in Section 4.17 is, to the best
of his or her knowledge, true and correct;
(14) evidence of the insurance policies required
by Section 5.4, together with such endorsements as are
necessary to show the Administrative Agent as sole loss
payee and an additional insured, as applicable,
thereunder;
(15) one or more Requests for Borrowing or
Requests for Letters of Credit (and, in connection
therewith, applicable Letter of Credit Agreements);
(16) a Certificate signed by a Senior Officer of
Borrower certifying that the conditions specified in
Sections 8.1(g) and 8.1(h) have been satisfied; and
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(17) such other assurances, certificates,
documents, consents or opinions as the Administrative
Agent and/or any Closing Date Lender reasonably may
require.
(b) The fees payable on the Closing Date pursuant to
Section 3.3 shall have been paid.
(c) The Administrative Agent shall be reasonably
satisfied that, upon the filing of the financing statements described in
Section 8.1(a)(10) and the Patent Security Agreement and the Trademark
Security Agreement with the appropriate Governmental Agencies, the
Administrative Agent (on behalf of the Lenders) will hold a first
priority perfected Lien in the Collateral described respectively therein
subject only to Permitted Encumbrances and other encumbrances permitted
pursuant to Section 6.9.
(d) The Administrative Agent shall have completed and
received all audits, inspections and examinations as deemed necessary in
the Administrative Agent's reasonable opinion with respect to the
Collateral, the books and records of Borrower and its Subsidiaries, the
financial and business condition and operations of Borrower and its
Subsidiaries and the transactions contemplated hereby.
(e) The corporate structure of Borrower and the
Subsidiaries shall be reasonably satisfactory to the Closing Date
Lenders.
(f) The reasonable costs and expenses of the
Administrative Agent in connection with the preparation of the Loan
Documents payable pursuant to Section 11.3, and invoiced to Borrower
prior to the Closing Date, shall have been paid.
(g) The representations and warranties of Borrower
contained in Article 4 shall be true and correct in all material
respects.
(h) Borrower and any other Parties shall be in compliance
with all the terms and provisions of the Loan Documents, and giving
effect to the initial Advances or initial Letter of Credit (as
applicable), no Default or Event of Default shall have occurred and be
continuing.
(i) Borrower shall have delivered to the Administrative
Agent, evidence, in form and substance satisfactory to the Lenders, that
the BofA Credit Facilities have been or will be concurrently terminated
and that all Liens securing any part of the BofA Credit Facilities have
been or will be concurrently reconveyed, released and/or terminated, as
the case may be.
(j) All legal matters relating to the Loan Documents
shall be reasonably satisfactory to Sheppard, Mullin, ▇▇▇▇▇▇▇ & Hampton
LLP, special counsel to Lender.
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(k) The Closing Date shall have occurred on or before
December 31, 2001.
8.2 Any Advance. The obligation of each Lender to make any
Advance, and the obligation of the Issuing Lender to issue any Letter of Credit,
is subject to the following conditions precedent (unless the Requisite Lenders
or, in any case where the approval of all of the Lenders is required pursuant to
Section 11.2, all of the Lenders, in their sole and absolute discretion, shall
agree otherwise):
(a) except (i) for representations and warranties which
expressly speak as of a particular date or are no longer true and
correct as a result of a change which is permitted by this Agreement or
(ii) as disclosed by Borrower and approved in writing by the Requisite
Lenders, the representations and warranties contained in Article 4
(other than Sections 4.4, 4.6 (first sentence), 4.10 and 4.17) shall be
true and correct in all material respects on and as of the date of the
Advance or the Letter of Credit as though made on that date;
(b) no circumstance or event shall have occurred that
constitutes a Material Adverse Effect since the Closing Date;
(c) other than matters described in Schedule 4.10 or not
required as of the Closing Date to be therein described, there shall not
be then pending or threatened any action, suit, proceeding or
investigation against or affecting Borrower or any other Obligor or any
Property of any of them before any Governmental Agency that constitutes
a Material Adverse Effect;
(d) the Administrative Agent shall have timely received a
Request for Borrowing (or telephonic or other request for Borrowing
referred to in the second sentence of Section 2.1(d), if applicable), or
the Issuing Lender shall have received a Request for Letter of Credit,
as the case may be, in compliance with Article 2; and
(e) the Administrative Agent shall have received, in form
and substance satisfactory to the Administrative Agent, such other
assurances, certificates, documents or consents related to the foregoing
as the Administrative Agent or Requisite Lenders reasonably may require.
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Article 9.
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
9.1 Events of Default. The existence or occurrence of any one or
more of the following events, whatever the reason therefor and under any
circumstances whatsoever, shall constitute an Event of Default:
(a) Borrower fails to pay (i) any principal on any of the
Revolving Notes, or any portion thereof, on the date when due, (ii) any
principal on any of the Notes due and payable on the Revolving Maturity
Date or the Term Maturity Date, or (iii) any principal on any of the
Term Notes (other than principal due on the Term Maturity Date), or any
portion thereof, within five (5) Banking Days after the date when due;
or
(b) Borrower fails to pay any interest on any of the
Notes, or any fees under Sections 3.2 or 3.4, or any portion thereof,
within five (5) Banking Days after the date when due; or fail to pay any
other fee or amount payable to the Lenders of the Administrative Agent
under any Loan Document, or any portion thereof, within five (5) Banking
Days after written demand therefor; or
(c) Borrower fails to comply with, or cause or permit any
of its Subsidiaries to fail to comply with, any of the covenants
contained in Article 6; or
(d) (i) Borrower fails to comply with Section 7.1(j) in
the manner stated therein or (ii) Borrower fails to perform any other
reporting requirement set forth in Article 7 within ten (10) Banking
Days of the date specified for performance therein; or
(e) Borrower or any other Party fails to perform or
observe any other covenant or agreement (not specified in clause (a),
(b), (c) or (d) above) contained in any Loan Document on its part to be
performed or observed within twenty-five (25) Banking Days after the
giving of notice by the Administrative Agent on behalf of the Requisite
Lenders of such Default; or
(f) Any representation or warranty of Borrower or any
other Party made in any Loan Document, or in any certificate or other
writing delivered by Borrower or such other Party pursuant to any Loan
Document, proves to have been incorrect when made or reaffirmed in any
respect that is materially adverse to the interests of the Lenders; or
(g) to the extent not otherwise addressed in this Section
9.1, Borrower or any of its Subsidiaries (i) fails to pay the principal,
or any principal installment, of any present or future Indebtedness of
$250,000 or more, or any guaranty of present or future Indebtedness of
$250,000 or more, on its part to be paid, when due (or within any stated
grace period), whether at the stated maturity, upon acceleration, by
reason of required prepayment or otherwise or (ii) fails to perform or
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observe any other term, covenant or agreement on its part to be
performed or observed, or suffers any event of default to occur, in
connection with any present or future Indebtedness of $250,000 or more,
or of any guaranty of present or future Indebtedness of $250,000 or
more, if as a result of such failure or sufferance any holder or holders
thereof (or an agent or trustee on its or their behalf) has the right to
declare such Indebtedness due before the date on which it otherwise
would become due or the right to require Borrower or any such Subsidiary
to redeem or purchase, or offer to redeem or purchase, all or any
portion of such Indebtedness; or
(h) Any Loan Document, at any time after its execution
and delivery and for any reason other than the agreement or action (or
omission to act) of the Administrative Agent or satisfaction in full of
all the Obligations, ceases to be in full force and effect or is
declared by a court of competent jurisdiction to be null and void,
invalid or unenforceable in any respect which is materially adverse to
the interests of the Lenders; or any Collateral Document ceases (other
than by action or inaction of the Administrative Agent) to create a
valid and effective Lien in any material portion of the Collateral; or
any Party thereto denies in writing that it has any or further liability
or obligation under any Loan Document, or purports to revoke, terminate
or rescind same; or
(i) A final judgment against Borrower or any of its
