--------------------------------------------------------------------------------
AMENDED AND RESTATED
CREDIT AND SECURITY AGREEMENT
dated as of
November 21, 2002
among
COLUMBUS ▇▇▇▇▇▇▇▇ CORPORATION, as Borrower,
LARCO INDUSTRIAL SERVICES LTD,
COLUMBUS ▇▇▇▇▇▇▇▇ LIMITED,
THE GUARANTORS NAMED HEREIN,
THE LENDERS PARTY HERETO FROM TIME TO TIME,
FLEET CAPITAL CORPORATION, as Administrative Agent
FLEET NATIONAL BANK, as Issuing Lender,
CONGRESS FINANCIAL CORPORATION (NEW ENGLAND), Co-Syndication Agent,
KEY BANK N.A., as Co-Syndication Agent,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL, A DIVISION OF ▇▇▇▇▇▇▇ ▇▇▇▇▇ BUSINESS
FINANCIAL SERVICES INC., as Documentation Agent
and
FLEET SECURITIES, INC., as Arranger
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
----
AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT............................1
ARTICLE 1. DEFINITIONS........................................................1
1.1. DEFINED TERMS......................................................1
1.2. CLASSIFICATION OF LOANS AND BORROWINGS............................41
1.3. TERMS GENERALLY...................................................41
1.4. ACCOUNTING TERMS; GAAP............................................41
1.5. JOINT AND SEVERAL OBLIGATIONS; DESIGNATED FINANCIAL
OFFICERS................................................................42
ARTICLE 2. THE CREDITS.......................................................44
2.1. REVOLVING LOANS..................................................44
2.2. TERM LOAN.........................................................46
2.3. CONVERSION OPTIONS................................................47
2.4. DOMESTIC LETTERS OF CREDIT AND FOREIGN LETTERS OF CREDIT..........50
2.5. LOANS AND BORROWINGS; FUNDING OF BORROWINGS.......................55
2.6. EXPIRATION, TERMINATION OR REDUCTION OF COMMITMENTS..............57
2.7. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-
OFFS; COLLECTION........................................................58
2.8. PREPAYMENT OF LOANS...............................................62
2.9. FEES..............................................................68
2.10. INCREASED COSTS..................................................69
2.11. TAXES; SETOFF; ETC..............................................70
2.12. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS...................71
2.13. CHANGE IN DOMESTIC BORROWING BASE, CANADIAN
BORROWING BASE AND TERM LOAN BORROWING BASE.............................72
2.14. CANADIAN FACILITY...............................................72
ARTICLE 3. GUARANTEE BY GUARANTORS...........................................73
3.1. THE GUARANTEE.....................................................73
3.2. OBLIGATIONS UNCONDITIONAL.........................................74
3.3. REINSTATEMENT.....................................................75
3.4. SUBROGATION.......................................................75
3.5. REMEDIES..........................................................76
3.6. INSTRUMENT FOR THE PAYMENT OF MONEY...............................76
3.7. CONTINUING GUARANTEE..............................................76
3.8. GENERAL LIMITATION ON AMOUNT OF OBLIGATIONS
GUARANTEED..............................................................76
3.9. LUXEMBOURG GUARANTOR'S LIMITATION................................76
ARTICLE 4. THE COLLATERAL...................................................77
4.1. GRANT OF SECURITY INTEREST........................................77
4.2. SPECIAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE CREDIT PARTIES......................................................78
4.3. COLLECTION OF PROCEEDS OF ACCOUNTS RECEIVABLE.....................86
4.4. FIXTURES, ETC....................................................88
4.5. RIGHT OF AGENT TO DISPOSE OF COLLATERAL, ETC......................89
4.6. RIGHT OF AGENT TO USE AND OPERATE COLLATERAL, ETC.................89
4.7. PROCEEDS OF COLLATERAL............................................90
-i-
4.8. RELATION TO COLLATERAL DOCUMENTS.................................90
4.9. MARSHALLING.......................................................91
ARTICLE 5. REPRESENTATIONS AND WARRANTIES....................................91
5.1. ORGANIZATION;POWERS...............................................91
5.2. AUTHORIZATION; ENFORCEABILITY.....................................92
5.3. GOVERNMENTAL APPROVALS; NO CONFLICTS..............................92
5.4. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE...................92
5.5. PROPERTIES........................................................93
5.6. LITIGATION AND ENVIRONMENTAL MATTERS..............................94
5.7. COMPLIANCE WITH LAWS AND AGREEMENTS...............................96
5.8. INVESTMENT AND HOLDING COMPANY STATUS.............................96
5.9. TAXES.............................................................96
5.10. ERISA............................................................97
5.11. DISCLOSURE.......................................................97
5.12. CAPITALIZATION...................................................98
5.13. SUBSIDIARIES.....................................................98
5.14. MATERIAL INDEBTEDNESS, LIENS AND AGREEMENTS......................98
5.15. FEDERAL RESERVE REGULATIONS......................................99
5.16. SOLVENCY.........................................................99
5.17. FORCE MAJEURE...................................................100
5.18. ACCOUNTS RECEIVABLE.............................................100
5.19. LABOR AND EMPLOYMENT MATTERS....................................101
5.20. BANK ACCOUNTS...................................................102
5.21. OBLIGATIONS AS SENIOR DEBT......................................102
5.22. SENIOR SUBORDINATED NOTE DOCUMENTS AND TRANCHE B
LOAN DOCUMENTS.........................................................102
5.23. CERTAIN TRANSACTIONS............................................102
5.24. COLUMBUS ▇▇▇▇▇▇▇▇ FINANCE CORPORATION...........................102
ARTICLE 6. CONDITIONS......................................................103
6.1. CLOSING DATE.....................................................103
6.2. EACH EXTENSION OF CREDIT.........................................107
ARTICLE 7. AFFIRMATIVE COVENANTS............................................108
7.1. FINANCIAL STATEMENTS AND OTHER INFORMATION.......................108
7.2. NOTICES OF MATERIAL EVENTS.......................................111
7.3. EXISTENCE; CONDUCT OF BUSINESS...................................112
7.4. PAYMENT OF OBLIGATIONS...........................................112
7.5. MAINTENANCE OF PROPERTIES; INSURANCE.............................112
7.6. BOOKS AND RECORDS; INSPECTION RIGHTS.............................113
7.7. FISCAL YEAR......................................................114
7.8. COMPLIANCE WITH LAWS.............................................114
7.9. USE OF PROCEEDS..................................................114
7.10. CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES.....................114
7.11. ERISA...........................................................114
7.12. ENVIRONMENTAL MATTERS; REPORTING AND ASSESSMENTS................115
7.13. MATTERS RELATING TO ADDITIONAL REAL PROPERTY COLLATERAL.........116
7.14. CASH DEPOSITS/BANK ACCOUNTS.....................................116
7.15. NEW GUARANTORS..................................................117
7.16. PUNCTUAL PAYMENT................................................117
7.17. FURTHER ASSURANCES..............................................117
-ii-
7.18. POST-CLOSING COVENANTS..........................................117
ARTICLE 8. NEGATIVE COVENANTS...............................................118
8.1. INDEBTEDNESS.....................................................118
8.2. LIENS............................................................119
8.3. CONTINGENT LIABILITIES...........................................121
8.4. FUNDAMENTAL CHANGES; ASSET SALES.................................121
8.5. INVESTMENTS; HEDGING AGREEMENTS..................................122
8.6. RESTRICTED JUNIOR PAYMENTS.......................................123
8.7. TRANSACTIONS WITH AFFILIATES.....................................123
8.8. RESTRICTIVE AGREEMENTS; RESTRICTIONS ON NEGATIVE PLEDGES
AND UPSTREAM LIMITATION................................................124
8.9. SALE-LEASEBACK TRANSACTIONS......................................124
8.10. CERTAIN FINANCIAL COVENANTS.....................................124
8.11. LINES OF BUSINESS...............................................126
8.12. OTHER INDEBTEDNESS..............................................126
8.13. MODIFICATIONS OF CERTAIN DOCUMENTS; DESIGNATION OF
SENIOR DEBT............................................................127
8.14. TRANCHE B PAYMENTS..............................................127
8.15. COLUMBUS ▇▇▇▇▇▇▇▇ FINANCE CORPORATION...........................128
ARTICLE 9. EVENTS OF DEFAULT................................................128
9.1. EVENTS OF DEFAULT................................................128
9.2. DISTRIBUTION OF COLLATERAL PROCEEDS..............................133
9.3. RECEIVERSHIP.....................................................133
ARTICLE 10. THE AGENT.......................................................134
10.1. APPOINTMENT AND AUTHORIZATION...................................134
10.2. AGENT'S RIGHTS AS LENDER........................................134
10.3. DUTIES AS EXPRESSLY STATED......................................135
10.4. RELIANCE BY AGENT...............................................135
10.5. ACTION THROUGH SUB-AGENTS.......................................136
10.6. RESIGNATION OF AGENT AND APPOINTMENT OF SUCCESSOR
AGENT..................................................................136
10.7. LENDERS' INDEPENDENT DECISIONS..................................137
10.8. INDEMNIFICATION.................................................137
10.9. CONSENTS UNDER OTHER LOAN DOCUMENTS.............................138
10.10. DELINQUENT LENDERS.............................................138
10.11. ELECTRONIC COMMUNICATIONS......................................138
ARTICLE 11. MISCELLANEOUS...................................................139
11.1. NOTICES.........................................................139
11.2. WAIVERS; AMENDMENTS.............................................139
11.3. EXPENSES; INDEMNITY: DAMAGE WAIVER..............................141
11.4. SUCCESSORS AND ASSIGNS..........................................145
11.5. SURVIVAL........................................................150
11.6. COUNTERPARTS; INTEGRATION; REFERENCES TO AGREEMENT;
EFFECTIVENESS..........................................................150
11.7. SEVERABILITY....................................................151
11.8. RIGHT OF SETOFF.................................................151
11.9. SUBORDINATION BY CREDIT PARTIES.................................152
11.10. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS................................................................152
-iii-
11.11. WAIVER OF JURY TRIAL...........................................153
11.12. HEADINGS AND DRAFTING..........................................153
11.13. CONFIDENTIALITY................................................153
-iv-
AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT dated as of
November 21, 2002 is by and among COLUMBUS ▇▇▇▇▇▇▇▇ CORPORATION, a New York
corporation (the "BORROWER"), LARCO INDUSTRIAL SERVICES LTD, a business
corporation organized under the laws of the Province of Ontario, COLUMBUS
▇▇▇▇▇▇▇▇ LIMITED, a business corporation organized under the laws of Canada, the
Guarantors named herein, the lenders from time to time party hereto, FLEET
CAPITAL CORPORATION, as Administrative Agent, FLEET NATIONAL BANK, as Issuing
Lender and FLEET SECURITIES, INC., as Arranger.
WHEREAS, the Borrower has previously entered into that certain Credit
Agreement dated as of March 31, 1998 (as amended, the "EXISTING CREDIT
AGREEMENT"), among the Borrower, the lenders named therein, and Fleet National
Bank, as Agent;
WHEREAS, pursuant to a certain Assignment and Acceptance, dated
November 21, 2002 (the "ASSIGNMENT"), among the Borrower, the lenders party to
the Existing Credit Agreement, the Administrative Agent and the Lenders party to
this Agreement, (i) the lenders under the Existing Credit Agreement have
assigned to the Lenders the outstanding loans and other obligations under the
Existing Credit Agreement and (ii) the Agent under the Existing Credit Agreement
has assigned to the Administrative Agent hereunder all of its liens, security
interests, and collateral security under the Existing Credit Agreement; and
WHEREAS, it is the intention and desire of the parties that the loans
and other obligations under the Existing Credit Agreement be amended and
restated as set forth herein such that the rights, obligations, liens, security
interests, and collateral security assigned pursuant to the Assignment shall
hereafter be evidenced by this Agreement and the other Loan Documents referred
to herein.
NOW, THEREFORE, the parties agree that, effective as of the Closing
Date, the Existing Credit Agreement shall be amended and restated as set forth
herein.
The parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
1.1. DEFINED TERMS. As used in this Agreement, the following terms have
the meanings specified below:
"ACCOUNTS RECEIVABLE/LOAN RECONCILIATION REPORT" means a certificate
signed by a Designated Financial Officer in substantially the form of EXHIBIT
B-3 hereto.
"ACCUMULATED OTHER COMPREHENSIVE GAIN (OR LOSS)" means "accumulated
other comprehensive gain (or loss)" as defined under GAAP.
"ADDITIONAL MORTGAGE" has the meaning assigned to such term in
subsection 7.13(a).
"ADDITIONAL MORTGAGED PROPERTY" means any Real Property Asset that is
now owned or leased, or hereinafter acquired or leased, by the Credit Parties,
on which the Agent determines to acquire a Mortgage following the Closing Date.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire in
a form supplied by the Agent.
"ADVANCE REQUEST" means a written request signed by a Designated
Financial Officer for a Borrowing in accordance with subsection 2.1(b), in
substantially the form of EXHIBIT B-4 annexed hereto or such other form
acceptable to the Agent.
"AFFILIATE" means, with respect to a specified Person, another Person
that Controls or is Controlled by or is under common Control with the Person
specified. Notwithstanding anything herein to the contrary, in no event shall
the Agent or any Lender be considered an "Affiliate" of any Credit Party.
"AGENT" means Fleet Capital Corporation in its capacities as
administrative agent for the Lenders hereunder.
"AGENT'S OFFICE" means ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"AGREEMENT" means this Amended and Restated Credit and Security
Agreement, including the Schedules and Exhibits hereto, as from time to time
amended and supplemented in accordance with the term hereof.
"APPLICABLE MARGIN" means, for any Type of Loans (a) for the Initial
Payment Period (as defined below) the following percentages per annum:
--------------------------------------------------------------------------------
APPLICABLE MARGIN (% PER ANNUM)
-----------------------------------------
BASE RATE LOANS LIBOR RATE LOANS
----------------------- -----------------------------------------
Revolving Loans 1.50% 2.75%
Term Loan 2.00% 3.25%
--------------------------------------------------------------------------------
and (b) for any Payment Period (as defined below) other than the Initial Payment
Period, the respective rates indicated below for Loans of such Type opposite the
applicable Senior Leverage Ratio indicated below (or as provided in the final
paragraph of this definition, for part of a Payment Period):
--------------------------------------------------------------------------------
APPLICABLE MARGIN (% PER ANNUM)
--------------------------------------------------------------------------------
REVOLVING LOANS TERM LOANS
--------- ------------- --------------------------- ---------------------------
SENIOR
LEVERAGE LIBOR BASE RATE LIBOR BASE RATE
LEVEL RATIO RATE LOANS LOANS RATE LOANS LOANS
--------- ------------- ------------- ------------- ------------- -------------
I >3.00:1 3.00% 1.75% 3.50% 2.25%
--------- ------------- ------------- ------------- ------------- -------------
II => 2.00:1 2.75% 1.50% 3.25% 2.00%
and <3.00:1
--------- ------------- ------------- ------------- ------------- -------------
III < 2.00:1 2.50% 1.25% 3.00% 1.75%
--------- ------------- ------------- ------------- ------------- -------------
For purposes hereof, a "PAYMENT PERIOD" means (i) initially, the period
commencing on the Closing Date to and including the third Business Day after the
date of delivery of the financial statements required by subsection 7.1(b) and
the Compliance Certificate required by subsection 7.1(e) for the fiscal period
of the Credit Parties ended March 31, 2003 (the "INITIAL PAYMENT PERIOD"), and
(ii) thereafter, the period commencing on the day immediately succeeding the
last day of the prior Payment Period to but not including the third Business Day
after the earlier of (x) the due date of the next Compliance Certificate
required to be delivered by the Borrower to the Agent pursuant to subsection
7.1(e) concurrently with the delivery by the Borrower of the financial
statements required by subsection 7.1(b), or (y) the date of the actual receipt
by the Agent of such Compliance Certificate. Subject to and in accordance with
the final paragraph of this definition, the Applicable Margin shall be effective
for each Payment Period (or in the circumstances described in the final
paragraph of this definition, such portion of a Payment Period).
The Applicable Margin for any Payment Period except the Initial Payment
Period shall be determined on the basis of the Compliance Certificate required
to be delivered to the Agent pursuant to subsection 7.1(e) concurrently with the
delivery by the Borrower of the corresponding financial statements required by
subsection 7.1(b), setting forth, among other things, a calculation of the
Senior Leverage Ratio as at the last day of the fiscal quarter immediately
preceding such Payment Period.
Anything in this Agreement to the contrary notwithstanding, the
Applicable Margin shall be the rates applicable to Level I in the table above if
the Compliance Certificate required to be delivered by subsection 7.1(e) and the
financial statements required by subsection 7.1(b), respectively, shall not be
delivered within three (3) Business Days after the same shall be due (but only
with respect to the portion of such Payment Period prior to the delivery of such
certificate).
"APPLICABLE PERCENTAGE" means the percentage of the total Commitments
or Loans of all Classes hereunder represented by the aggregate amount of such
Lender's Commitments or Loans of all Classes hereunder.
"APPLICABLE RECIPIENT" has the meaning assigned to such term in
subsection 2.7(f).
"APPRAISED VALUE" means the fair market value of any Real Property
Assets determined by the most recent appraisal performed by a qualified
independent appraiser, in form and substance acceptable to the Agent.
"APPROVED FUND" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"APPROVED RESTRUCTURING CHARGES" means cash restructuring charges
incurred by the Borrower and/or its Subsidiaries and approved by the Agent up to
an amount not to exceed $4,500,000 in the aggregate from the Closing Date to the
second anniversary of the Closing Date (of which no more than $2,300,000 shall
be paid in cash by the Borrower and/or its Subsidiaries from September 30, 2002
through March 31, 2003); PROVIDED however, no more than $2,000,000 in cash
restructuring charges for any one facility, plant or other Property shall
constitute Approved Restructuring Charges.
"ARRANGER" means Fleet Securities, Inc.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 11.4), and accepted by the Agent, in the form of EXHIBIT E
annexed hereto or any other form approved by the Agent which complies with the
provisions of Section 11.4.
"ASSIGNMENTS OF MORTGAGE" means the several Assignments of Mortgage,
made in favor the Agent, upon certain of the Real Property Assets of the Credit
Parties set forth in SCHEDULE 1.1, in the form and substance acceptable to the
Agent.
"ASSIGNMENT OF SECURITY INTEREST IN COPYRIGHTS" means the Assignment of
Security Interest in Copyrights, made by Fleet National Bank, as Agent under the
Existing Credit Agreement, in favor of the Agent, in the form and substance
acceptable to the Agent.
"ASSIGNMENTS OF SECURITY INTEREST IN PATENTS" means the several
Assignments of Security Interest in Patents, made by Fleet National Bank, as
Agent under the Existing Credit Agreement, in favor of the Agent, in the form
and substance acceptable to the Agent.
"ASSIGNMENTS OF SECURITY INTEREST IN TRADEMARKS" means the several
Assignments of Security Interest in Trademarks, made by Fleet National Bank, as
Agent under the Existing Credit Agreement, in favor of the Agent, in the form
and substance acceptable to the Agent.
"AUDUBON EUROPE" means Audubon Europe S.A.R.L, a company duly founded
and validly existing under the laws of Luxembourg.
"AVAILABILITY BLOCK" means the aggregate mandatory prepayments which
have not been applied to repay the Loans or Tranche B Loans in accordance with
subsections 2.8(c) or Section 8.14, as the case may be. The Availability Block
shall be reduced by the amount of the optional prepayments made to the Lenders
and/or Tranche B Lenders in accordance with subsections 2.8(a) or Section 8.14,
as the case may be.
"AVAILABLE FUNDS" means all deposits in the Controlled Accounts which
have been made by 2:00 p.m., Boston, Massachusetts time, on a Business Day, or
such later time as the Agent and the Cash Management Bank shall have expressly
consented to.
"BASE RATE" means the higher of (i) the variable annual rate of
interest so designated from time to time by Fleet National Bank as its "prime
rate", such rate being a reference rate and not necessarily representing the
lowest or best rate being charged to any customer, and (ii) one-half of one
percent (1/2%) above the Federal Funds Effective Rate. For the purposes of this
definition, "Federal Funds Effective Rate" shall mean for any day, the rate per
annum equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the
Agent from three funds brokers of recognized standing selected by the Agent.
Changes in the Base Rate resulting from any changes in Fleet National Bank's
"prime rate" shall take place immediately without notice or demand of any kind.
"BOARD" means the Board of Governors of the Federal Reserve System of
the United States of America.
"BORROWER" means Columbus ▇▇▇▇▇▇▇▇ Corporation, a New York corporation.
"BORROWING" means Loans of a particular Class of the same Type, made,
converted or continued on the same date and, in the case of LIBOR Rate Loans, as
to which a single LIBOR Interest Period is in effect.
"BORROWING BASE CERTIFICATE" means a certificate signed by a Designated
Financial Officer certifying the amount of the Domestic Borrowing Base and
Canadian Borrowing Base as of the date set forth therein, in substantially the
form of EXHIBIT B-1 hereto.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which commercial banks in Boston, Massachusetts are authorized or
required by law to remain closed; PROVIDED that, when used in connection with a
LIBOR Rate Loan, the term "BUSINESS DAY" shall also exclude any day on which
banks are not open for dealings in U.S. dollar deposits in the London interbank
market.
"CANADIAN BORROWERS" means, collectively, Larco Industrial Services
Ltd., a business corporation organized under the laws of the Province of Ontario
and Columbus ▇▇▇▇▇▇▇▇ Limited, a business corporation organized under the laws
of Canada.
"CANADIAN BORROWING BASE" means, at the relevant time of reference
thereto, an amount determined by the Agent by reference to the most recent
Borrowing Base Certificate delivered to the Agent and the Lenders pursuant to
subsection 7.1(f) which is equal to the lesser of the Canadian Sublimit and the
Dollar Equivalent sum of:
(a) 85% of Eligible Accounts of the Canadian Borrowers, PLUS
(b) 40% of the lower of cost or fair market value of Eligible
Inventory of the Canadian Borrowers; PROVIDED, that in no
event shall the SUM of (i) the amount of the Domestic
Borrowing Base comprised of Eligible Inventory of the Borrower
and its Domestic Subsidiaries which are Guarantors, plus (ii)
the amount of the Canadian Borrowing Base comprised of
Eligible Inventory of the Canadian Borrowers, exceed
$25,000,000 at any time, PLUS
(c) 60% of the Appraised Value of the Canadian Real Property,
MINUS
(d) the Environmental Reserve allocable to the Canadian Borrowing
Base (in the Agent's discretion); MINUS
(e) reserves for foreign exchange and interest rate derivative
exposure and such other reserves as the Agent in its sole
discretion shall deem appropriate from time to time, including
without limitation, such reserve for amounts owing by any
Canadian Borrower to any Person to the extent secured by a
Lien on, or trust over, any Property of such Canadian
Borrower, including Prior Claims, landlord, bailee and customs
claims which are not subordinated to the satisfaction of
Agent, and Eligible Inventory of such Canadian Borrower
subject to rights of suppliers under Section 81.1 of the
Bankruptcy and Insolvency Act (Canada);
The Canadian Borrowing Base shall be calculated in U.S Dollars and Canadian
dollars. In determining the Canadian Borrowing Base from time to time, the Agent
may, but shall not be required to, rely upon reports or analyses generated by
the Borrower (including, without limitation, Borrowing Base
Certificates/Collateral Update Certificates) and reports or analyses generated
by or on behalf of the Agent or any Lender or by third party collateral
examination. Notwithstanding anything to the contrary set forth herein, the
Agent may in its sole discretion at any time and from time to time, subject to
subsections 11.2(b)(xi)) and (b)(xii), adjust the percentages of Eligible
Accounts or Eligible Inventory, change eligibility criteria contained in the
definitions of Eligible Accounts or Eligible Inventory, and change and/or
establish reserves (such reserves to be standard and customary for facilities of
this nature) taken in respect of Eligible Inventory and Eligible Accounts from
time to time based upon the results of any appraisals or other sources of
information which demonstrate in the Agent's reasonable judgment based on due
inquiry a change in the collectability of accounts receivable of the Canadian
Borrowers and/or the marketability or composition of inventory of the Canadian
Borrowers and/or other market changes affecting the value of accounts or
inventory comprising the Canadian Borrowing Base.
"CANADIAN COMMITMENT LETTER" means that certain Commitment Letter,
between the Canadian Lender and the Canadian Borrowers pursuant to which the
Canadian Lender has agreed to provide a revolving credit facility to the
Canadian Borrowers.
"CANADIAN EXCESS AMOUNT" means, as of any date of determination
thereof, an amount in Dollars equal to the result of (a) the Dollar Equivalent
of all loans and other advances outstanding under the Canadian Facility MINUS
the Canadian Borrowing Base.
"CANADIAN FACILITY" means the facility provided by the Canadian Lender
to the Canadian Borrowers, subject to Section 2.14 hereof.
"CANADIAN INTERCREDITOR AGREEMENT" means an intercreditor agreement, in
form and substance satisfactory to the Agent, between the Agent and the Canadian
Lender, with respect to the Canadian Facility.
"CANADIAN LENDER" means The Bank of Nova Scotia, a chartered bank under
the laws of Canada, or such other or successor lender(s) approved by the Agent
that shall be providing the Canadian Facility to the Canadian Borrowers.
"CANADIAN LETTER OF CREDIT" has the meaning assigned to such term in
subsection 2.14(a).
"CANADIAN LOAN DOCUMENTS" means, collectively, the Canadian
Intercreditor Agreement, Debentures, the Canadian Security Agreement, the
Canadian Patent and Trademark Agreements, the Canadian Commitment Letter, the
Canadian Letter of Credit and all other instruments and documents, including
without limitation PPSA financing statements, and the like, required to be
executed or delivered pursuant to this Agreement or any Canadian Loan Document.
"CANADIAN REAL PROPERTY" means the real property located at 107 and ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ and 863 and ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ SN8 and owned by the Canadian Borrowers, so long as such
property shall be subject to a First Priority Lien in favor of the Agent.
"CANADIAN PATENT AND TRADEMARK AGREEMENTS" means the several patent and
trademark agreements, made by the Credit Parties in favor of the Agent, in form
and substance satisfactory to the Agent.
"CANADIAN SECURITY AGREEMENT" means the security agreement, made by the
Credit Parties in favor of the Agent, to be governed by Ontario law, in form and
substance satisfactory to the Agent.
"CANADIAN SUBLIMIT" has the meaning assigned to such term in subsection
2.14(a).
"CAPITAL EXPENDITURES" means, for any period, the sum for the Borrower
and its consolidated Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP) of the aggregate amount of expenditures
made or liabilities incurred during such period (including the aggregate amount
of Capital Lease Obligations incurred during such period) to acquire or
construct fixed assets, plant and equipment (including renewals, improvements
and replacements, but excluding repairs) computed in accordance with GAAP;
PROVIDED that such term shall not include any such expenditures in connection
with any replacement or repair of Property affected by a Casualty Event.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"CAPITAL STOCK" means (a) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, and (b) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person and any and all warrants,
rights or options to purchase any of the foregoing.
"CASH MANAGEMENT BANK" means Fleet National Bank.
"CASUALTY EVENT" means, with respect to any Property of any Person, any
loss of or damage to, or any condemnation or other taking of, such Property for
which such Person or any of its Subsidiaries receives insurance proceeds, or
proceeds of a condemnation award or other compensation.
"CHANGE IN LAW" means (a) the adoption of any law, rule or regulation
after the Closing Date, (b) any change after the Closing Date in any law, rule
or regulation or in the interpretation or application thereof by any
Governmental Authority or (c) compliance by any Lender or the Issuing Lender
(or, for purposes of subsection 2.10(b), by any lending office of such Lender or
by such Lender's or the Issuing Lender's holding company, if any) with any
request, guideline or directive (whether or not having the force of law), other
than a request or directive to comply with any law, rule or regulation in effect
on the Closing Date, of any Governmental Authority made or issued after the
Closing Date.
"CHANGE OF CONTROL" means each occurrence of any of the following:
(a) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Borrower
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the shareholders of the Borrower was approved
by a vote of at least a majority of the directors of the Borrower then still in
office who were either directors at the beginning of such period, or whose
election or nomination for election was previously approved) cease for any
reason to constitute a majority of the Board of Directors of the Borrower;
(b) any Person or group of persons (within the meaning of Section 13 or
14 of the Securities Exchange Act of 1934) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under said Act), directly or indirectly, of twenty-five
percent (25%) or more of the outstanding shares of Capital Stock of the
Borrower;
(c) the Borrower shall cease to have beneficial ownership (as defined
in Rule 13d-3 under the Exchange Act) of 100% of the aggregate voting power of
the Capital Stock of each other Credit Party, free and clear of all Liens (other
than any Liens granted hereunder and Permitted Liens);
(d) except as permitted hereunder, (i) any Credit Party consolidates
with or merges into another entity or conveys, transfers or leases all or
substantially all of its properties and assets to another Person, or (ii) any
entity consolidates with or merges into any Credit Party in a transaction
pursuant to which the outstanding voting Capital Stock of such Credit Party is
reclassified or changed into or exchanged for cash, securities or other
property, other than any such transaction described in this clause (ii) in which
either (A) in the case of any such transaction involving the Borrower, no Person
or group (within the meaning of Section 13(d)(3) of the Exchange Act) has,
directly or indirectly, acquired beneficial ownership of more than 25% of the
aggregate outstanding voting Capital Stock of the Borrower or (B) in the case of
any such transaction involving a Credit Party other than the Borrower, the
Borrower has beneficial ownership of 100% of the aggregate voting power of all
Capital Stock of the resulting, surviving or transferee entity; or
(e) a "Change of Control" shall occur under the Senior Subordinated
Note Indenture.
"CLASS" when used in reference to any Loan, Borrowing or Commitment,
refers to whether such Loan, the Loans comprising such Borrowing or the Loans
that the a Lender holding such Commitment is obligated to make, are Revolving
Loans, or a Term Loan.
"CLOSING DATE" means the time specified in a written notice from the
Agent when the conditions specified in Section 6.1 are satisfied (or waived in
accordance with Section 11.2).
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL" means all of the property and assets and all interests
therein and proceeds thereof now owned or hereafter acquired by any Credit Party
upon which a Lien is granted or purported to be granted by such Credit Party as
security for all or any part of the Obligations.
"COLLATERAL DOCUMENT" means any Patent Agreement, any Trademark
Agreement, any Assignment of Security Interest in Patents, any Assignment of
Security Interest in Trademarks, any Assignment of Security Interest in
Copyright, any Pledge Agreement, any Assignment of Mortgage, any Mortgage, any
Copyright Mortgage, any Lockbox Agreement, any Control Agreement, any Canadian
Patent and Trademark Agreement, any Canadian Security Agreement, and all other
instruments and documents, including without limitation any Uniform Commercial
Code financing statements, and the like, required to be executed or delivered
pursuant to this Agreement or any Collateral Document.
"COLLATERAL UPDATE CERTIFICATE" means a certificate signed by a
Designated Financial Officer, in substantially the form of EXHIBIT B-2 annexed
hereto.
"COMMITMENTS" means (a) for all Lenders, the aggregate of the Total
Revolving Credit Commitment and Total Term Loan Commitment, and (b) for each
Lender the aggregate of such Lender's Revolving Credit Commitment and Term Loan
Commitment.
"COMPLIANCE CERTIFICATE" means a certificate signed by a Designated
Financial Officer, in substantially the form of EXHIBIT D annexed hereto, (a)
certifying as to whether a Default has occurred and, if a Default has occurred,
specifying the details thereof and any action taken or proposed to be taken with
respect thereto, (b) setting forth reasonably detailed calculations
demonstrating compliance with Section 8.10, and (c) stating whether any change
in GAAP or in the application thereof has occurred since the date of the audited
financial statements referred to in Section 5.4 and, if any such change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate.
"CONTINGENT OBLIGATION" means, with respect to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, (a) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of a primary obligor, (b) the obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement, (c) any obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation or
(B) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, assets, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to assure
or hold harmless the holder of such primary obligation against loss in respect
thereof; PROVIDED, however, that the term "Contingent Obligation" shall not
include any product warranties extended in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation with respect to which
such Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the terms of
the instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability with respect thereto
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.
"CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"CONTROLLING" and "CONTROLLED" have meanings correlative thereto. A Person who
owns or holds Capital Stock, beneficial interests or other securities
representing five percent (5%) or more of the Total Voting Power of another
Person shall be deemed, for purposes of this Agreement, to "control" such other
Person.
"CONTROL AGREEMENT" means, with respect to any Controlled Account, an
agreement in accordance with subsection 4.3(b), in form and substance
satisfactory to the Agent, executed and delivered by the Credit Parties, the
depository institution at which such Controlled Account is maintained and the
Agent on the Closing Date and thereafter in accordance with Section 7.14, as
such agreement may be amended, supplemented or otherwise modified from time to
time.
"CONTROLLED ACCOUNT" has the meaning assigned to such term in
subsection 4.3(a).
"CONVERSION REQUEST" means a notice given by the Borrower to the Agent
of the Borrower's election to convert or continue a Loan in accordance with
Section 2.3.
"COPYRIGHTS" means all copyrights, whether statutory or common law,
owned by or assigned to the Credit Parties, and all exclusive and nonexclusive
licenses to the Credit Parties from third parties or rights to use copyrights
owned by such third parties, including, without limitation, the registrations,
applications and licenses listed on SCHEDULE 5.5 hereto, along with any and all
(a) renewals and extensions thereof, (b) income, royalties, damages, claims and
payments now and hereafter due and/or payable with respect thereto, including,
without limitation, damages and payments for past, present or future
infringements thereof, (c) rights to ▇▇▇ for past, present and future
infringements thereof, and (d) foreign copyrights and any other rights
corresponding thereto throughout the world.
"COPYRIGHT MORTGAGE" means any Memorandum of Grant of Security Interest
in Copyrights, made by the applicable Credit Party in favor of the Agent and in
substantially the form of EXHIBIT I.
"CREDIT PARTIES" means the U.S. Credit Parties and the Canadian
Borrowers.
"DEBENTURE" means any debenture made by a Credit Party in favor of the
Agent, for the benefit of the Agent and the Lenders, in form and substance
satisfactory to the Agent, securing the Obligations.
"DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DELINQUENT LENDER" has the meaning assigned to such term in Section
10.10.
"DESIGNATED FINANCIAL OFFICER" means an individual holding one or more
of the following offices with the Borrower or otherwise having executive
responsibilities for financial matters and listed in SCHEDULE 1.5 hereto: chief
financial officer, principal accounting officer, treasurer, assistant treasurer
or controller.
"DETERMINED VALUE" means, at the relevant time of reference thereto,
the appraised value of Eligible Fixed Assets on an orderly liquidation basis
determined by the most recent appraisal thereof conducted pursuant to subsection
7.6. To the extent that any Eligible Fixed Asset is encumbered by a lien or
encumbrance which is a Permitted Lien not securing the Obligations, the amount
of the Indebtedness secured by such lien or encumbrance shall be deducted from
the value determined in accordance with the immediately preceding sentence of
this definition of "Determined Value".
"DISCLOSED MATTERS" means the actions, suits and proceedings and the
environmental matters disclosed in SCHEDULE 5.6.
"DISPOSITION" means any transaction, or series of related transactions,
pursuant to which any Person or any of its Subsidiaries sells, assigns,
transfers or otherwise disposes of any property or assets (whether now owned or
hereafter acquired) to any other Person, in each case, whether or not the
consideration therefor consists of cash, securities or other assets owned by the
acquiring Person, excluding any sales of inventory in the ordinary course of
business on ordinary business terms.
"DOLLAR EQUIVALENT" means, on any particular date, with respect to any
amount denominated in U.S. Dollars, such amount of U.S. Dollars, and with
respect to any amount denominated in a currency other than U.S. Dollars, the
amount (as conclusively ascertained by the Agent absent manifest error) of U.S.
Dollars which could be purchased by the Agent with such amount or currency (in
accordance with its normal banking practices) in the applicable foreign currency
deposit markets with such amount of such currency at the spot rate of exchange
prevailing at or about 11:00 a.m. (Boston time) on such date.
"DOMESTIC BORROWING BASE" means, at the relevant time of reference
thereto, an amount determined by the Agent by reference to the most recent
Borrowing Base Certificate delivered to the Agent and the Lenders pursuant to
subsection 7.1(f) which is equal to the sum of:
(a) 85% of Eligible Accounts of the Borrower and its Domestic
Subsidiaries which are Guarantors, PLUS
(b) 40% of the lower of cost or fair market value of Eligible
Inventory of the Borrower and its Domestic Subsidiaries which
are Guarantors, PROVIDED, that in no event shall the SUM of
(i) the amount of the Domestic Borrowing Base comprised of
Eligible Inventory of the Borrower and its Domestic
Subsidiaries which are Guarantors PLUS (ii) the amount of the
Canadian Borrowing Base comprised of Eligible Inventory of
the Canadian Borrowers, exceed $25,000,000 at any time, MINUS
(c) the Environmental Reserve allocable to the Domestic Borrowing
Base (in the Agent's discretion); MINUS
(d) reserves for foreign exchange and interest rate derivative
exposure and such other reserves as the Agent in its sole
discretion shall deem appropriate from time to time; MINUS
(e) the Availability Block.
In determining the Domestic Borrowing Base from time to time, the Agent
may, but shall not be required to, rely upon reports or analyses generated by
the Borrower (including, without limitation, Borrowing Base Certificates and
Collateral Update Certificates) and reports or analyses generated by or on
behalf of the Agent or any Lender or by third party collateral examination.
Notwithstanding anything to the contrary set forth herein, the Agent may in its
sole discretion at any time and from time to time, subject to subsections
11.2(b)(xi)) and (b)(xii), adjust the percentages of Eligible Accounts or of
Eligible Inventory, change eligibility criteria contained in the definitions of
Eligible Accounts or Eligible Inventory, and change and/or establish reserves
(such reserves to be standard and customary for facilities of this nature) taken
in respect of Eligible Inventory and Eligible Accounts from time to time based
upon the results of any appraisals or other sources of information which
demonstrate in the Agent's reasonable judgment based on due inquiry a change in
the collectability of accounts receivable of the Borrower or any Domestic
Subsidiary and/or the marketability or composition of inventory of the Borrower
or any Domestic Subsidiary and/or other market changes affecting the value of
accounts or inventory comprising the Domestic Borrowing Base.
"DOMESTIC EXCESS AVAILABILITY" means, as of any date of determination
thereof, the result of:
(a) Domestic Gross Availability at such time, MINUS
(b) Domestic Revolving Credit Exposure at such time, MINUS
(c) the Canadian Excess Amount at such time.
"DOMESTIC GROSS AVAILABILITY" means, as of any date of determination
thereof, the lesser of:
(a) the Domestic Borrowing Base at such time, and
(b) the Domestic Revolving Credit Commitment at such time.
"DOMESTIC LC DISBURSEMENTS" means a payment made by the Issuing Lender
pursuant to a Domestic Letter of Credit.
"DOMESTIC LC EXPOSURE" means, at any time, the sum of (a) 100% of the
aggregate undrawn amount of all outstanding standby and documentary Domestic
Letters of Credit at such time, plus (b) the aggregate amount of all Domestic LC
Disbursements that have not yet been reimbursed by or on behalf of the Borrower
at such time.
"DOMESTIC LETTERS OF CREDIT" has the meaning assigned to such term in
subsection 2.4(a)(i).
"DOMESTIC REVOLVING CREDIT COMMITMENT" means, at any time, the Total
Revolving Credit Commitment at such time, MINUS the Dollar Equivalent of the
aggregate amount available to be drawn under the Canadian Letter of Credit.
"DOMESTIC REVOLVING CREDIT EXPOSURE" means, at any time, the Total
Revolving Credit Exposure MINUS the Dollar Equivalent of the aggregate amount
available to be drawn under the Canadian Letter of Credit.
"DOMESTIC SUBSIDIARY" means, at any time, any Subsidiary of the
Borrower organized under the laws of the United States of America or any State
thereof, including any Subsidiary of the Borrower listed in SCHEDULE 1.6 hereto.
"DRAWDOWN DATE" means the date on which any Revolving Loan or Term Loan
is made or is to be made, and the date on which any Revolving Loan is converted
or continued in accordance with Section 2.3.
"EBITDA" means, for any period and without duplications, (a) the net
income of the Borrower and its Subsidiaries (determined on a consolidated basis
in accordance with GAAP) for such period, PLUS (b) to the extent deducted in
calculating net income without duplication (i) income taxes accrued during such
period, (ii) Interest Expense during such period, (iii) depreciation,
amortization and other Non-Cash Charges accrued for such period, and (iv)
Approved Restructuring Charges incurred during such period, MINUS (c) to the
extent such items were added in calculating net income (i) extraordinary gains
during such period, (ii) gains from any Casualty Event, Disposition, or
discontinued operation during such period, and (iii) interest and other income
(excluding interest and other income related to CM Insurance Company, Inc.)
during such period.
"ELECTRONIC COMMUNICATIONS" has the meaning assigned to such term in
Section 10.11.
"ELIGIBLE ACCOUNTS" means (a) the aggregate face amount of the accounts
receivable outstanding and owed to any Credit Party as determined in accordance
with GAAP consistently applied and as entered on the books and records of such
Credit Party in the ordinary course of the business operations of such Credit
Party, MINUS (b) without duplication, the aggregate amount of any returns,
discounts (which may, at the Agent's option, be calculated on the shortest term
offered by such Credit Party), claims, credits, debit memoranda, customer
deposits, chargebacks, contra accounts, allowances or excise taxes of any nature
(whether issued, owing, granted or outstanding), and which satisfy each of the
requirements set forth below:
(i) the subject goods have been sold and/or services have been
rendered on an absolute sale basis and on an open account basis to an
account debtor which is not (A) a Governmental Authority or other
Person such that the Assignment of Claims Act (or other similar legal
or regulatory requirement) would apply to the pledge of receivables of
such account debtor, unless the Assignment of Claims Act (or such other
legal or regulatory requirement) has been complied with to the
satisfaction of the Agent or (B) an Affiliate of such Credit Party;
(ii) an invoice (in form and substance acceptable to the
Agent) has been sent to the applicable account debtor and bears an
invoice date contemporaneous with or later than the date of sale of
such goods or rendering of such service;
(iii) the account receivable does not arise from a sale to the
account debtor on a ▇▇▇▇-and-hold, guaranteed sale, sale-or-return,
sale-on-assignment, sale-on-appraisal, consignment or any other
repurchase or return basis;
(iv) the account is not evidenced by chattel paper or an
instrument of any kind, and has not been reduced to judgment;
(v) the account debtor is not insolvent or the subject of any
bankruptcy or insolvency proceedings of any kind;
(vi) the account debtor is credit worthy and not experiencing
financial difficulties that could affect the collectability of the
account;
(vii) the account debtor is an entity organized under the laws
of one of the United States or one of the provinces of Canada whose
main office is also located within the United States including Puerto
Rico as within the United States or Canada, or, if the account debtor
is not such an entity organized and located within the United States or
Canada, the account is supported by a letter of credit issued or
confirmed by a bank acceptable to the Agent or by other credit
enhancements, in each case in form and substance satisfactory to the
Agent;
(viii) the account receivable is a valid and legally
enforceable obligation of the account debtor thereunder, it is not
subject to recoupment, offset (other than discount for prompt payment)
or other defense on the part of such account debtor or to any claim on
the part of such account debtor denying liability thereunder;
(ix) the account receivable is not subject to any Lien of any
kind except for the Lien of the Agent securing the obligations of such
Credit Party under this Agreement and the Liens permitted hereunder;
(x) the account receivable has not remained outstanding in
whole or in part for more than sixty (60) days after the due date
(invoiced in accordance with the Borrower's usual and customary terms
as in effect on the Closing Date);
(xi) the account receivable does not arise out of a
transaction (direct or indirect) with an employee, officer, agent,
director or stockholder of such Credit Party or any Affiliate of such
Credit Party;
(xii) the account receivable is not owing from an account
debtor from whom fifty percent (50%) or more of the dollar amount of
all accounts receivable are deemed ineligible under clause (x) above;
(xii) the account receivable constitutes Collateral in which
the Agent has a First Priority Lien securing the Obligations of such
Credit Party under this Agreement;
(xiv) such Credit Party has not made an agreement with the
account debtor to extend the time of payment of the subject account
receivable;
(xv) the account debtor is not located in Minnesota (or any
other jurisdiction which adopts a statute or other requirement with
respect to which any Credit Party that obtains business from within
such jurisdiction or is otherwise subject to such jurisdiction's tax
law must file a "Business Activity Report" (or other applicable report)
or make any other required filings in a timely manner in order to
enforce its claims in such jurisdiction's courts or arising under such
jurisdiction's laws); PROVIDED, that accounts receivable which would be
Eligible Accounts but for the terms of this clause (xv) shall
nonetheless be deemed to be Eligible Accounts if such Credit Party has
filed a "Business Activity Report" (or other applicable report) with
the applicable state office or is qualified to do business in such
jurisdiction and, at the time the account receivable was created, was
qualified to do business in such jurisdiction or had on file with the
applicable state office a current "Business Activity Report" (or other
applicable report);
(xvi) the account receivable is (x) with respect to accounts
receivable included in the Domestic Borrowing Base, denominated in U.S.
Dollars and (y) with respect to accounts receivable included in the
Canadian Borrowing Base, denominated in Canadian Dollars;
(xvii) the account receivable does not consist of a progress
billing or an excess billing;
PROVIDED, however, that (A) the Agent may in its sole discretion exclude
particular accounts from the definition of Eligible Accounts and may impose
additional and/or more restrictive eligibility or valuation criteria than those
set forth above as preconditions for any account to be deemed to be an Eligible
Account hereunder, and (B) an account deemed to be an Eligible Account at any
one point in time may be excluded by the Agent in its sole discretion at a
future point in time.
"ELIGIBLE FIXED ASSETS" means the machinery and equipment (i) owned by
the Borrower and its Domestic Subsidiaries which are Guarantors, (ii) located in
the United States of America, (iii) in which the Agent shall have a First
Priority Lien, (iv) which are properly insured in accordance with the provisions
of Section 7.5, and (v) which are listed on that certain schedule of Eligible
Fixed Assets attached to the Term Loan Borrowing Base Certificate delivered to
the Agent on or prior to the Closing Date.
