FINANCING AND SECURITY AGREEMENT
by and between
NATIONSBANK, N.A.
and
▇▇▇▇▇ PLASTICS CORPORATION
January 21, 1997
ARTICLE 1
SECTION 1.1 CERTAIN DEFINED TERMS 1
SECTION 1.2 ACCOUNTING TERMS AND OTHER DEFINITIONAL PROVISIONS 47
ARTICLE 2
THE CREDIT FACILITIES
SECTION 2.1 THE REVOLVING CREDIT FACILITY 48
2.1.1 REVOLVING CREDIT FACILITY 48
2.1.2 PROCEDURE FOR MAKING ADVANCES UNDER THE REVOLVING LOAN
49
2.1.3 BORROWING BASE 50
2.1.4 BORROWING BASE REPORT 51
2.1.5 REVOLVING CREDIT NOTES 53
2.1.6 MANDATORY PREPAYMENTS OF REVOLVING LOAN 53
2.1.7 OPTIONAL PREPAYMENTS OF REVOLVING LOAN 53
2.1.8 THE COLLATERAL ACCOUNT 53
2.1.9 REVOLVING LOAN ACCOUNT 55
2.1.10 REVOLVING CREDIT UNUSED LINE FEE 56
2.1.11 EARLY TERMINATION FEE 56
2.1.12 REQUIRED AVAILABILITY UNDER THE REVOLVING CREDIT
FACILITY............................................ 59
2.1.13 OPTIONAL REDUCTION OF REVOLVING CREDIT COMMITTED AMOUNT
60
SECTION 2.2 THE TERM LOAN FACILITY 60
2.2.1 TERM LOAN COMMITMENTS 60
2.2.2 AMORTIZATION OF TERM LOANS; THE TERM NOTES 61
2.2.3 MANDATORY PREPAYMENTS OF TERM LOAN 62
2.2.4 OPTIONAL PREPAYMENTS OF TERM LOANS 63
SECTION 2.3 THE LETTER OF CREDIT FACILITY....................... 64
2.3.1 LETTERS OF CREDIT 64
2.3.2 LETTER OF CREDIT FEES 64
2.3.3 TERMS OF LETTERS OF CREDIT; POST-EXPIRATION DATE
LETTERS OF CREDIT................................... 65
2.3.4 PROCEDURES FOR LETTERS OF CREDIT 66
2.3.5 PAYMENTS OF LETTERS OF CREDIT 67
2.4.1 BOND LETTERS OF CREDIT 68
2.4.2 BOND LETTER OF CREDIT FEES 69
2.4.3 TERMS OF BOND LETTERS OF CREDIT 69
2.4.4 PROCEDURES FOR BOND LETTERS OF CREDIT 70
2.4.5 PAYMENTS OF BOND LETTERS OF CREDIT 71
2.5.1 PROCEDURES FOR LETTERS OF CREDIT AND BOND LETTERS OF
CREDIT.............................................. 73
2.5.2 GENERAL LETTER OF CREDIT PROVISIONS 73
2.5.3 PARTICIPATIONS IN THE LETTERS OF CREDIT AND THE BOND
LETTERS OF CREDIT................................... 75
2.5.4 PAYMENTS BY THE LENDERS TO THE AGENT 75
SECTION 2.6 INTEREST............................................... 77
2.6.2 SELECTION OF INTEREST RATES 78
2.6.3 INABILITY TO DETERMINE LIBOR BASE RATE 80
2.6.4 INDEMNITY 80
2.6.5 PAYMENT OF INTEREST 81
SECTION 2.7 GENERAL FINANCING PROVISIONS
2.7.1 BORROWER'S REPRESENTATIVES 82
2.7.2 USE OF PROCEEDS OF THE LOANS 83
2.7.3 FIELD EXAMINATION FEES 83
2.7.4 COMPUTATION OF INTEREST AND FEES 83
2.7.5 PAYMENTS 83
2.7.6 LIENS; SETOFF 84
2.7.7 REQUIREMENTS OF LAW 84
2.7.8 FUNDS TRANSFER SERVICES 85
SECTION 2.8 SETTLEMENT AMONG LENDERS 86
2.8.1 TERM LOANS 86
2.8.2 REVOLVING LOAN 86
2.8.3 SETTLEMENT PROCEDURES AS TO REVOLVING LOAN 86
2.8.4 SETTLEMENT OF OTHER OBLIGATIONS 90
2.8.5 PRESUMPTION OF PAYMENT 90
ARTICLE 3
THE COLLATERAL
SECTION 3.1 DEBT AND OBLIGATIONS SECURED 92
SECTION 3.2 GRANT OF LIENS 92
SECTION 3.3 COLLATERAL DISCLOSURE LIST 93
SECTION 3.4 PERSONAL PROPERTY 94
3.4.1 SECURITIES, CHATTEL PAPER, PROMISSORY NOTES, ETC. 94
3.4.2 PATENTS, COPYRIGHTS AND OTHER PROPERTY REQUIRING
ADDITIONAL STEPS TO PERFECT......................... 95
SECTION 3.5 RECORD SEARCHES 95
SECTION 3.6 REAL PROPERTY 96
SECTION 3.7 SUBSIDIARY GUARANTOR ASSETS 97
SECTION 3.8 COSTS 98
SECTION 3.9 RELEASE 98
SECTION 3.10 INCONSISTENT PROVISIONS 99
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 REPRESENTATIONS AND WARRANTIES
4.1.1 SUBSIDIARIES 99
4.1.2 GOOD STANDING 99
4.1.3 POWER AND AUTHORITY 99
4.1.4 BINDING AGREEMENTS 100
4.1.5 NO CONFLICTS 100
4.1.6 NO DEFAULTS, VIOLATIONS 100
4.1.7 COMPLIANCE WITH LAWS 101
4.1.8 MARGIN STOCK 101
4.1.9 INVESTMENT COMPANY ACT; MARGIN SECURITIES 101
4.1.10 LITIGATION 102
4.1.11 FINANCIAL CONDITION 102
4.1.12 PROFORMA FINANCIAL STATEMENTS 102
4.1.13 FULL DISCLOSURE 103
4.1.14 INDEBTEDNESS FOR BORROWED MONEY 103
4.1.15 SUBORDINATED DEBT; SENIOR SECURED DEBT 103
4.1.16 TAXES 104
4.1.17 ERISA 104
4.1.18 TITLE TO PROPERTIES 104
4.1.19 PATENTS, TRADEMARKS, ETC. 105
4.1.20 EMPLOYEE RELATIONS 105
4.1.21 PRESENCE OF HAZARDOUS MATERIALS OR HAZARDOUS MATERIALS
CONTAMINATION.......................................105
4.1.22 PERFECTION AND PRIORITY OF COLLATERAL 106
4.1.23 PLACES OF BUSINESS AND LOCATION OF COLLATERAL 106
4.1.24 BUSINESS NAMES AND ADDRESSES 107
4.1.25 EQUIPMENT 107
4.1.26 INVENTORY 107
4.1.27 ACCOUNTS 107
4.1.28 PACKERWARE MERGER TRANSACTION 107
4.1.29 CONTAINER PURCHASE AGREEMENT TRANSACTION 107
4.1.30 BTP/BORROWER TRANSACTION 108
4.1.31 LOAN RESTRUCTURING TRANSACTION 108
4.1.32 BIC/BORROWER TRANSACTION 108
SECTION 4.2 SURVIVAL; UPDATES OF REPRESENTATIONS AND WARRANTIES 109
ARTICLE 5
CONDITIONS PRECEDENT
SECTION 5.1 CONDITIONS TO THE INITIAL ADVANCE AND INITIAL LETTER OF
CREDIT
5.1.1 ORGANIZATIONAL DOCUMENTS - BORROWER. 109
5.1.2 OPINION OF BORROWER'S COUNSEL 110
5.1.3 ORGANIZATIONAL DOCUMENTS - SUBSIDIARY GUARANTOR 111
5.1.4 CONSENTS, LICENSES, APPROVALS, ETC. 111
5.1.5 NOTES 112
5.1.6 FINANCING DOCUMENTS AND COLLATERAL 112
5.1.7 OTHER FINANCING DOCUMENTS 112
5.1.8 OTHER DOCUMENTS, ETC. 112
5.1.9 PAYMENT OF FEES 112
5.1.10 COLLATERAL DISCLOSURE LIST 112
5.1.11 RECORDINGS AND FILINGS 112
5.1.12 INSURANCE CERTIFICATE 113
5.1.13 LANDLORD'S WAIVERS 113
5.1.14 BAILEE ACKNOWLEDGEMENTS 113
5.1.15 FIELD EXAMINATION 113
5.1.16 APPRAISAL 113
5.1.17 PROFORMA BALANCE SHEET AND PROJECTIONS 113
5.1.18 STOCK CERTIFICATES AND STOCK POWERS 113
5.1.19 PACKERWARE MERGER AGREEMENT TRANSACTION 114
5.1.20 ENVIRONMENTAL REPORTS 114