Subsidiaries is entered for the payment of money in excess of $500,000
(not covered by insurance or for which an insurer has reserved its
rights) and, absent procurement of a stay of execution, such judgment
remains unsatisfied for thirty (30) calendar days after the date of
entry of judgment, or in any event later than five (5) days prior to the
date of any proposed sale thereunder; or any writ or warrant of
attachment or execution or similar process is issued or levied against
all or any material part of the Property of Borrower or any of its
Subsidiaries and is not released, vacated or fully bonded within thirty
(30) calendar days after its issue or levy; or
(j) Borrower or any of its Subsidiaries institutes or
consents to the institution of any proceeding under a Debtor Relief Law
relating to it or to all or any material part of its Property, or is
unable or admits in writing its inability to pay its debts as they
mature, or makes an assignment for the benefit of creditors; or applies
for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for
all or any material part of its Property; or any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer is
appointed without the application or consent of that Person and the
appointment continues undischarged or unstayed for sixty (60) calendar
days; or any proceeding under a Debtor Relief Law relating to any such
Person or to all or any part of its Property is instituted without the
consent of that Person and continues undismissed or unstayed for sixty
(60) calendar days; or
(k) A Change in Control occurs; or
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(l) The dissolution or liquidation of Borrower or any of
its Subsidiaries other than Trac Modular and any Subsidiary with less
than $50,000_ of total assets, or Borrower or any such , or Borrower or
any such Subsidiary, any of their partners, members, directors or
stockholders, as the case may be, shall take action seeking to effect
the dissolution or liquidation of Borrower or such Subsidiary; or
(m) The occurrence of an Event of Default (as such term
is or may hereafter be specifically defined in any other Loan Document)
under any other Loan Document; or
(n) Any Pension Plan maintained by Borrower is finally
determined by the PBGC to have a material "accumulated funding
deficiency" as that term is defined in Section 302 of ERISA in excess of
an amount equal to 5% of the consolidated total assets of Borrower as of
the most-recently ended Fiscal Quarter; or
(o) Any holder of a Subordinated Obligation asserts in
writing that such Subordinated Obligation is not subordinated to the
Obligations in accordance with its terms and Borrower does not promptly
deny in writing such assertion and contest any attempt by such holder to
take action based on such assertion;
(p) Any event occurs which gives the holder or holders of
any Subordinated Obligation (or an agent or trustee on its or their
behalf) the right to declare such Subordinated Obligation due before the
date on which it otherwise would become due, or the right (other than by
reason of a Change in Control) to require the issuer thereof, to redeem
or purchase, or offer to redeem or purchase, all or any portion of any
Subordinated Obligation, or a final judgment is entered by a court of
competent jurisdiction that any Subordinated Obligation is not
subordinated in accordance with its terms to the Obligations; or
(q) Any event or circumstance (other than those listed in
(a)-(p) above) shall occur that constitutes, in the good faith
determination of the Requisite Lenders, a Material Adverse Effect and
such Material Adverse Effect is not cured, in the good faith
determination of the Requisite Lenders, within twenty-five (25) Banking
Days after occurrence thereof.
9.2 Remedies Upon Event of Default. Without limiting any other
rights or remedies of the Administrative Agent or the Lenders provided for
elsewhere in this Agreement, or the other Loan Documents, or by applicable Law,
or in equity, or otherwise:
(a) Upon the occurrence, and during the continuance, of
any Event of Default other than an Event of Default described in Section
9.1(j):
(1) the Commitments to make Advances and all
other obligations of the Administrative Agent or the
Lenders and all rights of Borrower and any other Parties
under the Loan Documents shall be suspended without
notice to or demand upon Borrower, which are expressly
waived by
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Borrower except that all of the Lenders or the Requisite
Lenders (as the case may be, in accordance with Section
11.2) may waive an Event of Default or, without waiving,
determine, upon terms and conditions satisfactory to the
Lenders or Requisite Lenders, as the case may be, to
reinstate the Commitments and such other obligations and
rights and make further Advances, which waiver or
determination shall apply equally to, and shall be
binding upon, all the Lenders;
(2) the Issuing Lender may demand immediate
payment by Borrower of an amount equal to the Aggregate
Effective Amount of all outstanding Letters of Credit to
be held by the Administrative Agent, on behalf of the
Lenders, in an interest-bearing cash collateral account
as collateral for all of the Obligations; and
(3) the Requisite Lenders may request the
Administrative Agent to, and the Administrative Agent
thereupon shall, terminate the Commitments and/or declare
all or any part of the unpaid principal of all Notes, all
interest accrued and unpaid thereon and all other amounts
payable under the Loan Documents to be forthwith due and
payable, whereupon the same shall become and be forthwith
due and payable, without protest, presentment, notice of
dishonor, demand or further notice of any kind, all of
which are expressly waived by Borrower.
(b) Upon the occurrence of any Event of Default described
in Section 9.1(j):
(1) the Commitments shall terminate without
notice to or demand upon Borrower, which are expressly
waived by Borrower, except that all of the Lenders may
waive the Event of Default or, without waiving,
determine, upon terms and conditions satisfactory to all
the Lenders, to reinstate the Commitments and make
further Advances, which determination shall apply equally
to, and shall be binding upon, all the Lenders;
(2) an amount equal to the Aggregate Effective
Amount of all outstanding Letters of Credit shall be
immediately due and payable to the Issuing Lender without
notice to or demand upon Borrower, which are expressly
waived by Borrower, to be held by the Administrative
Agent, on behalf of the Lenders, in an interest-bearing
cash collateral account as collateral for all of the
Obligations; and
(3) the unpaid principal of all Notes, all
interest accrued and unpaid thereon and all other amounts
payable under the Loan Documents shall be forthwith due
and payable, without protest, presentment, notice of
dishonor, demand or further notice of any kind, all of
which are expressly waived by Borrower.
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(c) Upon the occurrence of any Event of Default, the
Lenders and the Administrative Agent, or any of them, without notice to
(except as expressly provided for in any Loan Document) or demand upon
Borrower, which are expressly waived by Borrower (except as to notices
expressly provided for in any Loan Document), may proceed (but only with
the consent of the Requisite Lenders) to protect, exercise and enforce
their rights and remedies under the Loan Documents against Borrower and
any other Party and such other rights and remedies as are provided by
Law or equity.
(d) The order and manner in which the Lenders' rights and
remedies are to be exercised shall be determined by the Requisite
Lenders in their sole discretion, and all payments received by the
Administrative Agent and the Lenders, or any of them, shall be applied
first to the costs and expenses (including reasonable attorneys' fees
and disbursements and the reasonably allocated costs of attorneys
employed by the Administrative Agent or by any Lender) of the
Administrative Agent and of the Lenders, and thereafter paid pro rata to
the Lenders in the same proportions that the aggregate Obligations owed
to each Lender under the Loan Documents bear to the aggregate
Obligations owed under the Loan Documents to all the Lenders, without
priority or preference among the Lenders. Regardless of how each Lender
may treat payments for the purpose of its own accounting, for the
purpose of computing Borrower's Obligations hereunder and under the
Notes, payments shall be applied first, to the costs and expenses of the
Administrative Agent and the Lenders, as set forth above, second, to the
payment of accrued and unpaid interest due under any Loan Documents to
and including the date of such application (ratably, and without
duplication, according to the accrued and unpaid interest due under each
of the Loan Documents), and third, to the payment of all other amounts
(including principal and fees) then owing to the Administrative Agent or
the Lenders under the Loan Documents. No application of payments will
cure any Event of Default, or prevent acceleration, or continued
acceleration, of amounts payable under the Loan Documents, or prevent
the exercise, or continued exercise, of rights or remedies of the
Lenders hereunder or thereunder or at Law or in equity.