"ELIGIBLE INVENTORY" means finished goods, semi-finished goods, and raw
materials and component parts inventory (exclusive of work in process,
packaging, supplies, machinery and tooling) of any Credit Party recorded on the
books and records of such Credit Party in the ordinary course of the business
operations of such Credit Party valued on a first in first out basis (net of the
LIFO reserve maintained by the Borrower and its Subsidiaries with respect to
such inventory) at the lower of (a) the fair market value of such inventory, or
(b) the cost of such inventory (net of all positive cost reserves maintained by
the Borrower and its Subsidiaries with respect thereto, including, without
limitation, the purchase price variance reserve, the absorption reserve and the
price reserve), which inventory satisfies each of the following requirements:
(i) is in good and merchantable condition;
(ii) meets all standards imposed by any government agency
having regulatory authority over such goods and/or their use,
manufacture and/or sale;
(iii) has been physically received in (A) with respect to
inventory included in the Domestic Borrowing Base, the continental
United States by the Borrower or a Domestic Subsidiary which is a
Guarantor or (B) with respect to inventory included in the Canadian
Borrowing Base, Canada by a Canadian Borrower, and, in each case, is
located at a facility owned or leased by such Credit Party, is not
in-transit, and is not subject to advance payment by such Credit Party;
PROVIDED that no inventory located at a leased facility shall be deemed
to be "Eligible Inventory" hereunder unless the landlord of such
facility shall have entered into an agreement satisfactory in form and
substance to the Agent acknowledging the Liens of the Agent and
granting the Agent unrestricted access to such inventory;
(iv) is currently held for sale and currently salable in the
normal course of the business operations, or, as respects raw materials
or semi-finished goods, is incorporated or is being held to be
incorporated in customer products being produced or provided by any
Credit Party;
(v) does not constitute returned (unless suitable for resale),
excess, obsolete, unsaleable, shopworn, seconds, used, damaged or unfit
inventory;
(vi) is not accounted for in the obsolescence reserve
maintained by any Credit Party; has not remained in the possession of
such Credit Party for more than twenty-four (24) months or has not
otherwise been determined by the Agent in its sole discretion to
constitute slow-moving inventory;
(vii) is not subject to a sale to an account debtor on a
▇▇▇▇-and-hold, guaranteed sale, sale-or-return, sale-on-approval,
consignment or any other repurchase or return basis;
(viii) is not subject to any Lien of any kind except for the
Lien of the Agent securing Obligations under this Agreement and other
Liens permitted hereunder;
(ix) has not been sold to any Credit Party; and
(x) constitutes Collateral in which the Agent has a First
Priority Lien securing the Obligations;
PROVIDED, however, that (A) the aggregate amount of Eligible Inventory shall be
computed net of (I) the Inventory Accounting Variance Reserve and (II) such
reserves for slow moving and other ineligible inventory as the Agent shall deem
appropriate, (B) the Agent may in its sole discretion exclude particular items
of inventory from the definition of Eligible Inventory and may impose additional
and/or more restrictive eligibility or valuation criteria than those set forth
above as preconditions for any item of inventory to be deemed to be Eligible
Inventory hereunder, and (C) inventory deemed to be Eligible Inventory at any
one point in time may be excluded by the Agent in its sole discretion at a
future point in time.
"ENVIRONMENTAL ACTIONS" means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter or other communication from any Person or
Governmental Authority involving violations of Environmental Laws or Releases of
Hazardous Materials (i) from any assets, properties or businesses owned or
operated by any Credit Party or any of its Subsidiaries or any predecessor in
interest; (ii) from adjoining properties or businesses; or (iii) onto any
facilities which received Hazardous Materials generated by any Credit Party or
any of its Subsidiaries or any predecessor in interest.
"ENVIRONMENTAL LAWS" means all applicable laws, licenses, rules,
regulations, codes, ordinances, orders, decrees, judgments, injunctions, or
binding agreements issued, promulgated or entered into by any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, release or threatened release of any
Hazardous Material or to health and safety matters, including without
limitation, the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 as
amended ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986
("▇▇▇▇"), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act and all local, state and federal laws and regulations now
or hereafter in effect and applicable relating to the presence, abatement,
removal, disposal, transportation or treatment of materials containing asbestos.
"ENVIRONMENTAL LIABILITIES" means all liabilities, Remedial Actions,
monetary obligations, contingent or otherwise (including, without limitation,
any liability for damages, losses, punitive damages, consequently damages,
treble damages, costs and expense of environmental remediation, fines,
penalties, sanctions, indemnities or interest incurred as a result of any claim
or demand by any Governmental Authority or any third party), of any Credit Party
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the presence, generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the spill, leaking, pumping, pouring, discharging,
injecting, disposing, dumping, escaping, release or threatened release of any
Hazardous Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"ENVIRONMENTAL PERMITS" has the meaning assigned to such term in
Section 7.12(a).
"ENVIRONMENTAL RESERVE" means a reserve established by the Agent in its
sole discretion for the abatement or remediation of Hazardous Materials on or at
any of the Real Property Assets. The Agent may, in its discretion, allocate all
or any portion of the Environmental Reserve to the Domestic Borrowing Base, the
Canadian Borrowing Base and the Term Loan Borrowing Base.
"EQUITY RIGHTS" means, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including any stockholders' or voting trust agreements) for the issuance or
sale of, any additional shares of Capital Stock of any class, or partnership or
other ownership interests of any type in, such Person or securities convertible
into any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, and regulations
thereunder, in each case, as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Credit Parties, is treated as a single
employer within the meaning of Sections 414(b), (c), (m) or (o) of the Code.
Notwithstanding the foregoing, for purposes of any liability related to a
Multiemployer Plan under Title IV of ERISA, the term "ERISA Affiliate" means any
trade or business that, together with the Credit Parties, is treated as a single
employer within the meaning of Section 4001(b) of ERISA.
"ERISA EVENT" means (a) a "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder for which the notice
requirement has not been waived with respect to any Pension Plan, (b) the
existence with respect to any Pension Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived, (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Pension Plan, (d) the incurrence by any Credit
Party or any ERISA Affiliate of any liability under Title IV of ERISA with
respect to the termination of any Pension Plan, (e) the receipt by any Credit
Party or any ERISA Affiliate from the PBGC or plan administrator of any notice
relating to an intention to terminate any Pension Plan or Pension Plans or to
appoint a trustee to administer any Pension Plan, or (f) the receipt by any
Credit Party or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from any Credit Party or any ERISA Affiliate of any notice of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"EVENT OF DEFAULT" has the meaning assigned to such term in Section
9.1.
"EXCESS CASH FLOW" means, with respect to any Person for any period,
(a) Net Income of such Person and its Subsidiaries for such period, PLUS (b) all
non-cash items of such Person and its Subsidiaries deducted in determining Net
Income for such period, LESS (c) the sum of (i) all non-cash items of such
Person and its Subsidiaries added to the calculation of Net Income for such
period, (ii) all scheduled cash principal payments on the Term Loans and
Revolving Loans (only to the extent that the Revolving Credit Commitment is
permanently reduced by the amount of such payments) made during such period and
all scheduled prepayments of other Indebtedness of such Person or any of its
Subsidiaries during such period to the extent such other Indebtedness is
permitted to be incurred, and such payments are permitted to be made, under this
Agreement, (iii) the cash portion of Capital Expenditures made by such Person
and its Subsidiaries during such period to the extent permitted to be made under
this Agreement, and (iv) all voluntary prepayments of principal made to the
Lenders pursuant to subsection 2.8(a), and to the Tranche B Lenders permitted
under Section 8.14, in each case in excess of the amount of the Availability
Block made during or after the end of such period but prior to the date such
Excess Cash Flow payment is required to be made pursuant to subsection 2.8(b)
(it being understood that any such payment deducted pursuant to this clause (iv)
shall not be deducted from Excess Cash Flow for any subsequent period).
"EXCLUDED TAXES" means, with respect to the Agent, any Lender, the
Issuing Lender or any other recipient of any payment to be made by or on account
of any Obligation hereunder, (a) income, net worth or franchise taxes imposed on
(or measured by) its net income or net worth by the United States of America, or
by the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which
its lending office is located or in which it is taxable solely on account of
some connection other than the execution, delivery or performance of this
Agreement or the receipt of income hereunder, (b) any branch profits taxes
imposed by the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign
Lender, any withholding tax that is imposed on amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party to this Agreement or is
attributable to such Foreign Lender's failure or inability to comply with
subsection 2.11(e), except to the extent that such Foreign Lender's assignor (if
any) was entitled, at the time of assignment, to receive additional amounts from
the Borrower with respect to such withholding tax pursuant to subsection
2.11(a).
"EXISTING CREDIT AGREEMENT" has the meaning assigned to such term in
the Recital.
"EXISTING INDEBTEDNESS" means (i) Indebtedness of the Credit Parties
existing as of the Closing Date which is being repaid in full with the proceeds
of the Loans made by the Lenders and the Tranche B Loans on the Closing Date
including Indebtedness under the Existing Credit Facility and (ii) Indebtedness
of the Credit Parties existing as of the Closing Date which is permitted to
remain outstanding after the Closing Date under Section 8.1 and is listed on
SCHEDULE 8.1 hereto.
"EXISTING LETTERS OF CREDIT" means those certain existing letters of
credit set forth on SCHEDULE 1.7 hereto.
"EXTRAORDINARY RECEIPTS" means any cash received by the Borrower or any
of its Subsidiaries not in the ordinary course of business (and not consisting
of proceeds described in subsections 2.8(b)(i), (ii) or (iii) hereof),
including, without limitation, (a) foreign, United States, state or local tax
refunds, (b) pension plan reversions, (c) proceeds of insurance, (d) judgments,
proceeds of settlements or other consideration of any kind in connection with
any cause of action, (e) condemnation awards (and payments in lieu thereof), (f)
indemnity payments and (g) any purchase price adjustment received in connection
with any purchase agreement.
"FASB" means Financial Accounting Standards Board.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"FEE LETTER" has the meaning assigned to such term in subsection
2.9(a).
"FIRST PRIORITY" means, with respect to any Lien created or purported
to be created in any Collateral hereunder or pursuant to any Loan Document, that
such Lien is the most senior Lien to which such Collateral, is subject.
"FIXED CHARGE COVERAGE RATIO" means, for any Reference Period, the
ratio of (a) (i) EBITDA for such Reference Period MINUS (ii) the aggregate
amount of all Capital Expenditures during such Reference Period MINUS (iii) the
aggregate amount paid, or required to be paid (without duplication), in cash in
respect of the current portion of all income taxes for such Reference Period to
(b) the sum for the Borrower and its Subsidiaries (determined on a consolidated
basis without duplication in accordance with GAAP), of (i) the aggregate amount
of Interest Expense for such Reference Period (net of the sum of (A) the PIK
interest accrued during such Reference Period in respect of the Tranche B Loans,
plus (B) the amortization during such Reference Period of financing costs
incurred in connection with this Agreement, the Existing Credit Agreement, the
Tranche B Financing Agreements and the Senior Subordinated Note Indenture) and
(ii) the aggregate amount of regularly scheduled payments of principal in
respect of Indebtedness for borrowed money (including the principal component of
any payments in respect of Capital Lease Obligations) paid or required to be
paid during such Reference Period.
"FLEET" means Fleet Capital Corporation in its capacity as a Lender.
"FOREIGN LC DISBURSEMENT" means a payment made by the Issuing Lender
pursuant to a Foreign Letter of Credit, and shall include the Canadian Letter of
Credit.
"FOREIGN LC EXPOSURE" means, at any time, the sum of the Dollar
Equivalent amounts of (a) 100% of the aggregate undrawn amount of all
outstanding standby and documentary Foreign Letters of Credit at such time, PLUS
(b) the aggregate amount of all Foreign LC Disbursements that have not yet been
reimbursed by or on behalf of any Credit Party at such time.
"FOREIGN LENDER" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"FOREIGN LETTERS OF CREDIT" has the meaning assigned to such term in
subsection 2.4(a)(ii), and shall include the Canadian Letter of Credit.
"FOREIGN OFFICE" means, with respect to any Lender, an office of such
Lender located outside of the United States of America.
"FOREIGN SUBSIDIARY" means any Subsidiary of the Borrower organized
under the laws of any jurisdiction other than the United States of America or
any State thereof.
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States, applied on a consistent basis, PROVIDED that
for the purpose of Section 8.10 hereof and the definitions used therein, "GAAP"
shall mean generally accepted accounting principles in effect on the Closing
Date and consistent with those used in the preparation of the financial
statements of the Borrower and its Subsidiaries, PROVIDED, further, that if
there occurs after the Closing Date any change in GAAP that affects in any
respect the calculation of any covenant contained in Section 8.10 hereof, the
Agent and the Borrower shall negotiate in good faith amendments to the
provisions of this Agreement that relate to the calculation of such covenant
with the intent of having the respective positions of the Lenders and the
Borrower after such change in GAAP conform as nearly as possible to their
respective positions as of the Closing Date and, until any such amendments have
been agreed upon, the covenants in Section 8.10 hereof shall be calculated as if
no such change in GAAP has occurred.
"GOVERNMENTAL AUTHORITY" means the government of the United States of
America, Canada, any other nation or any political subdivision thereof, whether
federal, provincial, state or local, and any agency, department, commission,
board, bureau, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
"GUARANTEE" means a guarantee, an endorsement, a contingent agreement
to purchase or to furnish funds for the payment or maintenance of, or otherwise
to be or become contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any Person, or a
guarantee of the payment of dividends or other distributions upon the stock or
equity interests of any Person, or an agreement to purchase, sell or lease (as
lessee or lessor) property, products, materials, supplies or services primarily
for the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss, and including,
without limitation, causing a bank or other financial institution to issue a
letter of credit or other similar instrument for the benefit of another Person,
but excluding endorsements for collection or deposit in the ordinary course of
business. The terms "GUARANTEE" and "GUARANTEED" used as a verb shall have a
correlative meaning. The amount of any Guarantee shall be deemed to be an amount
equal to the stated or determinable amount of the primary obligations in respect
of which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder).
"GUARANTOR" means (i) the Borrower, (ii) each Subsidiary of the
Borrower listed as a "Guarantor" on the signature pages hereto, and (iii) each
other Person which becomes a Guarantor hereunder after the Closing Date by
complying with the requirements of Section 7.15.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature, in each case regulated
pursuant to any Environmental Laws.
"HEDGING AGREEMENT" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(a) all indebtedness and other obligations of such Person for borrowed money;
(b) all obligations of such Person for the deferred purchase or acquisition
price of Property or services (other than trade payables which are not for
borrowed money) or other accounts payable (including accrued expenses and
deferred taxes) incurred in the ordinary course of such Person's business and
not outstanding for more than 90 days after the date such payable was created);
(c) all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses; (d) all reimbursement, payment or
other obligations and liabilities of such Person created or arising under any
conditional sales or other title retention agreement with respect to property
used and/or acquired by such Person, even though the rights and remedies of the
lessor, seller and/or lender thereunder may be limited to repossession or sale
of such property; (e) all Capital Lease Obligations or Synthetic Leases of such
Person; (f) all obligations and liabilities, contingent or otherwise, of such
Person, in respect of letters of credit, acceptances or similar instruments
issued or accepted by banks and other financial institutions for the account of
such Person; (g) all obligations and liabilities, calculated on a basis
satisfactory to the Agent and in accordance with accepted practice, of such
Person in respect of Hedging Agreements; (h) all Contingent Obligations; (i)
liabilities incurred under Title IV of ERISA with respect to any plan (other
than a Multiemployer Plan) covered by Title IV of ERISA and maintained for
employees of such Person or any of its ERISA Affiliates; (j) Withdrawal
Liability incurred under ERISA by such Person or any of its ERISA Affiliates
with respect to any Multiemployer Plan; and (k) all obligations referred to in
clauses (a) through (j) of this definition of another Person secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) a Lien upon property owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness. The Indebtedness of any Person shall include the Indebtedness of
any partnership of or joint venture in which such Person is a general partner or
a joint venturer.
"INDEMNIFIED TAXES" means all Taxes other than (a) Excluded Taxes and
Other Taxes and (b) amounts constituting penalties or interest imposed with
respect to Excluded Taxes or Other Taxes.
"INTERCREDITOR AGREEMENT" means the Lien Subordination and
Intercreditor Agreement, among the Lenders, the Agent, the Tranche B Agent and
the Tranche B Lenders.
"INTERCOMPANY INDEBTEDNESS" has the meaning assigned to such term in
Section 11.9.
"INTEREST EXPENSE" means, for any period, the sum, without duplication,
for the Borrower and its Subsidiaries (determined on a consolidated basis in
accordance with GAAP), of the following: (a) all interest in respect of
Indebtedness accrued or paid during such period (whether or not actually paid
during such period), PLUS (b) the net amounts payable (or MINUS the net amounts
receivable) in respect of Hedging Agreements accrued during such period (whether
or not actually paid or received during such period) excluding reimbursement of
legal fees and other similar transaction costs and excluding payments required
by reason of the early termination of Hedging Agreements in effect on the
Closing Date, PLUS (c) all fees, including letter of credit fees and expenses,
(but excluding reimbursement of legal fees), incurred hereunder and under the
Tranche B Financing Agreements during such period.
"INTEREST PAYMENT DATE" means (a) as to any Base Rate Loan, the first
day of each calendar month with respect to interest accrued during the preceding
calendar month with respect to such Base Rate Loan; and (b) as to any LIBOR Rate
Loan, the earlier of (i) the last day of the Interest Period for such LIBOR Rate
Loan and (ii) the first day of each calendar month with respect to interest
accrued during the preceding calendar month.
"INTEREST PERIOD" means, with respect to each Revolving Loan or all or
any relevant portion of the Term Loan, (a) initially, the period commencing on
the Drawdown Date of such Loan and ending on the last day of one of the periods
set forth below, as selected by the Borrower in an Advance Request or as
otherwise required by the terms of this Agreement (i) for any Base Rate Loan,
the last day of the calendar month; and (ii) for any LIBOR Rate Loan, 1, 2, 3,
or 6 months; and (b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Revolving Loan or all or such
portion of the Term Loan and ending on the last day of one of the periods set
forth above, as selected by the Borrower in a Conversion Request; PROVIDED that
all of the foregoing provisions relating to Interest Periods are subject to the
following:
(a) if any Interest Period with respect to a LIBOR Rate Loan
would otherwise end on a day that is not a LIBOR Business Day, that
Interest Period shall be extended to the next succeeding LIBOR Business
Day unless the result of such extension would be to carry such LIBOR
Interest Period into another calendar month, in which event such LIBOR
Interest Period shall end on the immediately preceding LIBOR Business
Day;
(b) if any Interest Period with respect to a Base Rate Loan
would end on a day that is not a Business Day, that Interest Period
shall end on the next succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in
Section 2.3, the Borrower shall be deemed to have requested a
conversion of the affected LIBOR Rate Loan to a Base Rate Loan and the
continuance of all Base Rate Loans as Base Rate Loans on the last day
of the then current Interest Period with respect thereto;
(d) any Interest Period relating to any LIBOR Rate Loan that
begins on the last LIBOR Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar
month at the end of such LIBOR Interest Period) shall end on the last
LIBOR Business Day of a calendar month; and
(e) any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date.
"INVENTORY ACCOUNTING VARIANCE RESERVE" means a reserve in the amount
of 5.5% of the total value of all Eligible Inventory of the Borrower and its
Subsidiaries; PROVIDED however, the Inventory Accounting Variance Reserve shall
be equal to zero if, and for so long as, the Borrower can demonstrate to the
satisfaction of the Agent that the variance between actual inventory values and
general ledger inventory values of the Borrower and its Subsidiaries does not
exceed 3.0% of the total value of all Eligible Inventory of the Borrower and its
Subsidiaries.
"INVESTMENT" means, for any Person: (a) the acquisition (whether for
cash, Property, services or securities or otherwise) of Capital Stock, bonds,
notes, debentures, partnership, limited liability company or other ownership
interests or other securities of any other Person or any agreement to make any
such acquisition (including, without limitation, any "short sale" or any sale of
any securities at a time when such securities are not owned by the Person
entering into such short sale); (b) the making of any deposit with, or advance,
loan or other extension of credit to, any other Person (including the purchase
of Property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such Property to such Person, but excluding
any such advance, loan or extension of credit representing the purchase price of
inventory or supplies sold by such Person in the ordinary course of business,
PROVIDED that in no event shall the term of any such inventory or supply
advance, loan or extension of credit exceed 180 days); or (c) the entering into
of any Guarantee of, or other contingent obligation with respect to,
Indebtedness or other liability of any other Person and (without duplication)
any amount committed to be advanced, lent or extended to such Person.
"IP COLLATERAL" means, collectively, the Collateral relating to
intellectual property rights of the Credit Parties hereunder or under any other
Loan Document.
"ISSUING LENDER" means Fleet National Bank, an affiliate of the Agent,
in its capacity as an issuer of Letters of Credit hereunder.
"LANDLORD'S WAIVER AND CONSENT" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, in the form approved by the Agent in its sole
discretion.
"LC DISBURSEMENT" means any Domestic LC Disbursement or any Foreign LC
Disbursement.
"LC GUARANTY" means a guaranty or indemnity in form and substance
satisfactory to the Agent and the Issuing Lender pursuant to which the Agent
shall guarantee the payment or performance by the Borrower and each Canadian
Borrower of its reimbursement obligations in respect of Letters of Credit.
"LEASEHOLD PROPERTY" means any leasehold interest of any Credit Party
as lessee under any lease of real property, other than any such leasehold
interest designated from time to time by the Agent in its sole discretion as not
being required to be included in the Collateral and not being of material
importance to the business or operations of the Credit Parties.
"LENDERS" means the Persons listed on SCHEDULE 2.1 (including, without
limitation, the Issuing Lender) and any other Person that shall have become a
party hereto pursuant to an Assignment and Acceptance, other than any such
Person that ceases to be a party hereto pursuant to an Assignment and
Acceptance.
"LETTER OF CREDIT" means any Domestic Letter of Credit or Foreign
Letter of Credit issued hereunder and includes, except as expressly set forth
herein, the Canadian Letter of Credit.
"LIBOR LENDING OFFICE" means initially, the office of such Lender
designated as such by notice to the Borrower; thereafter, such other office of
such Lender, if any, that shall be making or maintaining LIBOR Rate Loans.
"LIBOR RATE" means, for any Interest Period with respect to a LIBOR
Rate Loan, the rate of interest equal to (i) the rate determined by the Agent at
which Dollar deposits for such LIBOR Interest Period are offered based on
information presented on Telerate Page 3750 as of 11:00 a.m. London time on the
second LIBOR Business Day prior to the first day of such LIBOR Interest Period,
divided by (ii) a number equal to 1.00 minus the Eurocurrency Reserve Rate. If
the rate described above does not appear on the Telerate System on any
applicable interest determination date, the LIBOR Rate shall be the rate
(rounded upward, if necessary, to the nearest one hundred-thousandth of a
percentage point), determined on the basis of the offered rates for deposits in
U.S. Dollars for a period of time comparable to such LIBOR Rate Loan which are
offered by four major banks in the London interbank market at approximately
11:00 a.m. London time, on the second LIBOR Business Day prior to the first day
of such Interest Period as selected by the Agent. The principal London office of
each of the four major London banks will be requested to provide a quotation of
its Dollar deposit offered rate. If at least two such quotations are provided,
the rate for that date will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for that date will be
determined on the basis of the rates quoted for loans in U.S. Dollars to leading
European banks for a period of time comparable to such Interest Period offered
by major banks in New York City at approximately 11:00 a.m. New York City time,
on the second LIBOR Business Day prior to the first day of such Interest Period.
In the event that the Agent is unable to obtain any such quotation as provided
above, it will be considered that LIBOR Rate pursuant to a LIBOR Rate Loan
cannot be determined.
"LIBOR RATE LOANS" means Loans bearing interest calculated by reference
to the LIBOR Rate.
"LIEN" means any mortgage, deed of trust, pledge, lien (statutory or
otherwise), security interest, hypothecation, charge or other encumbrance or
security or preferential arrangement of any nature, including, without
limitation, any conditional sale or title retention arrangement, any capital
lease and any assignment, deposit arrangement or financing lease intended as, or
having the same effect as any of the foregoing.
"LOAN DOCUMENTS" means this Agreement, the Revolving Credit Notes, the
Term Notes, the Collateral Documents, the Fee Letter, the Canadian Loan
Documents, the LC Guaranty, the Intercreditor Agreement and other instruments or
documents delivered or to be delivered from time to time pursuant to this
Agreement, as the same may be supplemented and amended from time to time in
accordance with their respective terms.
"LOANS" means the Revolving Loans and the Term Loan.
"LOCKBOX" has the meaning assigned to such term in subsection 4.3(a).
"LOCKBOX AGREEMENT" means, with respect to any Lockbox of the Credit
Parties, an agreement in accordance with subsection 4.3(b), in form and
substance satisfactory to the Agent, executed and delivered by the Credit
Parties, the depository institution at which such Lockbox is maintained and the
Agent on the Closing Date, as such agreement may be amended, supplemented or
otherwise modified from time to time.
"MA UCC" means the Uniform Commercial Code as in effect from time to
time in the Commonwealth of Massachusetts.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on any of (a)
the operations, business, assets, properties, condition (financial or otherwise)
or prospects of the Borrower or the Credit Parties taken as a whole, (b) the
ability of any Credit Party to pay or perform any of its obligations under this
Agreement or the other Loan Documents to which it is a party, (c) the legality,
validity or enforceability of this Agreement or any other Loan Document, (d) the
rights and remedies of the Agent or any Lender under this Agreement or any other
Loan Document, or (e) the validity, perfection or priority of a Lien in favor of
the Agent for the benefit of the Lenders on any of the Collateral with an
aggregate fair market value in excess of $100,000.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans or
Letters of Credit), including, without limitation, obligations in respect of one
or more Hedging Agreements, in an aggregate principal amount exceeding
$1,000,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of any Person in respect of a Hedging Agreement at
any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that such Person would be required to pay if such Hedging Agreement
were terminated at such time.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property reasonably
determined by the Agent to be of material value as Collateral or of material
importance to the operations of the Credit Parties and as to which the aggregate
amount of all rents payable during any fiscal year exceeds $100,000.
"MATERIAL OWNED PROPERTY" means any real property owned by any Credit
Party that is reasonably determined by the Agent to be of material value as
Collateral or of material importance to the operations of the Credit Parties.
"MATERIAL RENTAL OBLIGATIONS" means obligations of the Credit Parties
to pay rent under any one or more operating leases with respect to any real or
personal property that is material to the business of the Credit Parties and as
to which the aggregate amount of all rents payable during any fiscal year
exceeds $100,000.
"MATURITY DATE" means March 31, 2007.
"MORTGAGED PROPERTY" means, at any time of determination, any and all
real property owned or leased by the Credit Parties that are subject to a
Mortgage in favor of the Agent for the benefit of the Lenders and the Agent,
including without limitation the Properties listed on SCHEDULE 1.1.
"MORTGAGES" means, collectively, the several security instruments
(whether designated as a deed of trust or a mortgage, leasehold mortgage,
assignment of leases and rents or by any similar title) executed and delivered
by any Credit Party, in such form as may be approved by the Agent in its sole
and reasonable discretion, in each case with such changes thereto as may be
recommended by the Agent's local counsel based on local laws or customary local
practices, with respect to the Real Property Assets owned or leased by a Credit
Party, in each case as such security instrument or amendment may be amended,
supplemented or otherwise modified from time to time.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NET CASH PAYMENTS" means,
(a) with respect to any Casualty Event, the aggregate amount
of cash proceeds of insurance, condemnation awards and other
compensation received by the Borrower or any of its Subsidiaries in
respect of such Casualty Event net of (i) reasonable expenses incurred
by the Borrower or any of its Subsidiaries in connection therewith and
(ii) contractually required repayments of Indebtedness to the extent
secured by any senior Lien permitted by Section 8.2 on any asset, and
(iii) any income and transfer taxes payable by the Borrower or any of
its Subsidiaries in respect of such Casualty Event;
(b) with respect to any Disposition, the aggregate amount of
all cash payments received by the Borrower or any of its Subsidiaries
directly or indirectly in connection with such Disposition, whether at
the time of such Disposition or after such Disposition under deferred
payment arrangements or Investments entered into or received in
connection with such Disposition, net of (i) the amount of any legal,
title, transfer and recording tax expenses, commissions and other fees
and expenses payable by the Borrower or any of its Subsidiaries in
connection therewith, (ii) any Federal, state and local income or other
Taxes payable by the Borrower or any of its Subsidiaries as a result
thereof, and (iii) any repayments by the Borrower or any of its
Subsidiaries of Indebtedness to the extent that such Indebtedness is
secured by any senior Lien permitted by Section 8.2 on any asset that
is the subject of such Disposition and the transferee of (or holder of
a Lien on) such property requires that such Indebtedness be repaid as a
condition to the purchase of such property, and (iv) any repayments by
the Borrower or any of its Subsidiaries to minority stockholders if and
to the extent permitted hereby; and
(c) with respect to any incurrence of Indebtedness or offering
of Capital Stock, the aggregate amount of all cash proceeds received by
the Borrower or any of its Subsidiaries therefrom less all legal,
underwriting and similar fees and expenses incurred in connection
therewith;
in each case of clause (a), (b) and (c) to the extent, but only to the
extent, that the amounts so deducted are (x) actually paid to a Person
that, except in the case of reasonable out-of-pocket expenses, is not
an Affiliate of such Person or any of its Subsidiaries and (y) properly
attributable to such transaction or to the asset that is the subject
thereof.
"NET INCOME" means, with respect to any Person for any period, the net
income (loss) of such Person and its Subsidiaries for such period, determined on
a consolidated basis and in accordance with GAAP, but excluding from the
determination of Net Income (without duplication) (a) any extraordinary or non
recurring gains or losses or gains or losses from Dispositions, (b)
restructuring charges, (c) effects of discontinued operations and (d) interest
income (excluding interest income from CM Insurance Company, Inc.).
"NET WORTH" means, as of any date of determination thereof, the sum of
Total Assets MINUS (a) Total Liabilities, PLUS (b) non-cash goodwill impairment
charges recorded after the Closing Date in accordance with FASB Statement No.
142, and MINUS (c) the balance in the Accumulated Other Comprehensive Gain
(Loss) equity account.
"NON-CASH CHARGES" means, with respect to any calculation of net income
for any period, all non-cash extraordinary losses and charges deducted in such
calculation (as determined in accordance with GAAP (excluding inventory and
account receiveable write-downs and charge-offs), including, without limitation,
non-cash recognition of unrealized declines in the market value of marketable
securities recorded in accordance with FASB Statement No. 115, non-cash asset
impairment charges recorded in accordance with FASB Statement No. 142 and FASB
Statement No. 144, and non-cash restructuring charges.
"OBLIGATIONS" means all indebtedness, obligations and liabilities of
any of the Borrower and its Subsidiaries to any of the Lenders, the Agent, the
Cash Management Bank, and the Issuing Lender, individually or collectively,
existing on the Closing Date or arising thereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise, arising or incurred under this Agreement or any of the other Loan
Documents or in respect of any of the Loans, the Notes, the Letters of Credit or
other instruments at any time evidencing any thereof, including, without
limitation, the aggregate outstanding principal balance of and all interest on
the Loans made by the Lenders to the Borrower (including any interest accruing
after the commencement of any proceeding by or against the Borrower under the
federal bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law, and any
other interest that would have accrued but for the commencement of such
proceeding, whether or not any such interest is allowed as a claim enforceable
against the Borrower in any such proceeding), and all reimbursement obligations
in respect of Letters of Credit, (ii) all LC Disbursements, (iii) all fees,
costs, charges, expenses and other obligations from time to time owing to the
Lenders, the Issuing Lender, the Cash Management Bank, the Agent, or any of
their Affiliates by the Credit Parties or any of their Subsidiaries hereunder or
under any other Loan Document, and (iv) all overdraft obligations, fees, costs,
charges, expenses and other obligations from time to time owing to the Lenders,
the Issuing Lender, the Cash Management Bank, the Agent, or any of their
Affiliates by the Credit Parties or any of their Subsidiaries in respect of any
Hedging Agreement, cash management agreement (including ACH transactions),
operating or deposit account, or other banking product from time to time made
available to the Credit Parties or any of their Subsidiaries by the Agent, the
Issuing Lender, the Cash Management Bank or any Lender or any of their
Affiliates; PROVIDED that, with respect to any such amounts under this clause
(iv) owing to a Lender or any of its Affiliates (other than the Cash Management
Bank, the Agent and their Affiliates), the Agent shall have given its prior
written approval to the inclusion of such amounts as Obligations hereunder.
Notwithstanding the foregoing, it is expressly agreed that the Obligations of
the Canadian Borrowers hereunder and under the other Loan Documents shall be
limited to all indebtedness, obligations and liabilities arising or incurred in
respect of the Canadian Facility, the Canadian Letter of Credit (and all LC
Disbursements in respect thereof), and all overdraft obligations, fees, costs,
charges, expenses and other obligations with respect to the Canadian Facility,
and the Canadian Letter of Credit, from time to time owing to the Lenders, the
Issuing Lender, or the Agent.
"OPTIONAL CURRENCY" means any of the following currencies: Mexican
peso, Canadian dollars, Danish crowns, or the "Euro", Japanese yen or United
Kingdom pounds sterling.
"OTHER TAXES" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement and the other Loan Documents,
PROVIDED that there shall be excluded from "Other Taxes" all Excluded Taxes.
"PATENT AGREEMENT" means any Patent Collateral Assignment and Security
Agreement, made by any Credit Party in favor of the Agent and, in substantially
the form of EXHIBIT H or in form and substance acceptable to the Agent.
"PATENTS" means all patents issued or assigned to and all patent
applications made by the Credit Parties and, to the extent that the grant of a
security interest does not cause a breach or termination thereof, all exclusive
and nonexclusive licenses to the Credit Parties from third parties or rights to
use patents owned by such third parties, including, without limitation, the
patents, patent applications and licenses listed on SCHEDULE 5.5 hereto, along
with any and all (a) inventions and improvements described and claimed therein,
(b) reissues, divisions, continuations, extensions and continuations-in-part
thereof, (c) income, royalties, damages, claims and payments now and hereafter
due and/or payable under and with respect thereto, including, without
limitation, damages and payments for past or future infringements thereof, (d)
rights to ▇▇▇ for past, present and future infringements thereof, and (e) any
other rights corresponding thereto throughout the world.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PENSION PLAN" means any Plan that is a defined benefit pension plan
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which any Credit Party or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA and
with respect to any Canadian Borrower, all pension and retirement plans relating
to the current and former employees of such Canadian Borrower, whether
registered or unregistered, funded or unfunded and written or oral.
"PERMITTED INVESTMENTS" means:
(a) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States of America (or by
any agency thereof to the extent such obligations are backed by the full faith
and credit of the United States of America), in each case maturing within one
year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from Standard and Poor's Ratings Service or from
▇▇▇▇▇'▇ Investors Service, Inc.;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $250,000,000;
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above;
(e) advances, loans and extensions of credit to any director, officer
or employee of the Credit Parties, if the aggregate outstanding amount of all
such advances, loans and extensions of credit (excluding travel advances in the
ordinary course of business) does not at any time exceed $500,000;
(f) investments in money market mutual funds that are rated AAA by
Standard & Poor's Rating Service; and
(g) stocks, bonds, funds, covered call options, cash equivalents, and
cash included in the portfolio of Investments owned by CM Insurance Company,
Inc. under the investment objective of "Aggressive Growth/ Moderate Income"
using the following asset guidelines: cash, 0% to 20%; bonds, 0% to 30%; stocks,
70% to 90%; other, 0% to 20%; in each case, invested at the discretion of Fleet
Investment Advisors, Inc. and Gold-K Securities, Inc.
"PERMITTED LIENS" has the meaning set forth in Section 8.2.
"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, joint-stock company, unincorporated
organization, partnership, Governmental Authority or other enterprise or entity.
"PLAN" means any employee benefit plan within the meaning of Section
3(3) of ERISA in which any Credit Party or any ERISA Affiliate is an "employer"
as defined in Section 3(5) of ERISA or any employee benefit plan established and
maintained by, or for the benefit of such Credit Party for the benefit of its
respective employee, including, but not limited to, any Pension Plan or
Multiemployer Plan.
"PLEDGE AGREEMENT" means any pledge agreement, between a Credit Party
and the Agent, in substantially the form of EXHIBIT F or in form and substance
satisfactory to the Agent.
"POST-DEFAULT RATE" means a rate of interest per annum equal to the
Base Rate PLUS the Applicable Margin PLUS two percent (2%).
"PREPAYMENT ESCROW ACCOUNT" has the meaning assigned to such term in
subsection 2.8(c)(v).
"PRIOR CLAIMS" means all Liens created by applicable law (in contrast
with Liens voluntarily granted) which rank or are capable of ranking prior or
pari passu with any Agent's Lien (or the applicable equivalent of such Liens)
against all or part of the Collateral of the Canadian Borrowers, including for
amounts owing for vacation pay, employee deductions and contributions, goods and
services taxes, sales taxes, realty taxes, business taxes, workers'
compensation, pension plan or fund obligations and overdue rents (to the extent,
in the case of rents, that such rents are not already the subject of a reserve).
"PROPERTY" means any interest of any kind in property or assets,
whether real, personal or mixed, and whether tangible or intangible.
"PROPRIETARY RIGHTS" has the meaning assigned to such term in
subsection 5.5(b).
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the opinion
of the Agent, desirable in order to create or perfect Liens on any IP
Collateral.
"REAL PROPERTY ASSET" means, at any time of determination, any and all
real property owned or leased by the Credit Parties.
"REFERENCE PERIOD" means, as of any date of determination, the period
of four (4) consecutive fiscal quarters of the Borrower and its Subsidiaries
ending on such date, or if such date is not a fiscal quarter end date, the
period of four (4) consecutive fiscal quarters most recently ended (in each case
treated as a single accounting period).
"REGISTER" has the meaning assigned to such term in Section 11.4.
"REGISTERED PROPRIETARY RIGHTS" has the meaning assigned to such term
in subsection 5.5(c).
"REIMBURSEMENT OBLIGATION" has the meaning assigned to such term in
subsection 2.4(e).
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"RELEASE" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, seeping, migrating,
dumping or disposing of any Hazardous Material (including the abandonment or
discarding of barrels, containers and other closed receptacles containing any
Hazardous Material) into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Materials through or in the ambient air,
soil, surface or ground water, or property.
"REMEDIAL ACTION" means all actions taken to (a) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate or in any other way address
Hazardous Materials in the indoor or outdoor environment; (b) prevent or
minimize a Release or threatened Release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; (c) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities; or (d)
perform any other actions authorized by 42 U.S.C. ss. 9601.
"REQUIRED LENDERS" means, as of any date, any combination of Lenders
the sum of whose aggregate Revolving Credit Commitments (or, if the Revolving
Credit Commitments have been terminated, whose outstanding Revolving Loans and
risk associated with outstanding Letters of Credit) and outstanding principal
amounts under the Term Loan constitute at least fifty-one percent (51%) of the
sum of the Total Revolving Credit Commitment (or, if the Revolving Credit
Commitments have been terminated, the total outstanding Revolving Loans and
Letters of Credit) and the total outstanding principal amounts under the Term
Loan.
"RESET DATE" has the meaning assigned to such term in Section
2.7(b)(ii).
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of, or other equity interest in, any Credit Party or any of its Subsidiaries now
or hereafter outstanding, except a dividend payable solely in shares of stock or
other equity interests, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of stock of, or other equity interest in, any Credit Party
or any of its Subsidiaries now or hereafter outstanding, (iii) any payment made
to retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of stock of, or other equity
interest in, any Credit Party or any of its Subsidiaries, (iv) any payment or
prepayment of principal of, premium, if any, or interest on, or redemption
purchase, retirement, defeasance (including economic or legal defeasance),
sinking fund or similar payment with respect to the Senior Subordinated Notes
and/or any intercompany Indebtedness owing by the Borrower or any Guarantor, and
(v) any payment made to any Affiliates of any Credit Party or any of its
Subsidiaries in respect of management, consulting or other similar services
provided to any Credit Party or any of its Subsidiaries.
"RESTRICTIVE AGREEMENTS" has the meaning assigned to such term in
subsection 5.13(b).
"REVOLVING CREDIT AVAILABILITY PERIOD" means the period from and
including the Closing Date to but excluding the earlier of (a) the Maturity Date
and (b) the date of termination of the Revolving Credit Commitments, as
terminated by the Borrower pursuant to Section 2.6 or by the Agent pursuant to
Section 9.1.
"REVOLVING CREDIT COMMITMENT" means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans and to acquire participations
in Letters of Credit hereunder, as such commitment may be (a) reduced from time
to time pursuant to Sections 2.6 and 2.8, or reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to Section 11.4. The
initial maximum amount of each Lender's Revolving Credit Commitment is set forth
on SCHEDULE 2.1, or in the Assignment and Acceptance pursuant to which such
Lender shall have assumed its Revolving Credit Commitment, as applicable.
"REVOLVING CREDIT COMMITMENT PERCENTAGE" means, with respect to each
Lender, the percentage set forth on SCHEDULE 2.1 hereto as such Lender's
percentage of the Total Revolving Credit Commitment.
"REVOLVING CREDIT EXPOSURE" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans at such time and such Lender's Applicable Percentage of the Total LC
Exposure at such time.
"REVOLVING CREDIT NOTES" means the promissory notes, substantially in
the form of EXHIBIT A-1 annexed hereto, issued by the Borrower in favor of the
Lenders.
"REVOLVING LOAN" means a Loan made pursuant to subsection 2.1(a) that
utilizes the Revolving Credit Commitments.
"SENIOR FUNDED INDEBTEDNESS" means, at any time of determination, the
sum of Total Funded Indebtedness MINUS the principal amount of the Senior
Subordinated Notes outstanding at such time.
"SENIOR LEVERAGE RATIO" means as at any date of determination, the
ratio of (a) Senior Funded Indebtedness of the Borrower and its Subsidiaries
outstanding on such date to (b) the EBITDA for the Reference Period ended on
such date.
"SENIOR SUBORDINATED NOTE DOCUMENTS" means the Senior Subordinated Note
Indenture, the Senior Subordinated Notes and all other documents, instruments
and agreements executed and delivered in connection with the Senior Subordinated
Notes, in each case, as the same shall, subject to the terms and conditions of
this Agreement, be amended, supplemented or otherwise modified and in effect
from time to time.
"SENIOR SUBORDINATED NOTE INDENTURE" means the Columbus ▇▇▇▇▇▇▇▇
Corporation Series A and Series B 8 1/2% Senior Subordinated Notes Due 2008
Indenture, dated as of March 31, 1998 (as supplemented by the Supplemental
Indenture, dated as of March 31, 1998, the Second Supplemental Indenture, dated
as of February 12, 1999, the Third Supplemental Indenture, dated as of March 1,
1999, the Fourth Supplemental Indenture, dated as of November 1, 1999, the Fifth
Supplemental Indenture, dated as of April 4, 2002 and the Sixth Supplemental
Indenture, dated as of August 5, 2002), between the Borrower, as issuer, and
State Street Bank and Trust Company, N.A., as trustee, as the same shall,
subject to the terms and conditions of this Agreement, be further amended,
supplemented or otherwise modified and in effect from time to time.
"SENIOR SUBORDINATED NOTES" means the Borrower's 8 1/2% senior
subordinated notes due 2008 issued pursuant to the Senior Subordinated Note
Indenture, as the same shall, subject to the terms and conditions of this
Agreement, be amended, supplemented or otherwise modified and in effect from
time to time.
"SETTLEMENT" means the making or receiving of payments, in immediately
available funds, by the Lenders, to the extent necessary to cause each Lender's
actual share of the outstanding amount of Revolving Loans (after giving effect
to any Advance Request) to be equal to such Lender's Revolving Credit Commitment
Percentage of the outstanding amount of such Revolving Loans (after giving
effect to any Advance Request), in any case where, prior to such event or
action, the actual share is not so equal.
"SETTLEMENT DATE" has the meaning assigned to such term in subsection
2.5(d).
"SETTLEMENT LOAN" has the meaning assigned to such term in subsection
2.5(e).
"SPECIAL COUNSEL" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, in its capacity as
special counsel to Fleet Capital Corporation, as Agent.
"SUBSIDIARY" means, with respect to any Person at any date, any
corporation, limited or general partnership, limited liability company, trust,
estate, association, joint venture or other business entity (i) the accounts of
which would be consolidated with those of such Person in such Person's
consolidated financial statements if such financial statements were prepared in
accordance with GAAP or (ii) of which more than 50% of (A) the outstanding
Capital Stock having (in the absence of contingencies) ordinary voting power to
elect a majority of the board of directors or other managing body of such
Person, (B) in the case of a partnership or limited liability company, the
interest in the capital or profits of such partnership or limited liability
company or (C) in the case of a trust, estate, association, joint venture or
other entity, the beneficial interest in such trust, estate, association or
other entity business is, at the time of determination, owned or controlled
directly or indirectly through one or more intermediaries, by such Person.
References herein to "SUBSIDIARIES" shall, unless the context requires
otherwise, be deemed to be references to Subsidiaries of the Borrower.
"SYNTHETIC LEASE" means, any lease of goods or other property, whether
real or personal, which is treated as an operating lease under GAAP and as a
loan or financing for U.S. income tax purposes.
"TAXES" means any and all taxes, levies, imposts, duties, deductions,
charges, fees, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any Governmental Authority.
"TERM LOAN" means the term loan made or to be made by the Lenders to
the Borrower on the Closing Date in the aggregate principal amount of
$33,000,000 pursuant to Section 2.2.
"TERM LOAN BORROWING BASE" means, at the relevant time of reference
thereto, an amount determined by the Agent by reference to the most recent Term
Loan Borrowing Base Certificate delivered to the Agent and the Lenders pursuant
to subsection 7.1(i) which is equal to the lesser of:
(a) $33,000,000 and
(b) the sum of:
(i) 80% of the Determined Value of Eligible Fixed Assets
owned by the Borrower and its Domestic Subsidiaries
which are Guarantors, PLUS,
(ii) 60% of the Appraised Value of the Term Loan Borrowing
Base Properties A owned by the Borrower and its
Domestic Subsidiaries which are Guarantors, PLUS,
(iii) 70% of the Appraised Value of the Term Loan Borrowing
Base Properties B owned by the Borrower and its
Domestic Subsidiaries which are Guarantors; MINUS,
(iv) the Environmental Reserve allocable to the Term Loan
(in the Agent's discretion).