5.1.21 FINANCIAL STATEMENTS 114
SECTION 5.2. CONDITIONS TO ALL EXTENSIONS OF CREDIT 114
5.2.1 DEFAULT 115
5.2.2 REPRESENTATIONS AND WARRANTIES 115
5.2.3 ADVERSE CHANGE 115
5.2.4 LEGAL MATTERS 115
SECTION 6.1 AFFIRMATIVE COVENANTS 115
6.1.1 FINANCIAL STATEMENTS 115
6.1.2 REPORTS TO SEC AND TO STOCKHOLDERS 118
6.1.3 RECORDKEEPING, RIGHTS OF INSPECTION, FIELD EXAMINATION,
ETC.................................................118
6.1.4 CORPORATE EXISTENCE 119
6.1.5 COMPLIANCE WITH LAWS 120
6.1.6 PRESERVATION OF PROPERTIES 120
6.1.7 LINE OF BUSINESS 120
6.1.8 INSURANCE 120
6.1.9 TAXES 121
6.1.10 ERISA 121
6.1.11 NOTIFICATION OF EVENTS OF DEFAULT AND ADVERSE
DEVELOPMENTS........................................122
6.1.12 HAZARDOUS MATERIALS; CONTAMINATION 123
6.1.13 FINANCIAL COVENANTS 124
(a) TANGIBLE CAPITAL FUNDS 124
(b) FUNDED DEBT TO EBITDA 125
(c) INTEREST COVERAGE RATIO 125
(d) FIXED CHARGE COVERAGE RATIO 126
6.1.14 COLLECTION OF ACCOUNTS 126
6.1.15 GOVERNMENT ACCOUNTS 127
6.1.16 INVENTORY 127
6.1.17 INSURANCE WITH RESPECT TO EQUIPMENT AND INVENTORY 128
6.1.18 MAINTENANCE OF THE COLLATERAL 128
6.1.19 DEFENSE OF TITLE AND FURTHER ASSURANCES 129
6.1.20 BUSINESS NAMES; LOCATIONS 130
6.1.21 SUBSEQUENT OPINION OF COUNSEL AS TO RECORDING
REQUIREMENTS........................................130
6.1.22 USE OF PREMISES AND EQUIPMENT 130
6.1.23 PROTECTION OF COLLATERAL 131
6.1.24 APPLICATION OF NET CASUALTY PROCEEDS 131
6.1.25 BTP/BORROWER TRANSACTION 131
6.1.26 BIC/BORROWER TRANSACTION 134
SECTION 6.2 NEGATIVE COVENANTS 137
6.2.1 CAPITAL STRUCTURE, MERGER, ACQUISITION OR SALE OF
ASSETS..............................................138
6.2.2 SUBSIDIARIES 139
6.2.3 PURCHASE OR REDEMPTION OF SECURITIES, DIVIDEND
RESTRICTIONS........................................139
6.2.4 INDEBTEDNESS 140
6.2.5 INVESTMENTS, LOANS AND OTHER TRANSACTIONS 142
6.2.6 CAPITAL EXPENDITURES 144
6.2.7 STOCK OF SUBSIDIARIES 144
6.2.8 SUBORDINATED INDEBTEDNESS 144
6.2.9 LIENS 145
6.2.10 TRANSACTIONS WITH AFFILIATES 146
6.2.11 ERISA COMPLIANCE 146
6.2.12 PROHIBITION ON HAZARDOUS MATERIALS 146
6.2.13 AMENDMENTS 146
6.2.14 METHOD OF ACCOUNTING; FISCAL YEAR 147
6.2.15 TRANSFER OF COLLATERAL 147
6.2.16 SALE AND LEASEBACK 147
ARTICLE 7
DEFAULT AND RIGHTS AND REMEDIES
SECTION 7.1 EVENTS OF DEFAULT 148
7.1.1 FAILURE TO PAY 148
7.1.2 BREACH OF REPRESENTATIONS AND WARRANTIES 148
7.1.3 FAILURE TO COMPLY WITH CERTAIN COVENANTS 148
7.1.4 FAILURE TO COMPLY WITH OTHER COVENANTS 148
7.1.5 DEFAULT UNDER OTHER FINANCING DOCUMENTS OR OBLIGATIONS
149
7.1.6 RECEIVER; BANKRUPTCY 149
7.1.7 INVOLUNTARY BANKRUPTCY, ETC. 149
7.1.8 JUDGMENT 150
7.1.9 EXECUTION; ATTACHMENT 150
7.1.10 DEFAULT UNDER OTHER BORROWINGS 150
7.1.12 MATERIAL ADVERSE CHANGE 151
7.1.13 CHANGE IN OWNERSHIP 151
7.1.15 PARENT LINE OF BUSINESS 151
SECTION 7.2 REMEDIES 152
7.2.1 ACCELERATION 152
7.2.2 FURTHER ADVANCES 152
7.2.3 UNIFORM COMMERCIAL CODE 152
7.2.4 SPECIFIC RIGHTS WITH REGARD TO COLLATERAL 153
7.2.5 APPLICATION OF PROCEEDS 155
7.2.6 PERFORMANCE BY AGENT 155
7.2.7 OTHER REMEDIES 156
ARTICLE 8
THE AGENT
SECTION 8.1 156
SECTION 8.2 NATURE OF DUTIES 157
8.2.1 IN GENERAL 157
8.2.2 EXPRESS AUTHORIZATION 157
SECTION 8.3 RIGHTS, EXCULPATION, ETC 158
SECTION 8.4 RELIANCE 159
SECTION 8.5 INDEMNIFICATION 160
SECTION 8.6 NATIONSBANK INDIVIDUALLY 160
SECTION 8.7 SUCCESSOR AGENT 161
8.7.1 RESIGNATION 161
8.7.2 APPOINTMENT OF SUCCESSOR 161
8.7.3 SUCCESSOR AGENT 161
SECTION 8.8 COLLATERAL MATTERS 161
8.8.1 RELEASE OF COLLATERAL 161
8.8.2 CONFIRMATION OF AUTHORITY, EXECUTION OF RELEASES 162
8.8.3 ABSENCE OF DUTY 163
SECTION 8.9 AGENCY FOR PERFECTION 163
SECTION 8.10 EXERCISE OF REMEDIES 163
SECTION 8.11 CONSENTS 164
SECTION 8.12 CIRCUMSTANCES WHERE CONSENT OF ALL OF THE LENDERS IS
REQUIRED............................................164
SECTION 8.13 DISSEMINATION OF INFORMATION 165
SECTION 8.14 DISCRETIONARY ADVANCES 165
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 NOTICES 166
SECTION 9.2 AMENDMENTS; WAIVERS 167
SECTION 9.3 CUMULATIVE REMEDIES 168
SECTION 9.4 SEVERABILITY 169
SECTION 9.5 ASSIGNMENTS BY LENDERS 169
SECTION 9.6 PARTICIPATIONS BY LENDERS 170
SECTION 9.7 DISCLOSURE OF INFORMATION BY LENDERS 170
SECTION 9.8 SUCCESSORS AND ASSIGNS 171
SECTION 9.9 CONTINUING AGREEMENTS 171
SECTION 9.10 ENFORCEMENT COSTS 172
SECTION 9.11 APPLICABLE LAW; JURISDICTION 172
SECTION 9.12 DUPLICATE ORIGINALS AND COUNTERPARTS 173
SECTION 9.13 HEADINGS 174
SECTION 9.14 NO AGENCY 174
SECTION 9.15 WAIVER OF TRIAL BY JURY 174
SECTION 9.16 LIABILITY OF THE AGENT AND THE LENDERS 175
SECTION 9.17 ENTIRE AGREEMENT 175
FINANCING AND SECURITY AGREEMENT
THIS FINANCING AND SECURITY AGREEMENT (this "Agreement") is made this
21st day of January, 1997, by and among ▇▇▇▇▇ PLASTICS CORPORATION, a
corporation organized under the laws of the State of Delaware (the
"Borrower"); NATIONSBANK, N.A., a national banking association, in its
capacity as a "Lender" ("NationsBank") and each other financial institution
which is a party to this Agreement, whether by execution and delivery of
this Agreement or otherwise pursuant to Section 9.5 hereof (collectively
the "Lenders" and individually, a "Lender"); and NATIONSBANK, N.A., a
national banking association, in its capacity as both collateral and
administrative agent for the Lenders (the "Agent").