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Article 10.
THE ADMINISTRATIVE AGENT
10.1 Appointment and Authorization. Subject to Section 10.8, each
Lender hereby irrevocably appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Administrative Agent by the terms thereof
or are reasonably incidental, as determined by the Administrative Agent,
thereto. This appointment and authorization is intended solely for the purpose
of facilitating the servicing of the Facilities and does not constitute
appointment of the Administrative Agent as trustee for any Lender or as
representative of any Lender for any other purpose and, except as specifically
set forth in the Loan Documents to the contrary, the Administrative Agent shall
take such action and exercise such powers only in an administrative and
ministerial capacity.
10.2 Administrative Agent and Affiliates. ▇▇▇▇▇ Fargo (and each
successor Administrative Agent) has the same rights and powers under the Loan
Documents as any other Lender and may exercise the same as though it were not
the Administrative Agent, and the term "Lender" or "Lenders" includes ▇▇▇▇▇
Fargo in its individual capacity. ▇▇▇▇▇ Fargo (and each successor Administrative
Agent) and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of banking, trust or other business with Borrower, any
Subsidiary thereof, or any Affiliate of Borrower or any Subsidiary thereof, as
if it were not the Administrative Agent and without any duty to account therefor
to the Lenders. ▇▇▇▇▇ Fargo (and each successor Administrative Agent) need not
account to any other Lender for any monies received by it for reimbursement of
its costs and expenses as Administrative Agent hereunder, or (subject to Section
11.10) for any monies received by it in its capacity as a Lender hereunder. The
Administrative Agent shall not be deemed to hold a fiduciary relationship with
any Lender and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against the Administrative Agent.
10.3 Proportionate Interest in any Collateral. The Administrative
Agent, on behalf of all the Lenders, shall hold in accordance with the Loan
Documents all items of any collateral or interests therein received or held by
the Administrative Agent. Subject to the Administrative Agent's and the Lenders'
rights to reimbursement for their costs and expenses hereunder (including
reasonable attorneys' fees and disbursements and other professional services and
the reasonably allocated costs of attorneys employed by the Administrative Agent
or a Lender) and subject to the application of payments in accordance with
Section 9.2(d), each Lender shall have an interest in the Lenders' interest in
such collateral or interests therein in the same proportions that the aggregate
Obligations owed such Lender under the Loan Documents bear to the aggregate
Obligations owed under the Loan Documents to all the Lenders, without priority
or preference among the Lenders.
10.4 Lenders' Credit Decisions. Each Lender agrees that it has,
independently and without reliance upon the Administrative Agent, any other
Lender or the directors, officers, agents, employees or attorneys of the
Administrative Agent or of any other Lender, and instead in reliance upon
information supplied to it by or on behalf of Borrower
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and upon such other information as it has deemed appropriate, made its own
independent credit analysis and decision to enter into this Agreement. Each
Lender also agrees that it shall, independently and without reliance upon the
Administrative Agent, any other Lender or the directors, officers, agents,
employees or attorneys of the Administrative Agent or of any other Lender,
continue to make its own independent credit analyses and decisions in acting or
not acting under the Loan Documents.
10.5 Action by Administrative Agent.
(a) The Administrative Agent may assume that no Default
has occurred and is continuing, unless the Administrative Agent (or the
Lender that is then the Administrative Agent) has received notice from
Borrower stating the nature of the Default or has received notice from a
Lender stating the nature of the Default and that such Lender considers
the Default to have occurred and to be continuing.
(b) The Administrative Agent has only those obligations
under the Loan Documents as are expressly set forth therein.
(c) Except for any obligation expressly set forth in the
Loan Documents and as long as the Administrative Agent may assume that
no Event of Default has occurred and is continuing, the Administrative
Agent may, but shall not be required to, exercise its discretion to act
or not act, except that the Administrative Agent shall be required to
act or not act upon the instructions of the Requisite Lenders (or of all
the Lenders, to the extent required by Section 11.2) and those
instructions shall be binding upon the Administrative Agent and all the
Lenders, provided that the Administrative Agent shall not be required to
act or not act if to do so would be contrary to any Loan Document or to
applicable Law or would result, in the reasonable judgment of the
Administrative Agent, in substantial risk of liability to the
Administrative Agent.
(d) If the Administrative Agent has received a notice
specified in clause (a), the Administrative Agent shall immediately give
notice thereof to the Lenders and shall act or not act upon the
instructions of the Requisite Lenders (or of all the Lenders, to the
extent required by Section 11.2), provided that the Administrative Agent
shall not be required to act or not act if to do so would be contrary to
any Loan Document or to applicable Law or would result, in the
reasonable judgment of the Administrative Agent, in substantial risk of
liability to the Administrative Agent, and except that if the Requisite
Lenders (or all the Lenders, if required under Section 11.2) fail, for
five (5) Banking Days after the receipt of notice from the
Administrative Agent, to instruct the Administrative Agent, then the
Administrative Agent, in its sole discretion, may act or not act as it
deems advisable for the protection of the interests of the Lenders.
(e) The Administrative Agent shall have no liability to
any Lender for acting, or not acting, as instructed by the Requisite
Lenders (or all the Lenders, if required under Section 11.2),
notwithstanding any other provision hereof.
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10.6 Liability of Administrative Agent. Neither the
Administrative Agent nor any of its directors, officers, agents, employees or
attorneys shall be liable for any action taken or not taken by them under or in
connection with the Loan Documents, except for their own gross negligence or
willful misconduct. Without limitation on the foregoing, the Administrative
Agent and its directors, officers, agents, employees and attorneys:
(a) May treat the payee of any Note as the holder thereof
until the Administrative Agent receives notice of the assignment or
transfer thereof, in form satisfactory to the Administrative Agent,
signed by the payee, and may treat each Lender as the owner of that
Lender's interest in the Obligations for all purposes of this Agreement
until the Administrative Agent receives notice of the assignment or
transfer thereof, in form satisfactory to the Administrative Agent,
signed by that Lender;
(b) May consult with legal counsel (including in-house
legal counsel), accountants (including in-house accountants) and other
professionals or experts selected by it, or with legal counsel,
accountants or other professionals or experts for Borrower or any other
Obligor and/or any of their Affiliates or the Lenders, and shall not be
liable for any action taken or not taken by it in good faith in
accordance with any advice of such legal counsel, accountants or other
professionals or experts;
(c) Shall not be responsible to any Lender for any
statement, warranty or representation made in any of the Loan Documents
or in any notice, certificate, report, request or other statement
(written or oral) given or made in connection with any of the Loan
Documents;
(d) Except to the extent expressly set forth in the Loan
Documents, shall have no duty to ask or inquire as to the performance or
observance by Borrower or any other Obligor of any of the terms,
conditions or covenants of any of the Loan Documents or to inspect any
Collateral or any Property, books or records of Borrower or any other
Obligor;
(e) Will not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness,
effectiveness, sufficiency or value of any Loan Document, any other
instrument or writing furnished pursuant thereto or in connection
therewith, or any Collateral;
(f) Will not incur any liability by acting or not acting
in reliance upon any Loan Document, notice, consent, certificate,
statement, request or other instrument or writing believed in good faith
by it to be genuine and signed or sent by the proper party or parties;
and
(g) Will not incur any liability for any arithmetical
error in computing any amount paid or payable by Borrower or any other
Obligor or paid or payable to or received or receivable from any Lender
under any Loan Document,
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including principal, interest, commitment fees, Advances and other
amounts; provided that, promptly upon discovery of such an error in
computation, the Administrative Agent, the Lenders and (to the extent
applicable) Borrower and/or any other applicable Obligor shall make such
adjustments as are necessary to correct such error and to restore the
parties to the position that they would have occupied had the error not
occurred.