"TERM LOAN BORROWING BASE CERTIFICATE" means a certificate signed by a
Designated Financial Officer certifying the amount of the Term Loan Borrowing
Base as of the date set forth therein, in substantially the form of EXHIBIT B-5
hereto.
"TERM LOAN BORROWING BASE PROPERTIES A" means the Mortgaged Properties
(together with their current Appraised Values) listed in SCHEDULE 1.1 - PART A.
"TERM LOAN BORROWING BASE PROPERTIES B" means the Mortgaged Properties
(together with their current Appraised Values) listed in SCHEDULE 1.1 - PART B.
"TERM LOAN COMMITMENT" means, with respect to each Lender, the
commitment of such Lender to fund its portion of the Term Loan to the Borrower
on the Closing Date. The initial amount of each Lender's Term Loan Commitment is
set forth on SCHEDULE 2.1.
"TERM NOTES" means the promissory notes, substantially in the form of
EXHIBIT A-2 annexed hereto, issued by the Borrower in favor of the Lenders and
evidencing the Term Loan.
"TITLE INSURANCE COMPANY" means Chicago Title Insurance Company.
"TITLE POLICY" means in relation to each Mortgaged Property, an ALTA
standard form title insurance policy issued by the Title Insurance Company (with
such reinsurance or co-insurance as the Agent may require, any such reinsurance
to be with direct access endorsements) in such amount as may be determined by
the Agent insuring the priority of the Mortgage of such Mortgaged Property and
that the Borrower or one of its Subsidiaries holds marketable fee simple title
to such Mortgaged Property, subject only to the encumbrances permitted by such
Mortgage and which shall not contain exceptions for mechanics liens, persons in
occupancy or matters which would be shown by a survey (except as may be
permitted by such Mortgage), shall not insure over any matter except to the
extent that any such affirmative insurance is acceptable to the Agent in its
sole discretion, and shall contain such endorsements and affirmative insurance
as the Agent in its discretion may require, including but not limited to (a)
comprehensive endorsement, (b) variable rate of interest endorsement, (c) usury
endorsement, (d) revolving credit endorsement, (e) tie-in endorsement, (f) doing
business endorsement and (g) ALTA form 3.1 zoning endorsement.
"TOTAL ASSETS" means the sum of (a) all assets ("CONSOLIDATED BALANCE
SHEET ASSETS") of the Borrower and its Subsidiaries determined on a consolidated
basis in accordance with GAAP, PLUS (b) without duplication, all assets leased
by the Borrower or any of its Subsidiaries as lessee under any Synthetic Lease
to the extent that such assets would have been consolidated balance sheet assets
had the Synthetic Lease been treated for accounting purposes as a Capital Lease
Obligation.
"TOTAL FUNDED INDEBTEDNESS" means, with respect to the Borrower and its
Subsidiaries, the sum, without duplication, of (a) the aggregate amount of
Indebtedness of the Borrower and its Subsidiaries determined on a consolidated
basis in accordance with GAAP, relating to (i) the borrowing of money or the
obtaining of credit, including the issuance of notes or bonds, (ii) the deferred
purchase price of assets (other than trade payables incurred in the ordinary
course of business), (iii) in respect of any Synthetic Leases or any Capital
Lease Obligations, and (iv) the maximum drawing amount of all letters of credit
outstanding, plus (b) Indebtedness of the type referred to in clause (a) of
another Person guaranteed by the Borrower or any of its Subsidiaries.
"TOTAL GROSS AVAILABILITY" means, at any time, the lesser of (a) the
sum of (i) the Domestic Borrowing Base at such time plus (ii) the Canadian
Borrowing Base at such time and (b) the Total Revolving Credit Commitment at
such time.
"TOTAL LIABILITIES" means all liabilities of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP and
classified as such on the consolidated balance sheet of the Borrower and its
Subsidiaries and all other Indebtedness of the Borrower and its Subsidiaries,
whether or not so classified.
"TOTAL LC EXPOSURE" means the sum of the Domestic LC Exposure and the
Foreign LC Exposure.
"TOTAL REVOLVING CREDIT COMMITMENT" means the sum of the Revolving
Credit Commitments of the Lenders, as in effect from time to time. On the
Closing Date, the Total Revolving Credit Commitment is equal to $67,000,000.
"TOTAL REVOLVING CREDIT EXPOSURE" means the total Revolving Credit
Exposures of all of the Lenders.
"TOTAL TERM LOAN COMMITMENT" means the sum of the Term Loan Commitments
of the Lenders, as in effect from time to time. On the Closing Date, the Total
Term Loan Commitment is equal to $33,000,000.
"TOTAL VOTING POWER" means, with respect to any Person, the total
number of votes which holders of securities having the ordinary power to vote,
in the absence of contingencies, are entitled to cast in the election of
directors of such Person.
"TRADEMARK AGREEMENT" means any Trademark Collateral Security and
Pledge Agreement, made by the any Credit Party in favor of the Agent and, in
substantially the form of EXHIBIT G or in form and substance acceptable to the
Agent.
"TRADEMARKS" means all trademarks (including service marks), federal
and state trademark registrations and applications made by the Credit Parties,
common law trademarks and trade names owned by or assigned to the Credit
Parties, all registrations and applications for the foregoing and all exclusive
and nonexclusive licenses from third parties of the right to use trademarks of
such third parties, including, without limitation, the registrations,
applications, unregistered trademarks, service marks and licenses listed on
SCHEDULE 5.5 hereto, along with any and all (a) renewals thereof, (b) income,
royalties, damages and payments now and hereafter due and/or payable with
respect thereto, including, without limitation, damages, claims and payments for
past or future infringements thereof, (c) rights to ▇▇▇ for past, present and
future infringements thereof, and (d) foreign trademarks, trademark
registrations, and trade name applications for any thereof and any other rights
corresponding thereto throughout the world.
"TRANCHE B AGENT" means Regiment Capital III, L.P., a Delaware limited
partnership, as agent for the Tranche B Lenders under the Tranche B Financing
Agreements.
"TRANCHE B CANADIAN FINANCING AGREEMENT" means the Financing Agreement,
dated or to be dated on or prior to the Closing Date (as amended and in effect
from time to time with the consent of the Agent and the Required Lenders), among
the Canadian Borrowers, the financial institutions from time to time party
thereto and Regiment Capital III, L.P., a Delaware limited partnership, as agent
for such financial institutions from time to time party thereto.
"TRANCHE B FINANCING" means the financing provided under the Tranche B
Financing Agreements.
"TRANCHE B FINANCING AGREEMENT" means the Financing Agreement, dated or
to be dated on or prior to the Closing Date (as amended and in effect from time
to time), among the Borrower, the Guarantors, the financial institutions from
time to time party thereto (collectively, the "TRANCHE B LENDERS") and Regiment
Capital III, L.P., a Delaware limited partnership, as agent for the Tranche B
Lenders.
"TRANCHE B FINANCING AGREEMENTS" means the Tranche B Canadian Financing
Agreement, together with the Tranche B Financing Agreement.
"TRANCHE B LOANS" means the loans made or to be made by the Tranche B
Lenders to the Borrower in the aggregate principal amount of $70,000,000
pursuant the Tranche B Financing Agreements.
"TRANCHE B LOAN DOCUMENTS" means, collectively, (i) the Tranche B
Financing Agreement, (ii) the Tranche B Canadian Financing Agreement and (iii)
all other agreements, instruments, and other documents executed and delivered in
connection therewith, as amended and in effect from time to time with the
consent of the Agent and the Required Lenders.
"TRANCHE B LENDERS" means the lenders party to the Tranche B Financing
Agreements.
"TYPE" when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the LIBOR Rate or the Base Rate.
"U.S. CREDIT PARTIES" means the Borrower and all Guarantors.
"U.S. DOLLARS" or $ means lawful currency of the United States of
America.
"WHOLLY OWNED SUBSIDIARY" means, with respect to any Person at any
date, any corporation, limited liability company, partnership, association or
other entity of which securities or other ownership interests representing 100%
of the equity or ordinary voting power (other than directors' qualifying shares)
or, in the case of a partnership, 100% of the general partnership interests are,
as of such date, directly or indirectly owned, controlled or held by such Person
or one or more Wholly Owned Subsidiaries of such Person or by such Person and
one or more Wholly Owned Subsidiaries of such Person.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
1.2. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a "Revolving
Loan" or "Term Loan") or by Type (e.g., a "Base Rate Loan" or a "LIBOR Rate
Loan") or by Class and Type (e.g., a "LIBOR Rate Revolving Loan" or a "Base Rate
Revolving Loan"). In similar fashion, (i) Borrowings may be classified and
referred to by Class, by Type and by Class and Type, and (ii) Commitments may be
classified and referred to by Class.
1.3. TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties of any
kind whatsoever, including cash, securities, accounts and contract rights.
1.4. ACCOUNTING TERMS; GAAP. Unless otherwise expressly provided
herein, each accounting term used herein shall have the meaning given it under
GAAP applied on a basis consistent with those used in preparing the financial
statements of the Borrower and its Subsidiaries.
1.5. JOINT AND SEVERAL OBLIGATIONS; DESIGNATED FINANCIAL OFFICERS.
(a) Each of the Credit Parties is accepting joint and several
liability hereunder and under the other Loan Documents in consideration
of the financial accommodations to be provided by the Lenders under
this Agreement, for the mutual benefit, directly and indirectly, of
each of the Credit Parties and in consideration of the undertakings of
each other Credit Party to accept joint and several liability for the
Obligations.
(b) Each of the Credit Parties, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but
also as a co-debtor, joint and several liability with the other Credit
Parties with respect to the payment and performance of all of the
Obligations (including, without limitation, any Obligations arising
under this Section 1.5), it being the intention of the parties hereto
that all of the Obligations shall be the joint and several Obligations
of each of the Credit Parties without preferences or distinction among
them.
(c) If and to the extent that any of the Credit Parties shall
fail to make any payment with respect to any of the Obligations as and
when due or to perform any of the Obligations in accordance with the
terms thereof, then in each such event the other Credit Parties will
make such payment with respect to, or perform, such Obligation.
(d) The Obligations of each of the Credit Parties under the
provisions of this Section 1.5 constitute full recourse Obligations of
each of the Credit Parties enforceable against each such corporation to
the full extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Agreement or any other
circumstance whatsoever.
(e) Except as otherwise expressly provided in this Agreement,
each of the Credit Parties hereby waives notice of acceptance of its
joint and several liability, notice of any Loans made under this
Agreement, notice of any action at any time taken or omitted by the
Lenders under or in respect of any of the Obligations, and, generally,
to the extent permitted by applicable law, all demands, notices and
other formalities of every kind in connection with this Agreement. Each
of the Credit Parties hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the
Obligations, the acceptance of any payment of any of the Obligations,
the acceptance of any partial payment thereon, any waiver, consent or
other action or acquiescence by the Lenders at any time or times in
respect of any default by any of the Credit Parties in the performance
or satisfaction of any term, covenant, condition or provision of this
Agreement, any and all other indulgences whatsoever by the Lenders in
respect of any of the Obligations, and the taking, addition,
substitution or release, in whole or in part, at any time or times, of
any security for any of the Obligations or the addition, substitution
or release, in whole or in part, of any of the Credit Parties. Without
limiting the generality of the foregoing, each of the Credit Parties
assents to any other action or delay in acting or failure to act on the
part of the Lenders with respect to the failure by any of the Credit
Parties to comply with any of its respective Obligations, including,
without limitation, any failure strictly or diligently to assert any
right or to pursue any remedy or to comply fully with applicable laws
or regulations thereunder, which might, but for the provisions of this
Section 1.5, afford grounds for terminating, discharging or relieving
any of the Credit Parties, in whole or in part, from any of its
Obligations under this Section 1.5, it being the intention of each of
the Credit Parties that, so long as any of the Obligations hereunder
remain unsatisfied, the Obligations of such Credit Parties under this
Section 1.5 shall not be discharged except by performance and then only
to the extent of such performance. The Obligations of each of the
Credit Parties under this Section 1.5 shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, re-construction or similar proceeding with respect to any
of the Credit Parties or the Lenders. The joint and several liability
of the Credit Parties hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other
change whatsoever in the name, membership, constitution or place of
formation of any of the Credit Parties or the Lender.
(f) The provisions of this Section 1.5 are made for the
benefit of the Lenders and their successors and assigns, and may be
enforced in good faith by them from time to time against any or all of
the Credit Parties as often as the occasion therefor may arise and
without requirement on the part of the Lender first to marshal any of
their claims or to exercise any of their rights against any other
Credit Party or to exhaust any remedies available to them against any
other Credit Party or to resort to any other source or means of
obtaining payment of any of the Obligations hereunder or to elect any
other remedy. The provisions of this Section 1.5 shall remain in effect
until all of the Obligations shall have been paid in full or otherwise
fully satisfied. If at any time, any payment, or any part thereof, made
in respect of any of the Obligations, is rescinded or must otherwise be
restored or returned by the Lenders upon the insolvency, bankruptcy or
reorganization of any of the Credit Parties, or otherwise, the
provisions of this Section 1.5 will forthwith be reinstated in effect,
as though such payment had not been made.
(g) Notwithstanding the foregoing or any other provision of
this Agreement, it is expressly agreed that the joint and several
liability of any Canadian Borrower hereunder and under the other Loan
Documents shall be limited to the Obligations of the Canadian Borrowers
and no Canadian Borrower shall otherwise be liable for the Obligations
of any other Credit Party hereunder other than the other Canadian
Borrower.
(h) Any notice, request, waiver, consent or other action made,
given or taken by any Credit Party shall bind all Credit Parties.
(i) Each Credit Party hereby authorizes each of the Designated
Financial Officers listed in SCHEDULE 1.5 hereto to act as agent for
each Credit Party and to execute and deliver on behalf of each Credit
Party such notices, requests, waivers, consents, certificates and other
documents, and to take any and all actions required or permitted to be
delivered or taken by any Credit Party hereunder. The Borrower may
replace any of the Designated Financial Officers listed in SCHEDULE 1.5
hereto or add any additional Designated Financial Officers by
delivering written notice to the Agent specifying the names of each new
Designated Financial Officer and the offices held by each such Person.
Each Credit Party hereby agrees that any such notices, requests,
waivers, consents, certificates and other documents executed, delivered
or sent by any Designated Financial Officer of the Borrower and any
such actions taken by any Designated Financial Officer of the Borrower
shall bind each Credit Party.
ARTICLE 2.
THE CREDITS
2.1. REVOLVING LOANS.
(a) REVOLVING CREDIT COMMITMENTS. Subject to the terms and
conditions set forth herein, each Lender agrees to make Revolving Loans
to the Borrower from time to time during the Revolving Credit
Availability Period in an aggregate principal amount that will not
result in such Lender's Revolving Credit Exposure exceeding the lesser
of (i) such Lender's Revolving Credit Commitment at such time and (ii)
an amount equal to such Lender's Applicable Percentage of the sum of
the (A) Domestic Borrowing Base at such time PLUS (B) the Canadian
Borrowing Base at such time; PROVIDED that the Domestic Revolving
Credit Exposure plus the Canadian Excess Amount shall not at any time
exceed the Domestic Gross Availability. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may
borrow, prepay and reborrow Revolving Loans.
(b) FUNDING OF REVOLVING LOANS. To request the funding of any
Revolving Loan hereunder, the Borrower shall deliver to the Agent, an
Advance Request in substantially the form of Exhibit B-4 hereto, by
facsimile or electronic mail transmission, not later than 1:00 p.m.,
Boston, Massachusetts time, (i) two (2) Business Days prior to the
proposed Drawdown Date of any Base Rate Loan and (ii) three (3) LIBOR
Business Days prior to the proposed Drawdown Date of any LIBOR Rate
Loan. Each such request shall specify (i) the principal amount of the
Revolving Loan requested, (ii) the proposed Drawdown Date of such
Revolving Loan, (ii) the Interest Period for such Revolving Loan, (iii)
the Type of such Revolving Loan and (iv) the Domestic Gross
Availability as set forth in the most recent Collateral Update
Certificate/Borrowing Base Certificate delivered to Lender. Promptly
following receipt of an Advance Request in compliance with this
subsection 2.1(b), the Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Revolving Loan to be made as
part of the requested Borrowing, and PROVIDED that no Default or Event
of Default shall have occurred and be continuing or shall result
therefrom, on the date such Advance Request is delivered to the Agent,
the Lenders shall make a Revolving Loan to the Borrower in accordance
with the terms of Section 2.5 in an amount equal to the amount set
forth in such Advance Request. Each Advance Request shall be in a
minimum aggregate amount of $1,000,000 or an integral multiple of
$100,000 in excess thereof.
(c) INTEREST ON REVOLVING LOANS.
(i) Subject to clause (iv) of this subsection 2.1(d),
each Revolving Loan which is a Base Rate Loan shall bear
interest for the period commencing with the Drawdown Date
thereof and ending on the last day of the calendar month with
respect thereto at the rate per annum equal to the Base Rate
plus the Applicable Margin with respect to Base Rate Loans as
in effect from time to time.
(ii) Subject to clause (iv) of this subsection
2.1(d), each Revolving Loan which is a LIBOR Rate Loan shall
bear interest for the period commencing with the Drawdown Date
thereof and ending on the last day of the LIBOR Rate Interest
Period with respect thereto at the rate equal to the LIBOR
Rate determined for such LIBOR Rate Interest Period PLUS the
Applicable Margin with respect to LIBOR Rate Loans as in
effect from time to time.
(iii) The Borrower promises to pay interest on each
Revolving Loan in arrears on each Interest Payment Date with
respect thereto.
(iv) Notwithstanding the foregoing, if there shall
occur and be continuing any Event of Default, the principal of
all Revolving Loans hereunder, at the option of the Agent or
Required Lenders, shall bear interest at the Post-Default Rate
during the period beginning on the date such Event of Default
first occurred and ending on the date such Event of Default is
cured or waived. All interest accrued at the Post-Default Rate
shall be payable on demand. All accrued interest on Revolving
Loans shall be payable upon expiration of the Revolving Credit
Availability Period. All interest and fees hereunder shall be
computed on the basis of a year of 360 days, and in each case
shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(d) REPAYMENT OF REVOLVING LOANS. The Borrower unconditionally
promises to pay to the Agent for the account of each Lender the then
unpaid principal amount of such Lender's Revolving Loans on the
Maturity Date. In addition, if following any reduction in the Total
Revolving Credit Commitment or at any other time the Domestic Revolving
Credit Exposure plus the Canadian Excess Amount shall exceed the
Domestic Gross Availability, the Borrower shall first, repay Revolving
Loans in an aggregate amount equal to such excess, and second, provide
cash collateral for the Total LC Exposure as specified in subsection
2.4(h) in an aggregate amount equal to 105% of such excess.
(e) LOAN ACCOUNTS. Each Lender shall maintain in accordance
with its usual practice an account evidencing the indebtedness of the
Borrower to such Lender resulting from each Revolving Loan made by such
Lender, including the amounts of principal and interest payable and
paid to such Lender from time to time hereunder. The Agent shall
maintain accounts in which it shall record the amount of each Revolving
Loan made hereunder, the amount of any principal, interest, fees and/or
expenses due and payable or to become due and payable from the Borrower
to each Lender hereunder and the amount of any sum received by the
Agent hereunder for the account of the Lenders and each Lender's share
thereof. The entries made in the account maintained by the Agent
pursuant to this subsection 2.1(e) shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; PROVIDED
that the failure of the Agent to maintain such account or any error
therein shall not in any manner affect the obligation of the Borrower
to repay the Revolving Loans in accordance with the terms of this
Agreement.
(f) REVOLVING CREDIT NOTE. Prior to the Closing Date, the
Borrower shall prepare, execute and deliver to each Lender a Revolving
Credit Note in the principal amount of such Lender's Revolving Credit
Commitment. Thereafter, the Revolving Loans of each Lender evidenced by
such Revolving Credit Note and interest thereon shall at all times
(including after assignment pursuant to Section 11.4) be represented by
one or more promissory notes in such form payable to the order of the
payee named therein.
2.2. TERM LOAN.
(a) FUNDING OF THE TERM LOAN. Subject to the terms and
conditions set forth herein, each Lender agrees to fund its portion of
the Term Loan in the full amount of its Term Loan Commitment on the
Closing Date. Principal amounts of the Term Loan that have been repaid
or prepaid may not be reborrowed.
(b) INTEREST ON THE TERM LOAN. The outstanding principal
amount of the Term Loan shall bear interest during each Interest Period
relating to all or any portion of the Term Loan at the following rates:
(i) To the extent that all or any portion of the Term
Loan bears interest during such Interest Period at the Base
Rate, the Term Loan or such portion shall bear interest during
such Interest Period at the rate per annum equal to the Base
Rate plus the Applicable Margin with respect to portions of
Term Loans consisting of Base Rate Loans as in effect from
time to time.
(ii) To the extent that all or any portion of the
Term Loan bears interest during such Interest Period at the
LIBOR Rate, the Term Loan or such portion shall bear interest
during such Interest Period at the rate per annum equal to the
LIBOR Rate determined for such Interest Period plus the
Applicable Margin with respect to portions of Term Loans
consisting of LIBOR Rate Loans as in effect from time to time.
(iii) The Borrower promises to pay interest on the
Term Loan or any portion thereof outstanding during each
Interest Period in arrears on each Interest Payment Date
applicable to such Interest Period.
(iv) Notwithstanding the foregoing, if there shall
occur and be continuing any Event of Default, the outstanding
principal balance of the Term Loan, at the option of the Agent
or Required Lenders, shall bear interest at the Post-Default
Rate during the period beginning on the date such Event of
Default first occurred and ending on the date such Event of
Default is cured or waived. All interest accrued at the
Post-Default Rate shall be payable on demand. All interest
hereunder shall be computed on the basis of a year of 360
days, and in each case shall be payable for the actual number
of days elapsed (including the first day but excluding the
last day).
(c) REPAYMENT OF TERM LOAN. The Borrower hereby
unconditionally promises to pay to the Agent for the account of the
Lenders quarterly principal installments in respect of the Term Loan in
sixteen (16) consecutive quarterly payments of $1,178,571.40, such
installments to be due and payable on the first day of each calendar
quarter of each calendar year, commencing on April 1, 2003, with a
final payment equal to the remaining unpaid principal amount of the
Term Loan due on the Maturity Date. If at any time the sum of the
outstanding amount of the Term Loans exceeds the Term Loan Borrowing
Base, then the Borrower shall immediately pay the amount of such excess
to the Agent, for the ratable benefit of the Lenders.
(d) LOAN ACCOUNTS. Each Lender shall maintain in accordance
with its usual practice an account evidencing the indebtedness of the
Borrower to such Lender in respect of the Term Loan, including the
amounts of principal and interest payable and paid to such Lender from
time to time hereunder. The Agent shall maintain accounts in which it
shall record the amount of each Lender's portion of the Term Loan made
hereunder, the amount of any principal or interest due and payable or
to become due and payable from the Borrower to each Lender hereunder
and the amount of any sum received by the Agent hereunder for the
account of the Lenders and each Lender's share thereof. The entries
made in the account maintained by the Agent pursuant to this subsection
2.2(d) shall be prima facie evidence of the existence and amounts of
the obligations recorded therein; PROVIDED that the failure of the
Agent to maintain such account or any error therein shall not in any
manner affect the obligation of the Borrower to repay the Term Loan in
accordance with the terms of this Agreement.
(e) TERM NOTE. Prior to the Closing Date, the Borrower shall
prepare, execute and deliver to each Lender a Term Note in the
principal amount of such Lender's Term Loan Commitment. Thereafter,
such Lender's portion of the Term Loan evidenced by such Term Note and
interest thereon shall at all times (including after assignment
pursuant to Section 11.4) be represented by one or more promissory
notes in such form payable to the order of the payee named therein.
2.3. CONVERSION OPTIONS.
(a) CONVERSION TO DIFFERENT TYPE OF REVOLVING LOAN. The
Borrower may elect from time to time to convert any outstanding
Revolving Loan to a Revolving Loan of another Type, PROVIDED that (a)
with respect to any such conversion of a LIBOR Rate Loan to a Base Rate
Loan, the Borrower shall give the Agent at least two (2) Business Days
prior written notice of such election; (b) with respect to any such
conversion of a Base Rate Loan to a LIBOR Rate Loan, the Borrower shall
give the Agent at least three (3) LIBOR Business Days prior written
notice of such election; (c) with respect to any such conversion of a
LIBOR Rate Loan into a Base Rate Loan, such conversion shall only be
made on the last day of the Interest Period with respect thereto and
(d) no Revolving Loan may be converted into a LIBOR Rate Loan when any
Default or Event of Default has occurred and is continuing. On the date
on which such conversion is being made each Lender shall take such
action as is necessary to transfer its Revolving Credit Commitment
Percentage of such Revolving Loans to its Domestic Lending Office or
its LIBOR Lending Office, as the case may be. All or any part of
outstanding Revolving Loans of any Type may be converted into a
Revolving Loan of another Type as provided herein, PROVIDED that any
partial conversion shall be in an aggregate principal amount of
$1,000,000 or a whole multiple thereof. Each Conversion Request
relating to the conversion of a Revolving Loan to a LIBOR Rate Loan
shall be irrevocable by the Borrower.
(b) CONTINUATION OF TYPE OF REVOLVING LOAN. Any Revolving Loan
of any Type may be continued as a Revolving Loan of the same Type upon
the expiration of an Interest Period with respect thereto by compliance
by the Borrower with the notice provisions contained in subsection
2.3(a); PROVIDED that no LIBOR Rate Loan may be continued as such when
any Default or Event of Default has occurred and is continuing, but
shall be automatically converted to a Base Rate Loan on the last day of
the first Interest Period relating thereto ending during the
continuance of any Default or Event of Default of which officers of the
Agent active upon the Borrower's account have actual knowledge. In the
event that the Borrower fails to provide any such notice with respect
to the continuation of any LIBOR Rate Loan as such, then such LIBOR
Rate Loan shall be automatically converted to a Base Rate Loan on the
last day of the first Interest Period relating thereto. The Agent shall
notify the Lenders promptly when any such automatic conversion
contemplated by this subsection 2.3(b) is scheduled to occur.
(c) LIBOR RATE LOANS. Any conversion to or from LIBOR Rate
Loans shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of
all LIBOR Rate Loans having the same Interest Period shall not be less
than $1,000,000 or a whole multiple of $100,000 in excess thereof. No
more than five (5) LIBOR Borrowings having different Interest Periods
may be outstanding at any time.
(d) ALTERNATE RATE OF INTEREST. If prior to the commencement
of any Interest Period for a LIBOR Borrowing, (i) the Agent determines
(which determination shall be conclusive absent manifest error) that
adequate and reasonable means do not exist for ascertaining the LIBOR
Rate for such LIBOR Interest Period, (ii) if such Borrowing is of a
particular Class of Loans, the Agent is advised by the Required Lenders
with respect to the Revolving Loans or Terms Loans, as the case may be,
that the LIBOR Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their
Loans of such Class included in such LIBOR Borrowing, or (iii) if the
Agent or any Lender shall have determined in good faith that as a
result of any Change in Law it is unlawful or impossible for any Lender
to make or maintain any LIBOR Borrowing; then in each case the Agent
shall give notice thereof to the Borrower and the affected Lenders by
telephone or telecopy as promptly as practicable thereafter and, until
the Agent notifies the Borrower and such Lenders that the circumstances
giving rise to such notice no longer exist, (x) any Advance Conversion
Request for LIBOR Rate Loans submitted by the Borrower shall be
automatically withdrawn and shall be deemed a request for a Base Rate
Loan, (y) each LIBOR Rate Loan will automatically, on the last day of
the then current Interest Period relating thereto, become a Base Rate
Loan, and (z) the obligations of the Lenders to make LIBOR Rate Loans
shall be suspended until the Agent determines that the circumstances
giving rise to such suspension no longer exist, whereupon the Agent
shall so notify the Borrower and the Lenders; PROVIDED that if as a
result of a Change in Law the Lenders are prohibited from maintaining
any outstanding LIBOR Borrowing, upon notice from the Agent, the
Borrower shall immediately (A) convert such LIBOR Borrowing to a Base
Rate Borrowing, or (B) repay such LIBOR Borrowing in full, together
with all interest accrued thereon and all fees and other amounts
payable to the Lenders hereunder (in either case, subject to the
provisions of subsection 2.3(e) of this Agreement with respect to
redeployment costs).
(e) BREAK FUNDING PAYMENTS. In the event of (i) the payment of
any principal of any LIBOR Rate Loan other than on the last day of the
LIBOR Interest Period applicable thereto (including as a result of an
Event of Default), (ii) the conversion of any LIBOR Rate Loan other
than on the last day of the Interest Period applicable thereto, or
(iii) the failure to borrow, convert, continue or prepay any LIBOR Rate
Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice is permitted to be revocable and is
revoked in accordance herewith), then, in any such event, the Borrower
shall compensate each Lender for the loss, cost and expense
attributable to such event (the "BREAKAGE COSTS"), as determined by
such Lender in a manner consistent with its customs and practices. In
the event that any Lender is entitled to receive compensation pursuant
to this subsection 2.3(e), such Lender shall deliver a certificate to
the Borrower setting forth the amount or amounts that such Lender is
entitled to receive, and the Borrower shall pay such Lender such amount
or amounts within three (3) days after receipt of such certificate.
2.4. DOMESTIC LETTERS OF CREDIT AND FOREIGN LETTERS OF CREDIT.
(a) COMMITMENT TO ISSUE DOMESTIC LETTERS OF CREDIT AND FOREIGN
LETTERS OF CREDIT AND LC GUARANTY.
(i) Subject to the terms and conditions set forth
herein, the Borrower may request the issuance of a letter of
credit in U.S. currency (the "DOMESTIC LETTER OF CREDIT") for
its own account and/or for the account of any of its
Subsidiaries by the Issuing Lender, in a form acceptable to
the Issuing Lender, at any time and from time to time during
the Revolving Credit Availability Period; PROVIDED, however,
that, after giving effect to such request, (a) the Domestic LC
Exposure shall not, at any time, exceed $12,000,000 and (b)
the Domestic Revolving Credit Exposure plus the Canadian
Excess Amount shall not exceed the Domestic Gross
Availability. Domestic Letters of Credit issued hereunder
shall constitute utilization of the Revolving Credit
Commitments. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and
conditions of any form of letter of credit application or
other agreement submitted by the Borrower to, or entered into
by the Borrower with, the Issuing Lender relating to any
Domestic Letter of Credit, the terms and conditions of this
Agreement shall control.
(ii) Subject to the terms and conditions set forth
herein, the Borrower may request the issuance of a letter of
credit in an Optional Currency (a "FOREIGN LETTER OF CREDIT")
for its own account and/or for the account of any of its
Subsidiaries by the Issuing Lender, in a form acceptable to
the Issuing Lender, at any time and from time to time during
the Revolving Credit Availability Period; PROVIDED, however,
that, after giving effect to such request, (a) the Dollar
Equivalent of the Foreign LC Exposure (exclusive of the
Canadian Letter of Credit) shall not exceed $5,000,000 at any
one time and (b) the Domestic Revolving Credit Exposure plus
the Canadian Excess Amount shall not exceed the Domestic Gross
Availability. Foreign Letters of Credit issued hereunder
(exclusive of the Canadian Letter of Credit to the extent of
the Canadian Borrowing Base) shall constitute utilization of
the Domestic Revolving Credit Commitments in the amount of the
Dollar Equivalent of such Foreign Letter of Credit. In the
event of any inconsistency between the terms and conditions of
this Agreement and the terms and conditions of any form of
letter of credit application or other agreement submitted by
the Borrower to, or entered into by the Borrower with, the
Issuing Lender relating to any Foreign Letter of Credit, the
terms and conditions of this Agreement shall control.
(iii) The Agent agrees, on behalf of the Lenders and
in reliance upon the agreement of the Lenders set forth in
this subsection 2.4(d) and upon the representations and
warranties of the Credit Parties contained herein, to enter
into an LC Guaranty with the Issuing Lender to support the
reimbursement obligations of the Borrower with respect to any
Letter of Credit and the Canadian Borrowers with respect to
the Canadian Letter of Credit.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN
CONDITIONS. Subject to Section 2.14, to request the issuance of a
Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit), the Borrower shall deliver to the
Issuing Lender and the Agent by electronic or facsimile transmission
(at least two (2) Business Days prior to the requested date of
issuance, amendment, renewal or extension) a letter of credit
application and reimbursement agreement in the form required by the
Issuing Lender. A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or extension of
each Letter of Credit, the Borrower shall be deemed to represent and
warrant that), after giving effect to such issuance, amendment, renewal
or extension (i) the Domestic LC Exposure at such time shall not exceed
$12,000,000 and the Dollar Equivalent of the Foreign LC Exposure at
such time (exclusive of the Canadian Letter of Credit) shall not exceed
$5,000,000, as the case may be and (ii) the Domestic Revolving Credit
Exposure plus the Canadian Excess Amount at such time shall not exceed
the Domestic Gross Availability. Any Letter of Credit issued, amended,
renewed or extended hereunder shall provide for the payment of sight
drafts for honor thereunder when presented in accordance with the terms
thereof and when accompanied by the documents described therein.
(c) EXPIRATION DATE. Each Letter of Credit shall expire
(without giving effect to any extension thereof by reason of an
interruption of business) at or prior to the close of business on the
earlier of (i) the date 365 days, in the case of standby Letters of
Credit, or 180 days, in the case of documentary Letters of Credit,
after the date of the issuance of such Letter of Credit (or, in the
case of any renewal or extension thereof, 365 days or 180 days, as
applicable, after such renewal or extension) PROVIDED that any such
standby Letter of Credit may provide for automatic extensions thereof
to a date not later than 365 days beyond its current expiration date,
and (ii) the date that is five (5) or, if confirmed by a confirmer,
thirty (30), Business Days prior to the Maturity Date. No Letter of
Credit may be extended beyond the date that is five Business Days prior
to the Maturity Date.
(d) PARTICIPATIONS.
(i) By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof)
by the Issuing Lender, and without any further action on the
part of the Issuing Lender, the Issuing Lender hereby grants
to each Lender, and each Lender hereby acquires from the
Issuing Lender, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate amount
available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender
hereby absolutely and unconditionally agrees to pay to the
Agent, for the account of the Issuing Lender, such Lender's
Applicable Percentage of each LC Disbursement made by the
Issuing Lender and not reimbursed by the Borrower on the date
due as provided in subsection 2.4(e), or of any reimbursement
payment required to be refunded to the Borrower for any
reason.
(ii) By the issuance of the LC Guaranty by the Agent,
and without any further action on the part of the Agent, the
Agent hereby grants to each Lender, and each Lender hereby
acquires from the Agent, a participation in the LC Guaranty
equal to such Lender's Applicable Percentage of the aggregate
amount guaranteed under the LC Guaranty. In the event the
Agent is required to make any payment to the Issuing Lender
under the LC Guaranty, each Lender hereby absolutely and
unconditionally agrees to pay to the Agent, for the account of
the Issuing Lender, such Lender's Applicable Percentage of
each such payment made by the Agent and not reimbursed by the
Borrower or the Canadian Borrowers, as the case may be
pursuant to subsection 2.4(e), or of any reimbursement payment
required to be refunded to the Borrower for any reason, and
each Lender severally agrees that it shall be absolutely
liable, without regard to the occurrence of any Default or
Event of Default or any other condition precedent whatsoever,
to the extent of such Lender's Applicable Percentage, to
reimburse the Agent on demand for such payment.
(e) REIMBURSEMENT. If the Issuing Lender shall make any LC
Disbursement in respect of a Letter of Credit or the Agent shall make
any payment under the LC Guaranty, the Borrower and/or, with respect to
the Canadian Letter of Credit, the Canadian Borrowers, shall reimburse
(each, a "REIMBURSEMENT OBLIGATION") the Issuing Lender in respect of
such LC Disbursement or the Agent in respect of such payment under the
LC Guaranty, as the case may be, by paying to the Agent for the account
of the Issuing Lender or to the Agent with respect to such payment
under the LC Guaranty, an amount in U.S. Dollars equal to such LC
Disbursement (or the Dollar Equivalent of such LC Disbursement in the
case of a Letter of Credit issued in an Optional Currency) or such
payment under the LC Guaranty not later than 1:00 p.m., Boston,
Massachusetts time, on (i) the Business Day that the Borrower or any
Canadian Borrower receives notice of such LC Disbursement or such
payment under the LC Guaranty, if such notice is received prior to
11:00 a.m., Boston, Massachusetts time, or (ii) the Business Day
immediately following the day that the Borrower or any Canadian
Borrower receives such notice, if such notice is not received prior to
such time, PROVIDED that, subject to the conditions to borrowing set
forth herein, payment of each such Reimbursement Obligation shall be
made through the automatic funding of a Base Rate Borrowing in an
amount equal to the amount of such Reimbursement Obligation, and the
Borrower hereby irrevocably authorizes and directs the Agent to take
such actions as may be necessary to effectuate such automatic funding
of such Base Rate Borrowings. To the extent that any such Reimbursement
Obligation is paid through the automatic funding of a Base Rate
Borrowing, the Borrower's obligation to make such payment shall be
discharged and replaced by the resulting Base Rate Borrowing. If the
Borrower cannot satisfy the conditions to borrowing set forth herein
such that the payment of any Reimbursement Obligation cannot be made
through the automatic funding of a Base Rate Borrowing and/or the
Borrower or any Canadian Borrower shall fail, for any reason, to make
such payment when due, the Agent shall notify each Lender of the
applicable LC Disbursement and/or such payments made by the Agent under
the LC Guaranty, the unreimbursed portion thereof and such Lender's
Applicable Percentage thereof. Promptly following receipt of such
notice, each Lender shall pay to the Agent in U.S. Dollars its
Applicable Percentage of the unreimbursed portion of the LC
Disbursement and/or any payments made by the Agent under the LC
Guaranty, in the same manner as provided in Section 2.5 with respect to
Loans made by such Lender (and Section 2.5 shall apply to the payment
obligations of the Lenders, treating each such payment as a Loan for
this purpose), and the Agent shall promptly pay to the Issuing Lender
the amounts so received by it from the Lenders. Promptly following
receipt by the Agent of any payment from the Borrower or any Canadian
Borrower pursuant to this paragraph, the Agent shall distribute such
payment to the Issuing Lender or, to the extent that the Lenders have
made payments pursuant to this paragraph to purchase participation
interests in the LC Disbursement and/or the LC Guaranty, then to such
Lenders and the Issuing Lender as their interests may appear. Any
payment made by a Lender pursuant to this paragraph to purchase a
participation interest in any LC Disbursement or any LC Guaranty shall
not constitute a Loan and shall not relieve the Borrower or any
Canadian Borrower of its obligation to reimburse such LC Disbursement
or any payment made by the Agent under the LC Guaranty. For the
avoidance of doubt, all Reimbursement Obligations with respect to
Domestic Letters of Credit or Foreign Letters of Credit, as the case
may be, shall be paid in U.S. Dollars. The Borrower shall indemnify and
hold harmless the Issuing Lender and the Agent for any loss, cost or
expense incurred by such Persons as a result of any change in the
currency exchange rate occurring during the period between the date
that the Issuing Lender makes payment on any Letter of Credit
denominated in an Optional Currency and/or the Agent makes any payment
of the LC Guaranty with respect to any Letter of Credit denominated in
an Optional Currency and the date on which the Issuing Lender and/or
the Agent receives final reimbursement in U.S. Dollars for the Dollar
Equivalent of the amount of such payment.
(f) OBLIGATIONS ABSOLUTE. The Borrower's and the Canadian
Borrowers' obligations to reimburse LC Disbursements or any payment
made by the Agent under the LC Guaranty, as provided in subsection
2.4(e) shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement under
any and all circumstances whatsoever and irrespective of (i) any lack
of validity or enforceability of any Letter of Credit or the LC
Guaranty, or any term or provision therein, (ii) any draft or other
document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Issuing
Lender to the beneficiary under a Letter of Credit against presentation
of a draft or other document that does not comply with the terms of
such Letter of Credit and (iv) any other event or circumstance
whatsoever (other than gross negligence or willful misconduct of the
Issuing Lender), whether or not similar to any of the foregoing, that
might, but for the provisions of this Section 2.4, constitute a legal
or equitable discharge of the Borrower's obligations hereunder.
(g) INTERIM INTEREST. If the Issuing Lender and/or the Agent
shall make any LC Disbursement in respect of any Letter of Credit
and/or any payment in respect of the LC Guaranty , and if the Borrower
cannot satisfy the conditions to borrowing set forth herein such that
payment of the Reimbursement Obligation resulting from such LC
Disbursement or with respect to the LC Guaranty cannot be made through
the automatic funding of a Base Rate Borrowing, then, unless the
Borrower or the Canadian Borrowers, as applicable, shall reimburse such
LC Disbursement or such payment made by the Agent with respect to the
LC Guaranty in full on the date such LC Disbursement or such payment is
made, the unpaid amount thereof shall bear interest, for each day from
and including the date such LC Disbursement or such payment is made to
but excluding the date that the Borrower or the Canadian Borrowers, as
applicable, reimburses such LC Disbursement or such payment, at the
rate per annum then applicable to Base Rate Loans; PROVIDED that, if
the Borrower or any Canadian Borrower, as applicable, fails to
reimburse such LC Disbursement or such payment when due pursuant to
subsection 2.4(e), then interest calculated at the Post-Default Rate
shall accrue on the unpaid amount thereof. Interest accrued pursuant to
this paragraph shall be for the account of the Issuing Lender or the
Agent, as the case may be, except that interest accrued on and after
the date of payment by any Lender pursuant to subsection 2.4(e) shall
be for the account of such Lender to the extent of such payment.
(h) CASH COLLATERALIZATION. If either (i) an Event of Default
shall occur and be continuing and the Borrower receives notice from the
Agent or the Required Lenders demanding the deposit of cash collateral
pursuant to this paragraph, or (ii) the Borrower shall be required to
provide cash collateral in the amount equal to 105% of the Total LC
Exposure pursuant to subsections 2.1(d) or 2.8(b), the Borrower shall
immediately deposit with the Agent an amount in cash equal to, in the
case of an Event of Default, the Total LC Exposure as of such date PLUS
any accrued and unpaid interest thereon and any letter of credit fees
incurred thereunder accrued or to be accrued and, in the case of any
cash collateral required to be provided pursuant to subsections 2.1(d)
or 2.8(b), the amount required under subsections 2.1(d) or 2.8(b), as
the case may be; PROVIDED that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall
become immediately due and payable, without demand or other notice of
any kind, upon the occurrence of any Event of Default described in
clause (g) or (h) of Section 9.1. Such deposit shall be held by the
Agent as collateral in the first instance for the Total LC Exposure
under this Agreement and thereafter for the payment of any other
obligations of the Credit Parties hereunder.
2.5. LOANS AND BORROWINGS; FUNDING OF BORROWINGS.
(a) LOANS AND BORROWINGS. Each Loan of a particular Class
shall be made as part of a Borrowing consisting of Loans of such Class
made by the Lenders ratably in accordance with their respective
Commitments of such Class. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its
obligations hereunder; PROVIDED that the Commitments of the Lenders are
several and no Lender shall be responsible for any other Lender's
failure to make Loans as required herein.
(b) FUNDING OF BORROWINGS. Each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer
of immediately available funds by 2:00 p.m., Boston, Massachusetts time
to the account of the Agent most recently designated by it for such
purpose by notice to the Lenders. The Agent will make such Loans
available to the Borrower by promptly crediting the amounts so
received, in like funds, to one or more accounts of the Borrower
maintained with the Agent; PROVIDED that Revolving Base Rate Loans made
to finance the reimbursement of an LC Disbursement under any Letter of
Credit as provided in subsection 2.4(e) or any payment made by the
Agent under the LC Guaranty shall be remitted by the Agent to the
Issuing Lender.
(c) AGENT'S ASSUMPTION THAT EACH LENDER WILL MAKE LOANS.
Unless the Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available
to the Agent such Lender's share of such Borrowing, the Agent may
assume that such Lender has made such share available on such date in
accordance with paragraph (b) of this Section 2.5 and may, in reliance
upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of
the applicable Borrowing available to the Agent, then the applicable
Lender and the Borrower agree to pay to the Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to the Borrower but
excluding the date of payment to the Agent, at the Federal Funds
Effective Rate. If such Lender pays such amount to the Agent, then such
amount shall constitute such Lender's Loan included in such Borrowing.
(d) SETTLEMENT. In order to facilitate the administration of
the Loans under this Agreement, the Agent and Lenders agree (such
agreement shall not be for the benefit of or enforceable by the Credit
Parties) that settlement among them with respect to the Revolving Loans
may take place on a periodic basis (but not less frequently than once
each week) on dates determined from time to time by the Agent (each a
"SETTLEMENT DATE"), which may occur before or after the occurrence or
during the continuance of any Default or Event of Default. On each
Settlement Date, payment shall be made by or to each Lender in the
manner provided herein and in accordance with the settlement report
delivered by the Agent to the Lenders with respect to such Settlement
Date so that, as of each Settlement Date and after giving effect to the
transactions to take place on such Settlement Date, each Lender shall
hold its Applicable Percentage of all outstanding Revolving Loans and
its Applicable Percentage of the Total LC Exposure.
(e) SETTLEMENT LOANS. Between Settlement Dates, the Agent may
but shall not be obligated to advance (or may request that one of its
Affiliates advance), to the Borrower out of the Agent's (or such
Affiliate's) own funds up to $7,500,000 in the aggregate of Borrowings
that are Base Rate Revolving Loans requested or deemed requested
pursuant to this Agreement (any such Borrowing funded exclusively by
the Agent or its Affiliate being referred to as a "SETTLEMENT LOAN").