RECITALS
A. The Borrower has applied to the Lenders for credit facilities
consisting of (i) a revolving credit facility in the maximum principal
amount of $21,000,000, (ii) a letter of credit facility in the maximum
principal amount of $5,000,000, as part of that revolving credit facility,
(iii) a term loan facility in the maximum principal amount of $27,000,000,
and (iv) a standby letter of credit facility in the maximum principal
amount of $12,000,000, all to be used by the Borrower for the Permitted
Uses described in this Agreement.
B. The Lenders are willing to make those credit facilities available
to the Borrower upon the terms and subject to the conditions set forth in
this Agreement.
ARTICLE 1
DEFINITIONS
SECTION 0.1.1 CERTAIN DEFINED TERMS. As used in this Agreement, the
terms defined in the Preamble and Recitals hereto shall have the respective
meanings specified therein, and the following terms shall have the
following meanings:
"Account" individually and "Accounts" collectively mean all
presently existing or hereafter acquired or created accounts, accounts
receivable, contract rights, notes, drafts, instruments, acceptances,
chattel paper, leases and writings evidencing a monetary obligation or a
security interest in, or a lease of, goods, all rights to receive the
payment of money or other consideration under present or future contracts
(including, without limitation, all rights to receive payments under
presently existing or hereafter acquired or created letters of credit), or
by virtue of merchandise sold or leased, services rendered, by or set forth
in or arising out of any present or future chattel paper, note, draft,
lease, acceptance, writing, bond, insurance policy, instrument, document or
general intangible, and all extensions and renewals of any thereof, all
rights under or arising out of present or future contracts, agreements or
general interest in merchandise which gave rise to any or all of the
foregoing, including all goods, all claims or causes of action now existing
or hereafter arising in connection with or under any agreement or document
or by operation of law or otherwise, all collateral security of any kind
(including, without limitation, real property mortgages and deeds of trust)
and letters of credit given by any Person with respect to any of the
foregoing, all books and records in whatever media (paper, electronic or
otherwise) recorded or stored, with respect to any or all of the foregoing
and all general intangibles necessary or beneficial to retain, access
and/or process the information contained in those books and records, and
all proceeds (cash and non-cash) of the foregoing.
"Account Debtor" means any Person who is obligated on an Account
and "Account Debtors" mean all Persons who are obligated on the Accounts.
"AeroCon, Inc." means AeroCon, Inc., a corporation organized and
existing under the laws of the State of Delaware, and its successors and
assigns.
"Affiliate" means, with respect to any designated Person, any
other Person, (i) directly or indirectly controlling, directly or
indirectly controlled by, or under direct or indirect common control with
the Person designated, (ii) directly or indirectly owning or holding ten
percent (10%) or more of any equity interest in such designated Person, or
(iii) ten percent (10%) or more of whose stock or other equity interest is
directly or indirectly owned or held by such designated Person. For
purposes of this definition, the term "control" (including with correlative
meanings, the terms "controlling", "controlled by" and "under common
control with") means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities or other equity
interests or by contract or otherwise.
"Agent" means the Person defined as the "Agent" in the preamble
of this Agreement and shall also include any successor Agent appointed
pursuant to Section 8.7.
"Agent's Obligations" shall mean any and all Obligations payable
solely to and for the exclusive benefit of the Agent by the Borrower under
the terms of this Agreement and/or any of the other Financing Documents,
including, without limitation, any and all Letter of Credit Fronting Fees
and/or Field Examination Fees.
"Agreement" means this Financing and Security Agreement, as
amended, restated, supplemented or otherwise modified in writing in
accordance with the provisions of Section 9.2 of this Agreement.
"Alternate Base Rate" means the sum of (i) the Base Rate PLUS
(ii) the Applicable Margin.
"Applicable Interest Rate" means (i) the LIBOR Rate, or (ii) the
Alternate Base Rate.
"Applicable Margin" means the applicable rate per annum to be
added to the LIBOR Base Rate or the Base Rate, as set forth in Section 2.6.1.
"Asset Disposition" means the disposition of any or all of the
Assets of the Borrower or any Subsidiary of the Borrower, whether by sale,
lease, transfer or other disposition (including any such disposition
effected by way of merger or consolidation) other than Permitted Asset
Dispositions.
"Assets" means at any date all assets that, in accordance with
GAAP consistently applied, should be classified as assets on a consolidated
balance sheet of the Borrower and its Subsidiaries.
"Assignee" has the meaning set forth in Section 9.5 of this
Agreement.
"Assignment of Patents" means (i) that certain collateral
assignment of patents as security dated the date hereof from the Borrower
to the Agent for the benefit of the Lenders ratably and the Agent and (ii)
that certain collateral assignment of patents as security dated the date
hereof from BTP, BIC, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and PackerWare to the Agent for the
benefit of the Lenders ratably and the Agent, as amended, restated,
supplemented or otherwise modified in writing at any time and from time to
time.
"Assignment of Trademarks" means (i) that certain collateral
assignment of trademarks as security dated the date hereof from the
Borrower to the Agent for the benefit of the Lenders ratably and the Agent
and (ii) that certain collateral assignment of trademarks as security dated
the date hereof from PackerWare to the Agent for the benefit of the Lenders
ratably and the Agent, as amended, restated, supplemented or otherwise
modified in writing at any time and from time to time.