10.7 Indemnification. Each Lender shall, ratably in accordance
with its Pro Rata Share of all of the then applicable Commitments (if any of the
Commitments are then in effect) and/or in accordance with its proportion of the
aggregate Indebtedness then evidenced by the Notes (if all of the Commitments
have then been terminated), indemnify and hold the Administrative Agent and its
directors, officers, agents, employees and attorneys harmless against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(including reasonable attorneys' fees and disbursements and allocated costs of
attorneys employed by the Administrative Agent) that may be imposed on, incurred
by or asserted against it or them in any way relating to or arising out of the
Loan Documents (other than losses incurred by reason of the failure of Borrower
to pay the Indebtedness represented by the Notes) or any action taken or not
taken by it as Administrative Agent thereunder, except such as result from its
own gross negligence or willful misconduct. Without limitation on the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for that
Lender's Pro Rata Share of any out-of-pocket cost or expense incurred by the
Administrative Agent in connection with the negotiation, preparation, execution,
delivery, amendment, waiver, restructuring, reorganization (including a
bankruptcy reorganization), enforcement or attempted enforcement of the Loan
Documents, to the extent that Borrower or any other Party are required by
Section 11.3 to pay that cost or expense but fails to do so upon demand. Nothing
in this Section 10.7 shall entitle the Administrative Agent or any indemnitee
referred to above to recover any amount from the Lenders if and to the extent
that such amount has theretofore been recovered from Borrower or any of the
other Obligors. To the extent that the Administrative Agent or any indemnitee
referred to above is later reimbursed such amount by Borrower or any of the
other Obligors, it shall return the amounts paid to it by the Lenders in respect
of such amount.
10.8 Successor Administrative Agent. The Administrative Agent
may, and at the request of the Requisite Lenders shall, resign as Administrative
Agent upon reasonable notice to the Lenders and Borrower effective upon
acceptance of appointment by a successor Administrative Agent. If the
Administrative Agent shall resign as Administrative Agent under this Agreement,
the Requisite Lenders shall appoint from among the Lenders a successor
Administrative Agent for the Lenders, which successor Administrative Agent shall
be approved by Borrower (and such approval shall not be unreasonably withheld or
delayed). If no successor Administrative Agent is appointed prior to the
effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and
Borrower, a successor Administrative Agent from among the Lenders. Upon the
acceptance of its appointment as successor Administrative Agent hereunder, such
successor Administrative Agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term "Administrative Agent"
shall mean such successor
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Administrative Agent and the retiring Administrative Agent's appointment, powers
and duties as Administrative Agent shall be terminated. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article 10, and Sections 11.3, 11.11 and 11.21, shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. Notwithstanding the foregoing, if no
successor Administrative Agent has accepted appointment as Administrative Agent
by the date which is thirty (30) days following a retiring Administrative
Agent's notice of resignation, the retiring Administrative Agent's resignation
shall nevertheless thereupon become effective and the Lenders shall perform all
of the duties of the Administrative Agent hereunder until such time, if any, as
the Requisite Lenders appoint a successor Administrative Agent as provided for
above.
10.9 No Obligations of Borrower. Nothing contained in this
Article 10 shall be deemed to impose upon Borrower any obligation in respect of
the due and punctual performance by the Administrative Agent of its obligations
to the Lenders under any provision of this Agreement, and Borrower shall have no
liability to the Administrative Agent or any of the Lenders in respect of any
failure by the Administrative Agent or any Lender to perform any of its
obligations to the Administrative Agent or the Lenders under this Agreement.
Without limiting the generality of the foregoing, where any provision of this
Agreement relating to the payment of any amounts due and owing under the Loan
Documents provides that such payments shall be made by Borrower to the
Administrative Agent for the account of the Lenders, Borrower's obligations to
the Lenders in respect of such payments shall be deemed to be satisfied upon the
making of such payments to the Administrative Agent in the manner provided by
this Agreement. In addition, Borrower may rely on a written statement by the
Administrative Agent to the effect that it has obtained the written consent of
the Requisite Lenders or all of the Lenders, as applicable under Section 11.2,
in connection with a waiver, amendment, consent, approval or other action by the
Lenders hereunder, and shall have no obligation to verify or confirm the same.
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Article 11.
MISCELLANEOUS
11.1 Cumulative Remedies; No Waiver. The rights, powers,
privileges and remedies of the Administrative Agent and the Lenders provided
herein or in any Note or other Loan Document are cumulative and not exclusive of
any right, power, privilege or remedy provided by Law or equity. No failure or
delay on the part of the Administrative Agent or any Lender in exercising any
right, power, privilege or remedy may be, or may be deemed to be, a waiver
thereof; nor may any single or partial exercise of any right, power, privilege
or remedy preclude any other or further exercise of the same or any other right,
power, privilege or remedy. The terms and conditions of Article 8 hereof are
inserted for the sole benefit of the Administrative Agent and the Lenders; the
same may be waived in whole or in part, with or without terms or conditions, in
respect of any Borrowing without prejudicing the Administrative Agent's or the
Lenders' rights to assert them in whole or in part in respect of any other
Borrowing.
11.2 Amendments; Consents. No amendment, modification,
supplement, extension, termination or waiver of any provision of this Agreement
or any other Loan Document, no approval or consent thereunder, and no consent to
any departure by Borrower or any other Party therefrom, may in any event be
effective unless in writing signed by the Administrative Agent with the written
approval of the Requisite Lenders (and, in the case of any amendment,
modification or supplement of or to any Loan Document to which Borrower is a
Party, signed by Borrower, and, in the case of any amendment, modification or
supplement to Article 10, signed by the Administrative Agent), and then only in
the specific instance and for the specific purpose given; and, without the
approval in writing of all the Lenders, no amendment, modification, supplement,
termination, waiver or consent may be effective:
(a) To amend or modify the principal of, or the amount of
principal, principal prepayments or the rate of interest payable on, any
Note, or the amount of the Facilities or the Pro Rata Share of any
Facility of any Lender or the amount of any commitment fee payable to
any Lender, or any other fee or amount payable to any Lender (in its
capacity as a Lender) under the Loan Documents or to waive an Event of
Default consisting of the failure of Borrower to pay when due principal,
interest or any fee;
(b) To postpone any date fixed for any payment of
principal of, prepayment of principal of or any installment of interest
on, any Note or any installment of any fee, or to extend the term of the
Facilities;
(c) To amend the provisions of the definition of
"Requisite Lenders", "Amortization Date", "Term Amortization Amount",
"Revolving Facility Maturity Date", or "Term Maturity Date";
(d) To release any Guarantor from its Guaranty or to
release any Collateral from the Lien of the Collateral Documents with a
book value (as determined
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in accordance with GAAP) in excess of $200,000 except if such release of
material Collateral occurs in connection with a Disposition permitted
under Section 6.2 or other action permitted under the Loan Documents, in
which case such release shall not require the consent of any of the
Lenders; or
(e) To amend or waive Article 8 or this Section 11.2; or
(f) To amend any provision of this Agreement that
expressly requires the consent or approval of all the Lenders.
Any amendment, modification, supplement, termination, waiver or consent pursuant
to this Section 11.2 shall apply equally to, and shall be binding upon, all the
Lenders and the Administrative Agent.