Each Settlement Loan shall constitute a Revolving Loan hereunder and
shall be subject to all of the terms, conditions and security
applicable to other Revolving Loans, except that all payments thereon
shall be payable to the Agent (or its Affiliate) solely for its own
account. The obligation of the Borrower to repay such Settlement Loans
to the Agent (or its Affiliate) shall be evidenced by the records of
the Agent and need not be evidenced by any promissory note. The Agent
shall not (and shall not permit any of its Affiliates to) make any
Settlement Loan if (i) the Agent shall have received written notice
from any Lender that one or more of the applicable conditions precedent
set forth in Sections 6.1 or 6.2 hereof will not be satisfied on the
requested funding date of the applicable Borrowing or (ii) the Agent
has actual knowledge that the requested Borrowing would exceed the
limitations set forth in Section 2.1 on the funding date. On each
Settlement Date, or, if earlier, upon demand by the Agent for payment
thereof, the then outstanding Settlement Loans shall be immediately due
and payable. The Borrower shall be deemed to have requested Loans to be
made on each Settlement Date in the amount of all outstanding
Settlement Loans and the proceeds of such Loans shall be applied to the
repayment of such Settlement Loans. The Agent shall notify the Lenders
of the outstanding balance of the Loans prior to 1:00 p.m. (Boston
time) on each Settlement Date and each Lender shall deposit with the
Agent an amount equal to its Applicable Percentage of the amount of
Revolving Loans deemed requested in immediately available funds not
later than 3:00 p.m. (Boston time) on such Settlement Date, and without
regard to whether any Default or Event of Default exists or any of the
conditions in Sections 6.1 or 6.2 are not satisfied. If any Settlement
Loan is not repaid on the due date thereof, then on the second Business
Day after the Agent's request each Lender (other than the Agent in its
capacity as a Lender) shall purchase a participating interest in such
Settlement Loan in an amount equal to its Applicable Percentage of such
Settlement Loan by transferring to the Agent, in immediately available
funds, the amount of such participation, without duplication for any
payment previously made. The proceeds of Settlement Loans may be used
solely for purposes for which Loans generally may be used in accordance
with this Agreement. If any amounts received by the Agent in respect of
any Settlement Loans are later required to be returned or paid by the
Agent to the Borrower or their respective representatives or
successors-in-interest, whether by court order, settlement or
otherwise, the other Lenders shall, upon demand by the Agent, pay to
the Agent for its own account, an amount equal to each other Lender's
Applicable Percentage of all such amounts required to be returned by
the Agent.
2.6. EXPIRATION, TERMINATION OR REDUCTION OF COMMITMENTS.
(a) EXPIRATION OF REVOLVING CREDIT COMMITMENTS. Unless
previously terminated, (i) the Revolving Credit Commitments shall
expire at the close of business on the Maturity Date, and (ii) the Term
Loan Commitments shall terminate immediately after the funding of the
Term Loan on the Closing Date.
(b) REDUCTION OF REVOLVING CREDIT COMMITMENTS. The Borrower
may at any time and from time to time reduce the Revolving Credit
Commitments; PROVIDED that (i) each reduction of the Revolving Credit
Commitments shall be in an amount that is at least equal to $1,000,000
or any greater multiple of $1,000,000, and (ii) the Borrower shall not
reduce the Revolving Credit Commitments if, after giving effect to any
concurrent repayment, the Domestic Revolving Credit Exposure would
exceed the Domestic Revolving Credit Commitment. The Borrower shall
notify the Agent of any election to reduce the Revolving Credit
Commitment at least five (5) Business Days prior to the effective date
of such reduction, specifying the effective date thereof. Each notice
of reduction of the Revolving Credit Commitment shall be irrevocable.
Each reduction of the Revolving Credit Commitment shall be permanent
and shall be made ratably among the Lenders in accordance with their
respective Revolving Credit Commitments.
(c) OPTIONAL TERMINATION OF REVOLVING CREDIT COMMITMENTS.
Subject to the provisions of subsection 2.6(d), the Borrower shall have
the right at any time to terminate the Revolving Credit Commitments.
The Borrower shall notify the Agent of any election to terminate the
Revolving Credit Commitments under this subsection 2.6(c) in writing at
least five (5) Business Days prior to the effective date of such
termination, specifying the effective date thereof. Each notice of
termination of the Revolving Credit Commitments shall be irrevocable.
Any termination of the Revolving Credit Commitments shall be permanent.
(d) TERMINATION FEE. In connection with any termination of the
Revolving Credit Commitments, the Borrower shall (i) repay the entire
principal balance of, and all accrued interest and fees owing with
respect to, the Revolving Loans and the Term Loans, and (ii) pay to the
Agent, for the account of each Lender, a termination fee equal to the
product of (A) the sum of (x) the average amount of the Revolving
Credit Commitments during the twelve (12) months preceding the date of
termination (or, if such termination occurs prior to the first
anniversary of the Closing Date, during the period between the Closing
Date and the date of termination), and (y) the average amount of the
aggregate outstanding principal balance of the Term Loan during the
twelve months preceding the date of termination (or, if such
termination occurs prior to the first anniversary of the Closing Date,
during the period between the Closing Date and the date of termination)
MULTIPLIED by (B) the applicable termination percentage set forth
below:
-----------------------------------------------------------------------
Period during which Applicable
TERMINATION DATE OCCURS TERMINATION PERCENTAGE
------------------------------------------------ ----------------------
Prior to the first anniversary of the Closing
Date 1.0%
------------------------------------------------ ----------------------
On or after the first anniversary of the Closing
Date but prior to the second anniversary of
the Closing Date 0.5%
------------------------------------------------ ---------------------
From and after the second anniversary of the
Closing Date 0%
------------------------------------------------ ----------------------
2.7. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS;
COLLECTION.
(a) PAYMENTS GENERALLY. The Borrower and the Canadian
Borrowers shall be obligated to make each payment required to be made
by the Borrower or such Canadian Borrower hereunder (whether of
principal, interest, fees or reimbursement of LC Disbursements, or
otherwise) prior to 1:00 p.m. Boston, Massachusetts time, on the date
when due, in immediately available funds, in U.S. Dollars, without
set-off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Agent, be deemed to have been
received on the next succeeding Business Day for purposes of
calculating interest thereon. All payments shall be made to the Agent
at its offices in Boston, Massachusetts, except that payments pursuant
to Sections 2.4, 2.10, 2.11, 11.3 and subsection 2.3(e) shall be made
directly to the Persons entitled thereto. The Agent shall distribute
any such payments received by it for the account of any other Person to
the appropriate recipient promptly following receipt thereof, and the
Borrower and the Canadian Borrowers shall have no liability in the
event timely or correct distribution of such payments is not so made.
If any payment shall be due on a day that is not a Business Day, the
date for payment shall be extended to the next succeeding Business Day,
and, in the case of any payment accruing interest, interest thereon
shall be payable for the period of such extension. Notwithstanding
anything to the contrary set forth herein, subject to the conditions to
the funding of Revolving Loans set forth herein, all payments of
interest, fees and any other amounts due to be paid by the Borrower or
any Canadian Borrower hereunder shall be made through the automatic
funding of Base Rate Revolving Loans in amounts equal to the amounts of
such interest, fees or other amounts due to be paid by the Borrower or
such Canadian Borrower hereunder, and the Borrower and each Canadian
Borrower hereby irrevocably authorizes and directs the Agent to take
such actions as may be necessary to effectuate such automatic funding
of Base Rate Revolving Loans, and, upon funding of any such Base Rate
Revolving Loan, the Borrower's and each Canadian Borrower's obligation
to make such payment shall be discharged and replaced by the resulting
Base Rate Revolving Loan. The Borrower and each Canadian Borrower
expressly acknowledges and agrees that (i) the Agent may, in its sole
discretion, effectuate the automatic funding of a Revolving Loan
pursuant to this subsection 2.7(a) even though at the time of, or after
giving effect to, the funding of such Revolving Loans the Domestic
Revolving Credit Exposure exceeds the Domestic Gross Availability, and
(ii) if any one or more of the conditions to the funding of Revolving
Loans cannot be satisfied and the Agent, in its sole discretion,
refuses to fund a Base Rate Revolving Loan in an amount sufficient to
satisfy the amount of any interest, fees or other amounts due
hereunder, the Borrower and such Canadian Borrower shall remain
obligated to pay the full amount of such interest, fees or other
amounts as and when the same shall become due.
(b) CURRENCY MATTERS.
(i) U.S. Dollars are the currency of account and
payment for each and every sum at any time due from the Credit
Parties hereunder. No payment to the Agent, any Lender or the
Issuing Lender (whether under any judgment or court order or
otherwise) shall discharge the obligation or liability in
respect of which it was made unless and until the Agent or
such Lender shall have received payment in full in U.S.
Dollars in which such obligation or liability was incurred,
and to the extent that the amount of any such payment shall,
on actual conversion into U.S. Dollars, fall short of such
obligation or liability actual or contingent expressed in U.S.
Dollars, the Borrower shall indemnify and hold harmless the
Agent, the Issuing Lender or such Lender, as the case may be,
with respect to the amount of the shortfall.
(ii) Not later than 1:00 p.m. (Boston time) on the
last Business Day of each calendar month (the "CALCULATION
DATE") or such other date as the Agent may from time to time
specify, the Agent shall determine the Dollar Equivalent of
Total LC Exposures as of such date. The Dollar Equivalent so
determined shall become effective on the first Business Day
immediately following such determination (a "RESET DATE") and
shall remain effective until the next succeeding Reset Date.
(iii) If, on any Reset Date, the Dollar Equivalent of
the aggregate outstanding amount of all Revolving Loans and
Total LC Exposure exceeds the Total Gross Availability, for
three (3) or more consecutive Business Days (but only as to
the Reset Date), then the Borrower shall repay or prepay the
Revolving Loans in accordance with this Agreement in an
aggregate principal amount such that, after giving effect
thereto, the aggregate outstanding amount (expressed in U.S.
Dollars) of all Revolving Loans PLUS Total LC Exposure no
longer exceeds the Total Gross Availability.
(iv) If on any Reset Date, the Dollar Equivalent of
the Foreign LC Exposure (exclusive of the Canadian Letter of
Credit) exceeds $5,000,000, then the Borrower shall
immediately upon demand provide cash collateral to the Agent
in the amount of such excess.
(c) PREPAYMENTS OF REVOLVING LOANS PRIOR TO EVENT OF DEFAULT.
(i) CREDIT FOR FUNDS RECEIVED. Prior to the
occurrence of an Event of Default, (A) all funds and cash
proceeds in the form of money, checks and like items received
in the Controlled Account maintained at the Cash Management
Bank as contemplated by Section 4.3(a) shall be credited, on
the same Business Day on which the Agent determines that good
collected funds have been received, and, prior to the receipt
of good collected funds, on a provisional basis until final
receipt of good collected funds, and applied as contemplated
by subsection 2.7(c)(ii), (B) all funds and cash proceeds in
the form of a wire transfer received in the Controlled Account
maintained at the Cash Management Bank as contemplated by
Section 4.3(a) shall be credited on the same Business Day as
the Agent's receipt of such amounts (or up to such later date
as the Agent determines that good collected funds have been
received), and applied as contemplated by subsection
2.7(c)(ii), and (C) all funds and cash proceeds in the form of
an automated clearing house transfer received in the
Controlled Account maintained at the Cash Management Bank as
contemplated by Section 4.3(a) shall be credited, on the next
Business Day following the Agent's receipt of such amounts (or
up to such later date as the Agent determines that good
collected funds have been received), and applied as
contemplated by subsection 2.7(c)(ii). For purposes of the
foregoing provisions of this subsection 2.7(c)(i), the Agent
shall not be deemed to have received any such funds or cash
proceeds on any day unless received by the Agent before 1:00
p.m. (Boston time) on such day. The Borrower further
acknowledges and agrees that any such provisional credits or
credits in respect of wire or automatic clearing house funds
transfers shall be subject to reversal if final collection in
good funds of the related item is not received by, or final
settlement of the funds transfer is not made in favor of, the
Agent in accordance with the Agent's customary procedures and
practices for collecting provisional items or receiving
settlement of funds transfers.
(ii) APPLICATION OF PAYMENTS. Prior to an Event of
Default, funds received in the Controlled Account maintained
at the Cash Management Bank as contemplated by Section 4.3(a)
and for which the Borrower has received credit shall be
applied as follows:
(A) first, to pay amounts then due and
payable under this Agreement, the Notes and the other
Loan Documents (including, without limitation,
pursuant to Section 2.8);
(B) second, to reduce Revolving Loans made
by the Agent pursuant to subsection 2.5(e) and for
which Settlement has not then been made;
(C) third, to reduce Revolving Loans which
are Base Rate Loans;
(D) fourth, to reduce Revolving Loans which
are LIBOR Rate Loans;
(E) fifth, to reduce the Term Loan; and
(F) sixth, to the Borrower's operating
account maintained with the Cash Management Bank.
All prepayments of the Revolving Loans pursuant to
this subsection 2.7(c) shall be subject to the provisions of
Section 2.3(e) and shall be allocated among the Lenders making
such Revolving Loans, in proportion, as nearly as practicable,
to the respective unpaid principal amount of such Revolving
Loans outstanding, with adjustments to the extent practicable
to equalize any prior payments or repayments not exactly in
proportion.
Prior to the occurrence of an Event of Default, the
Borrower may elect to avoid the Breakage Costs associated with
any prepayment of LIBOR Rate Loans by providing to the Agent
cash in an amount sufficient to cash collateralize such LIBOR
Rate Loans, but in no event shall the Borrower be deemed to
have paid such LIBOR Rate Loans until such cash has been paid
to the Agent for application to such Libor Rate Loans. The
Agent may elect to cause such cash collateral to be deposited
into either (i) a cash collateral account pursuant to the
terms of a cash collateral agreement executed by the Borrower
and the Agent and in form and substance satisfactory to the
Agent or (ii) a Controlled Account with appropriate
instructions prohibiting the Borrower's withdrawal of such
funds so long as they remain cash collateral. In each such
case, the Borrower agrees to execute and deliver to the
Agent such instruments and documents, including Uniform
Commercial Code financing statements and agreements with any
third party depository banks, as the Agent may request.
(d) APPLICATION OF PAYMENTS AFTER EVENT OF DEFAULT. After the
occurrence and during the continuance of an Event of Default, funds
received in the Controlled Account maintained at the Cash Management
Bank as contemplated by Section 4.3(a) and for which the Borrower has
received credit and proceeds of Collateral received by the Agent shall
be applied as set forth in Section 9.2.
(e) PRO RATA TREATMENT. If any Lender shall, by exercising any
right of set-off or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans (or
participations in LC Disbursements) (other than pursuant to Sections
2.4, 2.10 or 2.11), resulting in such Lender receiving payment of a
greater proportion of the aggregate principal amount of its Loans (and
participations in LC Disbursements) and accrued interest thereon than
the proportion of such amounts received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Loans (and LC Disbursements) of the
other Lenders to the extent necessary so that the benefit of such
payments shall be shared by all the Lenders ratably in accordance with
the aggregate amount of principal of and accrued interest on their
respective Loans (and participations in LC Disbursements); PROVIDED
that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to
the extent of such recovery, without interest unless the Lender from
which such payment is recovered is required to pay interest thereon, in
which case each Lender returning funds to such Lender shall pay its pro
rata share of such interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any
of its Loans (or participations in LC Disbursements) to any assignee or
participant, other than to any Credit Party or any of its Subsidiaries
or Affiliate thereof (as to which the provisions of this paragraph
shall apply). The Borrower consents to the foregoing and agrees, to the
extent they may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with
respect to such participation as fully as if such Lender were a direct
creditor of the Borrower in the amount of such participation.
(f) AGENT'S ASSUMPTION THAT BORROWER WILL MAKE PAYMENTS.
Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Agent for the account of
the Lenders or the Issuing Lender entitled thereto (the "APPLICABLE
RECIPIENT") hereunder that the Borrower will not make such payment, the
Agent may assume that the Borrower has made such payment on such date
in accordance herewith and may, in reliance upon such assumption,
distribute to the Applicable Recipient the amount due. In such event,
if the Borrower has not in fact made such payment, then each Applicable
Recipient severally agrees to repay to the Agent forthwith on demand
the amount so distributed to such Applicable Recipient with interest
thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Agent, at
the Federal Funds Effective Rate.
(g) LENDER'S FAILURE TO MAKE PAYMENT. If any Lender shall fail
to make any payment required to be made by it pursuant to subsections
2.4(d), 2.4(e), 2.5(c) or 2.7(d), then the Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Agent or the account of such Lender to
satisfy such Lender's obligations under such subsection until all such
unsatisfied obligations are fully paid.
2.8. PREPAYMENT OF LOANS.
(a) OPTIONAL PREPAYMENTS OF LOANS. The Borrower shall have the
right at any time and from time to time to prepay the Revolving Loans
in whole or in part, subject to prior notice in accordance with
subsection 2.8(c) in the case of LIBOR Rate Loans, and subject to the
payment of any amounts due under subsection 2.3(e) and, if the
Revolving Credit Commitment is terminated, subsection 2.6(d). The
Borrower shall have the right at any time and from time to time to
prepay the Term Loan in whole or in part, subject to prior notice in
accordance with subsection 2.8(c) and subject to the payment of any
amounts due under subsection 2.3(e) and, if the Term Loan is repaid in
full, subsection 2.6(d), and PROVIDED that each such prepayment of the
Term Loan shall be in an amount that is at least equal to $500,000 or
any greater multiple of $100,000. Each optional prepayment of the Term
Loan shall reduce the Availability Block by the amount of such
prepayment.
(b) MANDATORY PREPAYMENTS. The Borrower shall be obligated to,
and shall, make prepayments of the Loans hereunder (and reduce the
Revolving Credit Commitments hereunder) as follows:
(i) INCURRENCE OF DEBT. Without limiting the
obligation of the Borrower to obtain the consent of the
Required Lenders to any incurrence of Indebtedness not
otherwise permitted hereunder, the Borrower agrees, on the
closing of any incurrence of Indebtedness by the Borrower or
any of its Subsidiaries (other than Indebtedness permitted
pursuant to Section 8.1) to prepay the Loans hereunder (and
provide cash collateral for Total LC Exposure as specified in
subsection 2.4(h)), and the Revolving Credit Commitments
hereunder shall be subject to automatic reduction, upon the
date of such incurrence of Indebtedness, in an aggregate
amount equal to 100% of the amount of the Net Cash Payments
from such incurrence of Indebtedness received by the Borrower
and its Subsidiaries, such prepayment and reduction to be
effected in each case in the manner and to the extent
specified in subsection 2.8(c) below.
(ii) SALE OR OFFERING OF SECURITIES. The Borrower
agrees on the closing of any offering or sale of equity
securities by the Borrower or any of its Subsidiaries, to
prepay the Loans hereunder (and provide cash collateral for
Total LC Exposure as specified in subsection 2.4(h)), upon the
date of such sale or offering of securities, in an aggregate
amount equal to 100% of the amount of Net Cash Payments from
such offering of securities received by the Borrower and its
Subsidiaries, and such prepayment to be effected in each case
in the manner and to the extent specified in subsection 2.8(c)
below.
(iii) SALE OF ASSETS. Without limiting the obligation
of the Borrower or any Canadian Borrower (as the case may be)
to obtain the consent of the Required Lenders to any
Disposition not otherwise permitted hereunder, the Borrower
agrees, on the date of any Disposition (other than
Dispositions permitted under Section 8.4(c) of assets not
comprising the Term Loan Borrowing Base or Canadian Borrowing
Base to the extent that the aggregate Net Cash Payments
received therefrom do not exceed $500,000) by the Borrower or
any of its Subsidiaries, to prepay the Loans hereunder (and
provide cash collateral for Total LC Exposure as specified in
subsection 2.4(h)), upon the date of such Disposition, in an
aggregate amount equal to 100% of the amount of such Net Cash
Payments from such Disposition received by the Borrower or any
of its Subsidiaries on the date of such Disposition and such
prepayment to be effected in each case in the manner and to
the extent specified in subsection 2.8(c) below.
(iv) EXTRAORDINARY RECEIPTS. Upon the receipt by any
Credit Party or any of its Subsidiaries of any Extraordinary
Receipts, the Borrower shall make a prepayment to the Loans
(and provide cash collateral for Total LC Exposure as
specified in subsection 2.4(h)), and such prepayment to be
effected in each case in the manner and to the extent
specified in subsection 2.8(c) below in an amount equal to
100% of such Extraordinary Receipts, net of any reasonable
expenses incurred in collecting such Extraordinary Receipts;
PROVIDED, that in the case of insurance proceeds received in
connection with a Casualty Event with respect to Property
having an aggregate market value less than $1,500,000, so long
as, at the time of receipt and use of such insurance proceeds,
no Event of Default shall have occurred and be continuing, the
Credit Parties shall be entitled to use such insurance
proceeds (in an amount not in excess of $1,500,000) to repair
or replace the Property affected by such Casualty Event,
PROVIDED, further, that (A) until so used, such insurance
proceeds shall be deposited into a cash collateral account
(and when so deposited such insurance proceeds shall
constitute Collateral for the Obligations then outstanding),
(B) such insurance proceeds may be used solely to repair or
replace the Property that was the subject of such Casualty
Event with other Property of the same type, (C) such insurance
proceeds must be used and such Property must be repaired or
replaced within 180 days after the date of receipt thereof,
and (D) upon the occurrence and during the continuance of an
Event of Default or after such 180 day period shall have
expired, such insurance proceeds, if not so used, shall be
applied to the prepayment of Loans and cover for Total LC
Exposure as provided in this subsection 2.8(c).
(v) EXCESS CASH FLOW. (A) Within ten (10) days of
delivery to the Agent and the Lenders of audited annual
financial statements pursuant to Section 7.1(a)(i), commencing
with the delivery to the Agent and the Lenders of the
financial statements for the fiscal year ended March 31, 2004
or, if such financial statements are not delivered to the
Agent and the Lenders on the date such statements are required
to be delivered pursuant to Section 7.01(a)(i), ten (10) days
after the date such statements are required to be delivered to
the Agent and the Lenders pursuant to Section 7.01(a)(i), the
Borrower shall make a prepayment in the manner and to the
extent specified in subsection 2.8(c) below in an amount equal
to 50% of the Excess Cash Flow of the Borrower and its
Subsidiaries for such fiscal year.
(vi) EXCESS CASH AND PERMITTED INVESTMENTS. In the
event that the aggregate amount of the cash and Permitted
Investments of the Credit Parties and their Subsidiaries
(excluding the amount in the Prepayment Escrow Account and
investments permitted under clause (g) of the definition of
Permitted Investments) exceeds at any time $1,500,000, the
Borrower shall immediately make a prepayment of the Loans in
the manner and to the extent specified in subsections 2.8(a)
or (c) below in an amount equal to such excess.
(c) APPLICATION OF PREPAYMENTS.
(i) In the event of any mandatory prepayment of Loans
pursuant to subsections 2.8(b)(i), (ii) and (v), the proceeds
shall be applied as follows: FIRST, if such prepayment is made
at a time when any part of the Term Loan remains outstanding,
such prepayment shall be applied to the repayment of the Term
Loan, to be shared and applied ratably among the Lenders in
proportion to the outstanding amount of the Term Loan owing to
each Lender, and applied against the remaining scheduled
installments of the Term Loan in the inverse order of
maturity; and SECOND, after the Term Loan has been repaid in
full, the amount of any mandatory prepayment shall be applied,
to repay Revolving Loans, and, to provide cash collateral for
Total LC Exposure as specified in Section 2.4(h), and (A) with
respect to any mandatory prepayment of Loans pursuant to
subsections 2.8(b)(i) and (ii), with a corresponding increase
in Availability Block and a corresponding permanent reduction
in the Revolving Credit Commitments and (B) with respect to
any mandatory prepayment of Loans pursuant to subsection
2.8(b)(v), (x) so long as no Default or Event of Default shall
have occurred and be continuing, with a corresponding increase
in the Availability Block, but no permanent reduction in the
Revolving Credit Commitments, and (y) if a Default or Event of
Default shall have occurred and be continuing, with a
corresponding increase in the Availability Block and a
corresponding permanent reduction in the Revolving Credit
Commitments.
(ii) Upon receipt of Net Cash Payments from the
Disposition of, or from Casualty Events of any property
comprising the Term Loan Borrowing Base pursuant to
subsections 2.8(b)(iii) and 2.8(b)(iv), the Net Cash Payments
from such sale or such Casualty Event shall be applied as
follows:
(A) so long as no Default or Event of
Default shall have occurred and be continuing, (1) an
amount equal to the lesser of (aa) the appraised
value of such asset (as determined by the Agent by
reference to the most recent appraisal obtained by
the Agent) and (bb) 100% of the Net Cash Payment,
shall be applied to the repayment of the Term Loan to
be shared and applied ratably among the Lenders in
proportion to the outstanding amount of the Term Loan
owing to each Lender, and applied against the
remaining scheduled installments of the Term Loan in
inverse order of maturity; and (2) any remaining
proceeds shall be applied to repay Revolving Loans,
and, to provide cash collateral for Total LC Exposure
as specified in Section 2.4(h), with a corresponding
increase in the Availability Block, but with no
permanent reduction in the Revolving Credit
Commitments; and
(B) if a Default or an Event of Default
shall have occurred and be continuing, 100% of the
Net Cash Payment, shall be applied as follows: FIRST,
if any part of the Term Loan remains outstanding, to
the repayment of the Term Loan to be shared and
applied ratably among the Lenders in proportion to
the outstanding amount of the Term Loan owing to each
Lender, and applied against the remaining scheduled
installments of the Term Loan in inverse order of
maturity; and SECOND, after the Term Loan has been
repaid in full, to repay Revolving Loans, and, to
provide cash collateral for Total LC Exposure as
specified in Section 2.4(h), with a corresponding
increase in the Availability Block and a
corresponding permanent reduction in the Revolving
Credit Commitments.
(iii) Upon receipt of Net Cash Payments from the
Disposition of, or from Casualty Events of any property not
comprising the Term Loan Borrowing Base pursuant to
subsections 2.8(b)(iii), Extraordinary Receipts pursuant to
subsections 2.8(b)(iv), or the event of any mandatory
prepayment of Loans pursuant to subsections 2.8(b)(vi), 100%
of such Net Cash Payments shall be applied (A) so long as no
Default or Event of Default shall have occurred and be
continuing, to repay any outstanding Revolving Loans and to
provide cash collateral for Total LC Exposure as specified in
Section 2.4(h)), with a corresponding increase in the
Availability Block, but with no corresponding permanent
reduction in the Revolving Credit Commitments (unless however,
if the Term Loan has been paid in full, in which case with a
corresponding permanent reduction in the Revolving Credit
Commitments) and (B) if a Default or an Event of Default shall
have occurred and be continuing, to the repayment of the Term
Loan to be shared and applied ratably among the Lenders in
proportion to the outstanding amount of the Term Loan owing to
each Lender, and applied against the remaining scheduled
installments of the Term Loan in inverse order of maturity;
and after the Term Loan has been repaid in full, to repay
Revolving Loans, and, to provide cash collateral for Total LC
Exposure as specified in Section 2.4(h), with a corresponding
increase in the Availability Block and a corresponding
permanent reduction in the Revolving Credit Commitments.
(iv) Upon receipt of Net Cash Payments from the
Disposition of, or Casualty Event relating to, any asset
comprising the Canadian Borrowing Base or otherwise owned by a
Canadian Borrower 100% of such Net Cash Payments from such
Disposition or such Casualty Event shall be applied to reduce
the Canadian Facility and:
(A) with respect to the Disposition of, or
Casualty Event relating to the Canadian Real
Property, with a corresponding increase in the
Availability Block and a reduction in the commitment
under the Canadian Facility and in the amount of the
Canadian Letter of Credit; and
(B) with respect to the Disposition of, or
Casualty Event relating to any asset other than the
Canadian Real Property (1) so long as no Default or
Event of Default shall have occurred and be
continuing, with a corresponding increase in the
Availability Block, but with no permanent reduction
in the commitment under the Canadian Facility or in
the amount of the Canadian Letter of Credit; and (2)
if a Default or an Event of Default shall have
occurred and be continuing, with a corresponding
increase in the Availability Block and a reduction in
the commitment under the Canadian Facility and in the
amount of the Canadian Letter of Credit.
(v) To the extent all outstanding Revolving Loans are
paid in full and the Total LC Exposure has been cash
collateralized after making any mandatory prepayment under
this Section 2.8, any remaining proceeds (which have not been
applied to repay the Term Loans or Tranche B Loans) shall be
held in an escrow account (the "PREPAYMENT ESCROW ACCOUNT") to
be established by the Borrower and the Agent at Fleet National
Bank on or prior to the Closing Date. The funds then on
deposit in the Prepayment Escrow Account shall be applied to
prepay the Term Loans or Tranche B Loans, in accordance with
subsections 2.8(a) or (c) or Section 8.14, as the case may be.
With respect to any mandatory prepayment of LIBOR Rate Loans,
such mandatory prepayment shall be subject to subsection 2.3(e).
(d) NOTIFICATION OF CERTAIN PREPAYMENTS. The Borrower shall
notify the Agent by telephone (confirmed by telecopy) of any voluntary
prepayment of the Term Loan, any LIBOR Rate Loan, or any Tranche B Loan
not later than 1:00 p.m., Boston, Massachusetts time, three Business
Days before the date of such prepayment. The Borrower shall notify the
Agent of any mandatory prepayment of the Loans pursuant to subsection
2.8(b) hereunder as soon as practicable. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid. Promptly
following receipt of any such notice relating to a Borrowing, the Agent
shall advise the Lenders of the contents thereof.
(e) PREPAYMENTS ACCOMPANIED BY INTEREST. All prepayments of
the Term Loan shall be accompanied by accrued interest through the date
of prepayment.
2.9. FEES.
(a) FEES. The Borrower shall pay to the Agent for the account
of each Lender and the Agent, fees and expenses in the amount and at
the times specified in the Fee Letter.
(b) UNUSED FEE. The Borrower shall pay to the Agent for the
account of each Lender unused fees in respect of the Revolving Credit
Commitments, in an aggregate amount equal to the product of (x) the
rate per annum equal to one-half of one percent (1/2%), MULTIPLIED BY
(y) the daily average unused amounts of the respective Revolving Credit
Commitment of such Lender during the period from and including the date
on which the Closing Date shall occur to but excluding the date on
which the Revolving Credit Commitments terminate. Accrued unused fees
shall be payable monthly in arrears on the first day of each month and
on the date on which the Revolving Credit Commitments terminate. All
unused fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the
first day but excluding the last day).
(c) LETTER OF CREDIT FEES. The Borrower shall pay the Agent
through the Agent's Treasury and International Services Group with
respect to Letters of Credit issued hereunder the following fees:
(i) with respect to each standby or documentary
Letter of Credit and the LC Guaranty issued hereunder, to the
Agent for the accounts of the Lenders a participation fee with
respect to their participations in such Letters of Credit or
LC Guaranty which fee shall accrue at a rate per annum equal
to (x) the Applicable Margin with respect to LIBOR Rate
Revolving Loans MULTIPLIED BY (y) the average daily amount of
outstanding Letters of Credit during the period from and
including the Closing Date to but excluding the later of the
date on which there shall no longer be any Letters of Credit
outstanding hereunder;
(ii) with respect to each documentary or standby
Letter of Credit issued hereunder, to the Issuing Lender, a
fronting fee equal to 0.25% per annum of the available amount
of each Letter of Credit, along with the Issuing Lender's
standard fees with respect, but not limited, to the issuance,
amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder;
(iii) Accrued fees for Letters of Credit shall be
computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the
first day but excluding the last day), and shall be payable
monthly in arrears on the first day of each month and on the
date the Revolving Credit Commitments terminate, or such other
date as the Agent or the Issuing Lender may from time to time
specify, commencing on the first such date to occur after the
Closing Date, PROVIDED that any such fees accruing after the
date on which the Revolving Credit Commitments terminate shall
be payable on demand.
(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds. Fees paid shall not be refundable under
any circumstances, absent manifest error in the determination thereof,
and unless otherwise agreed by the Agent, all fees shall be paid in
U.S. Dollars.
2.10. INCREASED COSTS.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by,
any Lender or the Issuing Lender; or
(ii) impose on any Lender or the Issuing Lender or
the London interbank market any other condition affecting this
Agreement or LIBOR Rate Loans made by such Lender or any
Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase
the cost to such Lender of making or maintaining any LIBOR Rate Loan
(or of maintaining its obligation to make any such Loan) or to increase
the cost to such Lender or the Issuing Lender of participating in,
issuing or maintaining any Letter of Credit or to reduce the amount of
any sum received or receivable by such Lender or the Issuing Lender
hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Lender, as the case may
be, such additional amount or amounts as will compensate such Lender or
the Issuing Lender, as the case may be, for such additional costs
incurred or reduction suffered.
(b) If any Lender or the Issuing Lender reasonably determines
that any Change in Law regarding capital requirements has or would have
the effect of reducing the rate of return on such Lender's or the
Issuing Lender's capital or on the capital of such Lender's or the
Issuing Lender's holding company, if any, as a consequence of this
Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by the Issuing
Lender, to a level below that which such Lender or the Issuing Lender
or such Lender's or the Issuing Lender's holding company could have
achieved but for such Change in Law (taking into consideration such
Lender's or the Issuing Lender's policies and the policies of such
Lender's or the Issuing Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such
Lender or the Issuing Lender, as the case may be, such additional
amount or amounts as will compensate such Lender or the Issuing Lender,
or such Lender's or the Issuing Lender's holding company, for any such
reduction suffered.
(c) A certificate of a Lender or the Issuing Lender setting
forth the amount or amounts necessary to compensate such Lender or the
Issuing Lender or its holding company, as the case may be, as specified
in subsections 2.10(a) or 2.10(b) above shall be delivered to the
Borrower and shall be conclusive so long as it reflects a reasonable
basis for the calculation of the amounts set forth therein and does not
contain any manifest error. The Borrower shall pay such Lender or the
Issuing Lender the amount shown as due on any such certificate within
10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing
Lender to demand compensation pursuant to this Section 2.10 shall not
constitute a waiver of such Lender's or the Issuing Lender's right to
demand such compensation; PROVIDED that the Borrower shall not be
required to compensate a Lender or the Issuing Lender pursuant to this
Section 2.10 for any increased costs or reductions incurred more than
six months prior to the date that such Lender or the Issuing Lender, as
the case may be, notifies the Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender's or the
Issuing Lender's intention to claim compensation therefor; PROVIDED
further that, if the Change in Law giving rise to such increased costs
or reductions is (i) retroactive and (ii) occurred within such
six-month period, then the six-month period referred to above may be
extended to include the period of retroactive effect thereof, but in no
event any period prior to the Closing Date.
2.11. TAXES; SETOFF; ETC.
(a) Any and all payments by or on account of any Obligations
of the Borrower and the Canadian Borrowers hereunder shall be made
without recoupment, setoff or counterclaim and free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; PROVIDED
that if the Borrower or any Canadian Borrower shall be required to
deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 2.11) the Agent, any Lender
or the Issuing Lender (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii)
the Borrower or such Canadian Borrower shall make such deductions and
(iii) the Borrower or such Canadian Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower and the Canadian Borrowers shall
pay all Other Taxes to the relevant Governmental Authority in
accordance with applicable law.
(c) The Borrower and each Canadian Borrower shall indemnify
the Agent, each Lender and the Issuing Lender, within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes
or Other Taxes (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 2.11)
paid by the Agent, such Lender or the Issuing Lender, as the case may
be (and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto during the period prior to the
Borrower or such Canadian Borrower, as the case may be making the
payment demanded under this paragraph (c)), whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower or
any Canadian Borrower, as the case may be by a Lender or the Issuing
Lender, or by the Agent on its own behalf or on behalf of a Lender or
the Issuing Lender shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower or any Canadian Borrower to a
Governmental Authority, the Borrower or such Canadian Borrower shall
deliver to the Agent the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of a jurisdiction in
which the Borrower or any Canadian Borrower is located, or any treaty
to which such jurisdiction is a party, with respect to payments under
this Agreement shall deliver to the Borrower or such Canadian Borrower
(with a copy to the Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower or such Canadian
Borrower, such properly completed and executed documentation prescribed
by applicable law as will permit such payments to be made without
withholding or at a reduced rate.
2.12. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) DESIGNATION OF A DIFFERENT LENDING OFFICE. If any Lender
requests compensation under Section 2.10, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.11, then
such Lender shall use reasonable efforts to designate a different
lending office for funding or booking its Loans hereunder, or to assign
its rights and obligations hereunder to another of its offices,
branches or Affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 2.10 or 2.11, as the case may be, in the future and
(ii) would not subject such Lender to any material unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The
Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or
assignment.
(b) REPLACEMENT OF LENDERS. If any Lender requests
compensation under Section 2.10, or if any Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for
the account of any Lender pursuant to Section 2.11, or if any Lender
defaults in its obligation to fund Loans hereunder, then the Borrower
may, at its sole expense and effort, upon notice to such Lender and the
Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section
11.4, all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment); PROVIDED that (i)
the Borrower shall have received the prior written consent of the Agent
and the Issuing Lender, which consents shall not unreasonably be
withheld or delayed, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans (and
participations in LC Disbursements), accrued interest thereon, accrued
fees and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in
the case of any such assignment resulting from a claim for compensation
under Section 2.10 or payments required to be made pursuant to Section
2.11, such assignment will result in a reduction in such compensation
or payments. A Lender shall not be required to make any such assignment
and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.
2.13. CHANGE IN DOMESTIC BORROWING BASE, CANADIAN BORROWING BASE AND
TERM LOAN BORROWING BASE. The Domestic Borrowing Base and the Canadian Borrowing
Base shall be determined weekly (or at such other interval as may be specified
pursuant to subsection 7.1) by the Agent by reference to the Borrowing Base
Certificate, commercial finance and collateral audit reports, the Collateral
Update Certificate or Accounts Receivable/Loan Reconciliation Report delivered
to the Lenders and the Agent pursuant to subsection 7.1(g). The Term Loan
Borrowing Base shall be determined from time to time by the Agent by reference
to the appraisals or reappraisals of Eligible Fixed Assets or Real Property
Assets delivered to the Lenders and the Agent pursuant to subsection 7.1,
respectively and other information obtained by or provided to the Agent. The
Agent shall give to the Borrower written notice of any change in the Domestic
Borrowing Base, Canadian Borrowing Base or Term Loan Borrowing Base, as the case
may be determined by the Agent. Such notice shall be effective upon its receipt
by the Borrower.
2.14 CANADIAN FACILITY.
(a) On, and from time to time after, the Closing Date, the
Agent shall, subject to the terms and conditions set forth herein,
cause the Issuing Lender to issue for the account of the Borrower and
the Canadian Borrowers, and for the benefit of the Canadian Lender, a
letter of credit (the "CANADIAN LETTER OF CREDIT") in the original face
amount of $6,000,000 U.S. Dollars or the Canadian Dollar equivalent
thereof (the "CANADIAN SUBLIMIT"). The face amount of the Canadian
Letter of Credit and the Canadian Sublimit are subject to change from
time upon the agreement of the Borrower, the Agent and the Issuing
Lender; PROVIDED however, the Canadian Sublimit may not be increased by
more than $2,000,000 without the prior consent of the Required Lenders.
(b) The Canadian Lender and the Canadian Borrowers shall
execute and deliver a commitment letter (the "CANADIAN COMMITMENT
LETTER"), pursuant to which the Canadian Lender shall agree to lend to
the Canadian Borrowers and the Canadian Borrowers may borrow, repay and
reborrow from time to time between the Closing Date and the Maturity
Date upon notice pursuant to the Canadian Commitment Letter, such sums
as are requested by the Canadian Borrowers up to a maximum aggregate
amount outstanding (after giving effect to all amounts requested) at
any one time equal to Canadian Sublimit; PROVIDED that (after giving
effect to all amounts requested under the Canadian Facility) the
Domestic Revolving Credit Exposure plus the Canadian Excess Amount
shall not at any time exceed the Domestic Gross Availability. The Agent
shall have the right pursuant to the Canadian Commitment Letter and the
Canadian Intercreditor Agreement to limit from time to time the amount
of loans and other extensions of credit which may be advanced by the
Canadian Lender to the Canadian Borrowers.
(c) The Obligations of the Canadian Borrowers to the Issuing
Lender, the Agent and the Lenders in respect of the Canadian Letter of
Credit, shall be (i) guaranteed by the Borrower and the Guarantors
pursuant to the Guarantee and (ii) secured by a First Priority Lien in
favor of the Agent, for the benefit of the Lenders and the Agent, on
all tangible and intangible property and assets of such Canadian
Borrowers, wherever located, whether now owned or existing or hereafter
acquired or arising, together with any and all additions thereto and
replacements therefor and proceeds and products thereof, as further set
forth in the Canadian Security Documents.
ARTICLE 3.
GUARANTEE BY GUARANTORS
3.1. THE GUARANTEE. The Guarantors hereby guarantee to each Lender, the
Issuing Lender and the Agent and their respective successors and assigns the
prompt payment in full when due (whether at stated maturity, by acceleration or
otherwise) as well as the performance, of all of the Obligations. The Guarantors
hereby further agree that if the Borrower or any Canadian Borrower, as the case
may be, shall fail to pay in full when due (whether at stated maturity, by
acceleration or otherwise) or perform any of its Obligations, the Guarantors
will promptly pay or perform the same, without any demand or notice whatsoever,
all of which are expressly waived by the Guarantor and that in the case of any
extension of time of payment or renewal of any of the Obligations, the same will
be promptly paid in full when due (whether at extended maturity, by acceleration
or otherwise) or perform in accordance with the terms of such extension or
renewal. Payments by the Guarantors hereunder may be required by the Agent on
any number of occasions.
3.2. OBLIGATIONS UNCONDITIONAL. The obligations of the Guarantors under
Section 3.1 are absolute and unconditional irrespective of the value,
genuineness, validity, regularity or enforceability of this Agreement, the other
Loan Documents or any other agreement or instrument referred to herein or
therein, or any substitution, release or exchange of any other guarantee of or
security for any of the Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 3.2 that the obligations of the
Guarantors hereunder shall be absolute and unconditional under any and all
circumstances. Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more of the following shall not alter or
impair the liability of the Guarantors hereunder which shall remain absolute and
unconditional as described above:
(i) at any time or from time to time, without notice
to such Guarantors, the time for any performance of, place or
manner of payment or compliance with any of the Obligations
shall be extended, compromised, renewed, modified or such
performance or compliance shall be waived, as the case may be;
(ii) the maturity of any of the Obligations shall be
accelerated, or any of the Obligations shall be modified,
supplemented or amended in any respect, or any right hereunder
or under the other Loan Documents or any other agreement or
instrument referred to herein or therein shall be waived or
any other guarantee of any of the Obligations or any security
therefor shall be released or exchanged in whole or in part or
otherwise dealt with;
(iii) the adequacy of any rights which the Agent or
any Lender may have against any collateral security or other
means of obtaining repayment of any of the Obligations;
(iv) any lien or security interest granted to, or in
favor of, the Agent, the Issuing Lender or any Lender or
Lenders as security for any of the Obligations shall fail to
be perfected, any rights which the Agent, the Issuing Lender
or any Lender or Lenders might have in such Collateral shall
have failed to be preserved or any substitution, exchange,
surrender, release, loss or destruction of any such collateral
security;
(v) the addition, substitution or release of any
entity or other Person primarily or secondarily liable for any
Obligation; or
(vi) any act or omission which might in any manner or
to any extent vary the risk of such Guarantor or otherwise
operate as a release or discharge of such Guarantor, all of
which may be done without notice to such Guarantor.
The Guarantors hereby expressly waive promptness, diligence,
presentment, demand of payment, protest and all notices whatsoever, any
requirement that the Agent, the Issuing Lender or any Lender exhaust any right,
power or remedy or proceed against the Borrower or any Canadian Borrower
hereunder or under the other Loan Documents or any other agreement or instrument
referred to herein or therein, or against any other Person under any other
guarantee of, or security for, any of the Obligations and all defenses which may
be available by virtue of any valuation, stay, moratorium law or other similar
law now or hereafter in effect. The Guarantors expressly and knowingly waive all
suretyship defenses which might otherwise accrue without their Obligations
hereunder and under the other Loan Documents.
To the fullest extent permitted by law, each Guarantor hereby expressly
waives any and all rights or defenses arising by reason of (A) any "one action"
or "anti-deficiency" law which would otherwise prevent the Agent or any Lender
from bringing any action, including any claim for a deficiency, or exercising
any other right or remedy (including any right of set-off), against such
Guarantor before or after the Agent's or such Lender's commencement or
completion of any foreclosure action, whether judicially, by exercise of power
of sale or otherwise, or (B) any other law which in any other way would
otherwise require any election of remedies by the Agent or any Lender.
3.3. REINSTATEMENT. The obligations of the Guarantors under this
Article 3 shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of the Borrower or any Canadian Borrower in
respect of its Obligations is rescinded or must be otherwise restored by any
holder of any of its Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and each Guarantor agrees that it
will indemnify the Agent, the Issuing Lender and each Lender on demand for all
reasonable costs and expenses (including fees and expenses of counsel) incurred
by the Agent, any Lender or the Issuing Lender in connection with such
rescission or restoration, including any such costs and expenses incurred in
defending against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.
3.4. SUBROGATION. Until such time as the Obligations shall have been
indefeasibly paid in full, each of the Guarantors shall not exercise and hereby
waives all rights of subrogation, reimbursement, restitution, contribution or
otherwise whether arising by contract or operation of law (including, without
limitation, any such right arising under the Federal Bankruptcy Code of 1978, as
amended) or by reason of any payment by it pursuant to the provisions of this
Article 3 and further agrees with the Borrower and the Canadian Borrowers for
the benefit of each creditor of the Borrower and the Canadian Borrowers
(including, without limitation, the Agent, the Issuing Lender and each Lender)
that any such payment by it shall constitute a contribution of capital by such
Guarantor to the Borrower or the Canadian Borrowers, as the case may be. Each
Guarantor will not prove any claim in competition with the Agent or any Lender
in respect of any payment hereunder in any bankruptcy, insolvency or
reorganization case or proceedings of any nature. The Guarantors waive any
benefit of and any right to participate in any collateral security which may be
held by the Agent or any Lender.