"Base Rate" means the higher of (i) the Prime Rate, or (ii) the
sum of (x) the Federal Funds Rate, plus (y) fifty (50) basis points.
"Base Rate Loan" means any Loan for which interest is to be
computed with reference to the Alternate Base Rate.
"▇▇▇▇▇ ▇▇▇▇▇▇▇▇" means ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Corporation, a corporation
organized and existing under the laws of the State of Delaware, and its
successors and assigns.
"BIC" means ▇▇▇▇▇ Iowa Corporation, a corporation organized and
existing under the laws of the State of Delaware,and its successors and
assigns.
"BIC/Borrower Transaction" means either (i) the merger of BIC
into the Borrower in accordance with all applicable Laws and on terms and
conditions disclosed to and reasonably approved by the Agent, (ii) the sale
and transfer by BIC to the Borrower of all of BIC's rights, title and
interest in and to all Assets of BIC (except Inventory, Accounts and
General Intangibles) and BIC's immediate leaseback of all such Assets in
accordance with the terms of a written lease agreement reasonably
acceptable in all material respects to the Agent, or (iii) the sale of all
or substantially all of the Assets of BIC to the Borrower on terms and
conditions reasonably acceptable to the Agent. The Agent agrees that it
will not consent to the BIC/Borrower Transaction without the prior consent
of the Requisite Lenders, if the closing and consummation of the
BIC/Borrower Transaction would in and of itself constitute or give rise to
an immediate Default or Event of Default.
"BIC/Borrower Transaction Documents" means all material
agreements, documents and instruments now or hereafter executed and
delivered in connection with the BIC/Borrower Transaction, as the same may
from time to time be amended, restated, supplemented or otherwise modified.
"BTP" means ▇▇▇▇▇ Tri-Plas Corporation, a corporation organized
and existing under the laws of the State of Delaware, and its successors
and assigns.
"BTP/Borrower Transaction" means either (i) the merger of BTP
into the Borrower in accordance with all applicable Laws and on terms and
conditions disclosed to and reasonably approved by the Agent or (ii) the
sale and transfer by BTP to the Borrower of all of BTP's rights, title and
interest in and to all Assets of BTP (except Inventory, Accounts and
General Intangibles) and BTP's immediate leaseback of all such Assets in
accordance with the terms of a written lease agreement reasonably
acceptable in all material respects to the Agent. The Agent agrees that it
will not consent to the BTP/Borrower Transaction without the prior consent
of the Requisite Lenders, if the closing and consummation of the
BTP/Borrower Transaction would in and of itself constitute or give rise to
an immediate Default or Event of Default.
"BTP/Borrower Transaction Documents" means all material
agreements, documents and instruments now or hereafter executed and
delivered in connection with the BTP/Borrower Transaction, as the same may
from time to time be amended, restated, supplemented or otherwise modified.
"Bankruptcy Code" means the United States Bankruptcy Code, as
amended from time to time, and any successor Laws.
"Bond Letter of Credit Agreements" means the collective reference
to the Iowa Bond Letter of Credit Agreement and the Nevada Bond Letter of
Credit Agreement.
"Bond Letter of Credit Commitment" means the agreement of the
Agent relating to the issuance of the Bond Letters of Credit, the repayment
of the Bond Letter of Credit Obligations and the agreement of a Lender to
purchase a participating interest in any Bond Letter of Credit Obligations
with respect to such Bond Letters of Credit, all subject to and in
accordance with the provisions of this Agreement; and "Bond Letter of
Credit Commitments" means the collective reference to the Bond Letter of
Credit Commitment of the Agent and each of the Lenders.
"Bond Letter of Credit Committed Amount" has the meaning given
such term in Section 2.4.1.
"Bond Letter of Credit Facility" means the facility established
pursuant to Section 2.4 (Bond Letter of Credit Facility) of this Agreement.
"Bond Letter of Credit Fee" and "Bond Letter of Credit Fees" have
the meanings described in Section 2.4.2 (Bond Letter of Credit Fees).
"Bond Letter of Credit Fronting Fee" and "Bond Letter of Credit
Fronting Fees" have the meanings described in Section 2.4.2(Bond Letter of
Credit Fees).
"Bond Letter of Credit Obligations" means the collective
reference to the Iowa Bond Letter of Credit Obligations and the Nevada Bond
Letter of Credit Obligations.
"Bond Letter of Credit Agreement Documents" means the collective
reference to the Iowa Bond Letter of Credit Agreement Documents - Bonds,
the Iowa Bond Letter of Credit Agreement Documents - NB, the Nevada Bond
Letter of Credit Agreement Documents - Bonds, and the Nevada Bond Letter of
Credit Agreement Documents - NB.
"Bond Letters of Credit" means the collective reference to the
Iowa Bond Letter of Credit - NB and the Nevada Bond Letter of Credit - NB.
"Bonds" means the collective reference to the Iowa Bonds and the
Nevada Bonds.
"Borrowing Base" has the meaning described in Section 2.1.3
(Borrowing Base).
"Borrowing Base Deficiency" has the meaning described in Section
2.1.3 (Borrowing Base).
"Borrowing Base Report" has the meaning described in Section
2.1.4 (Borrowing Base Report).
"Borrowing Base Trigger Event" has the meaning described in
Section 2.1.4 (Borrowing Base Report).
"Business Day" means any day other than a Saturday, Sunday or
other day on which (i) in the case of NationsBank (as Agent and Lender),
commercial banks in the State are authorized or required to close and, (ii)
in the case of the Lenders other than NationsBank, those Lenders are open
for the transaction of business at the addresses stated after their names
on the signature pages of this Agreement.
"Capital Expenditure" means an expenditure which would be
classified as such in accordance with GAAP (whether payable in cash or
other property or accrued as a liability) for Fixed or Capital Assets,
including, without limitation, the entering into of a Capital Lease.
"Capital Lease" means with respect to any Person any lease of
real or personal property, for which the related Lease Obligations have
been or should be, in accordance with GAAP consistently applied, reflected
as a liability on the balance sheet that Person.
"Cash Equivalents" means (a) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit with maturities of one (1) year or less from the
date of acquisition of, or money market accounts maintained with, the
Agent, any Affiliate of the Agent, or any other domestic commercial bank
having capital and surplus in excess of One Hundred Million Dollars
($100,000,000.00) or such other domestic financial institutions or domestic
brokerage houses to the extent disclosed to, and approved by, the Agent and
(c) commercial paper of a domestic issuer rated at least either A-1 by
Standard & Poor's Corporation (or its successor) or P-1 by ▇▇▇▇▇'▇
Investors Service, Inc. (or its successor) with maturities of six (6)
months or less from the date of acquisition.
"Chattel Paper" means a writing or writings which evidence both a
monetary obligation and a security interest in or lease of specific goods;
any returned, rejected or repossessed goods covered by any such writing or
writings and all proceeds (in any form including, without limitation,
accounts, contract rights, documents, chattel paper, instruments and
general intangibles) of such returned, rejected or repossessed goods; and
all proceeds (cash and non-cash) of the foregoing.
"Closing Date" means the Business Day, in any event not later
than January 31, 1997, on which the Agent shall be reasonably satisfied
that the conditions precedent set forth in Section 5.1 (Conditions to Initial
Advance) have been fulfilled or otherwise waived by the Agent.
"Collateral" means all property of the Borrower and each
Subsidiary Guarantor subject from time to time to the Liens of this
Agreement, any of the Security Documents and/or any of the other Financing
Documents, together with any and all cash and non-cash proceeds and
products thereof.
"Collateral Account" has the meaning described in Section 2.1.8 (The
Collateral Account).