11.3 Costs, Expenses and Taxes. Borrower shall pay within five
(5) Banking Days after demand, accompanied by an invoice therefor, the
reasonable costs and expenses of the Administrative Agent in connection with the
negotiation, preparation, syndication, execution and delivery of the Loan
Documents and any amendment thereto or waiver thereof. Borrower shall also pay
on demand, accompanied by an invoice therefor, the reasonable costs and expenses
of the Administrative Agent and the Lenders in connection with the refinancing,
restructuring, reorganization (including a bankruptcy reorganization) and
enforcement of the Loan Documents, and any matter related thereto. The foregoing
costs and expenses shall include filing fees, recording fees, title insurance
fees, appraisal fees, search fees, and other out-of-pocket expenses and the
reasonable fees and out-of-pocket expenses of any legal counsel (including,
without duplication, reasonably allocated costs of legal counsel employed by the
Administrative Agent or any Lender), independent public accountants and other
outside experts retained by the Administrative Agent or any Lender, whether or
not such costs and expenses are incurred or suffered by the Administrative Agent
or any Lender in connection with or during the course of any bankruptcy or
insolvency proceedings of any Borrower, any other Obligor or any Subsidiary
thereof. Borrower shall pay any and all documentary and other taxes, excluding
(i) taxes imposed on or measured in whole or in part by a Lender's overall net
income imposed on it by (A) any jurisdiction (or political subdivision thereof)
in which it is organized or maintains its principal office or Eurodollar Lending
Office or (B) any jurisdiction (or political subdivision thereof) in which it is
"doing business" or (ii) any withholding taxes or other taxes based on gross
income imposed by the United States of America for any period with respect to
which it has failed to provide Borrower with the appropriate form or forms
required by Section 11.21, to the extent such forms are then required by
applicable Laws and all costs, expenses, fees and charges payable or determined
to be payable in connection with the filing or recording of this Agreement, any
other Loan Document or any other instrument or writing to be delivered hereunder
or thereunder, or in connection with any transaction pursuant hereto or thereto,
and shall reimburse, hold harmless and indemnify on the terms set forth in
Section 11.11 the Administrative Agent and the Lenders from and against any and
all loss, liability or legal or other expense with respect to or resulting from
any delay in paying or failure to pay any such tax, cost, expense, fee or charge
or that any of them may suffer or incur by reason of the failure of any Obligor
(or any Subsidiary thereof) to perform any of its Obligations. Any
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amount payable to the Administrative Agent or any Lender under this Section 11.3
shall bear interest from the fifth Banking Day following the date of demand for
payment at the Default Rate.
11.4 Nature of Lenders' Obligations. The obligations of the
Lenders hereunder are several and not joint or joint and several. Nothing
contained in this Agreement or any other Loan Document and no action taken by
the Administrative Agent or the Lenders or any of them pursuant hereto or
thereto may, or may be deemed to, make the Lenders a partnership, an
association, a joint venture or other entity, either among themselves or with
Borrower, any other Obligor or any Affiliate of any Obligor. A default by any
Lender will not increase the Commitment of any other Lender or the Pro Rata
Share of the Facilities attributable to any other Lender. Any Lender not in
default may, if it desires, assume (in such proportion as the nondefaulting
Lenders agree) the obligations of any Lender in default, but no Lender is
obligated to do so.
11.5 Survival of Representations and Warranties. All
representations and warranties contained herein or in any other Loan Document,
or in any certificate or other writing delivered by or on behalf of any one or
more of the Parties to any Loan Document, will survive the making of the
Advances hereunder and the execution and delivery of the Notes, and have been or
will be relied upon by Lender, notwithstanding any investigation made by the
Administrative Agent or any Lender or on their behalf.
11.6 Notices. Except as otherwise expressly provided in the Loan
Documents, all notices, requests, demands, directions and other communications
provided for hereunder or under any other Loan Document must be in writing and
must be mailed, telegraphed, telecopied, dispatched by commercial courier or
delivered to the appropriate party at the address set forth on the signature
pages of this Agreement or other applicable Loan Document or, as to any party to
any Loan Document, at any other address as may be designated by it in a written
notice sent to all other parties to such Loan Document in accordance with this
Section. Except as otherwise expressly provided in any Loan Document, if any
notice, request, demand, direction or other communication required or permitted
by any Loan Document is given by mail it will be effective on the earlier of
receipt or the fourth Banking Day after deposit in the United States mail with
first class or airmail postage prepaid; if given by telegraph or cable, when
delivered to the telegraph company with charges prepaid; if given by telecopier,
when sent; if dispatched by commercial courier, on the scheduled delivery date;
or if given by personal delivery, when delivered.
11.7 Execution of Loan Documents. Unless the Administrative Agent
otherwise specifies with respect to any Loan Document, (a) this Agreement and
any other Loan Document may be executed in any number of counterparts and any
party hereto or thereto may execute any counterpart, each of which when executed
and delivered will be deemed to be an original and all of which counterparts of
this Agreement or any other Loan Document, as the case may be, when taken
together will be deemed to be but one and the same instrument and (b) execution
of any such counterpart may be evidenced by a telecopier transmission of the
signature of such party. The execution of this Agreement or any other
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Loan Document by any party hereto or thereto will not become effective until
counterparts hereof or thereof, as the case may be, have been executed by all
the parties hereto or thereto.
11.8 Binding Effect; Assignment.
(a) This Agreement and the other Loan Documents to which
Borrower is a Party will be binding upon and inure to the benefit of
Borrower, the Administrative Agent, each of the Lenders, and their
respective successors and assigns, except that Borrower may not assign
its rights hereunder or thereunder or any interest herein or therein
without the prior written consent of all the Lenders. Each Lender
represents that it is not acquiring its Note with a view to the
distribution thereof within the meaning of the Securities Act of 1933,
as amended (subject to any requirement that disposition of such Note
must be within the control of such Lender). Any Lender may at any time
pledge its Note or any other instrument evidencing its rights as a
Lender under this Agreement to a Federal Reserve Bank, but no such
pledge shall release that Lender from its obligations hereunder or grant
to such Federal Reserve Bank the rights of a Lender hereunder absent
foreclosure of such pledge.
(b) From time to time following the Closing Date, each
Lender may assign to one or more Eligible Assignees all or any portion
of its rights and obligations under this Agreement (including all or a
portion of its Revolving Commitment, the Advances owing to it and the
Note or Notes held by it); provided that, subject to subsection (f)
below, (i) such Eligible Assignee, if not then a Lender or an Affiliate
of the assigning Lender, shall be approved by the Administrative Agent
and Borrower (neither of which approvals shall be unreasonably withheld
or delayed), (ii) such assignment shall be evidenced by an Assignment
and Acceptance, a copy of which shall be furnished to the Administrative
Agent as hereinbelow provided, (iii) except in the case of an assignment
to an Affiliate of the assigning Lender, to another Lender or of the
entire remaining rights and obligations of the assigning Lender under
this Agreement, the assignment shall not assign a portion of such
assigning Lender's Commitments and/or Advances owing to such assigning
Lender that is equivalent to less than $5,000,000, and (iv) the
effective date of any such assignment shall be as specified in the
Assignment and Acceptance, but not earlier than the date which is five
(5) Banking Days after the date the Administrative Agent has received
the Assignment and Acceptance. Upon the effective date of such
Assignment and Acceptance, the Eligible Assignee named therein shall be
a Lender for all purposes of this Agreement, with the Commitments and/or
Advances therein set forth and, to the extent of such Commitments and/or
Advances, the assigning Lender shall be released from its further
obligations under this Agreement. Borrower agrees that it shall execute
and deliver (against delivery by the assigning Lender to Borrower of
such Lender's Notes) to such assignee Lender, Notes evidencing that
assignee Lender's Commitments and/or Advances, and to the assigning
Lender, Notes evidencing the remaining balance of the Commitments and/or
Advances retained by the assigning Lender.