3.5. REMEDIES. The Guarantors agree that, as between the Guarantors and
the Lenders, the Obligations of the Borrower and/or the Canadian Borrowers
hereunder may be declared to be forthwith due and payable as provided in Section
9.1 (and shall be deemed to have become automatically due and payable in the
circumstances provided in Section 9.1) for purposes of Section 3.1
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such Obligations from becoming automatically due and payable) as
against the Borrower or any Canadian Borrower and that, in the event of such
declaration (or such Obligations being deemed to have become automatically due
and payable), such Obligations (whether or not due and payable by the Borrower
or any Canadian Borrower) shall forthwith become immediately due and payable by
the Guarantors for purposes of Section 3.1.
3.6. INSTRUMENT FOR THE PAYMENT OF MONEY. Each of the Guarantors hereby
acknowledges that the guarantee in this Article 3 constitutes an instrument for
the payment of money, and consents and agrees that the Agent, the Issuing
Lender, or any Lender, at its sole option, in the event of a dispute by such
Guarantor in the payment of any moneys due hereunder, shall have the right to
summary judgment or such other expedited procedure as may be available for a
suit on a note or other instrument for the payment of money.
3.7. CONTINUING GUARANTEE. The guarantee in this Article 3 is a
continuing guarantee, and shall apply to all Obligations whenever arising.
3.8. GENERAL LIMITATION ON AMOUNT OF OBLIGATIONS GUARANTEED. In any
action or proceeding involving any state or non-U.S. corporate law, or any state
or Federal or non-U.S. bankruptcy, insolvency, reorganization or other law
affecting the rights of creditors generally, if the obligations of the
Guarantors under Section 3.1 would otherwise be held or determined to be void,
invalid or unenforceable, or subordinated to the claims of any other creditors,
on account of the amount of its liability under Section 3.1, then,
notwithstanding any other provision hereof to the contrary, the amount of such
liability shall, without any further action by the Guarantors, any Lender, Agent
or other Person, be automatically limited and reduced to the highest amount that
is valid and enforceable and not subordinated to the claims of other creditors
as determined in such action or proceeding.
3.9. LUXEMBOURG GUARANTOR'S LIMITATION. Notwithstanding anything to the
contrary contained herein, the maximum aggregate liability of Audubon Europe
S.a.r.l. under this Section 3 in respect of the Obligations and under the
Tranche B Financing Agreement in respect of the Guaranteed Obligations as
defined therein shall not exceed ninety-five percent (95%) of the aggregate of
its net equity and its preferred equity certificates, as stated in its most
recently approved financial statements.
ARTICLE 4.
THE COLLATERAL
4.1. GRANT OF SECURITY INTEREST. As collateral security for due and
punctual payment and performance of all of its Obligations, each Credit Party
hereby pledges and assigns to the Agent, and grants to the Agent for the ratable
benefit of the Lenders, the Issuing Lender and the Cash Management Bank a
continuing security interest in and lien on, all tangible and intangible
property and assets of such Credit Party, wherever located, whether now owned or
existing or hereafter acquired or arising, together with any and all additions
thereto and replacements therefor and proceeds and products thereof
(collectively referred to for purposes of this Article 4 as "COLLATERAL"),
including, without limitation the property described below:
(a) all tangible and intangible personal property, including
without limitation all present and future goods, inventory (including,
without limitation, all merchandise, raw materials, work in process,
finished goods and supplies), machinery, equipment, motor vehicles,
rolling stock, tools, furniture, fixtures, office supplies, computers,
computer software and associated equipment, whether now owned or
hereafter acquired, including, without limitation, all tangible
personal property used in the operation of the business of such Credit
Party;
(b) all rights under all present and future authorizations,
permits, licenses and franchises issued, granted or licensed to such
Credit Party for the operation of its business;
(c) all Patents of such Credit Party;
(d) all Trademarks of such Credit Party;
(e) all Copyrights of such Credit Party;
(f) the entire goodwill of business of such Credit Party and
all other general intangibles (including know-how, trade secrets,
customer lists, proprietary information, inventions, domain names,
methods, procedures and formulae) connected with the use of and
symbolized by any Patents, Trademarks or Copyrights of such Credit
Party;
(g) all rights under all present and future vendor or customer
contracts and all franchise, distribution, design, consulting,
construction, engineering, management and advertising and related
agreements;
(h) all rights under all present and future leases of real and
personal property; and
(i) all other personal property, including, without
limitation, all present and future accounts (including
health-care-insurance receivables), accounts receivable, cash, cash
equivalents, deposits, deposit accounts, loss carry back, tax refunds,
insurance claims and proceeds, premiums, rebates and refunds, choses in
action, commercial tort claims, securities and all other investment
property, partnership interests, limited liability company interests,
contracts, contract rights, rights to the payment of money, general
intangibles (including without limitation, all payment intangibles, all
customer and advertiser mailing lists, intellectual property, patents,
copyrights, trademarks, trade secrets, trade names, domain names,
goodwill, customer lists, advertiser lists, catalogs and other printed
materials, publications, indexes, lists, data and other documents and
papers relating thereto, blueprints, designs, charts, and research and
development, whether on paper, recorded electronically or otherwise),
all websites (including without limitation, all content, HTML
documents, audiovisual material, software, data, hardware, access
lines, connections, copyrights, trademarks, patents and trade secrets
relating to such websites) and domain names, any information stored on
any medium, including electronic medium, related to any of the personal
property of such Credit Party, all financial books and records and
other books and records relating, in any manner, to the business of
such Credit Party, all proposals and cost estimates and rights to
performance, all instruments and promissory notes, documents and
chattel paper (whether tangible or electronic), and all debts,
obligations and liabilities in whatever form owing to such Credit Party
from any person, firm or corporation or any other legal entity, whether
now existing or hereafter arising, now or hereafter received by or
belonging or owing to such Credit Party; and all guaranties and
security therefor, and all letters of credit rights (whether or not the
letter of credit is evidenced by a writing) and other supporting
obligations in respect of such debts, obligations and liabilities.
Any of the foregoing terms which are defined in the MA UCC shall have the
meaning provided in the MA UCC, as amended and in effect from time to time, as
supplemented and expanded by the foregoing.
4.2. SPECIAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE CREDIT
PARTIES. Each Credit Party hereby warrants and covenants to the Agent and the
Lenders that:
(a) Such Credit Party has delivered to the Agent a Perfection
Certificate in substantially the form of EXHIBIT C hereto. All
information set forth in such Perfection Certificate is complete, true
and correct in all material respects and there has been no change in
any of such information since the date on which the Perfection
Certificate was signed by such Credit Party.
(b) No Credit Party will change its jurisdiction of
organization, type of organization or other legal structure, principal
or any other place of business, or the location of any Collateral from
the locations set forth in the Perfection Certificate delivered by such
Credit Party, or make any change in its name or conduct its business
operations under any fictitious business name or trade name, without,
in any such case, at least thirty (30) days' prior written notice to
the Agent; PROVIDED that the inventory of such Credit Party may be in
the possession of manufacturers or processors in any jurisdiction in
which all necessary UCC financing statements have been filed by the
Agent and with respect to which the Agent has received waiver letters
from all landlords, warehousemen and processors in form and substance
acceptable to the Agent.
(c) Each Credit Party represents and warrants to the Lenders
and the Agent as follows: (i) except for the security interest created
by this Agreement and other Liens permitted hereunder, there is no
financing statement, security agreement, chattel mortgage, real estate
mortgage or other document filed or recorded with any filing records,
registry or other public office, that purports to cover, affect or give
notice of any present or possible future Lien on any assets or property
of the Credit Parties or any rights relating thereto, (ii) such Credit
Party is the owner of or has other rights in or power to transfer the
Collateral, free from any right or claim of any Person or any adverse
lien, except for the security interest created by this Agreement and
other Liens permitted hereunder, (iii) none of the Collateral
constitutes, or is the proceeds of, "farm products" as defined
inss.9-102(a)(34) of the MA UCC, (iv) none of the account debtors or
other Persons obligated on any of the Collateral is a Governmental
Authority covered by the Federal Assignment of Claims Act or like
federal, state or local statute or rule in respect of such Collateral
and (v) such Credit Party has at all times operated its business in
compliance with all applicable provisions of the federal Fair Labor
Standards Act, as amended, and with all applicable provisions of
federal, state and local statutes and ordinances dealing with the
control, shipment, storage or disposal of Hazardous Materials.
(d) Each Credit Party covenants with the Lenders and the Agent
that, such Credit Party shall defend its rights in the Collateral
against all claims and demands of all Persons at any time claiming the
same or any interests therein adverse to the Agent or any of the
Lenders.
(e) Each Credit Party represents and warrants to the Lenders
and the Agent that all filings, assignments, pledges and deposits of
documents or instruments have been made and all other actions have been
taken that are necessary or advisable, under applicable law, to
establish and perfect the Agent's security interest in the Collateral.
The Collateral and the Agent's rights with respect to the Collateral
are not subject to any setoff, claims, withholdings or other defenses.
(f) Except for Collateral that is obsolete or no longer used
in their business, the Credit Parties will keep the Collateral in good
order and repair (normal wear excepted) and will not use the same in
violation of law or any policy of insurance thereon and keep the
Collateral adequately insured at all times in accordance with the
provisions of Section 7.5. The Credit Parties will pay promptly when
due all taxes, assessments, governmental charges and levies upon the
Collateral or for its use or operation, except for taxes and
assessments permitted to be contested as provided in Section 7.4.
Following the occurrence and during the continuance of an Event of
Default, the Agent may at its option discharge any taxes or Liens to
which any Collateral is at any time subject (other than Permitted
Liens), and may, upon the failure of the Credit Parties to do so in
accordance with this Agreement, purchase insurance on any Collateral
and pay for the repair, maintenance or preservation thereof, and each
Credit Party agrees to reimburse the Agent on demand for any payments
or expenses incurred by the Agent or the Lenders pursuant to the
foregoing authorization and any unreimbursed amounts shall constitute
Obligations for all purposes hereof.
(g) The Agent may from time to time request and each Credit
Party shall deliver copies of all customer lists and vendor lists.
(h) Each Credit Party hereby irrevocably authorizes the Agent,
at any time and from time to time, to file in any jurisdiction
financing statements and amendments thereto that (i) indicate the
Collateral (x) as all assets of such Credit Party or words of similar
effect, regardless of whether any particular asset falls within the
scope of Article 9 of the MA UCC or such other jurisdiction or (y) as
being of an equal or lesser scope or with greater detail and (ii) which
contain any other information required by Article 9 of the MA UCC
(including Part 5 thereof) for the sufficiency or filing office
acceptance of any financing statement or amendment, including whether
(A) any Credit Party is an organization, the type of organization and
any organization identification number issued to such Credit Party and
(B) in the case of a financing statement filed as a fixture filing or
indicating Collateral as as-extracted collateral or timber to be cut, a
sufficient description of the real property to which the Collateral
relates. The Credit Parties agree to furnish any such information to
the Agent promptly upon request. Each Credit Party also ratifies its
authorization for the Agent to have filed in any Uniform Commercial
Code jurisdiction any like initial financing statements or amendments
thereto if filed prior to the Closing Date.
(i) Each Credit Party agrees that it will join with the Agent
in executing and, at its own expense file and refile, or permit the
Agent to file and refile such financing statements, continuation
statements and other documents (including, without limitation, Patent
Agreements, Trademark Agreements, Copyright Mortgages and licenses to
use software and other property protected by copyright), in such
offices (including, without limitation, the PTO, the United States
Copyright Office, and appropriate state patent, trademark and copyright
offices), as the Agent may reasonably deem necessary or appropriate,
wherever required or permitted by law, in order to perfect and preserve
the rights and interests granted to the Agent in the Collateral. Each
Credit Party will give the Agent notice of each office at which records
of such Credit Party pertaining to all intangible items of Collateral
are kept. Except as may be provided in such notice, the records
concerning all intangible Collateral are and will be kept at the
address shown in the respective Perfection Certificate for such Credit
Party as the principal place of business of such Credit Party.
(j) The Credit Parties are the sole and exclusive owners of
the websites and domain names listed on SCHEDULE 4.2(J) hereto and have
registered such domain names with all applicable authorities which
provides for the exclusive use by the Credit Parties of such domain
names. The websites do not contain any material, the publication of
which may result in (a) the violation of rights of any Person or (b) a
right of any Person against the publisher or distributor of such
material.
(k) The Credit Parties shall, annually by the end of the first
fiscal quarter following the previous fiscal year, provide written
notice to the Agent of all applications for registration of Patents,
Trademarks or Copyrights, to the extent such applications exist, made
during the preceding calendar year. The Credit Parties shall file and
prosecute diligently all applications for registration of Patents,
Trademarks or Copyrights now or hereafter pending that would be
necessary to the business of the Credit Parties to which any such
applications pertain, and to do all acts, in any such instance,
necessary to preserve and maintain all rights in such registered
Patents, Trademarks or Copyrights unless such Patents, Trademarks or
Copyrights are not material to the business of the Credit Parties, as
reasonably determined by the Credit Parties consistent with prudent and
commercially reasonable business practices. Any and all costs and
expenses incurred in connection with any such actions shall be borne by
the Credit Parties. Except in accordance with prudent and commercially
reasonable business practices, the Credit Parties shall not abandon any
right to file a Patent, Trademark or Copyright application or any
pending Patent, Trademark or Copyright application or any registered
Patent, Trademark or Copyright, in each case material to its business,
without the consent of the Agent.
(l) The domain name servers used in connection with the domain
names of the Credit Parties and all other relevant information
pertaining to such domain names, and the administrative contacts used
in connection with the registration of such domain names are identified
on SCHEDULE 4.2 hereto. No Credit Party will change such domain name
servers without 10 days' prior written notice to the Agent. No Credit
Party will cause a change in the identity of any domain name
administrative contact without 10 days' prior written notice to the
Agent.
(m) If any Credit Party is, now or at any time hereafter, a
beneficiary under a letter of credit in the face amount in excess of
$100,000, such Credit Party shall promptly notify the Agent thereof
and, at the request and option of the Agent, such Credit Party shall,
pursuant to an agreement in form and substance satisfactory to the
Agent, either (i) arrange for the issuer and any confirmer or other
nominated Person of such letter of credit to consent to an assignment
to the Agent of the proceeds of the letter of credit or (ii) arrange
for the Agent to become the transferee beneficiary of the letter of
credit, with the Agent agreeing, in each case, that the proceeds of the
letter of credit are to be applied by the Agent against the Obligations
as provided in this Agreement.
(n) To the extent any Credit Party shall, now or at any time
hereafter, hold or acquire any promissory note or other instrument or
tangible chattel paper (the principal amount of which is greater than
$100,000), such Credit Party will promptly notify the Lender thereof
and, at the request and option of the Lender, such Debtor will endorse,
assign and deliver such promissory note or other instrument or tangible
chattel paper to the Lender to be held as Collateral hereunder,
together with such instruments of transfer or assignment thereof
reasonably satisfactory in form and substance to the Lender.
(o) If any Credit Party shall, now or at any time hereafter,
hold or acquire any certificated securities, such Credit Party shall
forthwith endorse, assign and deliver the same to the Agent,
accompanied by such instruments of transfer or assignment duly executed
in blank as the Agent may from time to time specify; PROVIDED, however,
except with respect to entities which are disregarded entities for U.S.
income tax purposes, such Credit Party shall only be required to
endorse, assign and deliver shares representing sixty-five percent
(65%) of the Capital Stock of such Credit Party's first-tier Foreign
Subsidiaries. If any securities now or hereafter acquired by any Credit
Party are uncertificated and are issued to such Credit Party or its
nominee directly by the issuer thereof, such Credit Party shall
promptly notify the Agent thereof and, at the Agent's request and
option, pursuant to an agreement in form and substance satisfactory to
the Agent, either (i) cause the issuer to agree to comply without
further consent of such Credit Party or such nominee, at any time with
instructions from the Agent as to such securities, or (ii) arrange for
the Agent to become the registered owner of the securities. If any
securities, whether certificated or uncertificated, or other investment
property now or hereafter acquired by any Credit Party are held by such
Credit Party or its nominee through a securities intermediary or
commodity intermediary, such Credit Party shall promptly notify the
Agent thereof and, at the Agent's request and option, pursuant to an
agreement in form and substance satisfactory to the Agent, either (A)
cause such securities intermediary or (as the case may be) commodity
intermediary to agree to comply, in each case without further consent
of such Credit Party or such nominee, at any time with entitlement
orders or other instructions from the Agent to such securities
intermediary as to such securities or other investment property, or (as
the case may be) to apply any value distributed on account of any
commodity contract as directed by the Agent to such commodity
intermediary, or (B) in the case of financial assets or other
investment property held through a securities intermediary, arrange for
the Agent to become the entitlement holder with respect to such
investment property, with such Credit Party being permitted, only with
the consent of the Agent, to exercise rights to withdraw or otherwise
deal with such investment property. The Agent agrees with each Credit
Party that the Agent shall not give any such entitlement orders or
instructions or directions to any such issuer, securities intermediary
or commodity intermediary, and shall not withhold its consent to the
exercise of any withdrawal or dealing rights by such Credit Party,
unless an Event of Default has occurred and is continuing, or, after
giving effect to any such investment and withdrawal rights not
otherwise permitted by the Loan Documents, would occur. The provisions
of this paragraph shall not apply to any financial assets credited to a
securities account for which the Agent is the securities intermediary.
(p) For each deposit account or other accounts that any Credit
Party, now or at any time hereafter, opens or maintains (other than a
deposit account for which the Agent is the depositary bank), such
Credit Party shall, at the Agent's request and option, pursuant to an
agreement in form and substance satisfactory to the Agent, either (i)
cause the depositary bank or such Person to agree to comply without
further consent of such Credit Party, at any time with instructions
from the Agent to such depositary bank or such Person directing the
disposition of funds from time to time credited to or held in such
deposit account or other account, as the case may be, or (ii) arrange
for the Agent to become the customer of the depositary bank or other
Person with respect to the deposit account or other account, with such
Credit Party being permitted, only with the consent of the Agent, to
exercise rights to withdraw funds from such deposit account or other
account. The provisions of this paragraph shall not apply to (A) a
deposit account for which the Agent is in automatic control, (B) any
deposit accounts specially and exclusively used for payroll, payroll
taxes and other employee wage and benefit payments to or for the
benefit of such Credit Party's salaried employees, (C) the deposit
accounts or other accounts listed on SCHEDULE 4.2(P), and (D) deposit
accounts or local bank accounts not subject to the Agent's control so
long as (x) the aggregate amount of funds on deposit in all such local
bank accounts does not exceed $500,000, and (y) the aggregate amount of
funds on deposit in any such local bank account does not exceed
$50,000.
(q) No Credit Party holds any commercial tort claims, as
defined in Article 9 of the MA UCC, except as indicated in the
Perfection Certificates. If any of the Credit Parties shall at any time
acquire a commercial tort claim, such Credit Party shall promptly
notify the Lender in a writing signed by such Credit Party of the brief
details thereof and grant to the Lender in such writing a security
interest therein and in the proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance
reasonably satisfactory to the Lender.
(r) If any Collateral is, now or at any time hereafter, in the
possession of a bailee, the Credit Parties shall promptly notify the
Agent thereof and, at the Agent's request and option, shall promptly
obtain an acknowledgement from the bailee, in form and substance
satisfactory to the Agent, that the bailee holds such Collateral for
the benefit of the Agent and such bailee's agreement to comply, without
further consent of such Credit Party, at any time with instructions of
the Agent as to such Collateral. The Agent agrees with each Credit
Party that the Agent shall not give any such instructions unless an
Event of Default has occurred and is continuing or would occur after
taking into account any action by such Credit Party with respect to the
bailee.
(s) If any Credit Party, now or at any time hereafter, holds
or acquires an interest in any electronic chattel paper or any
"transferable record," as that term is defined in Section 201 of the
federal Electronic Signatures in Global and National Commerce Act, or
inss.16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction, such Credit Party shall promptly notify the
Agent thereof and, at the request and option of the Agent, shall take
such action as the Agent may reasonably request to vest in the Agent
control, underss.9-105 of the MA UCC, of such electronic chattel paper
or control under Section 201 of the federal Electronic Signatures in
Global and National Commerce Act or, as the case may be, ss.16 of the
Uniform Electronic Transactions Act, as so in effect in such
jurisdiction, of such transferable record. The Agent agrees with each
Credit Party that the Agent will arrange, pursuant to procedures
satisfactory to the Agent and so long as such procedures will not
result in the Agent's loss of control, for such Credit Party to make
alterations to the electronic chattel paper or transferable record
permitted under UCCss.9-105 or, as the case may be, Section 201 of the
federal Electronic Signatures in Global and National Commerce Act
orss.16 of the Uniform Electronic Transactions Act, unless an Event of
Default has occurred and is continuing or would occur after taking into
account any action by such Credit Party with respect to such electronic
chattel paper or transferable record.
(t) If any Credit Party has accounts receivable in respect of
which the account debtor is located in Minnesota, the Credit Parties
represent and warrant that the applicable Credit Party has filed and
shall file all legally-required Notice of Business Activities Reports
and comparable reports with the appropriate Governmental Authorities.
(u) Each Credit Party further agrees, upon the request of the
Agent and at the Agent's option, to take any and all other actions as
the Agent may determine to be necessary or useful for the attachment,
perfection and first priority of, and the ability of the Agent to
enforce, the Agent's security interest in any and all of the
Collateral, including, without limitation, (i) executing, delivering
and, where appropriate, filing financing statements and amendments
relating thereto, certificates and other documents or instruments as
may be necessary to enable the Agent to perfect or from time to time
renew the security interest granted hereby or by any other Loan
Document under the MA UCC, to the extent, if any, that such Credit
Party's signature thereon is required therefor, including, without
limitation, such financing statements and amendments thereto,
certificates and other documents as may be necessary to perfect a
security interest in any additional Collateral hereafter acquired by
such Credit Party or in any replacements or proceeds thereof, (ii)
causing the Agent's name to be noted as secured party on any
certificate of title for a titled good if such notation is a condition
to attachment, perfection or priority of, or ability of the Agent to
enforce, the Agent's security interest in such Collateral, (iii)
complying with any provision of any statute, regulation or treaty of
the United States as to any Collateral if compliance with such
provision is a condition to attachment, perfection or priority of, or
ability of the Agent to enforce, the Agent's security interest in such
Collateral, (iv) obtaining governmental and other third party waivers,
consents and approvals, in form and substance satisfactory to the
Agent, including, without limitation, any consent of any licensor,
lessor or other Person obligated on Collateral, (v) obtaining waivers
from mortgagees and landlords in form and substance satisfactory to the
Agent and (vi) taking all actions under any earlier versions of the MA
UCC or under any other law, as reasonably determined by the Agent to be
applicable in any relevant MA UCC or other jurisdiction, including any
foreign jurisdiction.
(v) Each Credit Party authorizes and appoints the Agent and
any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of such Credit Party or in the Agent's
own name, for the purpose of carrying out the terms of this Agreement,
to take any and all appropriate action and to execute any and all
documents and instruments that may be necessary or useful to accomplish
the purposes of this Agreement and, without limiting the generality of
the foregoing, hereby gives said attorneys the power and right, on
behalf of such Credit Party, without notice to or assent by such Credit
Party, to do the following: (i) upon the occurrence and during the
continuance of an Event of Default, generally to sell, transfer,
pledge, make any agreement with respect to or otherwise dispose of or
deal with any of the Collateral in such manner as is consistent with
the MA UCC and as fully and completely as though the Agent were the
absolute owner thereof for all purposes, and to do, at the Credit
Parties' expense, at any time, or from time to time, all acts and
things which the Agent deems necessary or useful to protect, preserve
or realize upon the Collateral and the Agent's security interest
therein, in order to effect the intent of this Agreement, all no less
fully and effectively as any Credit Party might do, including, without
limitation, (A) the filing and prosecuting of registration and transfer
applications with the appropriate federal, state or local agencies or
authorities with respect to trademarks, copyrights and patentable
inventions and processes, (B) upon written notice to such Credit Party,
the exercise of voting rights with respect to voting securities, which
rights may be exercised, if the Agent so elects, with a view to causing
the liquidation of assets of the issuer of any such securities and (C)
the execution, delivery and recording, in connection with any sale or
other disposition of any Collateral, of the endorsements, assignments
or other instruments of conveyance or transfer with respect to such
Collateral; and (ii) to the extent that such Credit Party's
authorization given in this subsection 4.2(v) is not sufficient, to
file such financing statements with respect hereto, with or without
such Credit Party's signature, or a photocopy of this Agreement in
substitution for a financing statement, as the Agent may deem
appropriate and to execute in such Credit Party's name such financing
statements and amendments thereto and continuation statements which may
require such Credit Party's signature. To the extent permitted by law,
each Credit Party hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. This power of
attorney is a power coupled with an interest and is irrevocable. The
powers conferred on the Agent hereunder are solely to protect the
interests of the Agent and the Lenders in the Collateral and shall not
impose any duty upon the Agent to exercise any such powers. The Agent
shall be accountable only for the amounts that it actually receives as
a result of the exercise of such powers, and neither it nor any of its
officers, directors, employees or agents shall be responsible to any
Credit Party for any act or failure to act, except for the Agent's own
gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction.
4.3. COLLECTION OF PROCEEDS OF ACCOUNTS RECEIVABLE.
(a) On or before the Closing Date, the Credit Parties (other
than the Canadian Borrowers) shall (i) direct all of their account
debtors and other obligors to make all payments on accounts receivable
of such Credit Parties directly to post office boxes (each a "LOCKBOX"
and collectively the "LOCKBOXES") under the control of the Cash
Management Bank and/or such other financial institutions as shall be
acceptable to the Agent, (ii) establish accounts (each a "CONTROLLED
ACCOUNT" and collectively the "CONTROLLED ACCOUNTS") in the Agent's
name for the benefit of the Borrower with the Cash Management Bank
and/or such other financial institutions as shall be acceptable to the
Agent, into which all payments received in the Lockboxes shall be
deposited, and into which such Credit Parties will immediately deposit
all payments made for inventory or services sold or rendered by such
Credit Parties and received by such Credit Parties in the identical
form in which such payments were made, whether by cash or check, (iii)
(A) to cause each financial institution other than the Cash Management
Bank with which a Lockbox and/or Controlled Account has been
established to, enter into a Lockbox Agreement and/or Control
Agreement, as applicable, confirming that the amounts on deposit in
such Lockbox and/or Controlled Account, as applicable, are the property
of and are under the control of the Agent, and that such financial
institution has no right to setoff against such Lockbox or Controlled
Account or against any other account maintained by such financial
institution into which the contents of such Controlled Account are
transferred, and (B) to direct such financial institution to cause all
funds held in such Lockbox and/or Controlled Account to be wired, or
otherwise transferred in immediately available funds in a manner
satisfactory to the Agent, no less frequently than once each day to,
and only to, a Controlled Account with the Cash Management Bank, and
(iv) to cause each of their Subsidiaries and Affiliate, and any other
Person acting for or in concert with such Credit Parties that receives
any monies, checks, notes, drafts or other payments relating to or as
proceeds of accounts receivable or any Collateral, to receive and hold
such items in trust for, and as the sole and exclusive property of, the
Agent and, immediately upon receipt thereof, shall remit the same or
cause the same to be remitted in hand to the Controlled Accounts;
PROVIDED that, for purposes of administrative convenience, the Agent
may in its reasonable discretion, permit such Credit Parties from time
to time to maintain one or more accounts with one or more financial
institutions other than the Cash Management Bank and with such maximum
cash balances as the Agent deems appropriate, and for which such Credit
Parties may, at the discretion of the Agent, be permitted to have
direct access. All funds received in the Controlled Account maintained
at the Cash Management Bank as contemplated by this Section 4.3(a) and
for which the Borrower has received credit shall be applied in
accordance with such subsection 2.7(c).
(b) On or before the Closing Date, each Canadian Borrower
shall (i) direct all of their account debtors and other obligors to
make all payments on accounts receivable of such Canadian Borrower
directly to the operating account (the "NS ACCOUNT") maintained by the
Canadian Lender and/or such other financial institutions as shall be
acceptable to the Agent; (ii) cause each of its Subsidiaries and
Affiliates, and any other Person acting for or in concert with such
Canadian Borrower that receives any monies, checks, notes, drafts or
other payments relating to or as proceeds of accounts receivable of
such Canadian Borrower, to receive and hold such items in trust for,
and as the sole and exclusive property of, the Agent and, immediately
upon receipt thereof, to remit the same or cause the same to be
remitted in hand to the NS Account. The Credit Parties acknowledge that
upon receipt by the Canadian Lender of written notice from the Agent
that an Event of Default has occurred and is continuing, the Canadian
Lender shall have the right and obligation to comply with any
instructions originated by the Agent directing disposition of funds in
such accounts without further consent of any Credit Party. Each
Canadian Borrower agrees to enter into a Lockbox Agreement, a Control
Agreement or a blocked account agreement with the Canadian Lender and
the Agent, as the Agent may reasonably request. All funds received in
the NS Account for which the Borrower has received credit shall be
applied in the manner specified in subsection 2.8(c)(iv).
(c) Each Credit Party acknowledges that the Cash Management
Bank is an affiliate of the Agent and that the Cash Management Bank and
the Agent are parties to cash management agreements that confirm that
the Agent has dominion and control over all accounts of the Credit
Parties or the Agent maintained by the Cash Management Bank, and all
funds from time to time held in such accounts. The Borrower, the Agent
and the Cash Management Bank hereby agree that the Cash Management Bank
shall comply with any instructions originated by the Agent directing
disposition of funds in such accounts without further consent of the
Borrower. Each Credit Party agrees to enter into such Lockbox
Agreements and Control Agreements with the Cash Management Bank and the
Agent as the Agent may reasonably request.
(d) The Credit Parties agree to pay all reasonable fees, costs
and expenses which the Credit Parties incur in connection with opening
and maintaining a Lockbox and Controlled Account. All of such fees,
costs and expenses which remain unpaid pursuant to any Lockbox or
Control Agreement with the Credit Parties, to the extent same shall
have been paid by the Agent hereunder, shall constitute Loans
hereunder, shall be payable to the Agent by the Credit Parties upon
demand, and, until paid, shall bear interest at the highest rate then
applicable to Loans hereunder. All checks, drafts, instruments and
other items of payment or proceeds of Collateral delivered to the
Canadian Lender, the Agent or the Cash Management Bank in kind shall be
endorsed by the Credit Parties, to the Agent, and, if that endorsement
of any such item shall not be made for any reason, the Canadian Lender,
the Agent and the Cash Management Bank are each hereby irrevocably
authorized to endorse the same on behalf of the Credit Parties. For the
purpose of this subsection 4.3(d), each Credit Party irrevocably hereby
makes, constitutes and appoints the Agent (and all Persons designated
by the Agent for that purpose, including, without limitation, the Cash
Management Bank and the Canadian Lender) as such Credit Party's true
and lawful attorney and agent-in-fact (i) to endorse the name of such
Credit Party upon said items of payment and/or proceeds of Collateral
of the Credit Parties and upon any chattel paper, document, instrument,
invoice or similar document or agreement relating to any account
receivable of the Credit Parties or goods pertaining thereto; (ii) to
take control in any manner of any item of payment or proceeds thereof;
(iii) to have access to any lockbox or postal box into which any mail
of the Credit Parties is deposited; and (iv) open and process all mail
addressed to the Credit Parties and deposited therein.
(e) The Agent (and all Persons designated by the Agent for
such purpose, including, without limitation, the Cash Management Bank)
may, at any time and from time to time after the occurrence and during
the continuance of an Event of Default, whether before or after
notification to any account debtor and whether before or after the
maturity of any of the Obligations, (i) enforce collection of any
accounts receivable or contract rights of the Credit Parties by suit or
otherwise; (ii) exercise all of the rights and remedies of the Credit
Parties with respect to proceedings brought to collect any accounts
receivable; (iii) surrender, release or exchange all or any part of any
accounts receivable of the Credit Parties, or compromise or extend or
renew for any period (whether or not longer than the original period)
any indebtedness thereunder; (iv) sell or assign any account receivable
of the Credit Parties upon such terms, for such amount and at such time
or times as the Agent deems advisable; (v) prepare, file and sign the
names of the Credit Parties on any proof of claim in bankruptcy or
other similar document against any account debtor indebted on an
account receivable of the Credit Parties; and (vi) do all other acts
and things which are necessary, in the Agent's sole discretion, to
fulfill the Obligations of the Credit Parties under this Agreement and
to allow the Agent to collect the accounts receivable. In addition to
any other provision hereof or in any of the other Loan Documents, the
Agent may at any time on or after the occurrence of an Event of
Default, at the sole expense of the Credit Parties, notify any parties
obligated on any of the accounts receivable of the Credit Parties to
make payment directly to the Agent of any amounts due or to become due
thereunder.
4.4. FIXTURES, ETC. It is the intention of the parties hereto that
(except for Collateral located on any Mortgaged Property) none of the Collateral
shall become fixtures and each Credit Party will take all such reasonable action
or actions as may be necessary to prevent any of the Collateral from becoming
fixtures. Without limiting the generality of the foregoing, each Credit Party
will, if requested by the Agent, use commercially reasonable efforts to obtain
waivers of Liens, in form satisfactory to the Agent, from each lessor of real
property on which any of the Collateral is or is to be located to the extent
requested by the Agent.
4.5. RIGHT OF AGENT TO DISPOSE OF COLLATERAL, ETC. Upon the occurrence
and during the continuance of any Event of Default, subject to the provisions of
the MA UCC or other applicable law, the Agent shall have the right to take
possession of the Collateral and, in addition thereto, the right to enter upon
any premises on which the Collateral or any part thereof may be situated and
remove the same therefrom. The Agent may require the Credit Parties to make the
Collateral (to the extent the same is moveable) available to the Agent at a
place to be designated by the Agent or transfer any information related to the
Collateral to the Agent by electronic medium. The Agent may in its discretion
require any Credit Party to assemble all or any part of the Collateral at such
location or locations within the jurisdiction(s) of such Credit Party's
principal office(s) or at such other locations as the Agent may reasonably
designate. Unless the Collateral is perishable or threatens to decline speedily
in value or is of a type customarily sold on a recognized market, the Agent will
give the Credit Parties at least seven (7) days' prior written notice of the
time and place of any public sale thereof or of the time after which any private
sale or any other intended disposition thereof is to be made. Any such notice
shall be deemed to meet any requirement hereunder or under any applicable law
(including the MA UCC) that reasonable notification be given of the time and
place of such sale or other disposition. In addition, each Credit Party waives
any and all rights that it may have to a judicial hearing in advance of the
enforcement of any of the Agent's rights and remedies hereunder.
4.6. RIGHT OF AGENT TO USE AND OPERATE COLLATERAL, ETC. Upon the
occurrence and during the continuance of any Event of Default, subject to the
provisions of the MA UCC or other applicable law, the Agent shall have the right
and power (a) to take possession of all or any part of the Collateral, and to
exclude the Credit Parties and all Persons claiming under the Credit Parties
wholly or partly therefrom, and thereafter to hold, store, and/or use, operate,
manage and control the same, and (b) to grant a license to use, or cause to be
granted a license to use, any or all of the Patents, Trademarks and Copyrights
(in the case of Trademarks, along with the goodwill associated therewith), but
subject to the terms of any licenses. Upon any such taking of possession, the
Agent may, from time to time, at the expense of the Credit Parties, make all
such repairs, replacements, alterations, additions and improvements to and of
the Collateral as the Agent may deem proper. In any such case the Agent shall
have the right to manage and control the Collateral and to carry on the business
and to exercise all rights and powers of the Credit Parties in respect thereto
as the Agent shall deem proper, including the right to enter into any and all
such agreements with respect to the operation of the Collateral or any part
thereof as the Agent may see fit; and the Agent shall be entitled to collect and
receive all rents, issues, profits, fees, revenues and other income of the same
and every part thereof. Such rents, issues, profits, fees, revenues and other
income shall be applied to pay the expenses of holding and operating the
Collateral and of conducting the business thereof, and of all maintenance,
repairs, replacements, alterations, additions and improvements, and to make all
payments which the Agent may be required or may elect to make, if any, for
taxes, assessments, insurance and other charges upon the Collateral or any part
thereof, and all other payments which the Agent may be required or authorized to
make under any provision of this Agreement (including legal costs and reasonable
attorneys' fees). The Agent shall apply the remainder of such rents, issues,
profits, fees, revenues and other income as provided in Section 4.7.
4.7. PROCEEDS OF COLLATERAL. After deducting all reasonable costs and
expenses of collection, storage, custody, sale or other disposition and delivery
(including reasonable legal costs and attorneys' fees) and all other charges
against the Collateral, the Agent shall apply the residue of the proceeds of any
such sale or disposition to the Obligations in accordance with the terms hereof
and any surplus shall be returned to the Credit Parties or to any Person or
party lawfully entitled thereto. In the event the proceeds of any sale, lease or
other disposition of the Collateral are insufficient to pay all of the
Obligations in full, the Credit Parties will be liable for the deficiency,
together with interest thereon at the Post-Default Rate, and the cost and
expenses of collection of such deficiency, including (to the extent permitted by
law), without limitation, reasonable attorneys' fees, expenses and
disbursements.
4.8. RELATION TO COLLATERAL DOCUMENTS. The provisions of this Agreement
supplement the provisions of any real estate mortgage or deed of trust granted
by any Credit Party to the Agent, for the benefit of the Lenders and the Agent,
and which secures the payment or performance of any of the Obligations. Nothing
contained in any such real estate mortgage or deed of trust shall derogate from
any of the rights or remedies of the Agent or any of the Lenders hereunder. In
addition, to the provisions of this Agreement being so read and construed with
any such mortgage or deed of trust, the provisions of this Agreement shall be
read and construed with the Collateral Documents referred to below in the manner
so indicated.
(a) PLEDGE AGREEMENTS. Concurrently herewith each Credit Party
is executing and delivering to the Agent, for the benefit of the
Lenders and the Agent, a Pledge Agreement pursuant to which such Credit
Party is pledging to the Agent (a) 100% of the shares of the Capital
Stock of its Domestic Subsidiary or Subsidiaries, and/or Audubon
Europe, as the case may be, (b) 65% of the shares of the Capital Stock
of its Foreign Subsidiary or Subsidiaries (other than Audubon Europe)
and (c) all promissory notes held by or payable to such Credit Party.
Such pledge shall be governed by the terms of such pledge agreement and
not by the terms of this Agreement.
(b) TRADEMARK AND PATENT AGREEMENTS. Concurrently herewith
each Credit Party is executing and delivering to the Agent, for the
benefit of the Lenders and the Agent, a Trademark Agreement and a
Patent Agreement pursuant to which such Credit Party is assigning to
the Agent, for the benefit of the Lenders and the Agent, certain
Collateral consisting of trademarks, service marks and trademark and
service ▇▇▇▇ rights, patent and patent rights, together with the
goodwill appurtenant thereto. The provisions of the Trademark Agreement
and the Patent Agreement are supplemental to the provisions of this
Agreement, and nothing contained in the Trademark Agreement or the
Patent Agreement shall derogate from any of the rights or remedies of
the Agent or any of the Lenders hereunder. Neither the delivery of, nor
anything contained in, the Trademark Agreement or the Patent Agreement
shall be deemed to prevent or postpone the time of attachment or
perfection of any security interest in such Collateral created hereby.
(c) COPYRIGHT MORTGAGES, ETC. Concurrently herewith each
Credit Party is also executing and delivering to the Agent, for the
benefit of the Lenders and the Agent, for recording in the United
States Copyright Office (the "COPYRIGHT OFFICE") a Memorandum of Grant
of Security Interest in Copyrights. Such Credit Party represents and
warrants to the Lenders and the Agent that such Copyright Mortgage
identifies all now existing material copyrights and other rights in and
to all material copyrightable works of such Credit Party, identified,
where applicable, by title, author and/or Copyright Office registration
number and date. Each Credit Party represents and warrants to the
Lenders and the Agent that it has registered all material copyrights
with the Copyright Office, as identified in such Copyright Mortgage.
Each Credit Party covenants, promptly following such Credit Party's
acquisition thereof, to provide to the Agent like identifications of
all material copyrights and other rights in and to all material
copyrightable works hereafter acquired by such Credit Party, to
register such copyrights with the Copyright Office and to execute and
deliver to the Agent, for the benefit of the Lenders and the Agent, a
supplemental Memorandum of Grant of Security Interest in Copyrights, in
form and substance satisfactory to the Agent, for the benefit of the
Lenders and the Agent, modified to reflect such subsequent acquisitions
and registrations.
4.9. MARSHALLING. Neither the Agent nor any Lender shall be required to
marshal any present or future collateral security (including but not limited to
the Collateral) for, or other assurances of payment of, the Obligations or any
of them or to resort to such collateral security or other assurances of payment
in any particular order, and all of the rights and remedies of the Agent or any
Lender hereunder and of the Agent or any Lender in respect of such collateral
security and other assurances of payment shall be cumulative and in addition to
all other rights and remedies, however existing or arising. To the extent that
it lawfully may, each Credit Party hereby agrees that it will not invoke any law
relating to the marshalling of collateral which might cause delay in or impede
the enforcement of the Agent's rights and remedies under this Agreement or under
any other instrument creating or evidencing any of the Obligations or under
which any of the Obligations is outstanding or by which any of the Obligations
is secured or payment thereof is otherwise assured, and, to the extent that it
lawfully may, such Credit Party hereby irrevocably waives the benefits of all
such laws.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
Each Credit Party represents and warrants to the Lenders, the Issuing
Lender and the Agent, as to itself and each other Credit Party, that:
5.1. ORGANIZATION; POWERS. Each of the Borrower and its Subsidiaries
has been duly formed or organized and is validly existing and in good standing
under the laws of its jurisdiction of organization or formation. Each of the
Borrower and its Subsidiaries has all requisite power to own its property and
authority to carry on its business as now conducted and as presently
contemplated, and is qualified to do business in, and is in good standing and
duly authorized to do business in, every jurisdiction where such qualification
is required, except where the failure to have such power or authority or to be
so qualified or in good standing, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
5.2. AUTHORIZATION; ENFORCEABILITY. The borrowing of the Loans and the
grant of security interests pursuant to the Loan Documents are within the power
and authority of the Borrower and each of its Subsidiaries, as applicable, and
have been duly authorized by all necessary action on the part of the Borrower
and each of its Subsidiaries, as applicable. This Agreement and the other Loan
Documents have been duly authorized, executed and delivered by the Borrower and
each of its Subsidiaries, as applicable and constitute legal, valid and binding
obligations of the Borrower and each of its Subsidiaries, as applicable,
enforceable in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
5.3. GOVERNMENTAL APPROVALS; NO CONFLICTS. The borrowing of the Loans
and the grant of the security interests pursuant to the Loan Documents (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority which has not been obtained, except
as disclosed on SCHEDULE 5.3, (b) will not violate any applicable law, policy or
regulation or the organizational documents of the Borrower or any of its
Subsidiaries or any order of any Governmental Authority, (c) will not violate or
result in a default under any material term of any indenture, agreement or other
instrument binding upon the Borrower or any of its Subsidiaries, or any of their
assets, or give rise to a right thereunder to require any payment to be made by
the Borrower or any of its Subsidiaries, and (d) except for the Liens created by
the Loan Documents, will not result in the creation or imposition of any Lien on
any asset of the Borrower or any of its Subsidiaries.
5.4. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.
(a) The Credit Parties have heretofore delivered to the Agent
and the Lenders the following financial statements:
(i) the consolidated balance sheets and statements of
operations and cash flows of the Borrower and its
Subsidiaries, as of and for the fiscal years ended March 31,
2000, March 31, 2001, and March 31, 2002, audited and
accompanied by an opinion of the Borrower's independent public
accountants;
(ii) the unaudited consolidated balance sheet and
statements of operations and cash flows of the Borrower and
its Subsidiaries, as of and for the fiscal year-to-date period
ended September 30, 2002, certified by a Designated Financial
Officer that such financial statements fairly present the
financial condition of the Borrower and its Subsidiaries as at
such date and the results of the operations of the Borrower
and its Subsidiaries for the period ended on such date and
that all such financial statements, including the related
schedules and notes thereto have been prepared in all material
respects in accordance with GAAP applied consistently
throughout the periods involved, except as disclosed on
SCHEDULE 5.4; and
(iii) the projected consolidated balance sheets,
statements of operations and cash flows, for the Borrower and
its Subsidiaries for the fiscal years ended March 31, 2003
through March 31, 2007.
Except as disclosed on SCHEDULE 5.4, such financial statements
(except for the projections) present fairly, in all material respects,
the respective consolidated financial position and results of
operations and cash flows of the respective entities as of such
respective dates and for such periods in accordance with GAAP, subject
to year-end audit adjustments and the absence of footnotes in the case
of such unaudited or pro forma statements. The projections were
prepared by the Borrower in good faith and were based on assumptions
that were reasonable when made.
(b) Except as disclosed on SCHEDULE 5.4, since September 30,
2002, there has been no material adverse change in the business,
assets, operations or condition, financial or otherwise, of the
Borrower and its Subsidiaries from that set forth in the September 30,
2002 financial statements referred to in clause (ii) of paragraph (a)
above.
(c) Neither the Borrower nor any of its Subsidiaries has on
the Closing Date any contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments in each case that are material,
except as referred to or reflected or provided for in the financial
statements described in this Section 5.4 or in SCHEDULE 5.4 annexed
hereto, or as otherwise permitted pursuant to this Agreement.
(d) SCHEDULE 5.4(D) hereto contains the calculation of EBITDA
and other financial information, including restructuring charges for
the fiscal quarters ending March 31, 2002, June 30, 2002 and September
30, 2002.
5.5. PROPERTIES.
(a) Each of the Borrower and its Subsidiaries has good and
marketable title to, or valid, subsisting and enforceable leasehold
interests in, all of its Properties material to its business. All
machinery and equipment of each of the Borrower and its Subsidiaries is
in good operating condition and repair, and all necessary replacements
of and repairs thereto have be made so as to preserve and maintain the
value and operating efficiency of such machinery and equipment.
(b) Set forth on SCHEDULE 5.5 hereto is a complete list of all
Patents, Trademarks and Copyrights. The Borrower and its Subsidiaries
own, or are licensed to use, all Patents, Trademarks and Copyrights and
other intellectual property material to their business (collectively,
the "PROPRIETARY RIGHTS"), and to the knowledge of the Borrower and its
Subsidiaries, the use thereof by the Borrower or any of its
Subsidiaries does not infringe upon the rights of any other Person,
except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(c) SCHEDULE 5.5 clearly identifies all Patents, Trademarks
and Copyrights that have been duly registered in, filed in or issued by
the PTO or the United States Register of Copyrights (collectively, the
"REGISTERED PROPRIETARY Rights"). The Registered Proprietary Rights
have been properly maintained and renewed in accordance with all
applicable provisions of law and administrative regulations in the
United States, as applicable. The Borrower and its Subsidiaries have
taken commercially reasonable steps to protect their Registered
Proprietary Rights and to maintain the confidentiality of all
Proprietary Rights that are not generally in the public domain.