"Collateral Disclosure List" has the meaning described in
Section 3.3 (Collateral Disclosure List).
"Collection" means each check, draft, cash, money, instrument,
item, and other remittance in payment or on account of payment of the
Accounts or otherwise with respect to any Collateral, including, without
limitation, cash proceeds of any returned, rejected or repossessed goods,
the sale or lease of which gave rise to an Account, and other proceeds of
Collateral; and "Collections" means the collective reference to all of the
foregoing.
"Commitment" means with respect to each Lender, such Lender's
Revolving Credit Commitment, Letter of Credit Commitment, Term Loan
Commitment, or Bond Letter of Credit Commitment, as the case may be, and
"Commitments" means the collective reference to the Revolving Credit
Commitments, the Letter of Credit Commitments, the Term Loan Commitments
and the Bond Letter of Credit Commitments of all of the Lenders.
"Committed Amount" means with respect to each Lender, such
Lender's Revolving Credit Committed Amount, Letter of Credit Committed
Amount, the Term Loan Committed Amount, or the Bond Letter of Credit
Committed Amount, as the case may be, and "Committed Amounts" means
collectively the Revolving Loan Committed Amount, the Letter of Credit
Committed Amount, the Term Loan Committed Amount and the Bond Letter of
Credit Committed Amount of each of the Lenders.
"Compliance Certificate" means a periodic Compliance Certificate
described in Section 6.1.1 (a) (Financial Statements).
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Borrower within the
meaning of Section 414(b) or (c) of the Internal Revenue Code.
Container Purchase Agreement" means that certain asset purchase
agreement dated as of January 17, 1997 by and among the Borrower, Container
Industries, Inc. and the shareholders of Container Industries, Inc., as
amended, restated, supplemented or otherwise modified.
"Container Purchase Agreement Documents" means collectively the
Container Purchase Agreement and any and all other material agreements,
documents or instruments (together with any and all amendments,
modifications, and supplements thereto, restatements thereof, and
substitutes therefor) previously, now or hereafter executed and delivered
by the Borrower or any other Person in connection with the Container
Purchase Agreement.
"Container Purchase Transaction" means the acquisition of all or
substantially all of the assets of Container Industries, Inc.
"Copyrights" means and includes, in each case whether now
existing or hereafter arising, all of the Borrower's rights, title and
interest in and to (a) all copyrights, rights and interests in copyrights,
works protectable by copyright, copyright registrations, copyright
applications, and all renewals of any of the foregoing, (b) all income,
royalties, damages and payments now or hereafter due and/or payable under
any of the foregoing, including, without limitation, damages or payments
for past, current or future infringements of any of the foregoing, (c) the
right to ▇▇▇ for past, present and future infringements of any of the
foregoing, and (d) all rights corresponding to any of the foregoing
throughout the world.
"Credit Facility" means with respect to each Lender, such
Lender's Pro Rata Share of the Revolving Credit Facility, the Letter of
Credit Facility, the Term Loan Facility, or the Bond Letter of Credit
Facility, as the case may be, and "Credit Facilities" means collectively
the Revolving Credit Facility, the Letter of Credit Facility, the Term Loan
Facility and the Bond Letter of Credit Facility, and any and all other
credit facilities now or hereafter extended under or secured by this
Agreement.
"Current Bond Letter of Credit Obligations" has the meaning
described in Section 2.4.5 hereof.
"Current Letter of Credit Obligations" has the meaning described
in Section 2.3.5 hereof.
"Deed of Trust - Indian Trail" means that certain deed of trust
or mortgage dated the date hereof from BTP to or for the benefit of the
Agent, as the same may from time to time be amended, restated, supplemented
or modified, which Deed of Trust - Indian Trail grants to the Agent for the
benefit of the Lenders ratably and for the benefit of the Agent, a first
priority Lien on that certain property known generally as ▇▇▇▇▇▇ ▇▇▇▇▇▇-
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. As contemplated by the
terms of this Agreement, BTP and the Borrower are required to close and
consummate the BTP/Borrower Transaction within sixty (60) days of the
Closing Date. As used herein, the term "Deed of Trust - Indian Trail"
shall include any and all additional Security Documents relating to the
property encumbered by the Deed of Trust - Indian Trail executed and
delivered in connection with the closing and consummation of the
BTP/Borrower Transaction, all as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"Deed of Trust - Evansville" means that certain deed of trust or
mortgage dated the date hereof from the Borrower to or for the benefit of
the Agent, as the same may from time to time be amended, restated,
supplemented or modified, which Deed of Trust - Evansville grants to the
Agent for the benefit of the Lenders ratably and for the benefit of the
Agent, a first priority Lien on that certain property known generally as
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Deed of Trust - Henderson" means that certain deed of trust or
mortgage dated the date hereof from the Borrower to or for the benefit of
the Agent, as the same may from time to time be amended, restated,
supplemented or modified, which Deed of Trust - Henderson grants to the
Agent for the benefit of the Lenders ratably and for the benefit of the
Agent, a second priority Lien on that certain property known generally as
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇.
"Deed of Trust - Iowa Falls" means that certain deed of trust or
mortgage dated the date hereof from BIC to or for the benefit of the Agent,
as the same may from time to time be amended, restated, supplemented or
modified, which Deed of Trust - Iowa Falls grants to the Agent for the
benefit of the Lenders ratably and for the benefit of the Agent, a first
priority Lien on that certain property known generally as ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇. As contemplated by the terms of this
Agreement, BIC and the Borrower are required to close and consummate the
BIC/Borrower Transaction within one (1) year of the Closing Date. As used
herein, the term "Deed of Trust - Iowa Falls" shall include any and all
additional Security Documents relating to the property encumbered by the
Deed of Trust - Iowa Falls executed and delivered in connection with the
closing and consummation of the BIC/Borrower Transaction, all as the same
may be amended, restated, supplemented or otherwise modified from time to
time.
"Deed of Trust - Lawrence" means that certain deed of trust or
mortgage dated the date hereof from PackerWare to or for the benefit of the
Agent, as the same may from time to time be amended, restated, supplemented
or modified, which Deed of Trust - Lawrence grants to the Agent for the
benefit of the Lenders ratably and for the benefit of the Agent, a first
priority Lien on that certain property known generally as ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇.
"Deed of Trust - Winchester" means that certain deed of trust or
mortgage dated the date hereof from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to or for the benefit of
the Agent, as the same may from time to time be amended, restated,
supplemented or modified, which Deed of Trust - Lawrence grants to the
Agent for the benefit of the Lenders ratably and for the benefit of the
Agent, a first priority Lien on that certain property known generally as
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇. The Agent understands that
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ intends to close and consummate a sale of the property
encumbered by the Deed of Trust - Winchester as soon as commercially
practicable and that, accordingly, the Agent agrees that it shall not
record or cause to be recorded the Deed of Trust - Winchester among any
public land records office at any time prior to the date which is ninety
(90) days after the Closing Date; unless on or before such date there
exists a Default or an Event of Default.
"Deeds of Trust" means the collective reference to the Deed of
Trust - Indian Trail, the Deed of Trust - Evansville, the Deed of Trust -
Henderson, the Deed of Trust - Iowa Falls, the Deed of Trust - Lawrence,
and the Deed of Trust - Winchester.
"Default" means an event which, with the giving of notice or
lapse of time, or both, would constitute an Event of Default under the
provisions of this Agreement.