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(c) By executing and delivering an Assignment and
Acceptance, the Eligible Assignee thereunder acknowledges and agrees
that: (i) other than the representation and warranty that it is the
legal and beneficial owner of the rights and obligations hereunder being
assigned thereby free and clear of any adverse claim, the assigning
Lender has made 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 or
sufficiency of this Agreement or any other Loan Document; (ii) the
assigning Lender has made no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or
the performance by Borrower of the Obligations; (iii) it has received a
copy of this Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 7.1 and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance; (iv) it will, independently and without reliance upon the
Administrative Agent or any 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) it appoints and authorizes the Administrative Agent to
take such action and to exercise such powers under this Agreement as are
delegated to the Administrative Agent by this Agreement; and (vi) 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) The Administrative Agent shall maintain at the
Administrative Agent's Office a copy of each Assignment and Acceptance
delivered to it and a register (the "Register") of the names and address
of each of the Lenders and the Pro Rata Share of the Commitments held by
each Lender, giving effect to each Assignment and Acceptance. The
Register shall be available during normal business hours for inspection
by Borrower or any Lender upon reasonable prior notice to the
Administrative Agent. After receipt of a completed Assignment and
Acceptance executed by any Lender and an Eligible Assignee, and receipt
of an assignment fee of $3,500 from such Lender or Eligible Assignee,
the Administrative Agent shall, promptly following the effective date
thereof, provide to Borrower and the Lenders a revised Schedule 1.1
giving effect thereto. Borrower, the Administrative Agent and the
Lenders shall deem and treat the Persons listed as Lenders in the
Register as the holders and owners of the Pro Rata Shares of the
Facilities listed therein for all purposes hereof, and no assignment or
transfer of any Lender's rights and obligations hereunder shall be
effective, in each case unless and until an Assignment and Acceptance
effecting the assignment or transfer thereof shall have been accepted by
the Administrative Agent and recorded in the Register as provided above.
Prior to such recordation, all amounts owed with respect to the
applicable Pro Rata Shares of the Facilities shall be owed to the Lender
listed in the Register as the owner thereof, and any request, authority
or consent of any Person who, at the time of making such request or
giving such authority or consent, is listed in the Register as a Lender
shall be conclusive and binding on any subsequent holder, assignee or
transferee of the corresponding Pro Rata Shares of any of the
Facilities.
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(e) Each Lender may from time to time grant
participations to one or more banks or other financial institutions in
or to all or a portion of its rights and/or obligations under this
Agreement; provided, however, that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of
such obligations, (iii) the participating banks or other financial
institutions shall not be a Lender hereunder for any purpose except, if
the participation agreement so provides, for the purposes of Sections
3.5, 3.6, 11.11 and 11.21 but only to the extent that the cost of such
benefits to Borrower does not exceed the cost which Borrower would have
incurred in respect of the Lender granting such participation absent the
participation, (iv) Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement, (v) the participation interest shall be expressed as a
percentage of the granting Lender's Pro Rata Share of each applicable
Facility as it then exists and shall not restrict an increase in the
Facilities (or the aggregate Commitments pertaining thereto), or in the
granting Lender's rights and obligations hereunder, so long as the
amount of the participation interest is not affected thereby and (vi)
the consent of the holder of such participation interest shall not be
required for amendments or waivers of provisions of the Loan Documents
other than those which (A) extend any Amortization Date, any applicable
Maturity Date or any other date upon which any payment of money is due
to the Lenders, (B) reduce the rate of interest on the Notes, any fee or
any other monetary amount payable to the Lenders, (C) reduce the amount
of any installment of principal due under the Notes, or (D) release any
Guarantor from its Guaranty.
(f) Borrower agrees that upon the occurrence and during
the continuance of any Event of Default, each Lender shall be entitled
to assign its rights hereunder and under the Loan Documents, or grant
participation interests in its rights under this Agreement and the Loan
Documents, to any Person, in whole or in any part thereof,
notwithstanding any provisions contained herein (including those set
forth in subsection (b) above) or in any other Loan Document to the
contrary, except that, other than (i) assignments by a Lender to an
Affiliate of such Lender or to another Lender or (ii) pledges described
in the last sentence of subsection (a) above, no assignment shall be
made without the approval of the Administrative Agent.
11.9 Right of Setoff. If an Event of Default has occurred and is
continuing, the Administrative Agent or any Lender (but in each case only with
the consent of the Requisite Lenders) may exercise its rights under Article 9 of
the UCC and other applicable Laws and, to the extent permitted by applicable
Laws, apply any funds in any deposit account maintained with it by Borrower
and/or any Property of Borrower in its possession against the Obligations.
11.10 Sharing of Setoffs. Each Lender severally agrees that if
it, through the exercise of any right of setoff, banker's lien or counterclaim
against a Borrower, or otherwise, receives payment of the Obligations held by it
that is ratably more than any other Lender, through any means, receives in
payment of the Obligations held by that Lender, then, subject
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to applicable Laws: (a) the Lender exercising the right of setoff, banker's lien
or counterclaim or otherwise receiving such payment shall purchase, and shall be
deemed to have simultaneously purchased, from each of the other Lenders a
participation in the Obligations held by the other Lenders and shall pay to the
other Lenders a purchase price in an amount so that the share of the Obligations
held by each Lender after the exercise of the right of setoff, banker's lien or
counterclaim or receipt of payment shall be in the same proportion that existed
prior to the exercise of the right of setoff, banker's lien or counterclaim or
receipt of payment; and (b) such other adjustments and purchases of
participations shall be made from time to time as shall be equitable to ensure
that all of the Lenders share any payment obtained in respect of the Obligations
ratably in accordance with each Lender's share of the Obligations immediately
prior to, and without taking into account, the payment; provided that, if all or
any portion of a disproportionate payment obtained as a result of the exercise
of the right of setoff, banker's lien, counterclaim or otherwise is thereafter
recovered from the purchasing Lender by a Borrower or any Person claiming
through or succeeding to the rights of a Borrower, the purchase of a
participation shall be rescinded and the purchase price thereof shall be
restored to the extent of the recovery, but without interest. Each Lender that
purchases a participation in the Obligations pursuant to this Section 11.10
shall from and after the purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased. Borrower
expressly consents to the foregoing arrangements and agrees that any Lender
holding a participation in an Obligation so purchased pursuant to this Section
11.10 may exercise any and all rights of setoff, banker's lien or counterclaim
with respect to the participation as fully as if the Lender were the original
owner of the Obligation purchased.
11.11 Indemnity by Borrower. Borrower agrees to indemnify, save
and hold harmless the Administrative Agent and each Lender and their respective
directors, officers, agents, attorneys and employees (collectively the
"Indemnitees") from and against: (a) any and all claims, demands, actions or
causes of action (except a claim, demand, action, or cause of action for any
amount excluded from the definition of "Taxes" in Section 3.10(e)) if the claim,
demand, action or cause of action arises out of or relates to any act or
omission (or alleged act or omission) of Borrower, any other Obligor, any
Affiliate of any Obligor or any partner, officer, director, stockholder, or
other equity interest holder of any Obligor relating to any of the Facilities,
the use or contemplated use of proceeds of any Borrowing, or the relationship of
Borrower and the Lenders under this Agreement; (b) any administrative or
investigative proceeding by any Governmental Agency arising out of or related to
a claim, demand, action or cause of action described in clause (a) above; and
(c) any and all liabilities, losses, reasonable costs or expenses (including
reasonable attorneys' fees and the reasonably allocated costs of attorneys
employed by any Indemnitee and disbursements of such attorneys and other
professional services) that any Indemnitee suffers or incurs as a result of the
assertion of any foregoing claim, demand, action or cause of action; provided
that no Indemnitee shall be entitled to indemnification for any liability, loss,
cost or expense caused by its own gross negligence or willful misconduct or for
any liability, loss, cost or expense asserted against it by another Indemnitee.