(d) As of the Closing Date, SCHEDULE 5.5 annexed hereto
contains a true, accurate and complete list of (i) all Real Property
Assets, whether owned or leased, and (ii) all leases, subleases or
assignments of leases (together with all amendments, modifications,
supplements, renewals or extensions of any thereof) affecting each
Leasehold Property, regardless of whether the Borrower or any of its
Subsidiaries is the landlord or tenant (whether directly or as an
assignee or successor in interest) under such lease, sublease or
assignment. Except as specified in SCHEDULE 5.5, each agreement listed
in clause (ii) of the immediately preceding sentence is in full force
and effect and neither the Borrower nor any of its Subsidiaries has any
knowledge of any default that has occurred and is continuing
thereunder, and each such agreement constitutes the legal, valid and
binding obligation of the Borrower and each of its Subsidiaries, as
applicable, enforceable against the Borrower and each of its
Subsidiaries, as applicable, in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights
generally or by equitable principles.
5.6. LITIGATION AND ENVIRONMENTAL MATTERS.
(a) Except as set forth on SCHEDULE 5.6, there are no
Environmental Actions of any kind by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the
Borrower and its Subsidiaries, threatened against or affecting the
Borrower or any of its Subsidiaries that (i) if adversely determined,
could have a Material Adverse Effect or (ii) relates to this Agreement
or any other Loan Document or any transaction contemplated hereby or
thereby.
(b) The Borrower and its Subsidiaries have taken all necessary
steps to investigate the past and present condition and usage of the
Real Property Assets and the operations conducted thereon and, based
upon such diligent investigation, have determined, except as set forth
on SCHEDULE 5.6, that:
(i) none of the Borrower, its Subsidiaries or any
operator of the Real Property Assets currently or formerly
owned, leased or operated by the Borrower, any of its
Subsidiaries or any predecessor-in-interest or any operations
thereon are in violation or alleged violation, in any material
respect, of any Environmental Laws;
(ii) neither the Borrower nor any of its Subsidiaries
has become subject to any Environmental Liabilities and do not
know of any basis for any Environmental Liabilities, in each
case, which would have a Material Adverse Effect;
(iii) neither the Borrower nor any of its
Subsidiaries has received notice from any third party
including, without limitation, any Governmental Authority, (A)
that any one of them has been identified by a Governmental
Authority as a potentially responsible party under
Environmental Law; (B) that the Borrower, its Subsidiaries or
any predecessor-in-interest has generated, transported or
disposed of any Hazardous Materials at any site at which a
Governmental Authority has conducted or has ordered a party to
conduct a Remedial Action, removal or other response action
pursuant to any Environmental Law; or (C) that the Borrower or
any of its Subsidiaries is or shall be a named party to any
Environmental Action arising out of any third party's
incurrence of costs, expenses, losses or damages of any kind
whatsoever in connection with the Release of Hazardous
Materials;
(iv) (A) no portion of the Real Property Assets
currently or formerly owned, leased or operated by the
Borrower or any of its Subsidiaries has been used for the
generation, handling, processing, storage or disposal of
Hazardous Materials except in material accordance with
applicable Environmental Laws; and no underground tank or
other underground storage receptacle for Hazardous Materials
is located on any portion of the Real Property Assets
currently or formerly owned, leased or operated by the
Borrower or any of its Subsidiaries; (B) in the course of any
activities conducted by the Borrower or any of its
Subsidiaries or operators of its properties, no Hazardous
Materials have been generated or are being used on the Real
Property Assets currently or formerly owned, leased or
operated by the Borrower or any of its Subsidiaries except in
material accordance with applicable Environmental Laws; (C)
there have been no Releases (i.e. any past or present
releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or
dumping) or threatened Releases of Hazardous Materials on,
upon, into or from the properties of the Borrower or any of
its Subsidiaries, which Releases would have a material adverse
effect on the value of any of the Real Property Assets or
adjacent properties; (D) to the best knowledge of the Borrower
and its Subsidiaries, there have been no generation, storage,
disposal or Releases on, upon, from or into any real property
in the vicinity of any of the Real Property Assets which,
through soil or groundwater contamination, may have come to be
located on, and which would have a material adverse effect on
the value of, any Real Property Asset; and (E) in addition,
any Hazardous Materials that have been generated on any of the
Real Property Assets currently or formerly owned, leased or
operated by the Borrower, any of its Subsidiaries or any
predecessor-in-interest have been transported offsite only by
carriers having an identification number issued by any
Governmental Authority, treated or disposed of, to the
knowledge of the Borrower or any of its Subsidiaries, only by
treatment or disposal facilities maintaining valid permits as
required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best
knowledge of the Borrower and its Subsidiaries, operating in
material compliance with such permits and applicable
Environmental Laws; and
(v) none of the Borrower, its Subsidiaries or any of
the Real Property Assets are subject to any applicable
Environmental Law requiring the performance of Hazardous
Material site assessments, or the removal or remediation of
Hazardous Materials, or the giving of notice to any
Governmental Authority or the recording or delivery to other
Persons of an environmental disclosure document or statement
by virtue of the transactions set forth herein and
contemplated hereby, or as a condition to the recording of any
Mortgage or to the effectiveness of any other transactions
contemplated hereby.
(c) Since the Closing Date, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate,
has had, or materially increased the likelihood of having, a Material
Adverse Effect.
5.7. COMPLIANCE WITH LAWS AND AGREEMENTS. Except as set forth on
SCHEDULE 5.7, each of the Borrower and its Subsidiaries is in material
compliance with all laws, decrees, judgments, licenses, rules, regulations,
policies, permits, approvals and orders of any Governmental Authority applicable
to it, its property or the operation of its business and all material terms of
indentures, agreements and other instruments binding upon it or its property.
5.8. INVESTMENT AND HOLDING COMPANY STATUS. Neither the Borrower nor
any of its Subsidiaries is (a) an "investment company", or an "affiliated
company" or a "principal underwriter" of an "investment company", as defined in,
or subject to regulation under, the Investment Company Act of 1940, as amended,
(b) a "holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company", as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935, as amended or (c) a "bank
holding company" as defined in, or subject to regulation under, the Bank Holding
Company Act of 1956, as amended.
5.9. TAXES. Except as set forth on SCHEDULE 5.9, each of the Borrower
and its Subsidiaries has timely made, filed or caused to be filed all Tax
returns, declarations and reports required to have been filed or made and has
paid or caused to be paid all Taxes required to have been paid by it, except (a)
as of the Closing Date, Taxes that are being contested in good faith by
appropriate proceedings, so long as such contest operates to suspend the
enforcement of compliance therewith, the collection thereof and/or the
imposition of any penalty, fine or Lien with respect thereto, and for which the
Borrower or any of its Subsidiaries has set aside on its books adequate reserves
with respect thereto in accordance with GAAP, which reserves shall be acceptable
to Agent and (b) after the Closing Date, as permitted by Section 7.4. There are
no unpaid Taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction, and none of the officers of the Borrower or any of its
Subsidiaries knows of any basis for any such claim.
5.10. ERISA. Except as set forth on SCHEDULE 5.10, neither the Borrower
nor any of its Subsidiaries has any Pension Plans. No ERISA Event has occurred
or is reasonably expected to occur with respect to any Plan. Neither the
Borrower nor any of its Subsidiaries has a present intention to terminate any
Pension Plan (except in connection with the transactions described in Schedules
8.4(b) and 8.4(c)), with respect to which the Borrower or any of its
Subsidiaries would incur a cost of more than $100,000 to terminate such Plan,
including amounts required to be contributed to fund such Plan upon termination
thereof and all costs and expenses associated therewith, including, without
limitation, attorneys' and actuaries' fees and expenses in connection with such
termination and reasonable expenses and settlement or judgment costs and
attorneys' fees and expenses in connection with any litigation related to such
termination.
5.11. DISCLOSURE. As of the Closing Date, the Borrower and its
Subsidiaries have disclosed to the Agent all material agreements, instruments
and corporate or other restrictions to which the Borrower or any of its
Subsidiaries is subject after the Closing Date, and all other matters known to
the Borrower or any of its Subsidiaries, that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect. The
organizational structure of the Borrower and its Subsidiaries is as set forth on
SCHEDULE 5.12 annexed hereto. The information, reports, financial statements,
exhibits and schedules furnished at or prior to the Closing Date in writing by
or on behalf of the Borrower and its Subsidiaries to the Agent in connection
with the negotiation, preparation or delivery of this Agreement and the other
Loan Documents or included herein or therein or delivered pursuant hereto or
thereto, on the Closing Date, when taken as a whole do not contain any untrue
statement of material fact or omit to state any material fact necessary to make
the statements herein or therein, in light of the circumstances under which they
were made, not materially misleading. All written information furnished after
the Closing Date by the Borrower and its Subsidiaries to the Agent and/or the
Lenders in connection with this Agreement and the other Loan Documents and the
transactions contemplated hereby and thereby will be true, complete and accurate
in every material respect, or (in the case of pro forma information and
projections) prepared in good faith based on reasonable assumptions, on the date
as of which such information is stated or certified. There is no fact known to
the Borrower or any of its Subsidiaries that could reasonably be expected to
have a Material Adverse Effect that has not been disclosed herein, in the other
Loan Documents or in a report, financial statement, exhibit, schedule,
disclosure letter or other writing furnished to the Agent for use in connection
with the transactions contemplated hereby or thereby.
5.12. CAPITALIZATION. As of the Closing Date, the capital structure and
ownership of the Subsidiaries of the Borrower are correctly described on
SCHEDULE 5.12. As of the Closing Date, the authorized, issued and outstanding
Capital Stock of the Borrower and each of its Subsidiaries consists of the
Capital Stock described on SCHEDULE 5.12, all of which is duly and validly
issued and outstanding, fully paid and nonassessable. Except as set forth on
SCHEDULE 5.12, as of the Closing Date, (x) there are no outstanding Equity
Rights with respect to the Borrower or any of its Subsidiaries and, (y) there
are no outstanding obligations of the Borrower or any of its Subsidiaries to
repurchase, redeem, or otherwise acquire any shares of Capital Stock of or other
interest in the Borrower or any of its Subsidiaries, nor are there any
outstanding obligations of the Borrower or any of its Subsidiaries to make
payments to any Person, such as "phantom stock" payments, where the amount
thereof is calculated with reference to the fair market value or equity value of
the Borrower or any of its Subsidiaries.
5.13. SUBSIDIARIES.
(a) Set forth on SCHEDULE 5.13 is a complete and correct list
of all Subsidiaries of the Credit Parties as of the Closing Date,
together with, for each such Subsidiary, (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding ownership
interests in such Subsidiary and (iii) the nature of the ownership
interests held by each such Person and the percentage of ownership of
such Subsidiary represented by such ownership interests. Except as
disclosed in SCHEDULE 5.13, (x) each Credit Party and its respective
Subsidiaries owns, free and clear of all Liens (other than Liens
permitted hereunder), and has the unencumbered right to vote, all
outstanding ownership interests in each Person shown to be held by it
in SCHEDULE 5.13, (y) all of the issued and outstanding Capital Stock
of each such Person organized as a corporation is validly issued, fully
paid and nonassessable and (z) there are no outstanding Equity Rights
with respect to such Person.
(b) Except as set forth on SCHEDULE 8.8, as of the Closing
Date, neither the Borrower nor any of its Subsidiaries is subject to
any indenture, agreement, instrument or other arrangement containing
any provision of the type described in Section 8.8 ("RESTRICTIVE
AGREEMENTS"), other than any such provision the effect of which has
been unconditionally, irrevocably and permanently waived.
(c) Each of the Domestic Subsidiaries (other than CM Insurance
Company, Inc.) is a Guarantor and a Credit Party hereunder.
5.14. MATERIAL INDEBTEDNESS, LIENS AND AGREEMENTS.
(a) SCHEDULE 5.14 hereto contains a complete and correct list,
as of the Closing Date, of any Indebtedness or any extension of credit
(or commitment for any extension of credit) to, or guarantee by, the
Borrower or any of its Subsidiaries in an amount in excess of $100,000,
and the aggregate principal or face amount outstanding or that may
become outstanding with respect thereto is correctly described on
SCHEDULE 5.14.
(b) SCHEDULE 5.14 hereto contains a complete and correct list,
as of the Closing Date, of each Lien (other than the Liens in favor of
the Agent) securing Indebtedness of any Person and covering any
property of the Borrower or any of its Subsidiaries, and the aggregate
Indebtedness secured (or which may be secured) by each such Lien and
the Property covered by each such Lien is correctly described in the
appropriate part of SCHEDULE 5.14.
(c) SCHEDULE 5.14 hereto contains a complete and correct list,
as of the Closing Date, of each contract and arrangement to which the
Borrower or any of its Subsidiaries is a party for which breach,
nonperformance, cancellation or failure to renew would have a Material
Adverse Effect other than purchase orders made in the ordinary course
of business and subject to customary terms.
(d) To the extent requested by the Agent, true and complete
copies of each agreement listed on the appropriate part of SCHEDULE
5.14 have been delivered to the Agent, together with all amendments,
waivers and other modifications thereto. All such agreements are valid,
subsisting, in full force and effect, are currently binding and will
continue to be binding upon the Borrower and each of its Subsidiaries
that is a party thereto and, to the best knowledge of the Borrower and
its Subsidiaries, binding upon the other parties thereto in accordance
with their terms. The Borrower and its Subsidiaries are not in default
under any such agreements, the occurrence of which could have a
Material Adverse Effect.
5.15. FEDERAL RESERVE REGULATIONS. Neither the Borrower nor any of its
Subsidiaries is engaged principally or as one of its important activities in the
business of extending credit for the purpose of purchasing or carrying margin
stock (as defined in Regulation U of the Board). The making of the Loans
hereunder, the use of the proceeds thereof as contemplated hereby, and the
security arrangements contemplated by the Loan Documents, will not violate or be
inconsistent with any of the provisions of Regulations T, U, or X of the Board.
5.16. SOLVENCY. As of the Closing Date and after giving effect to the
initial Loans hereunder and the consummation of the transactions contemplated
hereby and by the Tranche B Loan Documents:
(a) the aggregate value of all properties of the Borrower and
its Subsidiaries at their present fair saleable value on a going
concern basis (i.e., the amount that may be realized within a
reasonable time, considered to be six months to one year, either
through collection or sale at the regular market value, conceiving the
latter as the amount that could be obtained for such properties within
such period by a capable and diligent businessman from an interested
buyer who is willing to purchase under ordinary selling conditions),
exceed the amount of all the debts and liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities) of
the Borrower and its Subsidiaries;
(b) the Borrower and its Subsidiaries will not, on a
consolidated basis, have an unreasonably small capital with which to
conduct their business operations as heretofore conducted; and
(c) the Borrower and its Subsidiaries will have, on a
consolidated basis, sufficient cash flow to enable them to pay their
debts as they mature.
5.17. FORCE MAJEURE. Since September 30, 2002, none of the business,
properties and other assets of the Borrower and its Subsidiaries is affected by
any fire or other casualty, strike, lockout or other labor trouble, embargo,
sabotage, confiscation, contamination, riot, civil disturbance, activity of
armed forces or act of God that has or could reasonably be expected to have a
Material Adverse Effect.
5.18. ACCOUNTS RECEIVABLE. The Agent may rely, in determining which
accounts receivable are Eligible Accounts, on all statements and representations
made by the Credit Parties with respect to such accounts receivable. Unless
otherwise indicated to the Agent in writing:
(a) Each account receivable is genuine and in all respects
what it purports to be, and it is not evidenced by a judgment;
(b) Each account receivable arises out of a completed, bona
fide sale and delivery of goods or rendition of services by a Credit
Party in the ordinary course of its business and in accordance with the
terms and conditions of all purchase orders, contracts or other
documents relating thereto and forming a part of the contract between
such Credit Party and the account debtor, and, in the case of goods,
title to the goods has passed from the Credit Party to the account
debtor;
(c) Each account receivable is for a liquidated amount
maturing as stated in the duplicate invoice covering such sale or
rendition of services, a copy of which has been furnished or is
available to the Agent;
(d) Each account receivable, and the Agent's security interest
therein, is not, and will not (by voluntary act or omission of the
Credit Parties) be in the future, subject to any offset, Lien,
deduction, defense, dispute, counterclaim or any other adverse
condition except for disputes resulting in returned goods where the
amount in controversy is deemed by the Agent to be immaterial, and each
such account receivable is absolutely owing to one of the Credit
Parties and is not contingent in any respect or for any reason;
(e) No Credit Party has made any agreement with any account
debtor for any extension, compromise, settlement or modification of any
account receivable or any deduction therefrom, except discounts or
allowances which are granted by the Credit Parties in the ordinary
course of their businesses for prompt payment and which are reflected
in the calculation of the net amount of each respective invoice related
thereto and are reflected in the Borrowing Base Certificates and
Collateral Update Certificates furnished to the Agent hereunder;
(f) To the best knowledge of the Credit Parties, the account
debtor under each account receivable had the capacity to contract at
the time any contract or other document giving rise to an account
receivable was executed and such account debtor is not insolvent; and
(g) To the best knowledge of the Credit Parties, there are no
proceedings or actions which are threatened or pending against any
account debtor which might result in any material adverse change in
such account debtor's financial condition or the collectability of any
account receivable.
5.19. LABOR AND EMPLOYMENT MATTERS.
(a) Except as set forth on SCHEDULE 5.19, (A) to the knowledge
of the Borrower or any of its Subsidiaries, no employee of the Borrower
or any of its Subsidiaries is represented by a labor union, no labor
union has been certified or recognized as a representative of any such
employee, and the Borrower and its Subsidiaries do not have any
obligation under any collective bargaining agreement or other agreement
with any labor union or any obligation to recognize or deal with any
labor union, and there are no such contracts or other agreements
pertaining to or which determine the terms or conditions of employment
of any employee of the Borrower or any of its Subsidiaries; (B) to the
knowledge of the Borrower or any of its Subsidiaries, there are no
pending or threatened representation campaigns, elections or
proceedings; (C) the Borrower and its Subsidiaries do not have
knowledge of any strikes, slowdowns or work stoppages of any kind, or
threats thereof, and no such activities occurred during the 24-month
period preceding the Closing Date; (D) neither the Borrower nor any of
its Subsidiaries has engaged in, admitted committing or been held to
have committed any unfair labor practice; and (E) to the knowledge of
the Borrower or any of its Subsidiaries, there are no controversies or
grievances between the Borrower or any of its Subsidiaries and any of
its employees or representatives thereof; in each case, which would
have a Material Adverse Effect.
(b) Except as set forth on SCHEDULE 5.19, the Borrower and its
Subsidiaries have at all times complied in all material respects, and
are in material compliance with, all applicable laws, rules and
regulations respecting employment, wages, hours, compensation,
benefits, and payment and withholding of taxes in connection with
employment.
(c) Except as set forth on SCHEDULE 5.19, to the knowledge of
the Borrower or any of its Subsidiaries, the Borrower and its
Subsidiaries have at all times complied with, and are in compliance
with, all applicable laws, rules and regulations respecting
occupational health and safety, whether now existing or subsequently
amended or enacted, including, without limitation, the Occupational
Safety & Health Act of 1970, 29 U.S.C. Section 651 et seq. and the
state analogies thereto, all as amended or superseded from time to
time, and any common law doctrine relating to worker health and safety,
except for noncompliance which could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
5.20. BANK ACCOUNTS. SCHEDULE 5.20 lists all banks and other financial
institutions at which the Borrower and each of its Subsidiaries maintains
deposits and/or other accounts as of the Closing Date, and such Schedule
correctly identifies the name and address of each depository, the name in which
the account is held, a description of the purpose of the account, and the
complete account number.
5.21. OBLIGATIONS AS SENIOR DEBT. The Obligations constitute Senior
Debt (as defined in the Senior Subordinated Note Indenture) and Designated
Senior Debt (as defined in the Senior Subordinated Note Indenture). As such, all
of the Obligations (and the Agent and Lenders) are entitled to the benefits of
each of the subordination and other provisions contained in the Senior
Subordinated Note Indenture which are available in respect of Senior Debt and
Designated Senior Debt (and to the holders thereof), and each of such
subordination and other provisions is in full force and effect and enforceable
in accordance with its terms.
5.22. SENIOR SUBORDINATED NOTE DOCUMENTS AND TRANCHE B LOAN DOCUMENTS.
The Credit Parties have heretofore furnished to the Agent true, complete and
correct copies of each of the Senior Subordinated Note Documents and the Tranche
B Loan Documents (including schedules, exhibits and annexes thereto). The Senior
Subordinated Note Documents and the Tranche B Loan Documents have not been
amended, supplemented or modified, and constitute the complete understanding
among the parties thereto in respect of the matters and transactions covered
thereby, except for amendments thereto delivered to the Agent prior to the
Closing Date. Each of the Senior Subordinated Note Documents and the Tranche B
Loan Documents is in full force and effect, and neither the Borrower nor any of
its Subsidiaries is in default under any of such documents.
5.23. CERTAIN TRANSACTIONS. Except for arm's length transactions
pursuant to which the Borrower or any of its Subsidiaries makes payments in the
ordinary course of business upon terms no less favorable than the Borrower or
any of its Subsidiaries could obtain from third parties, none of the officers,
directors, or employees of the Borrower or any of its Subsidiaries is presently
a party to any transaction with the Borrower or any of its Subsidiaries (other
than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.
5.24. COLUMBUS ▇▇▇▇▇▇▇▇ FINANCE CORPORATION. Columbus ▇▇▇▇▇▇▇▇ Finance
Corporation does not (i) own any assets other than that certain intercompany
promissory note issued by Columbus ▇▇▇▇▇▇▇▇ Limited and made to Columbus
▇▇▇▇▇▇▇▇ Finance Corporation in the aggregate face amount of C$3,750,000, (ii)
have any liabilities or (iii) engage in any business.
ARTICLE 6.
CONDITIONS
6.1. CLOSING DATE. The obligations of the Lenders to make Revolving
Loans, of the Lenders to make Term Loans, and of the Issuing Lender to issue
Letters of Credit hereunder shall not become effective until the date on which
each of the following conditions is satisfied (or waived in accordance with
Section 11.2):
(a) CORPORATE ACTION. All corporate action necessary for the
valid execution, delivery and performance by the Credit Parties of the
Loan Documents shall have been duly and effectively taken, and
satisfactory evidence thereof shall have been provided to the Agent.
(b) LOAN DOCUMENTS, ETC. Each of the Loan Documents shall have
been duly and properly authorized, executed and delivered by the
respective parties thereto and shall be in full force and effect in a
form satisfactory to the Agent.
(c) SENIOR SUBORDINATED NOTE DOCUMENTS. Certified copies of
the Senior Subordinated Note Documents as amended and in effect on the
Closing Date shall have been delivered to the Agent.
(d) TRANCHE B LOAN DOCUMENTS. Certified copies of the Tranche
B Loan Documents as amended and in effect on the Closing Date shall
have been delivered to the Agent.
(e) ORGANIZATIONAL STRUCTURE. The corporate organizational
structure, capitalization and ownership of the Credit Parties, shall be
as set forth on SCHEDULES 5.12 and 5.13 annexed hereto. The Agent shall
have had the opportunity to review, and shall be satisfied with, the
Credit Parties' state and federal tax assumptions, and the ownership,
capital, organization and structure of the Credit Parties.
(f) OFFICER'S CERTIFICATE; GOOD STANDING CERTIFICATES. The
Agent shall have received from each Credit Party a certificate as to
the good standing of each from the Secretary of State or other
appropriate official of the jurisdiction of its organization, dated no
earlier than November 1, 2002. The Agent shall also have received from
each Credit Party a certificate of an authorized officer certifying the
following attachments thereto: (a) a copy of its certificate or
articles of incorporation, partnership agreement or constitutive
documents, in each case as amended to date, certified by the Secretary
of State or other appropriate official of the jurisdiction of its
organization, (b) a true and correct copy of its by-laws, including all
amendments thereto, as applicable (c) a true and correct copy of the
resolutions of its board of directors authorizing the transactions
contemplated under this Agreement and under the other Loan Documents.
Such Officer's Certificate shall also give the name and bear a specimen
signature of each individual who shall be authorized (i) to sign the
Loan Documents, to which such Credit Party is a party on behalf of such
Credit Party; (ii) to make an Advance Request and a request for a
Letter of Credit, as applicable; and (iii) to give notices and to take
other action on such Credit Party's behalf under the Loan Documents to
which such Credit Party is a party.
(g) EXISTENCE AND GOOD STANDING. The Agent shall have received
such documents and certificates as the Agent or Special Counsel may
reasonably request relating to the organization, existence and good
standing of each Credit Party, the authorization of the transactions
contemplated hereby and any other legal matters relating to the Credit
Parties, this Agreement or the other Loan Documents, all in form and
substance reasonably satisfactory to the Agent and Special Counsel.
(h) SECURITY INTERESTS IN PERSONAL AND REAL PROPERTY. The
Agent shall have received evidence satisfactory to it that the Credit
Parties shall have taken or caused to be taken all such actions,
executed and delivered or caused to be executed and delivered all such
agreements, documents and instruments and made or caused to be made all
such filings and recordings (other than filings or recordings to be
made by the Agent on or after the Closing Date) that may be necessary
or, in the opinion of the Agent, desirable in order to create in favor
of the Agent, for the benefit of the Lenders, valid and (upon such
filing and recording) perfected First Priority security interests in
the entire personal and real property Collateral and the Canadian
Collateral.
(i) LEASES; LANDLORD'S WAIVERS AND CONSENTS. In the case of
each Material Leasehold Property existing as of the Closing Date,
copies of the lease, and all amendments thereto, between the applicable
Credit Party and the landlord or tenant party thereto, together with a
Landlord's Waiver and Consent with respect thereto and where required
by the terms of any lease, the consent of the mortgagee, ground lessor
or other party.
(j) ENVIRONMENTAL REPORTS. The Agent shall have received
reports and other information, in form, scope and substance
satisfactory to the Agent, regarding environmental matters relating to
such Real Property Assets as the Agent shall require, which reports
shall include Phase I and/or Phase II environmental assessments as
specified by the Agent for each such Real Property Asset, which conform
to the ASTM Standard Practice for Environmental Site Assessments, and
the Agent shall be satisfied with the results of such reports and other
information. Such reports shall be conducted by one or more
environmental consulting firms reasonably satisfactory to the Agent.
The Credit Parties shall deliver a similar satisfactory environmental
assessment prior to the acquisition of any future Real Property Asset.
(k) EVIDENCE OF INSURANCE. The Agent shall have received
certificates from the Credit Parties' insurance brokers that all
insurance required to be maintained pursuant to Section 7.5 is in full
force and effect and that the Agent on behalf of the Lenders has been
named as additional insured or loss payee thereunder to the extent
required under Section 7.5.
(l) NECESSARY GOVERNMENTAL PERMITS, LICENSES AND
AUTHORIZATIONS AND CONSENTS; ETC. The Credit Parties shall have
obtained all other permits, licenses, authorizations and consents from
all other Governmental Authorities and all consents of other Persons
with respect to Material Indebtedness, Liens and material agreements
listed on SCHEDULE 5.14 (and so identified thereon) annexed hereto, in
each case that are necessary or advisable in connection with the
transactions contemplated by the Loan Documents, and each of the
foregoing shall be in full force and effect, in each case other than
those the failure to obtain or maintain which, either individually or
in the aggregate, would not reasonably be expected to have a Material
Adverse Effect. No action, request for stay, petition for review or
rehearing, reconsideration or appeal with respect to any of the
foregoing shall be pending, and the time for any applicable
Governmental Authority to take action to set aside its consent on its
own motion shall have expired.
(m) TRANCHE B FINANCING. On or prior to the Closing Date, the
Agent shall have received evidence that the Tranche B Financing shall
have been consummated and that the Borrower has received net cash
proceeds from the Tranche B Financing in an aggregate amount of not
less than $65,000,000 and that the Borrower has deposited such net cash
proceeds into an account of the Borrower maintained with the Cash
Management Bank.
(n) EXISTING INDEBTEDNESS; LIENS. The Agent shall have
received evidence that all principal, interest, and other amounts owing
in respect of all Existing Indebtedness of the Credit Parties (other
than Indebtedness permitted to remain outstanding in accordance with
Section 8.1 hereof) will be repaid in full as of the Closing Date, and
that with respect to all Indebtedness permitted to remain outstanding
in accordance with Section 8.1 hereof, any defaults or events of
default existing as of the Closing Date with respect to such
Indebtedness will be cured or waived immediately following the funding
of the initial Loans. The Agent shall have received evidence that as of
the Closing Date, the Property of the Credit Parties is not subject to
any Liens (other than Liens permitted to remain outstanding in
accordance with Section 8.2 hereof).
(o) FINANCIAL STATEMENTS; PROJECTIONS. The Agent shall have
received the certified financial statements and projections referred to
in Section 5.4 hereof and the same shall not be inconsistent with the
information previously provided to the Agent.
(p) FINANCIAL OFFICER CERTIFICATE. The Agent shall have
received a certificate, dated the Closing Date and signed by a
Designated Financial Officer, confirming compliance with the conditions
set forth in paragraphs (a) and (b) of Section 6.2 on the Closing Date.
(q) NO MATERIAL ADVERSE CHANGE. There shall have occurred no
material adverse change (in the reasonable opinion of the Agent) in the
businesses, operations, properties (including tangible properties), or
conditions (financial or otherwise), assets, liabilities or income of
the Credit Parties, taken as a whole, since September 30, 2002.
(r) OPINION OF COUNSEL TO CREDIT PARTIES. The Agent shall have
received favorable written opinions (addressed to the Agent and dated
the Closing Date) of
(i) Opinion of Phillips, Lytle, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇ LLP, special counsel to the Credit Parties, covering
such matters relating to the Credit Parties, this Agreement,
the other Loan Documents or the transactions contemplated
hereby as the Agent shall reasonably request;
(ii) Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, bond counsel to the
Credit Parties regarding the Senior Indenture Notes;
(iii) Opinion of Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP,
Canadian local counsel to the Canadian Borrowers;
(iv) Opinion of Shook, Hardy & Bacon L.L.P., Missouri
local counsel to Audubon West, Inc. and LICO Steel, Inc.;
(v) Opinion of ▇▇▇▇▇ & ▇▇▇▇, Oklahoma local counsel
to Crane Equipment & Service, Inc.;
(vi) Opinion of Linklaters ▇▇▇▇▇▇, Luxembourg local
counsel to Audubon Europe;
(vii) Opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇, environmental
counsel to the Credit Parties; and
(viii) Opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Manager - Legal
Affairs of the Borrower.
(s) BORROWING BASE AND COLLATERAL UPDATE CERTIFICATES. A
Designated Financial Officer shall have executed and delivered to the
Agent a Collateral Update Certificate substantially in the form of
EXHIBIT B-2 annexed hereto, which Collateral Update Certificate shall
show Domestic Excess Availability under the Revolving Credit
Commitments of not less than $15,000,000 (after giving effect to the
payment of all sums and expenses, the issuance of all Letters of Credit
and the funding of all Loans to be paid, issued or funded on the
Closing Date).
(t) LOCKBOX ACCOUNTS/CONTROLLED ACCOUNTS. The Credit Parties
shall have established such Lockbox Accounts and Controlled Accounts
with the Cash Management Bank and such other financial institutions as
may be approved by the Agent as required in accordance with Section 4.3
hereof, and shall have entered into all Lockbox Agreements, Control
Agreements and/or blocked account agreements as shall be required by
the Agent.
(u) COMMERCIAL FINANCE EXAMINATION. The Agent shall have
received and be satisfied with the results of a commercial finance
examination of the accounts receivable and inventory of the Credit
Parties.
(v) INVENTORY APPRAISAL. The Agent shall have received and be
satisfied with the results of an appraisal of the inventory of the
Credit Parties.
(w) APPRAISAL. The Agent shall have received MAI Appraisal
dated as of a recent date for each of the Eligible Fixed Assets and
Real Property Assets in form and substance satisfactory to the Agent.
(x) SOLVENCY CERTIFICATE. The Agent shall have received an
officer's certificate of the Borrower dated as of the Closing Date as
to the solvency of the Borrower and its Subsidiaries following the
consummation of the transactions contemplated herein and in form and
substance satisfactory to the Agent.
(y) TITLE INSURANCE. The Agent shall have received a Title
Policy covering each Mortgaged Property (or commitments to issue such
policies, with all conditions to issuance of the Title Policy deleted
by an authorized agent of the Title Insurance Company) together with
proof of payment of all fees and premiums for such policies, from the
Title Insurance Company and in amounts satisfactory to the Agent,
insuring the interest of the Agent and each of the Lenders as mortgagee
under the Mortgages.
(z) FEES AND EXPENSES. The Agent and the Issuing Lender shall
have received all fees and other amounts due and payable to such Person
and Special Counsel at or prior to the Closing Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder.
(aa) OTHER DOCUMENTS. The Agent shall have received all
material contracts, instruments, opinions, certificates, assurances and
other documents as the Agent or any Lender or Special Counsel shall
have reasonably requested and the same shall be reasonably satisfactory
to each of them.
6.2. EACH EXTENSION OF CREDIT. The obligation of each Lender and the
Canadian Lender to make a Loan on the occasion of any Borrowing, and of the
Issuing Lender to issue, amend, renew or extend any Letter of Credit, is subject
to the satisfaction of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of each Credit Party set forth in this Agreement and the
other Loan Documents shall be true and correct in all material respects
on and as of the date of such Borrowing, or (as applicable) the date of
issuance, amendment, renewal or extension of such Letter of Credit,
both before and after giving effect thereto and to the use of the
proceeds thereof (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, such
representation or warranty shall be or have been true and correct as of
such specific date and PROVIDED that, to the extent any change in
circumstances expressly permitted by this Agreement causes any
representation and warranty set forth herein to no longer be true, such
representation and warranty shall be deemed modified to reflect such
change in circumstances).
(b) PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the transactions contemplated by this Agreement, the other Loan
Documents and all other documents incident thereto shall be
satisfactory in substance and in form to the Lenders and to the Agent
and the Agent's Special Counsel, and the Lenders, the Agent and such
counsel shall have received all information and such counterpart
originals or certified or other copies of such documents as the Agent
may reasonably request.
(c) NO DEFAULTS. At the time of, and immediately after giving
effect to, such Borrowing, or (as applicable) the date of issuance,
amendment, renewal or extension of such Letter of Credit, no Default
shall have occurred and be continuing.
ARTICLE 7.
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the principal
of and interest on each Loan and all fees payable hereunder shall have been paid
in full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, each Credit Party covenants and agrees
with the Agent and the Lenders that:
7.1. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Credit Parties
will furnish to the Agent and each Lender:
(a) as soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower and its Subsidiaries:
(i) consolidated and consolidating statements of
operations and cash flows of the Borrower and its Subsidiaries
for such fiscal year and the related consolidated and
consolidating balance sheets of the Borrower and its
Subsidiaries as at the end of such fiscal year, setting forth
in each case in comparative form the corresponding
consolidated and consolidating figures for the preceding
fiscal year, and consolidated statements of shareholders'
equity for such fiscal year, and
(ii) an opinion of independent certified public
accountants of recognized national standing (without a "going
concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit)
stating that the consolidated financial statements referred to
in the preceding clause (i) fairly present in all material
respects the consolidated financial condition and results of
operations of the Borrower and its Subsidiaries as at the end
of, and for, such fiscal year in accordance with GAAP.
(b) as soon as available and in any event within 45 days after
the end of each fiscal quarter of the Borrower and its Subsidiaries:
(i) consolidated and consolidating statements of
operations and the consolidated statements of cash flows of
the Borrower and its Subsidiaries for such fiscal quarter and
for the period from the beginning of the respective fiscal
year to the end of such fiscal quarter, and the related
consolidated and consolidating balance sheets of the Borrower
and its Subsidiaries as at the end of such period, setting
forth in each case in comparative form the corresponding
consolidated and consolidating figures for the corresponding
period in the preceding fiscal year, and the corresponding
figures for the budgets (except with respect to consolidating
balance sheets) most recently delivered to the Agent for such
period, and
(ii) a certificate of a Designated Financial Officer,
which certificate shall state that said consolidated and
consolidating financial statements referred to in the
preceding clause (i) fairly present in all material respects
the consolidated financial condition and results of operations
of the Borrower and its Subsidiaries, consistently applied, as
at the end of, and for, such period (subject to normal
year-end audit adjustments and the omission of footnotes) in
accordance with GAAP;
(c) as soon as available and in any event within 30 days after
the end of each of the first 11 months in each fiscal year of the
Borrower and its Subsidiaries:
(i) consolidated statements of operations and cash
flows of the Borrower and its Subsidiaries for such month and
for the period from the beginning of the respective fiscal
year to the end of such month, and the related consolidated
balance sheets of the Borrower and its Subsidiaries as at the
end of such period, setting forth in each case in comparative
form the corresponding consolidated figures for the
corresponding period in the preceding fiscal year, and the
corresponding figures for the budgets most recently delivered
to the Agent for such period, and
(ii) a certificate of a Designated Financial Officer,
which certificate shall state that said consolidated financial
statements referred to in the preceding clause (i) fairly
present in all material respects the consolidated financial
condition and results of operations of the Borrower and its
Subsidiaries, consistently applied, as at the end of, and for,
such period (subject to normal year-end audit adjustments and
the omission of footnotes) in accordance with GAAP;
(d) as soon as available and in any event within 30 days after
the beginning of each fiscal year of the Borrower and its Subsidiaries,
statements of budgeted consolidated and consolidating income and the
consolidated statements of cash flows for the Borrower and its
Subsidiaries for each fiscal month in such period and a budgeted
consolidated balance sheet of the Borrower and its Subsidiaries as of
the last day of each fiscal month in such period, and the projected
Domestic Excess Availability as of the last day of each fiscal month in
such period, together with supporting assumptions which shall be
reasonable when made, all prepared in good faith in reasonable detail
and consistent with the Borrower's past practices in preparing budgets
and otherwise reasonably satisfactory in scope to the Agent;
(e) as soon as available and in any event (i) within 90 days
after the end of each fiscal year, a Compliance Certificate duly
executed by a Designated Financial Officer with respect to the annual
financial statements delivered pursuant to subsection (a)(i) above,
(ii) within 45 days after the end of each fiscal quarter of the
Borrower and its Subsidiaries, a Compliance Certificate duly executed
by a Designated Financial Officer with respect to the quarterly
financial statements delivered pursuant to subsection 7.1(b)(i) above,
and (iii) within 30 days after the end of each fiscal month of the
Borrower and its Subsidiaries, a Compliance Certificate duly executed
by a Designated Financial Officer with respect to the monthly financial
statements delivered pursuant to subsection 7.1(c)(i) above;
(f) as soon as available and in any event no later than 1:00
p.m. (Boston time) on Wednesday of each week (or, if such day is not a
Business Day, on the preceding Business Day)(or with such greater
frequency as the Agent may reasonably request), a Borrowing Base
Certificate in the form attached hereto as EXHIBIT B-1, with respect to
the Collateral of the Borrower as of the close of business on the
previous Friday (or, if such day is not a Business Day, on the
preceding Business Day) (provided that inventory and the total
ineligible accounts may be calculated as of the close of business on
the last Business Day of the previous month), together with such other
information relating to the Collateral as the Agent shall reasonably
request, and accompanied by such supporting detail and documentation as
the Agent shall reasonably request;
(g) as soon as available and in any event within thirty (30)
days after the end of each month with respect to such month (or more
frequently if requested by the Agent), (i) a Borrowing Base Certificate
in the form attached hereto as EXHIBIT B-1 (ii) a Collateral Update
Certificate in the form attached hereto as EXHIBIT B-2, (iii) an
Accounts Receivable/Loan Reconciliation Report in the form attached
hereto as EXHIBIT B-3, (iv) a summary of inventory by type and
location, (v) an accounts receivable aging report (which report shall
contain amounts denominated in U.S. Dollars), and (vi) such other
information relating to the Collateral as the Agent shall reasonably
request, in each case, accompanied by such supporting detail and
documentation as the Agent shall reasonably request;
(h) as soon as available and in any event no later than 1:00
p.m. (Boston time) on each day that the Borrower makes any request for
any Borrowing hereunder, an Advance Request in the form attached hereto
as EXHIBIT B-4;
(i) as soon as available and in any event no later than 45
days after the last Business Day of each calendar quarter, a Term Loan
Borrowing Base Certificate in the form attached hereto as EXHIBIT B-5,
together with an updated list of Eligible Fixed Assets and such other
information relating to the Term Loan Borrowing Base Collateral as the
Agent shall reasonably request, and accompanied by such supporting
detail and documentation as the Agent shall reasonably request;
(j) as soon as available and in any event within ten (10) days
after the end of each month (or more frequently if requested by the
Agent), a rolling thirteen (13) week cash flow projection, of the
Borrower and its Subsidiaries in a form and in such details as is
reasonably satisfactory to the Agent, updating the prior cash flow
projection and, for prior periods ending up to one week prior to the
date of the report, showing actual performance and any variances of
actual performance from projected performance;
(k) promptly upon receipt thereof, copies of all management
letters and accountants' letters received by the Credit Parties;
(l) promptly after submission to any Governmental Authority,
all documents and information furnished to such Governmental Authority
in connection with any investigation of any Credit Party other than
routine inquiries by such Governmental Authority;
(m) as soon as possible and in any event within five (5) days
after execution, receipt or delivery thereof, copies of any material
notices that any Credit Party executes or receives in connection with
any Material Indebtedness (including, without limitation, the Senior
Subordinated Notes and the Tranche B Loans);
(n) as soon as possible and in any event within five (5) days
after execution, receipt or delivery thereof, copies of any material
notices that any Credit Party executes or receives in connection with
the sale or other Disposition of the Capital Stock of, or all or
substantially all of the assets of, any Credit Party;
(o) promptly after the sending or filing thereof, copies of
all statements, reports and other information any Credit Party sends to
any holders of its Indebtedness or its securities or files with the SEC
or any national (domestic or foreign) securities exchange; and
(p) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Credit Parties, or compliance with the terms of this
Agreement, as the Agent or any Lender may reasonably request.
7.2. NOTICES OF MATERIAL EVENTS. The Credit Parties will furnish to the
Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default hereunder or under the
Tranche B Financing Agreement or Tranche B Canadian Agreement;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting any Credit Party or Affiliate (i) with respect to
any claim in excess of $100,000 or (ii) that, if adversely determined,
could reasonably be expected to have a Material Adverse Effect;
(c) the occurrence of any ERISA Event related to the Plan of
any Credit Party or knowledge after due inquiry of any ERISA Event
related to a Plan of any other ERISA Affiliate that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Credit Parties in an aggregate
amount exceeding $100,000; and
(d) any other development that has, or could reasonably be
expected to have, a Material Adverse Effect.
Each notice delivered under this Section 7.2 shall be accompanied by a statement
of a Designated Financial Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.
7.3. EXISTENCE; CONDUCT OF BUSINESS. The Borrower and each of its
Subsidiaries shall do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its legal existence and the rights,
licenses, permits, privileges and franchises material to the conduct of its
business; PROVIDED that the foregoing shall not prohibit any merger,
consolidation, liquidation, dissolution or any discontinuance or sale of such
business permitted under Section 8.4.
7.4. PAYMENT OF OBLIGATIONS. The Borrower and each of its Subsidiaries
shall pay its obligations, including Tax liabilities, in an amount in excess of
$100,000 before the same shall become delinquent or in default, except where (a)
the validity or amount thereof is being contested in good faith by appropriate
proceedings, so long as such contest operates to suspend the enforcement of
compliance therewith, the collection thereof and/or the imposition of any
penalty, fine or Lien with respect thereto and (b) such Person has set aside on
its books adequate reserves with respect thereto in accordance with GAAP, which
reserves shall be acceptable to Agent.
7.5. MAINTENANCE OF PROPERTIES; INSURANCE. The Borrower and each of its
Subsidiaries shall (a) keep and maintain all property material to the conduct of
its business in good working order and condition, ordinary wear and tear
excepted, and (b) maintain insurance, with financially sound and reputable
insurance companies, as may be required by law and such other insurance in such
amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations, including, without limitation, business interruption and product
liability insurance. Such insurance shall be in such minimum amounts that such
Person will not be deemed a co-insurer under applicable insurance laws,
regulations and policies and otherwise shall be in such amounts, contain such
terms, be in such forms and be for such periods as may be reasonably
satisfactory to the Agent. Without limiting the generality of the foregoing, the
Borrower and each of its Subsidiaries will maintain or cause to be maintained
replacement value casualty insurance on the Collateral under such policies of
insurance, in each case with such insurance companies, in such amounts, with
such deductibles, and covering such terms and risks as are at all times
satisfactory to the Agent in its commercially reasonable judgment. All general
liability and other liability policies with respect to the Credit Parties shall
name the Agent for the benefit of the Lenders as an additional insured
thereunder as its interests may appear, and all business interruption and
casualty insurance policy shall contain a loss payable clause or endorsement,
satisfactory in form and substance to the Agent, that names the Agent for the
benefit of the Lenders as the loss payee thereunder. All policies of insurance
shall provide for at least 30 days prior written notice to the Agent of any
modifications or cancellation of such policy.