"Distribution" means (i) the payment of any dividends or other
distributions on capital stock of the Borrower (except distributions in any
class of capital stock) and (ii) the redemption or acquisition of capital
stock or Subordinated Indebtedness of the Borrower unless made
contemporaneously from the Net Proceeds of the sale of capital stock or the
issuance of Subordinated Indebtedness to the extent permitted by the
provisions of this Agreement or otherwise consented to by the Agent.
"Documents" means all documents of title, whether now existing or
hereafter acquired or created, and all proceeds (cash and non-cash) of the
foregoing.
"Early Termination Fee" has the meaning described in Section
2.1.11 (Early Termination Fee).
"EBITDA" means as to the Borrower and the Subsidiary Guarantors,
on a consolidated basis, as of any date or for any period of determination,
the sum of (a) the net profit (or loss) determined in accordance with GAAP
consistently applied, PLUS (b) interest expense and income tax provisions
for such period, PLUS (c) depreciation and amortization of Assets for such
period, PLUS (d) unusual expenses associated with the write-off of the
capitalized portion of financing costs, MINUS (e) non-cash gains from Asset
sales other than sales of Inventory in the ordinary course of business,
PLUS (f) non-cash losses from Asset sales other than sales of Inventory in
the ordinary course of business,, PLUS, (g) non-cash extraordinary losses,
MINUS (h) extraordinary gains, MINUS (i) interest income, MINUS (j) any
gain relating to the accumulated effect of any change in accounting method,
PLUS (k) any loss relating to the accumulated effect of any change in
accounting method, each item in clauses (a) through (k) calculated pursuant
to GAAP for such period, PLUS, (l) any non-cash compensation expenses,
MINUS, (m) any non-cash compensation gains.
"Eligible Inventory" means the collective reference to all
Inventory of the Borrower and each Subsidiary Guarantor held for sale,
valued at the lowest of (i) the cost, (ii) any ceiling prices which may be
established by any Law of any Governmental Authority or (iii) prevailing
market value, all as reduced by the aggregate amount of all reserves,
limits and deductions provided for in this definition or in Section
2.1.3(Borrowing Base)); EXCLUDING, however, any Inventory which consists of:
(a) any Inventory located outside of the United States,
(b) any Inventory located outside of a state in which the Agent
has properly perfected the Liens of the Agent and the Lenders under
this Agreement, free and clear of all other Liens (other than
Permitted Liens),
(c) any Inventory not in the actual possession of the Borrower or
a Subsidiary Guarantor, except to the extent provided in subsection
(d) below,
(d) any Inventory in the possession of a bailee, warehouseman,
consignee or similar third party, except to the extent that either (1)
such bailee, warehouseman, consignee or similar third party has
entered into an agreement with the Agent in which such bailee,
warehouseman, consignee or similar third party consents and agrees to
the Lien of the Agent and the Lenders on such Inventory and to such
other terms and conditions as may be reasonably required by the Agent,
or (2) with respect to any Inventory in the possession of a bailee or
warehouseman, the Agent has established a reserve for such Inventory
in an amount not greater than three (3) months of any fees or other
charges which would be due and payable to any such bailee and
warehouseman under its agreements with the Borrower or Subsidiary
Guarantor, as appropriate (the Agent agrees to so establish a reserve
as of the Closing Date and at such times thereafter as shall be
appropriate unless otherwise directed by the Borrower),
(e) any Inventory located on premises leased or rented to the
Borrower or a Subsidiary Guarantor or otherwise not owned by the
Borrower or a Subsidiary Guarantor, unless either (1) the Agent has
received a waiver and consent from the lessor, landlord and/or owner,
in form and substance reasonably satisfactory to the Agent and from
any mortgagee of such lessor, landlord or owner to the extent
reasonably required by the Agent or (2) with respect to any such
Inventory, the Agent has established a reserve for such Inventory in
an amount not greater than three (3) months of any rents or other
charges which would be due and payable to any such lessor, landlord or
owner under its agreements with the Borrower or Subsidiary Guarantor,
as appropriate (the Agent agrees to so establish a reserve as of the
Closing Date and at such times thereafter as shall be appropriate
unless otherwise directed by the Borrower),
(f) any Inventory the sale or other disposition of which has
given rise to an Account,
(g) any Inventory which fails to meet all standards and
requirements imposed by any Governmental Authority over such Inventory
or its production, storage, use or sale to the extent that the failure
to meet any such standards and/or requirements imposed by any
Governmental Authority would entitle a purchaser of such Inventory to
return the Inventory or otherwise cancel or rescind its purchase or
shall otherwise materially impair the value of the Inventory or the
ability of the Agent to realize upon the value of the Inventory,
(h) work-in-process or supplies (the Agent acknowledges that
based on its field examination of Inventory conducted prior to the
Closing Date, no Inventory has been classified as work-in-process,
except for certain Inventory of PackerWare as to which the Agent will
advise the Borrower once the Agent has completed its review of the
field examination and audit of PackerWare),
(i) any Inventory as to which the Agent determines in the
exercise of its sole and absolute discretion at any time and in good
faith (i) is not in merchantable condition or is defective, post-
seasonal, slow moving or obsolete and (ii) which the Agent determines
in the exercise of its sole and absolute discretion is unlikely to be
sold in the ordinary course of business within a reasonable period of
time and on customary terms and conditions, without significant out of
the ordinary course discounts or other concessions,
(j) any Inventory which the Agent in the good faith exercise of
its sole and absolute discretion has deemed to be ineligible because
the Agent considers the collateral value to the Agent and the Lenders
to be impaired in any material respect or its ability to realize such
value to be insecure in any material respect, and
(k) any Inventory of PackerWare until such time as the Agent
completes, reviews and approves a satisfactory field examination and
audit of the Assets and properties of PackerWare, at which time such
Assets and properties shall be included in the Borrowing Base if the
results of such field examination and audit are acceptable in all
respects to the Agent in its reasonable discretion and such Assets and
properties otherwise satisfy the eligibility criteria for inclusion in
the Borrowing Base.
In the event of any dispute under the foregoing criteria, as to
whether Inventory is, or has ceased to be, Eligible Inventory, the decision
of the Agent in the good faith exercise of its sole and absolute discretion
shall control.