If any claim, demand, action or cause of action is asserted against any
Indemnitee, such Indemnitee shall promptly notify Borrower, but the failure to
so promptly notify Borrower shall not affect Borrower's obligations under this
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Section unless such failure materially prejudices Borrower's right to
participate in the contest of such claim, demand, action or cause of action, as
hereinafter provided. Such Indemnitee may (and shall, if requested by Borrower
in writing) contest the validity, applicability and amount of such claim,
demand, action or cause of action and shall permit Borrower to participate in
such contest. Any Indemnitee that proposes to settle or compromise any claim or
proceeding for which Borrower may be liable for payment of indemnity hereunder
shall give Borrower written notice of the terms of such proposed settlement or
compromise reasonably in advance of settling or compromising such claim or
proceeding and shall obtain Borrower's prior consent (which shall not be
unreasonably withheld or delayed). In connection with any claim, demand, action
or cause of action covered by this Section 11.11 against more than one
Indemnitee, all such Indemnitees shall be represented by the same legal counsel
(which may be a law firm engaged by the Indemnitees or attorneys employed by an
Indemnitee or a combination of the foregoing) selected by the Indemnitees,
provided, that if such legal counsel determines in good faith that representing
all such Indemnitees would or could result in a conflict of interest under Laws
or ethical principles applicable to such legal counsel or that a defense or
counterclaim is available to an Indemnitee that is not available to all such
Indemnitees, then to the extent reasonably necessary to avoid such a conflict of
interest or to permit unqualified assertion of such a defense or counterclaim,
each affected Indemnitee shall be entitled to separate representation by legal
counsel selected by that Indemnitee, with all such legal counsel using
reasonable efforts to avoid unnecessary duplication of effort by counsel for all
Indemnitees; and further provided that the Administrative Agent (as an
Indemnitee) shall at all times be entitled to representation by separate legal
counsel (which may be a law firm or attorneys employed by the Administrative
Agent or a combination of the foregoing). Any obligation or liability of
Borrower to any Indemnitee under this Section 11.11 shall survive the expiration
or termination of this Agreement and the repayment of all Borrowings and the
payment and performance of all other Obligations owed to the Lenders.
11.12 Nonliability of the Lenders. Borrower acknowledges and
agrees that:
(a) Any inspections of any Property of Borrower or any
other Obligor made by or through the Administrative Agent or the Lenders
are for purposes of administration of the Facilities only and Borrower
is not entitled to rely upon the same (whether or not such inspections
are at the expense of Borrower);
(b) By accepting or approving anything required to be
observed, performed, fulfilled or given to the Administrative Agent or
the Lenders pursuant to the Loan Documents, neither the Administrative
Agent nor the Lenders shall be deemed to have warranted or represented
the sufficiency, legality, effectiveness or legal effect of the same, or
of any term, provision or condition thereof, and such acceptance or
approval thereof shall not constitute a warranty or representation to
anyone with respect thereto by the Administrative Agent or the Lenders;
(c) The relationship between Borrower and the
Administrative Agent and the Lenders is, and shall at all times remain,
solely that of borrower and lenders; neither the Administrative Agent
nor the Lenders shall under any
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circumstance be construed to be partners or joint venturers of Borrower,
any other Obligor or any of their respective Affiliates; neither the
Administrative Agent nor the Lenders shall under any circumstance be
deemed to be in a relationship of confidence or trust or a fiduciary
relationship with Borrower, any other Obligor or any of their respective
Affiliates, or to owe any fiduciary duty to Borrower, any other Obligor
or any of their respective Affiliates; neither the Administrative Agent
nor the Lenders undertake or assume any responsibility or duty to
Borrower, any other Obligor or any of their respective Affiliates to
select, review, inspect, supervise, pass judgment upon or inform
Borrower, any other Obligor or any of their respective Affiliates of any
matter in connection with their Property or the operations of Borrower,
any other Obligor or any of their respective Affiliates; Borrower, the
other Obligors and their respective Affiliates shall rely entirely upon
their own judgment with respect to such matters; and any review,
inspection, supervision, exercise of judgment or supply of information
undertaken or assumed by the Administrative Agent or the Lenders in
connection with such matters is solely for the protection of the
Administrative Agent and the Lenders and neither Borrower nor any other
Person is entitled to rely thereon; and
(d) The Administrative Agent and the Lenders shall not be
responsible or liable to any Person for any loss, damage, liability or
claim of any kind relating to injury or death to Persons or damage to
Property caused by the actions, inaction or negligence of Borrower, any
other Obligor and/or any of their respective Affiliates and Borrower
hereby indemnifies and holds the Administrative Agent and the Lenders
harmless on the terms set forth in Section 11.11 from any such loss,
damage, liability or claim.
11.13 No Third Parties Benefited. This Agreement is made for the
purpose of defining and setting forth certain obligations, rights and duties of
Borrower, the Administrative Agent and the Lenders in connection with the
Facilities, and is made for the sole benefit of Borrower, the Administrative
Agent and the Lenders, and the Administrative Agent's and the Lenders'
successors and assigns. Except as provided in Sections 11.8 and 11.11, no other
Person shall have any rights of any nature hereunder or by reason hereof.
11.14 Confidentiality. Each Lender agrees to hold any
confidential information that it may receive from Borrower pursuant to this
Agreement in confidence, except for disclosure: (a) to other Lenders or
Affiliates of a Lender; (b) to legal counsel and accountants for Borrower, any
other Obligor or any Lender; (c) to other professional advisors to Borrower or
any other Obligor or any Lender, provided that the recipient has accepted such
information subject to a confidentiality agreement substantially similar to this
Section 11.14; (d) to regulatory officials having jurisdiction over that Lender;
(e) as required by Law or legal process, provided that each Lender agrees to
notify Borrower of any such disclosures unless prohibited by applicable Laws, or
in connection with any legal proceeding to which that Lender and Borrower or any
other Obligor are adverse parties; and (f) to another financial institution in
connection with a disposition or proposed disposition to that financial
institution of all or part of that Lender's interests hereunder or a
participation interest in its Note(s), provided that the recipient has accepted
such information subject to a confidentiality
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agreement substantially similar to this Section 11.14. For purposes of the
foregoing, "confidential information" shall mean any information respecting
Borrower or any other Obligor reasonably considered by Borrower to be
confidential, other than (i) information previously filed with any Governmental
Agency and available to the public, (ii) information previously published in any
public medium from a source other than, directly or indirectly, that Lender, and
(iii) information previously disclosed by Borrower or such other Obligor to any
Person not associated with Borrower or such other Obligor which does not owe a
professional duty of confidentiality to Borrower or such other Obligor or which
has not executed an appropriate confidentiality agreement with Borrower or such
other Obligor. Nothing in this Section shall be construed to create or give rise
to any fiduciary duty on the part of the Administrative Agent or the Lenders to
Borrower or any other Obligor.
Borrower or any other Obligor institutes or consents to the institution of any
proceeding
11.15 Further Assurances. Borrower shall, at its expense and
without expense to the Lenders or the Administrative Agent, do, execute and
deliver such further acts and documents as the Requisite Lenders or the
Administrative Agent from time to time reasonably require for the assuring and
confirming unto the Lenders or the Administrative Agent of the rights hereby
created or intended now or hereafter so to be, or for carrying out the intention
or facilitating the performance of the terms of any Loan Document.