7.6. BOOKS AND RECORDS; INSPECTION RIGHTS. The Borrower and each of its
Subsidiaries shall keep proper books of record and account in which entries are
made of all dealings and transactions in relation to its business and activities
which fairly record such transactions and activities. The Borrower and each of
its Subsidiaries shall permit any representatives designated by the Agent or any
Lender to visit and inspect its properties, to examine and make extracts from
its books and records, to conduct audits, physical counts, valuations,
appraisals or examinations and verifications (whether by internal commercial
finance examiners or independent auditors) of all Collateral and the Borrower
and each of its Subsidiaries, and to discuss its affairs, finances and condition
with its officers and independent accountants at any reasonable times and as
frequently as the Agent deems appropriate; PROVIDED that, so long as no Default
has occurred and is continuing, all such visits shall be on reasonable prior
notice, at reasonable times during regular business hours; and PROVIDED further
that after the occurrence and during the continuance of any Default, the Agent
and the Lenders may visit at any reasonable times. The Borrower shall reimburse
the Agent and the Lenders for all examination and inspections costs, internal
costs at the Agent's customary rates in effect from time to time, plus all
out-of-pocket expenses incurred in connection with such audits, physical counts,
valuations, appraisals or examinations. Each of the Credit Parties authorizes
the Agent and, if accompanied by the Agent, the Lenders to communicate directly
with such Credit Party's independent certified public accountants and authorizes
such accountants to disclose to the Agent and the Lenders any and all financial
statements and other supporting financial documents and schedules including
copies of any management letters with respect to the business, financial
condition and other affairs of the Borrower or any of its Subsidiaries. At the
request of the Agent, each Credit Party shall deliver a letter addressed to such
accountants instructing them to comply with the provisions of this Section 7.6.
The Credit Parties, in consultation with the Agent, will arrange for a meeting
to be held at least once every year (and after the occurrence and during the
continuance of a Default, more frequently, if requested by the Agent or the
Required Lenders) with the Lenders and the Agent hereunder at which the business
and operations of the Credit Parties are discussed. The Credit Parties will
permit independent appraisers and environmental consultants selected by the
Agent to visit the properties of the Credit Parties and perform appraisals and
examinations of the machinery, equipment and Real Property Assets of the Credit
Parties at such times and with such frequencies as the Agent shall reasonably
request; PROVIDED that, so long as no Default has occurred and is continuing,
the Agent shall not request that the equipment or Real Property Assets of the
Credit Parties be appraised or examined by independent appraisers or
environmental consultants more frequently than once every year commencing on the
first anniversary of the Closing Date. The Borrower shall reimburse the Agent
and the Lenders for all fees, costs and expenses charged by such independent
appraisers and environmental consultants for each such appraisal and
examination.
7.7. FISCAL YEAR. To enable the ready and consistent determination of
compliance with the covenants set forth in Section 8.10 hereof, the Borrower and
each of its Subsidiaries shall maintain their current fiscal year and current
method of determining the last day of the first three fiscal quarters in each
fiscal year.
7.8. COMPLIANCE WITH LAWS. The Borrower and each of its Subsidiaries
shall comply in all material respects with (i) all permits, licenses and
authorizations, including, without limitation, environmental permits, licenses
and authorizations, issued by a Governmental Authority, (ii) all laws, rules,
regulations and orders including, without limitation, Environmental Laws, of any
Governmental Authority and (iii) all contractual obligations, in each case
applicable to it or its property.
7.9. USE OF PROCEEDS. The proceeds of the Loans will be used only for
(i) the refinancing of Existing Indebtedness, (ii) fees and expenses incurred in
connection with the transactions contemplated by this Agreement, the Tranche B
Financing Agreements and (iii) for general corporate and working capital
purposes of the Credit Parties. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations T, U and X.
7.10. CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES. Each Credit Party
will, and will cause each of its Subsidiaries to, take such action from time to
time as shall be necessary to ensure that the percentage of the issued and
outstanding shares of Capital Stock of any class or character owned by it in any
of its Subsidiaries on the Closing Date is not at any time decreased, other than
by reason of transfers to another Credit Party.
7.11. ERISA. The Credit Parties (a) will maintain, and cause each ERISA
Affiliate to maintain, each Plan in material compliance with the provisions of
such Plan and all applicable requirements of ERISA and of the Code and with all
applicable rulings and regulations issued under the provisions of ERISA and of
the Code and (b) will not and, to the extent authorized, will not permit any of
the ERISA Affiliates to (i) engage in any transaction with respect to any Plan
which would subject any Credit Party to either a civil penalty assessed pursuant
to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code, (ii)
fail to make full payment when due of all amounts which, under the provisions of
any Plan, any Credit Party or any ERISA Affiliate is required to pay as
contributions thereto, or permit to exist any accumulated funding deficiency (as
such term is defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, with respect to any Pension Plan or (iii) fail to make
any payments to any Multiemployer Plan that any Credit Party or any of the ERISA
Affiliates may be required to make under any agreement relating to such
Multiemployer Plan or any law pertaining thereto.
7.12. ENVIRONMENTAL MATTERS; REPORTING AND ASSESSMENTS.
(a) The Credit Parties will observe and comply in all material
respects with, and cause each of their Subsidiaries to observe and
comply in all material respects with, all Environmental Laws and all
permits and authorizations issued by any Governmental Authority under
Environmental Law (collectively, "ENVIRONMENTAL PERMITS"). The Credit
Parties will give the Agent prompt written notice of (a) any presence,
Release or threat of Release of any Hazardous Materials at or from any
Real Property Asset, (b) any actual or alleged violation as to any
Environmental Law or Environmental Permit by any Credit Party, (c) the
commencement of any Environmental Action or Remedial Action or other
communication to it or of which it has knowledge, or with the exercise
of due diligence, should have had knowledge regarding the presence or
suspected presence of any Hazardous Material at, on about, under,
within or in connection with any Real Property Asset or any migration
thereof from or to such Real Property Asset, (d) the discovery of any
occurrence or condition on any real property adjoining or in the
vicinity of any Real Property Asset that could cause such Real Property
Asset or any part thereof to be subject to any restrictions on
ownership, occupancy, transferability, or use, or subject the owner or
any Person having any interest in such Real Property Asset to any
liability, penalty, or disability under any Environmental Law, and (e)
the receipt of any notice or discovery of any information regarding any
actual, alleged, or potential Release, disposal or any other presence
or existence of any Hazardous Material at, on, about, under, within,
near or in connection with any Real Property Asset; in each case, which
(x) would have a material adverse effect on any Environmental Permits
held by any Credit Party, (y) will, or is likely to, have a Material
Adverse Effect, or (z) will require a material expenditure by such
Credit Party to cure such alleged problem or violation.
(b) The Agent may, from time to time, in its reasonable
discretion, obtain one or more environmental assessments or audits of
any Real Property Asset prepared by a hydrogeologist, an independent
engineer or other qualified consultant or expert approved by the Agent
to evaluate or confirm (a) whether any Hazardous Materials are present
in the soil, sediment, air or water at such Real Property Asset and (b)
whether the use and operation of such Real Property Asset complies with
all Environmental Laws; PROVIDED that, so long as no Default has
occurred and is continuing, the Agent shall not request any such
environmental assessments or audits of any Real Property Asset more
frequently than once every other year. Environmental assessments may
include, without limitation, detailed visual inspections of such Real
Property Asset, including any and all storage areas, storage tanks,
drains, dry ▇▇▇▇▇ and leaching areas, and the taking of soil samples,
surface water samples and ground water samples, as well as such other
investigations or analyses as the Agent deems appropriate. Subject to
Section 7.6 all such environmental assessments shall be conducted and
made at the sole expense of the Borrower.
7.13. MATTERS RELATING TO ADDITIONAL REAL PROPERTY COLLATERAL.
(a) In the event that any Credit Party acquires any Material
Owned Property after the Closing Date that the Agent determines is an
Additional Mortgaged Property or in the event that the Agent determines
that any Real Property Asset existing on the Closing Date has become an
Additional Mortgaged Property after the Closing Date, the Borrower
shall deliver to the Agent, as soon as practicable after the Agent has
notified the Borrower that such Real Property Asset is an Additional
Mortgaged Property, fully executed and notarized Mortgages ("ADDITIONAL
MORTGAGES"), in proper form for recording in all appropriate places in
all applicable jurisdictions, encumbering the interest of the
applicable Credit Party in such Additional Mortgaged Property, together
with mortgagee title insurance policies or commitments therefor, and
copies of all surveys, deeds, title exception documents, flood hazard
certificates and other documents as the Agent may reasonably require,
together with copies of all deeds with respect to such Additional
Mortgaged Property.
(b) In the event that any Credit Party enters into any lease
with respect to any Material Leasehold Property after the Closing Date,
the Borrower shall deliver to the Agent copies of the lease, and all
amendments thereto, between the Credit Party and the landlord or
tenant, together with a Landlord's Waiver and Consent with respect
thereto and where required by the terms of any such lease, the consent
of the mortgagee, ground lessor or other party.
(c) If requested by the Agent, the Credit Parties shall permit
an independent real estate appraiser satisfactory to the Agent, upon
reasonable notice, to visit and inspect any Additional Mortgaged
Property for the purpose of preparing an appraisal of such Additional
Mortgaged Property satisfying the requirements of all applicable laws
and regulations (in each case to the extent required under such laws
and regulations as determined by the Agent in its sole discretion).
7.14. CASH DEPOSITS/BANK ACCOUNTS. The Credit Parties shall take all
actions necessary to maintain, preserve and protect the rights and interests of
the Agent with respect to all cash deposits of the Credit Parties and all other
proceeds of Collateral and shall not, without the Agent's prior written consent,
open any deposit or other bank account, or instruct any account debtor to make
payment to any account other than to an established dominion account, Lockbox
Account or other Controlled Account under the Agent's control; PROVIDED that so
long as no Default or Event of Default shall have occurred and be continuing,
the Credit Parties shall be permitted to maintain (i) payroll accounts and other
accounts not subject to the Agent's control so long as the aggregate amount of
funds on deposit in all such payroll accounts does not materially exceed
estimated payroll for the next payroll period, and (ii) local bank accounts not
subject to the Agent's control so long as (x) the aggregate amount of funds on
deposit in all such local bank accounts does not exceed $500,000, and (y) the
aggregate amount of funds on deposit in any such local bank account does not
exceed $50,000.
7.15. NEW GUARANTORS. The Credit Parties will cause each Domestic
Subsidiary created, acquired or otherwise existing on or after the Closing Date
to immediately become a Guarantor and a Credit Party hereunder and shall execute
and deliver, and cause such Domestic Subsidiary to execute and deliver, to the
Agent, for the benefit of the Agent and the Lenders, all such Loan Documents and
other documents, and take all such actions, and cause such Domestic Subsidiary
to take all such actions, as may be required by the Agent in connection
therewith.
7.16. PUNCTUAL PAYMENT. The Credit Parties will duly and punctually pay
or cause to be paid the principal and interest on the Loans, all Reimbursement
Obligations, all used fees, all letter of credit fees incurred hereunder, and
all other amounts provided for in this Agreement and the other Loan Documents to
which the Borrower or any of its Subsidiaries is a party, all in accordance with
the terms of this Agreement and such other Loan Documents.
7.17. FURTHER ASSURANCES. The Credit Parties will, and will cause each
of their Subsidiaries to, take such action and execute, acknowledge and deliver,
at their sole cost and expense, such agreements, instruments or other documents
as the Agent may require from time to time in order (a) to carry out more
effectively the purposes of this Agreement and the other Loan Documents, (b) to
subject to valid and perfected Liens any of the Collateral or any other property
of any Credit Party and its Subsidiaries, (c) to establish and maintain the
validity and effectiveness of any of the Loan Documents and the validity,
perfection and First Priority of the Liens intended to be created thereby, and
(d) to better assure, convey, grant, assign, transfer and confirm unto the Agent
and each Lender the rights now or hereafter intended to be granted to it under
this Agreement or any other Loan Document.
7.18. POST-CLOSING COVENANTS.
(a) The Credit Parties will, within 20 days of the Closing
Date, deliver to the Agent a pledge and security agreement, in form and
substance satisfactory to the Agent, duly executed by certain of the
Credit Parties, with respect to the pledge of the common stock of each
of the following Subsidiaries of such Credit Parties:
(i) Societe d'Exploitation des Raccords Gautier;
(ii) Univeyor Electronic A/S;
(iii) Columbus ▇▇▇▇▇▇▇▇ de Mexico, S.A. de C.V.; and
(iv) Yale Industrial Products GmbH.
(b) The Credit Parties will, within 20 days of the Closing
Date, deliver to the Agent an opinion from each of the following
counsel to such Credit Parties, in form and substance satisfactory to
the Agent, as to such matters as the Agent may reasonably request:
(i) ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇, French counsel to Societe
d'Exploitation des Raccords Gautier;
(ii) Advokatfirmaet ▇▇▇▇▇ ▇▇▇▇▇▇▇, Danish counsel to
Univeyor Electronic A/S;
(iii) ▇▇▇▇▇▇▇ Lumen, Mexican counsel to Columbus
▇▇▇▇▇▇▇▇ De Mexico, S.A. de C.V.; and
(iv) ▇▇▇▇▇▇▇ & Partners LLP, German counsel to Yale
Industrial Products GmbH.
(c) The Credit Parties will, within 90 days of the Closing
Date, take such actions as may be necessary to cause the Agent's lien
on each titled motor vehicle (the fair market value of which is greater
than $5,000) of such Credit Parties to be noted on all certificates of
title with respect to such vehicle, including without limitation filing
applications for new certificates of title with respect thereto.
(d) The Credit Parties will, and will cause each of their
Subsidiaries, within 14 days of the Closing Date, to consummate each of
the transactions contemplated in Schedule 8.4(c) with respect to each
of Spreckels Land Company, Inc., Spreckels Development Company, Inc.,
Spreckels Water Company, Inc. and Spreckels Consolidated Industries,
Inc.
ARTICLE 8.
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full
and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, each Credit Party covenants and agrees
with the Agent and the Lenders that:
8.1. INDEBTEDNESS. The Credit Parties will not, and will not permit any
of their Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness created hereunder and under the Canadian
Facility;
(b) Existing Indebtedness on the Closing Date which is set
forth in SCHEDULE 8.1 and has been designated on such schedule as
Indebtedness that will remain outstanding following the funding of the
initial Loans, and any extension, renewal, refunding or replacement of
any such Indebtedness; PROVIDED, however, that (i) such extension,
renewal, refunding or replacement is pursuant to terms that are not
less favorable to the Credit Parties and the Lenders than the terms of
the Indebtedness being extended, renewed, refunded or replaced and (ii)
after giving effect to such extension, renewal, refunding or
replacement, the amount of such Indebtedness is not greater than the
amount of Indebtedness outstanding immediately prior to such extension,
renewal, refunding or replacement;
(c) Intercompany loans among the Borrower and Credit Parties
which are Guarantors; PROVIDED, that (i) the Investment corresponding
to such Indebtedness is permitted pursuant Section 8.5 hereof, (ii)
such intercompany loan is evidenced by a promissory note, (iii) such
promissory note is pledged to the Agent pursuant to the terms
hereunder, and (iv) there are no restrictions whatsoever on the ability
of the applicable Credit Party to repay such loan;
(d) Guarantees permitted under section 8.3;
(e) Indebtedness of any Foreign Subsidiary of the Borrower
(other than the Canadian Borrowers) in an aggregate amount for all such
Indebtedness not to exceed the local currency equivalent (as determined
by the Agent from time by reference to the Exchange Rate) of
$20,000,000 in the aggregate at any one time outstanding; PROVIDED that
(i) the proceeds of such Indebtedness are transferred to the Borrower
and applied to the repayment of the Revolving Loans, (ii) such
Indebtedness is incurred solely by such Foreign Subsidiary, (iii) such
Indebtedness is either unsecured or secured only by the assets of such
Foreign Subsidiary, and (iv) no guaranty or other credit support of any
kind is provided by any Person (including, without limitation, any
Credit Party) of or for such Indebtedness or any holder thereof; and
PROVIDED, further, that the Borrower shall notify the Agent in writing
in advance prior to permitting any such Foreign Subsidiary to incur any
Indebtedness under this Section 8.1(e); and
(f) Indebtedness of any Credit Party to the Tranche B Lenders
in an aggregate principal amount not to exceed $70,000,000 under the
Tranche B Financing Agreements as in effect as of the Closing Date.
8.2. LIENS. The Credit Parties will not, and will not permit any of
their Subsidiaries to, create, incur, assume or permit to exist any Lien on any
Property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except (the following being called "PERMITTED LIENS"):
(a) Liens created hereunder and under the other Loan
Documents;
(b) any Lien on any property or asset of any Credit Party
existing on the Closing Date and set forth in SCHEDULE 8.2 (excluding,
however, following the making of the initial Loans hereunder, the Liens
in favor of any Person other than the Agent securing Indebtedness not
designated on said schedule as Indebtedness to remain outstanding
following the funding of the initial Loans), but not the extension of
coverage thereof to other property or the extension of maturity,
refinancing or other modification of the terms thereof or the increase
of the Indebtedness secured thereby;
(c) Liens imposed by any Governmental Authority for Taxes,
assessments or charges in respect of obligations not yet delinquent or
in the case of Taxes and assessments on Properties other than Mortgaged
Properties not exceeding $250,000 in the aggregate more than 90 days
overdue which are being contested in good faith and by appropriate
proceedings, so long as such contest operates to suspend the
enforcement of compliance with and/or collection thereof, and so long
as adequate reserves with respect thereto are maintained on the books
of the applicable Credit Party in accordance with GAAP and which
reserves shall be acceptable to the Agent;
(d) landlords', carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens on Properties other than
Mortgaged Properties, and vendors' Liens imposed by statute or common
law not securing the repayment of Indebtedness, arising in the ordinary
course of business which are not overdue for a period of more than 60
days or which are being contested in good faith and by appropriate
proceedings, promptly initiated and diligently conducted, and a reserve
or other appropriate provision, if any, as shall be required by GAAP
shall have been made therefor, and so long as such contest operates to
suspend the enforcement of compliance with and/or collection thereof,
and Liens securing judgments (including, without limitation,
pre-judgment attachments) the existence of which do not result in an
Event of Default under Section 9.1(j) hereof;
(e) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation and
pledges or deposits to secure the performance of bids, tenders, trade
contracts (other than for borrowed money), leases (other than capital
leases), utility purchase obligations, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(f) encumbrances on any Real Property Asset other than a
Mortgaged Property consisting of easements, rights-of-way, zoning
restrictions, easements, licenses, restrictions and other similar
encumbrances incurred in the ordinary course of business, restrictions
on the use of Property or minor imperfections in title thereto which,
in the aggregate, are not material in amount, and which do not, in the
aggregate, materially detract from the value of such Real Property
Asset or materially interfere with the ordinary conduct of the business
of any Credit Party;
(g) Liens consisting of bankers' liens and rights of setoff,
in each case, arising by operation of law, and Liens on documents
presented in letter of credit drawings;
(h) the replacement, extension or renewal of any Lien
permitted by clauses (b) and (g) of this Section 8.2 upon or in the
same property theretofore subject thereto in connection with the
replacement, extension or renewal (without increase in the amount or
any change in any direct or contingent obligor) of the Indebtedness
secured thereby; and
(i) Liens in favor of Tranche B Lenders which are junior in
priority to the Liens in favor of the Agent under the Loan Documents.
8.3. CONTINGENT LIABILITIES. The Credit Parties will not, and will not
permit any of their Subsidiaries to, Guarantee the Indebtedness or other
obligations of any Person, or Guarantee the payment of dividends or other
distributions upon the stock of, or the earnings of, any Person, except:
(a) endorsements of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(b) Guarantees and letters of credit in effect on the Closing
Date which are disclosed in SCHEDULE 8.1, and any replacements thereof
in amounts not exceeding such Guarantees;
(c) obligations in respect of Letters of Credit; and
(d) guarantees issued pursuant to the terms of this Agreement
and the Tranche B Financing Agreements.
8.4. FUNDAMENTAL CHANGES; ASSET SALES.
(a) The Credit Parties will not, and will not permit any of
their Subsidiaries to, enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), except that any Credit
Party may, so long as no Default or Event of Default shall have
occurred or be continuing or result therefrom, be merged or combined
with or into any other Credit Party, PROVIDED that if such merger
involves the Borrower or a Guarantor, (x) the Borrower or such
Guarantor shall be the surviving entity and (y) no Change of Control
shall result therefrom. The Credit Parties will not form any Subsidiary
without the prior written consent of the Agent. The Credit Parties will
not acquire any business or property from, or Capital Stock of, or
other equity interests in, or be a party to any acquisition of, any
Person except for purchases of property to be used in the ordinary
course of business, Investments permitted under Section 8.5 and Capital
Expenditures.
(b) The Credit Parties will not, and will not permit any of
their Subsidiaries to, convey, sell, lease, transfer or otherwise
dispose (including any Disposition) of, in one transaction or a series
of transactions, any part of their business or property, whether now
owned or hereafter acquired (including, without limitation, receivables
and leasehold interests), except:
(i) obsolete property (including leasehold
interests), tools or equipment no longer used or useful in
their business, or worn out or in need of replacement and that
are replaced with assets of reasonably equivalent value or
utility or which are otherwise productive or useful in the
conduct of such Credit Party's business;
(ii) any inventory or other property sold or disposed
of in the ordinary course of business and on ordinary business
terms;
(iii) sales of property from a Credit Party to
another Credit Party permitted pursuant to Section 8.7;
(iv) sales by the Borrower or any of its Subsidiaries
of assets listed on SCHEDULE 8.4(B) hereto in the aggregate
amount for all such sales not to exceed $5,000,000 so long as
(A) no Default or Event of Default has occurred and is
continuing or would result from the sale of any such asset,
(B) each such sale is on arm's-length terms for fair and
reasonable consideration, (C) not less than 85% of the
proceeds from any such sale is in the form of cash, (D) the
Net Cash Payments received from each such sale are not less
than, with respect to each such asset, the amount
corresponding to such asset set forth on such SCHEDULE 8.4(B)
and (E) the Net Cash Payments of each such sale are applied in
accordance with Section 2.8; and
(v) sales by the Borrower or any of its Subsidiaries
of any other assets so long as (A) no Default or Event of
Default has occurred and is continuing or would result from
the sale of such asset, (B) such sale is on arm's-length terms
for fair and reasonable consideration, (C) not less than 85%
of the proceeds from such sale is in the form of cash, (D) the
Net Cash Payments are applied in accordance with Section 2.8,
and (E) the aggregate fair market value of all such assets
sold during any calendar year does not exceed $500,000.
(c) Notwithstanding anything to the contrary contained in this
Section 8.4, so long as no Default or Event of Default shall have
occurred or be continuing or would result therefrom, the Credit Parties
shall be permitted to consummate the transactions described on SCHEDULE
8.4(C).
8.5. INVESTMENTS; HEDGING AGREEMENTS.
(a) The Credit Parties will not, and will not permit any of
their Subsidiaries to, make or permit to remain outstanding any
Investment, except:
(i) Investments consisting of Guarantees permitted by
Section 8.3;
(ii) Investments by the Borrower and/or its
Subsidiaries in the Borrower or any Guarantor;
(iii) Investments of the Borrower and/or its
Subsidiaries in any of the Borrower's Subsidiaries which are
not Domestic Subsidiaries; PROVIDED that the aggregate amount
of such Investments made after the Closing Date does not
exceed $1,000,000;
(iv) Investments existing on the Closing Date and
described on SCHEDULE 8.5;
(v) Permitted Investments; and
(vi) Checking and deposit accounts with banks used in
the ordinary course of business.
(b) The Credit Parties will not, and will not permit any of
their Subsidiaries to, enter into any Hedging Agreement, other than
Hedging Agreements entered into in the ordinary course of business with
the prior written consent of the Agent to hedge or mitigate risks to
which the Credit Parties are exposed in the conduct of their business
or the management of their liabilities.
8.6. RESTRICTED JUNIOR PAYMENTS. The Credit Parties will not, and will
not permit any of their Subsidiaries, to declare or make any Restricted Junior
Payment at any time, other than:
(a) payments of dividends or management fees by a Subsidiary
of the Borrower to the Borrower or another wholly-owned Subsidiary of
the Borrower;
(b) payments of dividends and distributions payable solely in
common stock of such Person;
(c) so long as no Default shall have occurred and be
continuing and no Default shall be caused thereby, regularly scheduled
payments of interest (but not principal or premium) in respect of the
Senior Subordinated Notes on the dates and in the amounts set forth in
the Senior Subordinated Note Documents; and
(d) payments with respect to any intercompany loan permitted
under Section 8.1(c).
8.7. TRANSACTIONS WITH AFFILIATES. Except as expressly permitted by
this Agreement, the Credit Parties will not, and will not permit any of their
Subsidiaries to, directly or indirectly (a) make any Investment in an Affiliate;
(b) transfer, sell, lease, assign or otherwise dispose of any property to an
Affiliate; (c) merge into or consolidate with an Affiliate, or purchase or
acquire property from an Affiliate; or (d) enter into any other transaction
directly or indirectly with or for the benefit of an Affiliate (including,
without limitation, guarantees and assumptions of obligations of an Affiliate);
PROVIDED that:
(i) any Affiliate who is an individual may serve as a
director, officer, employee or consultant of any Credit Party,
receive reasonable compensation for his or her services in
such capacity and benefit from Permitted Investments to the
extent specified in clause (e) of the definition thereof;
(ii) the Credit Parties may engage in and continue
the transactions with or for the benefit of Affiliates which
are described in SCHEDULE 8.7 or are referred to in Sections
8.5 or 8.6 (but only to the extent specified in such
Sections); and
(iii) the Credit Parties may engage in transactions
with Affiliates in the ordinary course of business on terms
which are no less favorable to the Credit Parties than those
likely to be obtained in an arms' length transaction between a
Credit Party and a non-affiliated third party.
8.8. RESTRICTIVE AGREEMENTS; RESTRICTIONS ON NEGATIVE PLEDGES AND
UPSTREAM LIMITATION. The Credit Parties will not, and will not permit any of
their Subsidiaries to, directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement (other than this Agreement, the Tranche
B Financing Agreements and the other Loan Documents) that prohibits, restricts
or imposes any condition upon (a) the ability of any such Person to create,
incur or permit to exist any Lien upon any of its property or assets, or (b) the
ability of such Person to pay dividends or other distributions with respect to
any shares of its Capital Stock or other equity interests or to make or repay
loans or advances to any other Person or to Guarantee the Indebtedness of any
other Person; PROVIDED that (i) the foregoing shall not apply to restrictions
and conditions imposed by law, (ii) the foregoing shall not apply to
restrictions and conditions existing on the Closing Date identified on SCHEDULE
8.8 (but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition), (iii)
the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of stock or assets of a Subsidiary pending
such sale, provided such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause
(a) of the foregoing shall not apply to restrictions or conditions imposed by
any agreement relating to secured Indebtedness permitted by this Agreement if
such restrictions or conditions apply only to the property or assets securing
such Indebtedness, and (v) clause (a) of the foregoing shall not apply to
customary provisions in leases and other contracts (excluding license
agreements) restricting the assignment thereof.
8.9. SALE-LEASEBACK TRANSACTIONS. No Credit Party or any of its
Subsidiaries will directly or indirectly, enter into any arrangements with any
Person whereby such Person shall sell or transfer (or request another Person to
purchase) any property, real, personal or mixed, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property from any Person.
8.10. CERTAIN FINANCIAL COVENANTS.
(a) CAPITAL EXPENDITURES. The Borrower will not make, or
permit any of its Subsidiaries to make, Capital Expenditures during any
Reference Period ending during any fiscal year set forth in the table
below, that exceed, in the aggregate, the amounts set forth opposite
such fiscal year:
---------------------------------------------------------------------
FISCAL YEAR MAXIMUM AMOUNT
------------------------------------------------- -------------------
2003 Fiscal Year $6,000,000
------------------------------------------------- -------------------
2004 Fiscal Year $8,000,000
------------------------------------------------- -------------------
2005 Fiscal Year and each Fiscal Year thereafter $10,000,000
---------------------------------------------------------------------
(b) MAXIMUM SENIOR LEVERAGE RATIO. The Borrower shall not
permit the Senior Leverage Ratio for any Reference Period ending on the
date set forth in the table below, to exceed the ratio set forth
opposite such date in such table:
---------------------------------------------------------------------
PERIOD RATIO
------------------------------------------------- -------------------
Closing Date through September 30, 2003 3.25 to 1.00
------------------------------------------------- -------------------
December 31, 2003 through September 30, 2004 3.00 to 1.00
------------------------------------------------- -------------------
December 31, 2004 and each fiscal quarter
ending thereafter 2.75 to 1.00
---------------------------------------------------------------------
(c) FIXED CHARGE COVERAGE RATIO. The Borrower shall not permit
the Fixed Charge Coverage Ratio for any Reference Period ending on the
date set forth in the table below, to be less than the ratio set forth
opposite such date in such table:
---------------------------------------------------------------------
PERIOD RATIO
------------------------------------------------- -------------------
Closing Date through March 31, 2004 1.05 to 1.00
------------------------------------------------- -------------------
June 30, 2004 and each fiscal quarter ending
thereafter 1.10 to 1.00
------------------------------------------------- -------------------
(d) MINIMUM NET WORTH. The Borrower shall not permit Net Worth
at any time during a period set forth in the table below, to be less
than the amounts set forth opposite such date in such table:
---------------------------------------------------------------------
PERIOD MINIMUM AMOUNT
------------------------------------------------- -------------------
Closing Date through March 31, 2004 $72,500,000
------------------------------------------------- -------------------
June 30, 2004 through September 30, 2004 $74,500,000
------------------------------------------------- -------------------
December 31, 2004 and each fiscal quarter
ending thereafter $76,500,000
------------------------------------------------- -------------------
(e) MINIMUM EBITDA OF THE U.S. CREDIT PARTIES. The Borrower
shall not permit the EBITDA attributable to the U.S. Credit Parties,
for any Reference Period to be less than $30,000,000.
(f) MINIMUM EBITDA.
(i) The Borrower shall not permit EBITDA, for the
month of November 2002, to be less than $2,400,000.
(ii) The Borrower shall not permit EBITDA, for any
Reference Period ending on the date set forth in the table
below, to be less than the amounts set forth opposite such
date in such table:
---------------------------------------------------------------------
PERIOD MINIMUM AMOUNT
------------------------------------------------- -------------------
December 31, 2002 $44,019,000
------------------------------------------------- -------------------
January 31, 2003 $45,605,000
------------------------------------------------- -------------------
February 28, 2003 $45,200,000
------------------------------------------------- -------------------
March 31, 2003 through November 30, 2003 $42,620,000
------------------------------------------------- -------------------
December 31, 2003 through March 31, 2004 $45,000,000
---------------------------------------------------------------------
8.11. LINES OF BUSINESS. The Borrower will not, and will not permit any
of its Subsidiaries to, engage to any substantial extent in any line or lines of
business activity other than (i) the types of businesses engaged in by them as
of the Closing Date and businesses substantially related thereto, and (ii) such
other lines of business as may be consented to by the Required Lenders and the
Agent.
8.12. OTHER INDEBTEDNESS. The Borrower will not, and will not permit
any of its Subsidiaries to, purchase, redeem, retire or otherwise acquire for
value, or set apart any money for a sinking, defeasance or other analogous fund
for the purchase, redemption, retirement or other acquisition of, or make any
voluntary payment or prepayment of the principal of or interest on, or any other
amount owing in respect of any Senior Subordinated Notes or the Tranche B Loans,
except to the extent permitted by Sections 8.6 or 8.14.
8.13. MODIFICATIONS OF CERTAIN DOCUMENTS; DESIGNATION OF SENIOR DEBT.
The Borrower will not, and will not permit any of its Subsidiaries to, consent
to any amendment or modification of or supplement to any of the provisions of
any documents or agreements evidencing or governing the Subordinated Notes, the
Tranche B Loans or any other Existing Indebtedness. The Credit Parties will
designate the Credit Agreement and the Obligations hereunder as "Designated
Senior Debt" under the Senior Subordinated Note Indenture, and will not
designate any other Indebtedness other than the Tranche B Loans as "Designated
Senior Debt" under the Senior Subordinated Note Indenture.
8.14. TRANCHE B PAYMENTS. The Credit Parties will not, and will not
permit any of their Subsidiaries, to make any payments in respect of, or fund
any acquisition, purchase, or participation in, in whole or in part the Tranche
B Loans, except:
(a) the Credit Parties may make regularly scheduled cash
payments of interest, expenses and fees on the Tranche B Loans
(exclusive of any Term Loan PIK Amount (as defined in the Tranche B
Financing Agreement));
(b) so long as no Default or Event of Default exists or would
result therefrom and commencing following receipt by the Agent of the
financial statements for the fiscal year ending March 31, 2003, the
Credit Parties may, not more than once per quarter following such
fiscal year, prepay the principal of Tranche B Loans and the Term Loan
PIK Amounts (as defined in the Tranche B Financing Agreement) in whole
or in part, subject to the following conditions:
(i) the Credit Parties shall have delivered to the
Agent, not less than 30 days prior to the making of such
prepayment, a certificate demonstrating, in form and substance
satisfactory to the Agent, that:
(A) the Credit Parties were in compliance
with each of the Financial Covenants set forth in
Section 8.10 for the fiscal quarter most recently
ended immediately preceding the proposed prepayment
date;
(B) the Credit Parties project that they
shall be in compliance with each of the Financial
Covenants set forth in Section 8.10 for two
consecutive quarters immediately following the
proposed prepayment date, calculated on a pro forma
basis giving effect to the making of such prepayment;
(C) Domestic Excess Availability, calculated
as at the end of the fiscal quarter most recently
ended on (i) an actual basis and (ii) a pro forma
basis giving effect to the making of such prepayment,
shall have been no less than $15,000,000; and
(D) Domestic Excess Availability, calculated
as at the end of each of the three months ending
after the making of such proposed prepayment on a pro
forma basis giving effect to such prepayment, shall
be projected to be not less than $15,000,000; and
(ii) the Agent shall be satisfied that each of the
foregoing calculations are true and correct and shall be
satisfied that the minimum Domestic Excess Availability
thresholds required have been and will be satisfied assuming
the Credit Parties are honoring accounts payable in accordance
with their usual and customary terms; and
(c) At any time that the outstanding principal amount of the
Tranche B Loans no longer exceeds the outstanding principal amount of
the Term Loans, the Borrower shall, contemporaneously with the making
of such prepayment of the Tranche B Loans, make an equivalent payment
of the Term Loan (such payments of the Term Loan to be applied against
the remaining required installments of the Term Loan in the inverse
order of maturity thereof).
(d) Each prepayment of Tranche B Loans made under this Section
8.14 shall reduce the Availability Block by the amount of such
prepayment.
8.15. COLUMBUS ▇▇▇▇▇▇▇▇ FINANCE CORPORATION. Except as set forth in
Section 5.24 the Borrower and each of its Subsidiaries will not permit Columbus
▇▇▇▇▇▇▇▇ Finance Corporation to own any asset, incur any liabilities or engage
in any business or activity. The Borrower will not permit Columbus ▇▇▇▇▇▇▇▇
Limited to make, or Columbus ▇▇▇▇▇▇▇▇ Finance Corporation to receive, any
payment in respect of that certain intercompany promissory note issued by
Columbus ▇▇▇▇▇▇▇▇ Limited and made to Columbus ▇▇▇▇▇▇▇▇ Finance Corporation in
the aggregate face amount of C$3,750,000, other than a payment made
substantially contemporaneously with either (a) the amalgamation of Columbus
▇▇▇▇▇▇▇▇ Finance Corporation into a Credit Party or (b) the liquidation of
Columbus ▇▇▇▇▇▇▇▇ Finance Corporation and the distribution of all of its assets
to a Credit Party.
ARTICLE 9.
EVENTS OF DEFAULT
9.1. EVENTS OF DEFAULT. The occurrence of any of the following events
shall be deemed to constitute an "EVENT OF DEFAULT" hereunder:
(a) the Credit Parties shall fail to pay to the Agent, the
Issuing Lender, the Canadian Lender, the Cash Management Bank or the
Lenders, any principal of or interest on any Loan or any Reimbursement
Obligation in respect of any LC Disbursement or any other Obligation of
the Credit Parties to the Agent, the Issuing Lender, the Canadian
Lender, the Cash Management Bank or the Lenders when the same shall
become due and payable, whether at the due date thereof or at a date
fixed for prepayment thereof, by acceleration of such due or prepayment
date, or otherwise;
(b) any representation or warranty made or deemed made by or
on behalf of any Credit Party or any of its Subsidiaries in connection
with this Agreement, any of the other Loan Documents or any amendment
or modification hereof or thereof, or in any report, certificate,
financial statement or other document furnished pursuant to or in
connection with this Agreement, any of the other Loan Documents or any
amendment or modification hereof or thereof, shall prove to have been
incorrect in any material respect when made or deemed made;
(c) the Credit Parties (i) shall fail to observe or perform
any covenant, condition or agreement contained in Sections 7.1, 7.2,
7.5, 7.6, 7.9, 7.10, 7.12, 7.14, 7.15, 7.16 or in Article 8 (it being
expressly acknowledged and agreed that any Event of Default resulting
from the failure of the Credit Parties at any measurement date to
satisfy any financial covenant set forth in Section 8.10 shall not be
deemed to be "cured" or remedied by the Credit Parties' satisfaction of
such financial covenant at any subsequent measurement date) or (ii)
shall fail to observe or perform any other covenant, condition or
agreement contained in Sections 7.3, 7.4, 7.7, 7.8, 7.11, 7.13, or
7.17, and such failure described in this clause (ii) shall continue
unremedied for a period of 10 days after the earlier of (x) the date on
which any officer of any Credit Party knows or should have known of
such failure or (y) the date the Borrower receives notice thereof from
the Agent;
(d) the Borrower or any of its Subsidiaries shall fail to
observe or perform any covenant, condition or agreement contained in
this Agreement (other than those specified in clauses (a), (b) or (c)
of this Section 9.1) or any other Loan Document, and such failure shall
continue unremedied for a period of 20 days after the earlier of (x)
the date on which any officer of any Credit Party knows or should have
known of such failure or (y) the date the Borrower receives notice
thereof from the Agent;
(e) the Borrower or any of its Subsidiaries shall fail to make
any payment (whether of principal, interest or otherwise and regardless
of amount) in respect of any Material Indebtedness or any Material
Rental Obligation, when and as the same shall become due and payable,
after giving effect to any grace period with respect thereto;
(f) any event or condition occurs that results in (i) (A) any
Material Indebtedness of the Borrower or any of its Subsidiaries
becoming due prior to its scheduled maturity, (B) that enables or
permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee
or agent on its or their behalf to cause such Material Indebtedness to
become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity, or (C) requires
the Borrower or any of its Subsidiaries to offer to repay, repurchase,
redeem, or defease such Material Indebtedness, or (ii) the lease with
respect to any Material Rental Obligation of the Borrower or any of its
Subsidiaries being terminated prior to its scheduled expiration date or
that enables or permits (with or without the giving of notice, the
lapse of time or both) the counterparty to such lease to cause such
lease to be terminated prior to its scheduled expiration date;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or any of its
Subsidiaries or its debts, or of a substantial part of its assets,
under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any of its
Subsidiaries or for a substantial part of its assets, and, in any such
case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing
shall be entered;
(h) the Borrower or any of its Subsidiaries shall (i)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (g) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any of its
Subsidiaries or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against
it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing;
(i) the Borrower or any of its Subsidiaries shall become
unable, admit in writing or fail generally to pay its debts as they
become due;
(j) a final judgment or judgments for the payment of money (x)
in excess of $1,000,000 in the aggregate (exclusive of judgment amounts
fully covered by insurance where the insurer has admitted liability in
respect of such judgment) or (y) in excess of $1,000,000 in the
aggregate (regardless of insurance coverage), shall be rendered by one
or more courts, administrative tribunals or other bodies having
jurisdiction over the Borrower or any of its Subsidiaries and the same
shall not be discharged (or provision shall not be made for such
discharge), bonded, or a stay of execution thereof shall not be
procured, within 60 days from the date of entry thereof and the
Borrower or relevant Subsidiary shall not, within said period of 90
days, or such longer period during which execution of the same shall
have been stayed, appeal therefrom and cause the execution thereof to
be stayed during such appeal;
(k) an ERISA Event shall have occurred that, in the reasonable
opinion of the Required Lenders, when taken together with all other
ERISA Events that have occurred, could reasonably be expected to have a
Material Adverse Effect;
(l) there shall occur any Change of Control;
(m) any of the following shall occur: (i) the Liens created
hereunder or under the other Loan Documents shall at any time (other
than by reason of the Agent relinquishing such Lien) cease to
constitute valid and perfected Liens on any Collateral with an
aggregate fair market value in excess of $100,000 which is intended to
be covered thereby; (ii) except for expiration in accordance with its
respective terms, any Loan Document shall for whatever reason be
terminated, or shall cease to be in full force and effect; or (iii) the
enforceability of any Loan Document shall be contested by the Borrower
or any of its Subsidiaries;
(n) there shall occur any loss theft, damage or destruction of
any Collateral not fully covered (subject to such reasonable
deductibles as the Agent shall have approved) by insurance which has or
could reasonably be expected to have a Material Adverse Effect;
(o) any Guarantor shall assert that its obligations under any
Loan Document shall be invalid or unenforceable;
(p) there shall occur any material adverse change (in the
opinion of the Agent) on the businesses, operations, properties,
conditions (financial or otherwise), assets, liabilities, income or
prospects of the Borrower and its Subsidiaries; or
(q) the Canadian Lender shall make a drawing under the
Canadian Letter of Credit;
(r) any Credit Party shall be liable for any Environmental
Liabilities payment of which could reasonably be expected to have a
Material Adverse Effect;
(s) any bank at which any deposit account, Controlled Account,
or Lockbox Account of any Credit Party is maintained shall fail to
comply with any of the terms of any deposit account agreement, Control
Agreement, Lockbox Agreement or similar agreement to which such bank is
a party or any securities intermediary, commodity intermediary or other
financial institution at any time in custody, control or possession of
any investment property of any Credit Party shall fail to comply with
any of the terms of any investment property control agreement to which
such Person is a party;
(t) any Credit Party is enjoined, restrained or in any way
prevented by the order of any court or any Governmental Authority from
conducting all or any material part of its business for more than
fifteen (15) days;
(u) any cessation of a substantial part of the business of any
Credit Party for a period which materially and adversely affects the
ability of such Person to continue its business on a profitable basis;
(v) the loss, suspension or revocation of, or failure to
renew, any license or permit now held or hereafter acquired by any
Credit Party, if such loss, suspension, revocation or failure to renew
could reasonably be expected to have a Material Adverse Effect;
(w) the indictment, or the threatened indictment of any Credit
Party under any criminal statute, or commencement or threatened
commencement of criminal or civil proceedings against any Credit Party,
pursuant to which statute or proceedings the penalties or remedies
sought or available include forfeiture to any Governmental Authority of
any material portion of the property of such Person; or
(x) a "Default" or an "Event of Default" shall have occurred
under the Tranche B Loan Documents;
then, and in every such event (other than an event described in clause (g) or
(h) of this Section 9.1), and at any time thereafter during the continuance of
such event, the Agent may, and at the request of the Required Lenders shall, by
notice to the Borrower, take any or all of the following actions, at the same or
different times: (i) terminate the Commitments, and thereupon the Commitments
shall terminate immediately, (ii) notify the Borrower that the outstanding
principal of the Loans shall bear interest at the Post-Default Rate, and
thereupon the outstanding principal of the Loans shall bear interest at the
Post-Default Rate, (iii) declare the Loans then outstanding to be due and
payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other Obligations, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Credit Parties, (iv) require
that the Borrower deposit with the Agent cash collateral for all outstanding
Letters of Credit, and (v) the Agent, the Issuing Lender, the Cash Management
Bank and the Lenders may exercise all of the rights as secured party and
mortgagee hereunder or under the other Loan Documents; and in case of any event
with respect to the Credit Parties or any of its Subsidiaries described in
clause (g) or (h) of this Section 9.1, the Commitments shall automatically
terminate, the principal of the Loans then outstanding shall automatically bear
interest at the Post-Default Rate, the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other Obligations shall
automatically become due and payable, and the Borrower shall provide cash
collateral in accordance with Section 2.4(h) without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Credit Parties, and the Agent, the Issuing Lender, the Cash Management Bank and
the Lenders shall be permitted to exercise such rights as secured party and
mortgagee hereunder or under the other Loan Documents to the extent permitted by
applicable law.
9.2. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that, following
the occurrence or during the continuance of any Default or Event of Default, the
Agent or any Lender, as the case may be, receives any monies in connection with
the enforcement of any Loan Document, or otherwise with respect to the
realization upon any of the Collateral, such monies shall be distributed for
application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies
by the Agent, for the exercise, protection or enforcement by the Agent
of all or any of the rights, remedies, powers and privileges of the
Agent under this Agreement or any of the other Loan Documents or in
respect of the Collateral or in support of any provision of adequate
indemnity to the Agent against any Taxes or liens which by law shall
have, or may have, priority over the rights of the Agent to such
monies;
(b) Second, to all other Obligations in such order or
preference as the Required Lenders may determine; PROVIDED, however,
that (i) distributions shall be made (A) PARI PASSU among Obligations
with respect to fees payable to the Agent, the Issuing Lender and all
other Obligations and (B) with respect to each type of Obligation owing
to the Lenders, such as interest, principal, fees and expenses, among
the Lenders PRO RATA, and (ii) the Agent may in its discretion make
proper allowance to take into account any Obligations not then due and
payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Lenders and the
Agent of all of the Obligations, to the payment of any obligations
required to be paid pursuant to ss.9-608(a)(1)(C) or 9-615(a)(3) of the
Uniform Commercial Code of the Commonwealth of Massachusetts; and
(d)Fourth, the excess, if any, shall be returned to the Borrower or to
such other Persons as are entitled thereto.