"Eligible Receivable" and "Eligible Receivables" mean, at any
time of determination thereof, the unpaid portion of each Account (net of
any returns, discounts, claims asserted by Account Debtors or other
obligors with respect to such Account, credits, charges, accrued rebates or
other allowances, offsets, deductions, counterclaims, disputes or other
defenses asserted by Account Debtors or other obligors with respect to such
Account, and reduced by the aggregate amount of all reserves, limits and
deductions expressly provided for in this Agreement), which shall be
receivable in United States Dollars by the Borrower or any Subsidiary
Guarantor, provided each Account conforms and continues to conform to the
following criteria to the reasonable satisfaction of the Agent:
(a) the Account arose in the ordinary course of business from a
bona fide outright sale of Inventory or from services performed;
(b) the Account is a valid, legally enforceable obligation of the
Account Debtor;
(c) if the Account arises from the sale of Inventory, the
Inventory the sale of which gave rise to the account has been shipped
or delivered to the Account Debtor on an absolute sale basis and not
on a ▇▇▇▇ and hold sale basis, a consignment sale basis, a guaranteed
sale basis, a sale or return basis, or on the basis of any other
similar understanding;
(d) if the Account arises from the performance of services, such
services have been fully rendered;
(e) the Account is evidenced by an invoice or other documentation
in form reasonably acceptable to the Agent, dated no later than two
(2) Business Days after the date of shipment or performance and
containing only terms normally offered by the Borrower or the
Subsidiary Guarantor, as appropriate;
(f) the amount shown on the books of the Borrower or the
Subsidiary Guarantor, as appropriate, and on any invoice, certificate,
schedule or statement delivered to the Agent is owing to the Borrower
or the Subsidiary Guarantor, as appropriate, with any partial payment
reducing the amount of the Eligible Receivable by such partial payment
received;
(g) the Account is not outstanding more than one hundred twenty
(120) days from the date of the invoice therefor or past due more than
thirty (30) days after its due date, which shall not be later than
ninety (90) days after the invoice date;
(h) the Account is not owing by any Account Debtor for which
fifty percent (50%) or more of such Account Debtor's other Accounts
(or any portion thereof) due to the Borrower or any Subsidiary
Guarantor, individually, or the Borrower and each of the Subsidiary
Guarantors collectively, are non-Eligible Receivables;
(i) the Account is not owing by an Account Debtor or a group of
affiliated Account Debtors whose then existing Accounts owing to the
Borrower or any Subsidiary Guarantor, individually, exceed in the
aggregate, fifteen percent (15%) of the total Eligible Receivables of
the Borrower or the Subsidiary Guarantor, as appropriate, and is not
owing by an Account Debtor or a group of affiliated Account Debtors
whose then existing Accounts to the Borrower and each of the
Subsidiary Guarantors collectively exceed, in the aggregate, fifteen
percent (15%) of the total Eligible Receivables of the Borrower and
all of the Subsidiary Guarantors,
except that with respect to Accounts owing by those Account Debtors
identified on Schedule 1.1 attached hereto, as updated with the
Agent's consent at any time and from time, the Account is not owing by
any Account Debtor so named on Schedule 1.1 whose then existing
Accounts to the Borrower and/or any Subsidiary Guarantor,
individually, exceed, in the aggregate, twenty-five percent (25%) of
the total Eligible Receivables of the Borrower or any Subsidiary
Guarantor, as appropriate, and is not owing by an Account Debtor so
named on Schedule 1.1 whose then existing Accounts to the Borrower and
each of the Subsidiary Guarantors, collectively, exceed, in the
aggregate, twenty-five percent (25%) of the total Eligible Receivables
of the Borrower and all of the Subsidiary Guarantors;
(j) the Account Debtor has not returned, rejected or refused to
retain, or otherwise notified the Borrower or any Subsidiary Guarantor
of any dispute concerning, or claimed nonconformity of, any of the
Inventory or services from the sale or furnishing of which the Account
arose;
(k) the Account Debtor is not a Subsidiary or Affiliate of the
Borrower or any Subsidiary Guarantor or an employee, officer, director
of shareholder of the Borrower or any Subsidiary Guarantor or any
Subsidiary or Affiliate of the Borrower or any Subsidiary Guarantor
(For purposes of calculating Eligible Receivables, the term Affiliate
shall not include any Affiliate of any stockholder of the Parent);
(l) the Account Debtor is not incorporated or organized in or
primarily located in any jurisdiction outside of the United States of
America or Canada, unless the Account Debtor's obligations with
respect to such account are secured by a letter of credit, guaranty or
banker's acceptance having terms and from such issuers and
confirmation banks as are reasonably acceptable to the Agent in its
commercially reasonable discretion (which letter of credit, guaranty
or banker's acceptance is subject to the perfected Lien of the Agent
for the benefit of the Lenders ratably and the Agent);
(m) the Account Debtor with respect to such account is not
insolvent or the subject of any bankruptcy or insolvency proceedings
of any kind or of any other proceeding or action;
(n) the Account Debtor is not a Governmental Authority, unless
the Borrower or Subsidiary Guarantor, as appropriate, shall have
complied to the Agent's satisfaction with the Assignment of Claims Act
of 1940, as amended;
(o) neither the Borrower nor any of the Subsidiary Guarantors is
indebted in any manner to the Account Debtor (as creditor, lessor,
supplier otherwise), with the exception of customary credits,
adjustments and/or discounts given to an Account Debtor;
(p) the Account does not arise from services under or related to
any warranty obligation of the Borrower or any Subsidiary Guarantor or
out of service charges, finance charges or other fees for the time
value of money;
(q) the Account is not evidenced by Chattel Paper or an
Instrument of any kind and is not secured by any letter of credit,
except as permitted under subsection (l) above, unless the original of
any such Chattel Paper and/or Instrument has been delivered to the
Agent;
(r) the title of the Borrower or the Subsidiary Guarantor, as
appropriate, to the account is absolute and is not subject to any
prior assignment, claim, Lien, or security interest, except Permitted
Liens and Liens in favor of the Agent and/or the Lenders;
(s) no bond or other undertaking by a guarantor or surety which
is not reasonably acceptable to the Agent has been or is required to
be obtained, supporting the Account and any of the Account Debtor's
obligations in respect of the Account, other than as and to the extent
permitted or required under the provisions of subsection (l) above;
(t) the Borrower and each Subsidiary Guarantor, as appropriate,
have the full and unqualified right and power to assign and grant a
security interest in, and Lien on, the Account to the Agent as
security and collateral for the payment of the Obligations;
(u) the Account does not arise out of a contract with, or order
from, an Account Debtor that, by its terms, forbids or makes void or
unenforceable the assignment or grant of a Lien by the Borrower and
each Subsidiary Guarantor, as appropriate, to the Agent, for the
benefit of the Lenders ratably and the Agent, of the Account arising
from such contract or order;
(v) the Account is subject to a Lien in favor of the Agent, for
the benefit of the Lenders ratably and the Agent, which Lien
constitutes a first priority perfected security interest and Lien,
subject only to Permitted Liens;
(w) the Inventory giving rise to the Account was not, at the time
of the sale thereof, subject to any Lien, except those in favor of the
Agent, for the benefit of the Lenders ratably and the Agent and other
Permitted Liens;
(x) no part of the Account represents a progress billing or a
retainage;
(y) the Agent in the good faith exercise of its commercially
reasonable discretion has not deemed the Account ineligible because of
uncertainty in any material respect as to the creditworthiness of the
Account Debtor or because the Agent otherwise considers the collateral
value of such Account to the Agent and the Lenders to be impaired in
any material respect or its ability to realize such value to be
insecure in any material respect; and
(z) until such time as the Agent completes, reviews and approves
a satisfactory field examination and audit of the Assets and
properties of PackerWare, no Account of PackerWare shall be included
in the Borrowing Base; upon the completion, review and approval of a
satisfactory field examination and audit of the Assets and properties
of PackerWare, the Assets and properties of PackerWare shall be
eligible for inclusion in the Borrowing Base if the results of such
field examination and audit are acceptable in all respects to the
Agent in its reasonable discretion and such Assets and properties
otherwise satisfy the eligibility criteria for inclusion in the
Borrowing Base.
In the event of any dispute, under the foregoing criteria, as to whether an
account is, or has ceased to be, an Eligible Receivable, the decision of
the Agent in the good faith exercise of its commercially reasonable
discretion shall control.
"Enforcement Costs" means all commercially reasonable expenses,
charges, costs and fees whatsoever (including, without limitation,
reasonable outside and allocated in-house counsel attorney's fees and
expenses) of any nature whatsoever reasonably paid or incurred by or on
behalf of the Agent and/or any of the Lenders in connection with (a) any or
all of the Obligations, this Agreement and/or any of the other Financing
Documents and (b) the creation, perfection, collection, maintenance,
preservation, defense, protection, realization upon, disposition, sale or
enforcement of all or any part of the Collateral, this Agreement or any of
the other Financing Documents, including, without limitation, those costs
and expenses more specifically enumerated in Section 3.8(Costs)and Section
9.10(Enforcement Costs). The Lenders agree that the Borrower shall have no
obligation to reimburse any Lender, other than the Agent, for legal fees
and expenses incurred by such Lender in connection with its review,
execution and delivery of any of the Financing Documents, to the extent
such legal fees and expenses exceed Five Thousand Dollars ($5,000).