11.16 Integration. This Agreement, together with the other Loan
Documents and the letter agreement referred to in Section 3.3, comprises the
complete and integrated agreement of the parties on the subject matter hereof
and supersedes all prior agreements, written or oral, on the subject matter
hereof. In the event of any conflict between the provisions of this Agreement
and those of any other Loan Document, the provisions of this Agreement shall
control and govern; provided that the inclusion of supplemental rights or
remedies in favor of the Administrative Agent or the Lenders in any other Loan
Document shall not be deemed a conflict with this Agreement. Each Loan Document
was drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.
11.17 Governing Law. EXCEPT TO THE EXTENT OTHERWISE PROVIDED
THEREIN, EACH LOAN DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN A
STATE OR FEDERAL COURT LOCATED IN THE STATE OF CALIFORNIA. THE PARTIES EXPRESSLY
SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED IN ANY SUCH COURT, AND THE PARTIES HEREBY WAIVE ANY OBJECTION THEY MAY
HAVE BASED UPON LACK OF PERSONAL JURISDICTION AND HEREBY CONSENT TO THE GRANTING
OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY ANY SUCH COURT.
FURTHERMORE, THE PARTIES HEREBY WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW, ANY RIGHT
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THEY MAY HAVE TO ASSERT THE DOCTRINE OF "FORUM NON CONVENIENS" OR TO OBJECT TO
VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION
11.16.
11.18 Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable or invalid as to any
party or in any jurisdiction shall, as to that party or jurisdiction, be
inoperative, unenforceable or invalid without affecting the remaining provisions
or the operation, enforceability or validity of that provision as to any other
party or in any other jurisdiction, and to this end the provisions of all Loan
Documents are declared to be severable.
11.19 Headings. Article and Section headings in this Agreement
and the other Loan Documents are included for convenience of reference only and
are not part of this Agreement or the other Loan Documents for any other
purpose.
11.20 Time of the Essence. Time is of the essence of the Loan
Documents.
11.21 Foreign Lenders and Participants. Each Lender, and each
holder of a participation interest herein, that is incorporated or otherwise
organized under the Laws of a jurisdiction other than the United States of
America or any State thereof or the District of Columbia shall deliver to
Borrower (with a copy to the Administrative Agent), on or before the Closing
Date (or on or before accepting an assignment or receiving a participation
interest herein pursuant to Section 11.8, if applicable) two duly completed
copies, signed by a Responsible Official, of Form W-8 ECI satisfactory to
Borrower and the Administrative Agent that no withholding under the federal
income tax laws is required with respect to such Lender. Thereafter and from
time to time, each such Person shall (a) promptly submit to Borrower (with a
copy to the Administrative Agent), such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to Borrower and the Administrative Agent of any
available exemption from, United States withholding taxes in respect of all
payments to be made to such Person by Borrower pursuant to this Agreement and
(b) take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Person, and as may be reasonably necessary
(including the re-designation of its Eurodollar Lending Office, if any) to avoid
any requirement of applicable Laws that Borrower make any deduction or
withholding for taxes from amounts payable to such Person. In the event that
Borrower or the Administrative Agent become aware that a participation has been
granted pursuant to Section 11.8(e) to a financial institution that is
incorporated or otherwise organized under the Laws of a jurisdiction other than
the United States of America, any State thereof or the District of Columbia,
then, upon request made by Borrower or the Administrative Agent to the Lender
that granted such participation, such Lender shall cause such participant
financial institution to deliver the same documents and information to Borrower
and the Administrative Agent as would be required under this Section if such
financial institution were a Lender.
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11.22 Hazardous Material Indemnity. Borrower hereby agrees to
indemnify, hold harmless and defend (by counsel reasonably satisfactory to the
Administrative Agent) the Administrative Agent and each of the Lenders and their
respective directors, officers, employees, agents, successors and assigns from
and against any and all claims, losses, damages, liabilities, fines, penalties,
charges, administrative and judicial proceedings and orders, judgments, remedial
action requirements, enforcement actions of any kind, and all reasonable costs
and expenses incurred in connection therewith (including but not limited to
reasonable attorneys' fees and the reasonably allocated costs of attorneys
employed by the Administrative Agent or any Lender, and expenses to the extent
that the defense of any such action has not been assumed by Borrower), arising
directly or indirectly out of (a) the presence on, in, under or about any Real
Property of any Hazardous Materials, or any releases or discharges of any
Hazardous Materials on, under or from any Real Property and (b) any activity
carried on or undertaken on or off any Real Property by Borrower, any other
Obligor or any of their predecessors in title, whether prior to or during the
term of this Agreement, and whether by Borrower, any other Obligor or any
predecessor in title or any employees, agents, contractors or subcontractors of
Borrower, any other Obligor or any predecessor in title, or any third persons at
any time occupying or present on any Real Property, in connection with the
handling, treatment, removal, storage, decontamination, clean-up, transport or
disposal of any Hazardous Materials at any time located or present on, in, under
or about any Real Property. The foregoing indemnity shall further apply to any
residual contamination on, in, under or about any Real Property, or affecting
any natural resources, and to any contamination of any Property or natural
resources arising in connection with the generation, use, handling, storage,
transport or disposal of any such Hazardous Materials, and irrespective of
whether any of such activities were or will be undertaken in accordance with
applicable Laws, but the foregoing indemnity shall not apply to Hazardous
Materials on, in, under or about any Real Property, the presence of which is
caused by the Administrative Agent or the Lenders. Borrower hereby acknowledges
and agrees that, notwithstanding any other provision of this Agreement or any of
the other Loan Documents to the contrary, the obligations of Borrower under this
Section shall be unlimited obligations of Borrower and shall not be secured by
any Lien on any Real Property. Any obligation or liability of Borrower to any
Indemnitee under this Section 11.22 shall survive the expiration or termination
of this Agreement and the repayment of all Advances and the payment and
performance of all other Obligations owed to the Lenders.
11.23 Waiver of Right to Trial by Jury. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTY HERETO OR
ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
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EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.
11.24 Purported Oral Amendments. BORROWER EXPRESSLY ACKNOWLEDGES
THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED OR
MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN
INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2. BORROWER AGREES THAT IT
WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR
WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF THE ADMINISTRATIVE AGENT OR ANY
LENDER THAT DOES NOT COMPLY WITH SECTION 11.2 TO EFFECT AN AMENDMENT,
MODIFICATION, WAIVER OR SUPPLEMENT TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS.
[THIS SPACE INTENTIONALLY LEFT BLANK -
SIGNATURE PAGES TO FOLLOW[
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
MODTECH HOLDINGS, INC.,
a Delaware corporation
By
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Executive Officer
Address for Borrower:
Modtech Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ & Zepfel, LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-1
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
Address for notices to Administrative Agent
for borrowings and payments:
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Modtech Account Officer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Modtech Agency Officer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-2
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as a Lender
By
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Modtech Account Officer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-3
UNION BANK OF CALIFORNIA, N.A.,
as a Lender
By
--------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Modtech Account Officer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-4
COMERICA BANK-CALIFORNIA,
as a Lender
By
--------------------------------
Name:
Title:
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Modtech Account Officer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-5
SCHEDULE 1.1
LENDER COMMITMENTS AND
PRO RATA SHARES
LINE OF
BANK CREDIT % TERM LOAN % TOTAL %
------------------- -------------- -------------- -------------- -------------- -------------- --------------
▇▇▇▇▇ FARGO $ 15,000,000 37.5000% $11,000,000.00 42.3077% $ 26,000,000 39.3939%
COMERICA-CALIFORNIA $ 12,500,000 31.2500% $ 7,500,000.00 28.8462% $ 20,000,000 30.3030%
UNION BANK $ 12,500,000 31.2500% $ 7,500,000.00 28.8462% $ 20,000,000 30.3030%
TOTAL $ 40,000,000 100.0000% $26,000,000.00 100.0000% $ 66,000,000 100.0000%
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