9.3. RECEIVERSHIP. Without limiting the generality of the foregoing or
limiting in any way the rights of the Agent or the Lenders hereunder or under
the other Loan Documents or otherwise under applicable law, at any time after
(i) the entire principal balance of any Loan shall have become due and payable
(whether at maturity, by acceleration or otherwise) and (ii) the Agent shall
have provided to the Borrower not less than ten (10) days' prior written notice
of its intention to apply for a receiver, the Agent shall be entitled to apply
for and have a receiver appointed under state or federal law by a court of
competent jurisdiction in any action taken by the Agent to enforce the Lenders'
and the Agent's rights and remedies hereunder and under the other Loan Documents
in order to manage, protect, preserve, sell and otherwise dispose of all or any
portion of the Collateral and continue the operation of the business of the
Credit Parties, and to collect all revenues and profits thereof and apply the
same to the payment of all expenses and other charges of such receivership,
including the compensation of the receiver, and to the payment of the Loans and
other fees and expenses due hereunder and under the Loan Documents as aforesaid
until a sale or other disposition of such Collateral shall be finally made and
consummated. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH CREDIT PARTY HEREBY
IRREVOCABLY CONSENTS TO AND WAIVES ANY RIGHT TO OBJECT TO OR OTHERWISE CONTEST
THE APPOINTMENT OF A RECEIVER AS PROVIDED ABOVE. EACH CREDIT PARTY (I) GRANTS
SUCH WAIVER AND CONSENT KNOWINGLY AFTER HAVING DISCUSSED THE IMPLICATIONS
THEREOF WITH COUNSEL, (II) ACKNOWLEDGES THAT (A) THE UNCONTESTED RIGHT TO HAVE A
RECEIVER APPOINTED FOR THE FOREGOING PURPOSES IS CONSIDERED ESSENTIAL BY AGENT
IN CONNECTION WITH THE ENFORCEMENT OF THE LENDERS' AND THE AGENT'S RIGHTS AND
REMEDIES HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS, AND (B) THE AVAILABILITY
OF SUCH APPOINTMENT AS A REMEDY UNDER THE FOREGOING CIRCUMSTANCES WAS A MATERIAL
FACTOR IN INDUCING THE LENDERS TO MAKE THE LOANS TO THE BORROWER; AND (III)
AGREES TO ENTER INTO ANY AND ALL STIPULATIONS IN ANY LEGAL ACTIONS, OR
AGREEMENTS OR OTHER INSTRUMENTS IN CONNECTION WITH THE FOREGOING AND TO
COOPERATE FULLY WITH THE AGENT AND THE LENDERS IN CONNECTION WITH THE ASSUMPTION
AND EXERCISE OF CONTROL BY THE RECEIVER OVER ALL OR ANY PORTION OF THE
COLLATERAL. THE LENDERS AND AGENT ACKNOWLEDGE AND AGREE THAT NOTHING IN THIS
SECTION 9.2 SHALL BE DEEMED TO CONSTITUTE A WAIVER OF THE RIGHT OF CREDIT
PARTIES TO FILE FOR PROTECTION UNDER TITLE 11 OF THE UNITED STATES CODE AT ANY
TIME.
ARTICLE 10.
THE AGENT
10.1. APPOINTMENT AND AUTHORIZATION. Each of the Lenders and the
Issuing Lender hereby irrevocably appoints the Agent as its agent and authorizes
the Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Agent by the terms of this Agreement and the other Loan
Documents, together with such actions and powers as are reasonably incidental
thereto. Without limiting the generality of the foregoing, each of the Lenders
and the Issuing Lender hereby (a) authorizes the Agent to enter into the
Intercreditor Agreement on its behalf and consents and agrees to be bound by the
terms therein, (b) authorizes the Agent to release, from time to time, certain
of the Collateral in connection with any sale or other disposition of assets
permitted hereunder, and (c) authorizes the Agent to take such actions at any
time to enforce such Lender's rights hereunder and under the other Loan
Documents. The Agent shall be the "representative" of the Lenders for purposes
of its designation as a secured party on all security filings.
10.2. AGENT'S RIGHTS AS LENDER. The Lender or other financial
institution serving as the Agent or the Issuing Lender hereunder shall have the
same rights and powers in its capacity as a Lender hereunder as any other Lender
and may exercise the same as though it were not the Agent or the Issuing Lender,
and such institution and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with any Credit Party or any of its
Subsidiaries or other Affiliate thereof as if it were not the Agent or the
Issuing Lender hereunder.
10.3. DUTIES AS EXPRESSLY STATED. Neither the Agent nor the Issuing
Lender shall have any duties or obligations except those expressly set forth in
this Agreement and the other Loan Documents. Without limiting the generality of
the foregoing, (a) neither the Agent nor the Issuing Lender shall be subject to
any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) neither the Agent nor the Issuing Lender shall
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated by this
Agreement and the other Loan Documents that the Agent or Issuing Lender is
required to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as is required hereunder with respect to such action),
and (c) except as expressly set forth herein and in the other Loan Documents,
neither the Agent nor the Issuing Lender shall have any duty to disclose, or
shall be liable for the failure to disclose, any information relating to any
Credit Party or any of their respective Subsidiaries that is communicated to or
obtained by the financial institution serving as the Agent or the Issuing Lender
or any of its Affiliates or Approved Funds in any capacity. Neither the Agent
nor the Issuing Lender shall be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as is required hereunder with respect to such
action) or all of the Lenders if expressly required, or in the absence of its
own gross negligence or willful misconduct. Neither the Agent nor the Issuing
Lender shall be deemed to have knowledge of any Default other than a Default of
the types specified in Section 9.1(a) unless and until written notice thereof is
given to the Agent or the Issuing Lender by the Borrower or a Lender, and the
Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in, or in connection with,
this Agreement or the other Loan Documents, (ii) the contents of any
certificate, report or other document delivered hereunder or under any of the
other Loan Documents or in connection herewith of therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein or in any other Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, the other Loan
Documents or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article 6 or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the Agent
or the Issuing Lender. Neither the Agent nor the Issuing Lender shall, except to
the extent the Agent expressly instructed by the Required Lenders with respect
to collateral security hereunder and under the other Loan Documents, be required
to initiate or conduct any litigation or collection proceedings hereunder or
under any other Loan Document; PROVIDED, however, that the Agent shall not be
required to take any action which exposes the Agent to personal liability or
which is contrary to the Loan Documents or applicable law.
10.4. RELIANCE BY AGENT. The Agent and the Issuing Lender shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the
proper Person. The Agent and the Issuing Lender also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon. The Agent and the
Issuing Lender may consult with legal counsel, independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts. The Agent and the Issuing Lender shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Required Lenders
(or, if so specified by this Agreement, all Lenders) as it deems appropriate or
it shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action (it being understood that this provision
shall not release the Agent from performing any action with respect to the
Borrower expressly required to be performed by it pursuant to the terms hereof)
under this Agreement. The Agent and the Issuing Lender shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders (or, if so specified by this Agreement, all Lenders), and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Loans.
10.5. ACTION THROUGH SUB-AGENTS. The Agent and the Issuing Lender may
perform any and all of its duties, and exercise its rights and powers, by or
through any one or more sub-agents appointed by the Agent or the Issuing Lender.
The Agent and the Issuing Lender and any such sub-agent may perform any and all
its duties and exercise its rights and powers through its Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of the Agent and the Issuing Lender and any
such sub-agent, and shall apply to its activities in connection with the
syndication of the credit facilities provided for herein as well as activities
of the Agent or the Issuing Lender.
10.6. RESIGNATION OF AGENT AND APPOINTMENT OF SUCCESSOR AGENT. Subject
to the appointment and acceptance of a successor Agent, as provided in this
paragraph, the Agent may resign at any time by notifying the Lenders, the
Issuing Lender and the Credit Parties. Upon any such resignation, the Required
Lenders shall have the right, in consultation with the Credit Parties, to
appoint a successor Agent. If no successor shall have been so appointed and
shall have accepted such appointment within 30 days after such retiring Agent
gives notice of its resignation, then such retiring Agent may, on behalf of the
Lenders and the Issuing Lender, appoint a successor Agent, which shall be a bank
with an office in Boston, Massachusetts or New York, New York, or an Affiliate
of any such bank. Upon the acceptance of its appointment as Agent hereunder, by
a successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder and under
the other Loan Documents. The fees payable by the Borrower to a successor Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After an Agent's resignation hereunder,
the provisions of this Article and Section 11.3 shall continue in effect for the
benefit of such retiring Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Agent.
10.7. LENDERS' INDEPENDENT DECISIONS. Each Lender acknowledges that it
has, independently and without reliance upon the Agent, the Issuing Lender or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Issuing Lender or any other Lender and based on
such documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement and the other Loan Documents, any related agreement or any
document furnished hereunder or thereunder. Except as explicitly provided
herein, neither the Agent nor the Issuing Lender has any duty or responsibility,
either initially or on a continuing basis, to provide any Lender with any credit
or other information with respect to such operations, business, property,
condition or creditworthiness, whether such information comes into its
possession on or before the first Event of Default or at any time thereafter.
Neither the Agent nor the Issuing Lender shall be deemed a trustee or other
fiduciary on behalf of any party.
10.8. INDEMNIFICATION. Each Lender agrees to indemnify and hold
harmless the Agent and the Issuing Lender (to the extent not reimbursed under
Section 11.3, but without limiting the obligations of the Borrower under Section
11.3), ratably in accordance with the aggregate principal amount of the
respective Commitments of and/or Loans and Total LC Exposure held by the Lenders
(or, if all of the Commitments shall have been terminated or expired, ratably in
accordance with the aggregate outstanding amount of the Loans and Total LC
Exposure held by the Lenders), for any and all liabilities (including pursuant
to any Environmental Law), obligations, losses, damages, penalties, actions,
judgments, deficiencies, suits, costs, expenses (including the fees and expenses
of attorneys, consultants, appraisers, examiners, and other professionals
engaged by the Agent in connection with this Agreement and/or the administration
of the credit facilities contemplated hereby) or disbursements of any kind and
nature whatsoever that may be imposed on, incurred by or asserted against the
Agent or the Issuing Lender (including by any Lender) arising out of or by
reason of any investigation in or in any way relating to or arising out of any
Loan Document or any other documents contemplated by or referred to therein for
any action taken or omitted to be taken by the Agent or the Issuing Lender under
or in respect of any of the Loan Documents or other such documents or the
transactions contemplated thereby (including the costs and expenses that the
Borrower is obligated to pay under Section 11.3) or the enforcement of any of
the terms hereof or thereof or of any such other documents; provided however,
that no Lender shall be liable for any of the foregoing to the extent they are
determined by a court of competent jurisdiction in a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of the
party to be indemnified. The agreements set forth in this Section 10.8 shall
survive the payment of all Loans and other obligations hereunder and shall be in
addition to and not in lieu of any other indemnification agreements contained in
any other Loan Document.
10.9. CONSENTS UNDER OTHER LOAN DOCUMENTS. Except as otherwise provided
in this Agreement and the other Loan Documents, the Agent may, with the prior
consent of the Required Lenders (but not otherwise), consent to any
modification, supplement or waiver under any of the other Loan Documents.
10.10. DELINQUENT LENDERS. Notwithstanding anything to the contrary
contained in this Agreement or any of the other Loan Documents, any Lender that
fails to make available to the Agent its pro rata share of any Loan or to
purchase any participation in any Letter of Credit as, when and to the full
extent required by the provisions of this Agreement, shall be deemed delinquent
(a "DELINQUENT LENDER") and shall be deemed a Delinquent Lender until such time
as such delinquency is satisfied. A Delinquent Lender shall be deemed to have
assigned any and all payments due to it from the Credit Parties, whether on
account of outstanding Loans, unpaid Reimbursement Obligations, interest, fees
or otherwise, to the remaining nondelinquent Lenders for application to, and
reduction of, their respective pro rata shares of all outstanding Loans and
unpaid Reimbursement Obligations. The Delinquent Lender hereby authorizes the
Agent to distribute such payments to the nondelinquent Lenders in proportion to
their respective pro rata shares of all outstanding Loans and unpaid
Reimbursement Obligations. A Delinquent Lender shall be deemed to have satisfied
in full a delinquency when and if, as a result of application of the assigned
payments to all outstanding Loans and unpaid Reimbursement Obligations of the
nondelinquent Lenders, the Lenders' respective pro rata shares of all
outstanding Loans and unpaid Reimbursement Obligations have returned to those in
effect immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.
10.11. ELECTRONIC COMMUNICATIONS. The Credit Parties hereby authorize
and request the Agent, the Cash Management Bank, the Canadian Lender, the
Issuing Lender or any of their Affiliates to act on instructions given by
telephone, telegraph, telefax, cable, wireless, telex, telecopy, electronic mail
or other similar electronic means of communication (collectively, "ELECTRONIC
COMMUNICATIONS") from an authorized representative of such Credit Party,
including but not limited to instructions relating to the issuance and
processing of letters of credit and collection transactions and other similar
trade finance products, the execution of foreign exchange contracts and the
directing the payment of moneys and transfers, deposits or withdrawals of funds,
coins, precious metals, securities and other valuable assets from or to any
account maintained by the Agent, the Cash Management Bank, the Canadian Lender,
the Issuing Lender or such Affiliate as contemplated under this Agreement on
behalf of such Credit Party. Each Credit Party further authorizes and directs
the Agent, Cash Management Bank, Canadian Lender, Issuing Lender or any of their
Affiliates to respond to any inquiry made through any of the Electronic
Communications relating to the status of any account maintained by the Agent,
the Cash Management Bank, the Canadian Lender, the Issuing Lender or such
Affiliate as contemplated under this Agreement. Each of the Agent, the Cash
Management Bank, the Canadian Lender, the Issuing Lender or any of their
Affiliates, any branch or agency thereof and its respective directors, officers
and employees shall not be liable for any error, delay, damage, claim or other
loss, expense or cost arising out of any instruction given by Electronic
Communications. All such risks are assumed by the Credit Parties. All
instructions sent by telex shall contain the Credit Parties' answerback. The
certifications, authorizations, directions and any restrictions contained herein
will continue until the Agent, the Cash Management Bank, the Canadian Lender or
the Issuing Lender actually receive written notice of any change or revocation.
The Agent, the Cash Management Bank, the Canadian Lender and the Issuing Lender
shall have the right to refuse any instructions through any of above-mentioned
Electronic communications, in its/their discretion.
ARTICLE 11.
MISCELLANEOUS
11.1. NOTICES. Except in the case of notices and other communications
expressly permitted to be given by telephone or in a manner set forth in Section
10.11, all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telephonic facsimile (fax), as follows:
(a) if to any Credit Party, to Columbus ▇▇▇▇▇▇▇▇ Corporation,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇., Executive Vice President, Telephone no.
(▇▇▇) ▇▇▇-▇▇▇▇ and Fax no. (▇▇▇) ▇▇▇-▇▇▇▇ with a copy to Phillips,
Lytle, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Telephone No.: (716)
▇▇▇-▇▇▇▇ and Fax no. (▇▇▇) ▇▇▇-▇▇▇▇;
(b) if to the Agent, to Fleet Capital Corporation, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. Telephone no. (▇▇▇) ▇▇▇-▇▇▇▇ and Fax no. (617)
654-1167, with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Telephone no. (617)
▇▇▇-▇▇▇▇ and Fax no. (▇▇▇) ▇▇▇-▇▇▇▇;
(c) if to any Lender (including Fleet in its capacity as the
Issuing Lender), to it at its address (or fax number) set forth on
Schedule 2.1; and
(d) if to the Tranche B Agent, as required under the
Intercreditor Agreement, at Regiment Capital III, L.P., ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Telephone no. (▇▇▇) ▇▇▇-▇▇▇▇, Fax no. (▇▇▇) ▇▇▇-▇▇▇▇, with a
copy to ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., Telephone no. (212)
▇▇▇-▇▇▇▇ and Fax no. (▇▇▇) ▇▇▇-▇▇▇▇.
Any party hereto may change its address or fax number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
11.2. WAIVERS; AMENDMENTS.
(a) No failure or delay by the Agent, the Issuing Lender, the
Canadian Lender, the Cash Management Bank or the Lenders in exercising
any right or power hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise
of any other right or power. The rights and remedies of the Agent, the
Issuing Lender, the Cash Management Bank and the Lenders hereunder and
under the other Loan Documents are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by any Credit
Party or Subsidiary therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section 11.2, and
then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or issuance of a
Letter of Credit shall not be construed as a waiver of any Default,
regardless of whether the Agent, any Lender or the Issuing Lender may
have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the
Borrower and the Required Lenders or by the Borrower and the Agent with
the written consent of the Required Lenders and the Agent; PROVIDED
that no such agreement shall:.
(i) increase the Commitment of any Lender without the
written consent of such Lender and the Agent;
(ii) reduce the principal amount of any Loan or
Reimbursement Obligation or reduce the rate of interest
thereon (other than the decision not to charge, or to cease to
charge, Post-Default Interest), or reduce any fees payable
hereunder, without the written consent of each Lender affected
thereby;
(iii) postpone the scheduled date of payment of the
principal amount of any Loan or Reimbursement Obligation
(which excludes mandatory prepayments of the Loans required
under Section 2.8(b)), or any interest thereon, or any fees
payable hereunder, or reduce the amount of, waive or excuse
any such payment, change the maturity date of any Loan, or
postpone the scheduled date of expiration of any Commitment,
or extend the ultimate expiration date of any Letter of Credit
beyond the Maturity Date, without the written consent of each
Lender affected thereby;
(iv) except as expressly set forth in clause (x)
below, change subsection 2.8(c) in a manner that would alter
the application of prepayments thereunder, or change
subsections 2.7(c), (d) or (e) in a manner that would alter
the pro rata sharing of payments required thereby, without in
each case the written consent of each Lender;
(v) alter the rights or obligations of the Borrower
to prepay Loans (other than mandatory prepayments of Loans
under subsection 2.8(b)) without the written consent of each
Lender;
(vi) change any of the provisions of this Section
11.2 or the definition of "Required Lenders" or any other
provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights
hereunder or under any other Loan Document or make any
determination or grant any consent hereunder or thereunder,
without the written consent of each Lender;
(vii) release all or substantially all of the
Guarantors from their obligations in respect of its Guarantee
under Article 3 or release all or substantially all of the
Collateral (or terminate any Lien with respect thereto),
except as expressly permitted in this Agreement, without the
written consent of each Lender;
(viii) waive any of the conditions precedent
specified in Section 6.1 without the written consent of each
Lender and the Agent;
(x) subordinate the Loans to any other Indebtedness;
(xi) increase the percentage of Eligible Accounts,
Eligible Inventory or Appraised Value of the Canadian Real
Property (as applicable) in the calculation of the Canadian
Borrowing Base or the Domestic Borrowing Base, without the
written consent of each Lender; or
(xii) amend the definitions of "Domestic Borrowing
Base" or "Canadian Borrowing Base" or of any definition of any
component thereof, such that more credit would be available to
the Borrower or the Canadian Borrowers, based on the same
assets, as would have been available to the Borrower or the
Canadian Borrowers immediately prior to such amendment, it
being understood, however, that: the foregoing shall not (A)
limit the adjustment by the Agent of any reserve in the
Agent's administration of the Loans as otherwise permitted by
this Agreement or (B) prevent the Agent, in its administration
of the Loans, from restoring any component of Domestic
Borrowing Base or Canadian Borrowing Base or Term Loan
Borrowing Base which had been lowered by the Agent back to the
value of such component, as stated in this Agreement or to an
intermediate value;
PROVIDED further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Agent or the Issuing Lender hereunder without the
prior written consent of the Agent or the Issuing Lender, as the case may be.
11.3. EXPENSES; INDEMNITY: DAMAGE WAIVER.
(a) The Credit Parties jointly and severally agree to pay, or
reimburse the Agent or the Lenders, as applicable, for paying, (i) all
reasonable out-of-pocket expenses incurred by the Agent and its
Affiliates, including the reasonable fees, charges and disbursements of
Special Counsel and any local counsel, in connection with the
syndication of the credit facilities provided for herein, the
preparation of this Agreement and the other Loan Documents or any
amendments, modifications or waivers of the provisions hereof or
thereof (whether or not the transactions contemplated hereby or thereby
shall be consummated), or the administration or interpretation of the
Loan Documents and other instruments mentioned herein (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Lender in
connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder, (iii) all
out-of-pocket expenses (including without limitation reasonable
attorneys' fees and costs, which attorneys may be employees of the
Agent, the Issuing Lender, the Canadian Lender, the Cash Management
Bank or any Lender, and reasonable consulting, accounting, appraisal,
investment banking and similar professional fees and charges) incurred
by the Agent, the Issuing Lender, the Canadian Lender, the Cash
Management Bank or any Lender, including the fees, costs, charges and
disbursements of any counsel for the Agent, the Issuing Lender, the
Canadian Lender, the Cash Management Bank or any Lender, in connection
with (A) the enforcement or protection of their rights in connection
with this Agreement and the other Loan Documents, including their
rights under this Section 11.3, or in connection with the Loans made or
Letters of Credit issued hereunder, including in connection with any
workout, restructuring or negotiations in respect thereof, and (B) any
litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to any Lender's or the Agent's
relationship with the Borrower or any of its Subsidiaries, (iv) all
reasonable fees, expenses and disbursements of the Agent incurred in
connection with UCC and other collateral security searches, UCC and
other collateral security filings, intellectual property searches,
intellectual property filings or mortgage recordings, (v) any fees,
costs, expenses and bank charges, including bank charges for returned
checks, incurred by the Agent or the Cash Management Bank in
establishing, maintaining or handling agency accounts, lock box
accounts and other accounts for the collection of any of the
Collateral, (vi) all Other Taxes levied by any Governmental Authority
in respect of this Agreement or any of the other Loan Documents or any
other document referred to herein or therein and all costs, expenses,
Taxes, assessments and other charges incurred in connection with any
filing, registration, recording or perfection of any security interest
contemplated by any Loan Document or any other document referred to
therein. The Agent shall be entitled to pay any of the foregoing fees
and expenses by causing the debit of any account maintained by the
Borrower or any of its Subsidiaries with the Agent, the Cash Management
Bank, or any other institution with which the Agent shall have entered
into an agency account agreement.
(b) The Credit Parties jointly and severally agree to
indemnify the Agent, the Issuing Lender, the Canadian Lender, the Cash
Management Bank, each Lender and each Related Party of any of the
foregoing Persons (each such Person being called an "INDEMNITEE")
against, and hold each Indemnitee harmless from, any and all
Environmental Costs, losses, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee and settlement costs, incurred by or asserted
against any Indemnitee of every nature and character arising out of, in
connection with, or as a result of (i) the execution or delivery of
this Agreement, the other Loan Documents or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or thereunder or the consummation of
the transactions contemplated hereby or any other transactions
contemplated hereby or thereby (other than breaches by the Agent, the
Issuing Lender, the Canadian Lender, the Cash Management Bank or a
Lender), (ii) any Loan or Letter of Credit or the actual or proposed
use of the proceeds therefrom (including any refusal by the Issuing
Lender to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly
comply with the terms of such Letter of Credit), (iii) any actual or
alleged presence, disposal, escape, seepage, leakage, spillage,
discharge, emission, Release or threatened Release of Hazardous
Materials on or from any property owned, leased or operated by any
Credit Party or any of its Subsidiaries, or any Environmental Liability
related in any way to any Credit Party or any of its Subsidiaries
(including, without limitation, remediation, removal, response,
abatement, restoration, cleanup, legal, investigative, monitoring costs
and related costs, the costs of removal, transportation and disposal of
any and all Hazardous Materials from all or any portion of any Real
Property Asset, costs required to take necessary precautions to protect
against the release of Hazardous Materials at, on, in, about, under,
within, near or in connection with the Real Property Assets in or into
the air, soil, surface water, ground water, or soil vapor, any public
domain, or any surrounding areas, and costs incurred to comply, in
connection with all or any portion of the Real Property Assets, with
all applicable laws with respect to Hazardous Materials), (iv) the
reversal or withdrawal of any provisional credits granted by the Agent
upon the transfer of funds from lock box, bank agency, concentration
accounts or otherwise under any cash management arrangements with any
Credit Party or in connection with the provisional honoring of funds
transfers, checks or other items, (v) any action taken by such
Indemnitee in accordance with instructions given to such Indemnitee by
Electronic Communications, whether arising out of any investigation,
litigation or proceeding brought by such Credit Party, by others on
behalf of such Credit Party, by any third party or by any successors,
or assigns such Credit Party and notwithstanding the fact that (A) the
instructions received by such Indemnitee might have been unauthorized
by such Credit Party or (B) such Indemnitee might have misinterpreted
said instructions or made any other error, mistake or omission, absent
gross negligence or willful misconduct, or (vi) any actual or
prospective claim (including, but not limited to, claims with respect
to wrongful death, personal injury or damage to property), litigation,
investigation, Environmental Actions or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto, including any
actual or alleged infringement of any patent, copyright, trademark,
service ▇▇▇▇ or similar right of any Credit Party comprised in the
Collateral; PROVIDED that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such
Indemnitee.
(c) To the extent that the Credit Parties fail to pay any
amount required to be paid by them to the Agent under paragraph (a) or
(b) of this Section 11.3, each Lender severally agrees to pay to the
Agent such Lender's Applicable Percentage (determined as of the time
that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount. To the extent that the Credit Parties
fail to pay any amount required to be paid by them to the Issuing
Lender under paragraph (a) or (b) of this Section 11.3, each Lender
severally agrees to pay to the Issuing Lender such Lender's Applicable
Percentage (determined as of the time that the applicable unreimbursed
expense or indemnity payment is sought) of such unpaid amount.
(d) TO THE EXTENT PERMITTED BY APPLICABLE LAW, NONE OF THE
CREDIT PARTIES SHALL ASSERT, AND EACH CREDIT PARTY HEREBY WAIVES, ANY
CLAIM AGAINST ANY INDEMNITEE, ON ANY THEORY OF LIABILITY, FOR SPECIAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR
ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF,
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY AGREEMENT OR INSTRUMENT
CONTEMPLATED HEREBY OR THEREBY, THE TRANSACTIONS CONTEMPLATED HEREBY,
ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREOF.
(e) All amounts due under this Section 11.3 shall be payable
promptly after written demand therefor.
(f) In the event that any investigation, site monitoring,
containment, clean-up, removal, transportation, disposal, restoration,
reporting, or sampling with respect to Hazardous Materials or soil,
water, tanks, drums or other materials which contain or contained
Hazardous Materials (a "REMEDIAL WORK") is necessary under any
applicable local, state or federal law or regulation, any judicial
order, or by any governmental or non-governmental entity or Person
because of, or in connection with, the current or future presence,
suspected presence, release or suspected release or threat of release
of Hazardous Materials in or into the air, soil, ground water, surface
water or soil vapor at, on, about, under, within, near, from or in
connection with any Real Property Asset (or any portion thereof), the
Credit Parties shall promptly commence, or cause to be commenced, and
thereafter diligently prosecute to completion, all such Remedial Work.
All Remedial Work shall be performed by licensed contractors qualified
to perform such work under applicable federal, state and local law. All
Environmental Costs related to such Remedial Work shall be paid by the
Credit Parties including, without limitation, reasonable Environmental
Costs incurred by any Indemnitee in connection with the monitoring or
review of such Remedial Work by the Indemnitee or a third party engaged
by Indemnitee. In the event the Credit Parties shall fail to promptly
commence, or cause to be commenced, or fail to diligently prosecute to
completion, such Remedial Work, the Agent may, but shall not be
required to, cause such Remedial Work to be performed and all
Environmental Costs shall become an Environmental Liability hereunder.
11.4. SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that no Credit Party
may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender and the
Agent (and any attempted assignment or transfer without such consent
shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the
parties hereto, their respective successors and assigns permitted
hereby and, to the extent expressly contemplated hereby, the Related
Parties of the Agent, the Issuing Lender, the Canadian Lender, the Cash
Management Bank and the Lenders) any legal or equitable right, remedy
or claim under or by reason of this Agreement.
(b) Each Lender may at any time and from time to time assign
to one or more assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of the Revolving
Credit Commitment and the Loans at the time owing to it); PROVIDED that
for any assignment:
(i) except in the case of an assignment to a Lender
prior to such assignment or an Affiliate of such a Lender or
an Approved Fund (in which case, the assignee and assignor
Lenders shall give notice of the assignment to the Agent), the
Borrower and the Agent (and, in the case of an assignment of
all or a portion of a Commitment or any Lender's obligations
in respect of its Total LC Exposure, the Issuing Lender) each
must give its prior written consent to such assignment (which
consent shall not be unreasonably withheld, delayed or
conditioned),
(ii) except in the case of an assignment to a Lender
or an Affiliate or Approved Fund of a Lender or an assignment
of the entire remaining amount of the assigning Lender's
aggregate Commitments, the aggregate amount of the Commitments
of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Agent) shall
not be less than $5,000,000 unless the Borrower and the Agent
otherwise consent,
(iii) each Lender shall assign its Revolving Credit
Commitment, Revolving Loans, and Term Loan in the same
proportions, such that after giving effect to such assignment,
the Assignor's Applicable Percentage of the Revolving Credit
Commitments and Revolving Loans shall be the same as the
Assignor's Applicable Percentage of the outstanding Term Loan,
and the Assignee's Applicable Percentage of the Revolving
Credit Commitments and Revolving Loans shall be the same as
the Assignee's Applicable Percentage of the outstanding Term
Loan,
(iv) the parties to each assignment shall execute and
deliver to the Agent an Assignment and Acceptance, and, unless
such assignment is to a Lender or its Affiliate or Approved
Fund, shall pay a processing and recordation fee of $3,500,
and
(v) the assignee, if it shall not be a Lender, shall
deliver to the Agent an Administrative Questionnaire;
PROVIDED further that any consent of the Borrower otherwise
required under this paragraph shall not be required if an Event of
Default has occurred and is continuing or in the event of an assignment
to an existing Lender.
(c) Upon acceptance and recording pursuant to paragraph (e) of
this Section 11.4, from and after the effective date specified in each
Assignment and Acceptance, the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment
and Acceptance, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of
the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of the assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Sections 2.10, 2.11 and 11.3 and subsection 2.3(e)). Notwithstanding
anything therein to the contrary, no Approved Fund shall be entitled to
receive any greater amount pursuant to Sections 2.10 and 2.11 and
subsection 2.3(e) than the transferor Lender would have been entitled
to receive in respect of the assignment effected by such transferor
Lender had no assignment occurred. Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not
comply with paragraph (b) of this Section 11.4 shall be treated for
purposes of this Agreement as a sale by such Lender of a participation
in such rights and obligations in accordance with paragraph (f) of this
Section.
(d) The Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in Boston, Massachusetts
a copy of each Assignment and Acceptance delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amount of the Loans and LC Disbursements
owing to, each Lender pursuant to the terms hereof from time to time
(the "REGISTER"). The entries in the Register shall be conclusive, and
the Borrower, the Agent, the Issuing Lender and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available
for inspection by the Borrower, the Issuing Lender and any Lender or
the Agent, at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, together
with each Note subject to such assignment, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in
paragraph (b) of this Section 11.4 and any written consent to such
assignment required by paragraph (b) of this Section 11.4, the Agent
shall accept such Assignment and Acceptance, record the information
contained therein in the Register and give prompt notice thereof to the
Borrower and the Lenders (other than the assigning Lender). No
assignment shall be effective for purposes of this Agreement unless it
has been recorded in the Register as provided in this paragraph. Within
five (5) Business Days after receipt of such notice, the Borrower, at
its own expense, shall execute and deliver to the Agent, in exchange
for each surrendered Note, a new Note to the order of such assignee in
an amount equal to the amount assumed by such assignee pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained
some portion of its obligations hereunder, a new Note to the order of
the assigning Lender in an amount equal to the amount retained by it
hereunder. Such new Notes shall provide that they are replacements for
the surrendered Notes, shall be in an aggregate principal amount equal
to the aggregate principal amount of the surrendered Notes, shall be
dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the assigned Notes.
(f) Any Lender may, without the consent of or notice to the
Borrower, the Agent or the Issuing Lender, sell participations to one
or more banks or other entities (a "PARTICIPANT") in all or a portion
of such Lender's rights and obligations under this Agreement (including
all or a portion of its Commitments and the Loans owing to it);
PROVIDED 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 and
(iii) the Borrower, the Agent, the Issuing Lender 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. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the
sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; PROVIDED
that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section
11.2(b), or in Section 11.2(c), that affects such Participant. Subject
to paragraph (g) of this Section 11.4, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.10 and 2.11
and subsection 2.3(e) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this
Section 11.4.
(g) A Participant shall not be entitled to receive any greater
payment under Section 2.10 or 2.11 than the applicable Lender would
have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such
Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 2.11 unless the Borrower is
notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
subsection 2.11(e) as though it were a Lender.
(h) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any such pledge or
assignment to a Federal Reserve Bank, and this Section shall not apply
to any such pledge or assignment of a security interest; PROVIDED that
no such pledge or assignment of a security interest shall release a
Lender from any of its obligations hereunder or substitute any such
assignee for such Lender as a party hereto.
(i) Anything in this Section 11.4 to the contrary
notwithstanding, no Lender may assign or participate any interest in
any Loan held by it hereunder to any Credit Party or any of its
Affiliates or Subsidiaries without the prior consent of each Lender and
the Agent.
(j) A Lender may furnish any information concerning any Credit
Party or any of its Subsidiaries in the possession of such Lender from
time to time to assignees and participants (including prospective
assignees and participants) subject, however, to and so long as the
recipient agrees in writing to be bound by, the provisions of Section
11.13. In addition, the Agent may furnish any information concerning
any Credit Party, any of its Subsidiaries, or any Affiliate in the
Agent's possession to any Affiliate of the Agent, subject, however, to
the provisions of Section 11.13. The Credit Parties shall assist any
Lender in effectuating any assignment or participation pursuant to this
Section 11.4 (including during syndication) in whatever manner such
Lender reasonably deems necessary, including participation in meetings
with prospective transferees.
(k) If any assignee Lender is an Affiliate of the Credit
Parties, then any such assignee Lender shall have no right to vote as a
Lender hereunder or under any of the other Loan Documents for purposes
of granting consents or waivers or for purposes of agreeing to
amendments or other modifications to any of the Loan Documents or for
purposes of making requests to the Agent pursuant to Section 9.1, and
the determination of the Required Lenders shall for all purposes of
this Agreement and the other Loan Documents be made without regard to
such assignee Lender's interest in any of the Loans or Reimbursement
Obligations. If any Lender sells a participating interest in any of the
Loans or Reimbursement Obligations to a Participant, and such
Participant is any Credit Party or an Affiliate of such Credit Party,
then such transferor Lender shall promptly notify the Agent of the sale
of such participation. A transferor Lender shall have no right to vote
as a Lender hereunder or under any of the other Loan Documents for
purposes of granting consents or waivers or for purposes of agreeing to
amendments or modifications to any of the Loan Documents or for
purposes of making requests to the Agent pursuant to Section 9.1 to the
extent that such participation is beneficially owned by any Credit
Party or any Affiliate of such Credit Party, and the determination of
the Required Lenders shall for all purposes of this Agreement and the
other Loan Documents be made without regard to the interest of such
transferor Lender in the Loans or Reimbursement Obligations to the
extent of such participation.
(l) Notwithstanding anything to the contrary contained in this
subsection 11.4, any Lender (a "GRANTING LENDER") may grant to a
special purpose funding vehicle (an "SPC") of such Granting Lender,
identified as such in writing from time to time delivered by the
Granting Lender to the Agent and the Credit Parties, the option to
provide to such Credit Party all or any part of any Loan that such
Granting Lender would otherwise be obligated to make to such Credit
Party pursuant to this Agreement, PROVIDED that (i) nothing herein
shall constitute a commitment to make any Loan by any SPC, (ii) the
Granting Bank's obligations under this Agreement shall remain
unchanged, (iii) the Granting Lender should retain the sole right to
enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement and (iv) if an SPC elects not
to exercise such option or otherwise fails to provide all or any part
of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the terms hereof. The making of a Loan by an SPC hereunder
shall utilize the Commitment of the Granting Lender to the same extent,
and as if, such Loan were made by the Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any expense
reimbursement, indemnity or similar payment obligation under this
Agreement (all liability for which shall remain with the Granting
Lender). In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after
the later of (i) the payment in full of all outstanding senior
indebtedness of any SPC and (ii) the Maturity Date, it will not
institute against, or join any other Person in instituting against,
such SPC any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or similar proceedings under the laws of the
United States of America or any State thereof. In addition,
notwithstanding anything to the contrary contained in this subsection
11.4(l), any SPC may (i) with notice to, but (except as specified
below) without the prior written consent of, any Credit Party or the
Agent and without paying any processing fee therefor, assign all or a
portion of its interests in any Loans to its Granting Lender or to any
financial institutions (consented to by the Agent and, so long as no
Default or Event of Default has occurred and is continuing, such Credit
Party, which consents shall not be unreasonably withheld or delayed)
providing liquidity and/or credit facilities to or for the account of
such SPC to fund the Loans made by such SPC or to support the
securities (if any) issued by such SPC to fund such Loans and (ii)
disclose on a confidential basis any non-public information relating to
its Loans (other than financial statements referred to in Sections 5.4
or 7.1) to any rating agency, commercial paper dealer or provider of a
surety, guarantee or credit or liquidity enhancement to such SPC. In no
event shall any Credit Party be obligated to pay to an SPC that has
made a Loan any greater amount than such Credit Party would have been
obligated to pay under this Agreement if the Granting Lender had made
such Loan. An amendment to this subsection 11.4(l) without the written
consent of an SPC shall be ineffective insofar as it alters the rights
and obligations of such SPC.
11.5. SURVIVAL. All covenants, agreements, representations and
warranties made by the Credit Parties and Subsidiaries herein and in the other
Loan Documents, and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement and the other Loan Documents,
shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of this Agreement and the other Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Agent, the Issuing Lender or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect so long as the principal of or any accrued interest on any Loan or
any fee or any other Obligation payable under this Agreement or the other Loan
Documents is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.10, 2.11, 10.3, and 11.4 and subsection 2.3(e) shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any other Loan Document or any provision hereof or thereof.
11.6. COUNTERPARTS; INTEGRATION; REFERENCES TO AGREEMENT;
EFFECTIVENESS. This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Agreement, the other Loan Documents and any separate letter
agreements with respect to fees payable to the Agent or its counsel constitute
the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Whenever there is a reference in any Loan
Document or UCC Financing Statement to the "CREDIT AGREEMENT" to which the
Agent, the Lenders and the Credit Parties are parties, such reference shall be
deemed to be made to this Agreement among the parties hereto. Except as provided
in Section 6.1, this Agreement shall become effective when it shall have been
executed by the Agent and when the Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
11.7. SEVERABILITY. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
11.8. RIGHT OF SETOFF. Each Credit Party hereby grants to the Agent,
the Cash Management Bank and each Lender that from time to time maintains any
deposit accounts, holds or controls any funds, collateral or property, or
otherwise becomes indebted to the Credit Parties a security interest in all
deposits (general or special, time or demand, provisional or final) and funds at
any time held and other indebtedness at any time owing by the Agent, the Cash
Management Bank or any Lender to or for the credit or the account of any Credit
Party as security for the Obligations, and the Credit Parties hereby agree that
if an Event of Default shall have occurred and be continuing, the Agent, the
Cash Management Bank and each Lender are hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) or
other funds, securities or other property of the Credit Parties at any time held
and other indebtedness at any time owing by the Agent, the Cash Management Bank
or such Lender to or for the credit or the account of any Credit Party against
any and all of the Obligations, irrespective of whether or not the Agent or the
Lenders shall have made any demand under this Agreement and although any of the
Obligations may be unmatured. The rights of the Agent, the Canadian Lender, the
Cash Management Bank and each Lender under this Section 11.8 are in addition to
any other rights and remedies (including other rights of setoff) which the
Agent, the Cash Management Bank or any such Lender may have. ANY AND ALL RIGHTS
TO REQUIRE THE CASH MANAGEMENT BANK OR ANY LENDER TO EXERCISE ITS RIGHTS OR
REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS,
PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS
OR OTHER PROPERTY OF ANY CREDIT PARTY ARE HEREBY KNOWINGLY, VOLUNTARILY AND
IRREVOCABLY WAIVED. Each of the Lenders agree with each other Lender that (a) if
an amount to be set off is to be applied to Indebtedness of any Credit Party to
such Lender, other than Indebtedness evidenced by the Notes held by such Lender
or constituting Reimbursement Obligations owed to such Lender, such amount shall
be applied ratably to such other Indebtedness and to the Indebtedness evidenced
by all such Notes held by such Lender or constituting Reimbursement Obligations
owed to such Lender, and (b) if such Lender shall receive from any Credit Party,
whether by voluntary payment, exercise of the right of setoff, counterclaim,
cross action, enforcement of the claim evidenced by the Notes held by, or
constituting Reimbursement Obligations owed to, such Lender by proceedings
against such Credit Party at law or in equity or by proof thereof in bankruptcy,
reorganization, liquidation, receivership or similar proceedings, or otherwise,
and shall retain and apply to the payment of the Note or Notes held by, or
Reimbursement Obligations owed to, such Lender any amount in excess of its
ratable portion of the payments received by all of the Lenders with respect to
the Notes held by, and Reimbursement Obligations owed to, all of the Lenders,
such Lender will make such disposition and arrangements with the other Lenders
with respect to such excess, either by way of distribution, PRO TANTO assignment
of claims, subrogation or otherwise as shall result in each Lender receiving in
respect of the Notes held by it or Reimbursement Obligations owed it, its
proportionate payment as contemplated by this Agreement; PROVIDED that if all or
any part of such excess payment is thereafter recovered from such Lender, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
11.9. SUBORDINATION BY CREDIT PARTIES. The Credit Parties hereby agree
that all present and future Indebtedness of any Credit Party to another Credit
Party ("INTERCOMPANY INDEBTEDNESS") shall be subordinate and junior in right of
payment and priority to the Obligations, and each Credit Party agrees not to
make, demand, accept or receive any payment in respect of any present or future
Intercompany Indebtedness, including, without limitation, any payment received
through the exercise of any right of setoff, counterclaim or cross claim, or any
collateral therefor, unless and until such time as the Obligations shall have
been indefeasibly paid in full; PROVIDED that, so long as no Default shall have
occurred and be continuing and no Default shall be caused thereby, the Credit
Parties may make and receive such payments as shall be customary in the ordinary
course of the Credit Parties' business. If, notwithstanding the foregoing
sentence, any Credit Party shall collect, enforce or receive any amounts in
respect of such indebtedness while any Obligations are still outstanding, such
amounts shall be collected, enforced and received by such Credit Party as
trustee for the Lenders and the Agent and be paid over to the Agent, for the
benefit of the Lenders and the Agent, on account of the Obligations, without
affecting in any manner the liability of such Credit Party under the other
provisions of this Agreement. Without in any way limiting the foregoing, in the
event of any insolvency or bankruptcy proceedings, or any receivership,
liquidation, reorganization, dissolution or other similar proceedings relative
to any Credit Party or to its businesses, properties or assets, the Lenders
shall be entitled to receive payment in full of all of the Obligations, before
any Credit Party shall be entitled to receive any payment in respect of any
present or future Intercompany Indebtedness.
11.10. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) This Agreement shall be construed in accordance with and
governed by the law of The Commonwealth of Massachusetts.
(b) Each party hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction
of the courts of The Commonwealth of Massachusetts and of the United
States District Court for the District of Massachusetts, and any
appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or the other Loan Documents, or
for recognition or enforcement of any judgment, and each of the parties
hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in
such Massachusetts court (or, to the extent permitted by law, in such
Federal court). Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any
right that the Agent, the Issuing Lender, the Canadian Lender. the Cash
Management Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against any Credit Party or any
of its Subsidiaries or its properties in the courts of any
jurisdiction.
(c) Each party hereto hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this
Agreement or the other Loan Documents in any court referred to in
paragraph (b) of this Section 11.10. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 11.1.
Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
11.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.11.
11.12. HEADINGS AND DRAFTING. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement. Each of the parties hereto
agrees that no party hereto shall be deemed to be the drafter of this Agreement.
11.13. CONFIDENTIALITY. Each Lender agrees to keep confidential
information obtained by it pursuant hereto and the other Loan Documents
confidential in accordance with such Lender's customary practices and agrees
that it will only use such information in connection with the transactions
contemplated by this Agreement and not disclose any of such information other
than (a) to such Lender's employees, representatives, directors, attorneys,
auditors, agents, professional advisors, trustees or Affiliates who are advised
of the confidential nature of such information or to any direct or indirect
contractual counterparty in swap agreements or such contractual counterparty's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provisions of
this Section 11.13), (b) to the extent such information presently is or
hereafter becomes available to such Lender on a non-confidential basis from any
source of such information that is in the public domain at the time of
disclosure, (c) to the extent disclosure is required by law (including
applicable securities law), regulation, subpoena or judicial order or process
(PROVIDED that notice of such requirement or order shall be promptly furnished
to the Borrower unless such notice is legally prohibited) or requested or
required by bank, securities, insurance or investment company regulators or
auditors or any administrative body or commission to whose jurisdiction such
Lender may be subject, (d) to any rating agency to the extent required in
connection with any rating to be assigned to such Lender, (e) to assignees or
participants or prospective assignees or participants who agree to be bound by
the provisions of this Section 11.13, (f) to the extent required in connection
with any litigation between any Credit Party and any Lender with respect to the
Loans or this Agreement and the other Loan Documents or (g) with the Borrower's
prior written consent.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BORROWER
--------
COLUMBUS ▇▇▇▇▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
CANADIAN BORROWERS
------------------
LARCO INDUSTRIAL SERVICES LTD
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Treasurer
COLUMBUS ▇▇▇▇▇▇▇▇ LIMITED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Assistant Treasurer
GUARANTORS
----------
YALE INDUSTRIAL PRODUCTS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Treasurer
CRANE EQUIPMENT & SERVICE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Treasurer
AUDUBON WEST, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Treasurer
LICO STEEL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Treasurer
AUDUBON EUROPE S.A.R.L.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Manager
AGENT
FLEET CAPITAL CORPORATION,
as Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
ISSUING LENDER
--------------
FLEET NATIONAL BANK,
as Issuing Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
CASH MANAGEMENT BANK
--------------------
FLEET NATIONAL BANK,
as Cash Management Bank
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
LENDER
------
FLEET CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
LENDER
------
CITIZENS BUSINESS CREDIT COMPANY, A
DIVISION OF CITIZENS LEASING, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: First Vice President
LENDER
------
CONGRESS FINANCIAL CORPORATION
(NEW ENGLAND)
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: First Vice President
LENDER
------
KEY BANK N.A.
By: /s/ ▇▇▇▇ ▇ ▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
LENDER
------
LASALLE BUSINESS CREDIT, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
LENDER
------
MANUFACTURERS AND TRADERS TRUST COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
LENDER
------
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL, A DIVISION OF
▇▇▇▇▇▇▇ ▇▇▇▇▇ BUSINESS FINANCIAL
SERVICES INC.
By: /s/ ▇. ▇▇▇▇▇▇▇▇
-----------------------
Name: ▇. ▇▇▇▇▇▇▇▇
Title: Director