"Equipment" means all equipment, machinery, computers, chattels,
tools, parts, machine tools, furniture, furnishings, fixtures and supplies
of every nature, presently existing or hereafter acquired or created and
wherever located, whether or not the same shall be deemed to be affixed to
real property, together with all accessions, additions, fittings,
accessories, special tools, and improvements thereto and substitutions
therefor and all parts and equipment which may be attached to or which are
necessary or beneficial for the operation, use and/or disposition of such
personal property, all licenses, warranties, franchises and general
intangibles related thereto or necessary or beneficial for the operation,
use and/or disposition of the same, together with all Accounts, Chattel
Paper, Instruments and other consideration received by the Borrower or any
Subsidiary Guarantor on account of the sale, lease or other disposition of
all or any part of the foregoing, and together with all rights under or
arising out of present or future Documents and contracts relating to the
foregoing and all proceeds (cash and non-cash) of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Business Day" means any Business Day on which
dealings in United States Dollar deposits are carried out on the London
interbank market and on which commercial banks are open for domestic and
international business (including dealings in Dollar deposits) in London,
England.
"Eurodollar Lending Office" means with respect to the Agent such
branch or office of the Agent as designated by the Agent, as applicable,
from time to time as the branch or office at which the LIBOR Loans are to
be made or maintained.
"Event of Default" has the meaning described in Article 7.
"Federal Funds Rate" means for any day of determination, 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) by the
Federal Reserve Bank for the next preceding Business Day) by the Federal
Reserve Bank of Richmond or, if such rate is not so published for any day
that is a Business Day, the average of quotations for such day on such
transactions received by the Agent from three (3) Federal funds brokers of
recognized standing selected by the Agent.
"Fees" means the collective reference to each fee payable to the
Agent, for its own account or for the ratable benefit of the Lenders, under
the terms of this Agreement or under the terms of any of the other
Financing Documents, including, without limitation, the Revolving Credit
Unused Line Fees, the Letter of Credit Fees, the Letter of Credit Fronting
Fees, the Bond Letter of Credit Fees, the Bond Letter of Credit Fronting
Fees, the Early Termination Fee and the Field Examination Fees.
"Field Examination Fee" and "Field Examination Fees" have the
meanings described in Section 2.7.3(Field Examination Fees).
"Financing Documents" means at any time collectively this
Agreement, the Notes, the Security Documents, the Letter of Credit
Documents, the Bond Letter of Credit Agreement Documents, and any other
instrument, agreement or document previously, simultaneously or hereafter
executed and delivered by the Borrower, any Guarantor and/or any other
Person, singly or jointly with another Person or Persons, evidencing,
securing, guarantying or in connection with this Agreement, any Note, any
of the Security Documents, any of the Credit Facilities, and/or any of the
Obligations, all as the same may be amended, restated, supplemented,
replaced or otherwise modified at any time and from time to time.
"Fixed or Capital Assets" of a Person at any date means all
assets which would, in accordance with GAAP consistently applied, be
classified on the balance sheet of such Person as property, plant or
equipment at such date.
"Fixed Charges" means as to the Borrower and each of the
Subsidiary Guarantors, on a consolidated basis, for any period of
determination, the scheduled payments of principal and cash interest on
account of all Indebtedness for Borrowed Money and on account of all
Capital Leases, plus cash Taxes, plus cash dividends declared or paid by
the Borrower. For purposes of calculating "Fixed Charges", the Agent and
the Lenders agree that scheduled payments with respect to the Iowa Bond
Letter of Credit Obligations shall reflect the permitted amortization of a
portion of such Iowa Bond Letter of Credit Obligations pursuant to Section
2.4.5(b) of this Agreement.
"Fixed Charge Coverage Ratio" means as to the Borrower and each
of the Subsidiary Guarantors, on a consolidated basis, for the period of
any determination thereof, the ratio of (a) EBITDA, less the aggregate
amount of all non-financed Capital Expenditures for such period, to (b)
Fixed Charges.
"Funded Debt" means as to the Borrower and each of the Subsidiary
Guarantors, on a consolidated basis, as of any date of determination, (i)
the aggregate of all Indebtedness for Borrowed Money of the Borrower and
each of the Subsidiary Guarantors, whether secured or unsecured (but
excluding, without duplication, loans by the Borrower to one or more of the
Subsidiary Guarantors), having a final maturity (or which by the terms
thereof is renewable or extendible at the option of the obligor for a
period ending) more than a year after that date, including current
maturities of long-term Indebtedness for Borrowed Money (as determined in
accordance with GAAP), less (ii) the aggregate amount of all cash balances
and Cash Equivalents of the Borrower and/or any of the Subsidiary
Guarantors.
"GAAP" means generally accepted accounting principles in the
United States of America in effect from time to time.
"General Intangibles" means all general intangibles of every
nature, whether presently existing or hereafter acquired or created, and
without implying any limitation of the foregoing, further means all books
and records, claims (including without limitation all claims for income tax
and other refunds), choses in action, claims, causes of action in tort or
equity, contract rights, judgments, customer lists, Patents, Trademarks,
licensing agreements, rights in intellectual property, goodwill (including
goodwill of the business of the Borrower or any Subsidiary Guarantor
symbolized by and associated with any and all Trademarks, trademark
licenses, Copyrights and/or service marks), royalty payments, licenses,
rights as lessee under any lease of real or personal property, literary
rights, Copyrights, service names, service marks, logos, trade secrets,
amounts received as an award in or settlement of a suit in damages, deposit
accounts, interests in joint ventures, general or limited partnerships, or
limited liability companies or partnerships, rights in applications for any
of the foregoing, books and records in whatever media (paper, electronic or
otherwise) recorded or stored, with respect to any or all of the foregoing
and all general intangibles necessary or beneficial to retain, access
and/or process the information contained in those books and records, and
all proceeds (cash and non-cash) of the foregoing.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government and any department, agency or instrumentality
thereof.
"Guarantor" means the Parent or any Subsidiary Guarantor or their
respective successors and assigns, as the case may be; and "Guarantors"
means the Parent, each and every Subsidiary Guarantor, and each of their
respective successors and assigns.
"Guaranty" means collectively each guaranty of payment for the
benefit of the Lenders ratably and the Agent dated the date hereof to the
Lender from any or all of the Guarantors, as the same may from time to time
be amended, restated, supplemented or otherwise modified.
"Hazardous Materials" means (a) any "hazardous waste" as defined
by the Resource Conservation and Recovery Act of 1976, as amended from time
to time, and regulations promulgated thereunder; (b) any "hazardous
substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time, and
regulations promulgated thereunder; (c) any substance the presence of which
on any property now or hereafter owned, acquired or operated by the
Borrower or any Subsidiary Guarantor is prohibited by any Law similar to
those set forth in this definition; and (d) any other substance which by
Law requires special handling in its collection, storage, treatment or
disposal.
"Hazardous Materials Contamination" means the contamination
(whether presently existing or occurring after the date of this Agreement)
by Hazardous Materials of any property owned, operated or controlled by the
Borrower or any Subsidiary Guarantor or for which the Borrower or any
Subsidiary Guarantor has responsibility, including, without limitation,
improvements, facilities, soil, ground water, air or other elements on, or
of, any property now or hereafter owned, acquired or operated by the
Borrower or any Subsidiary Guarantor, and any other contamination by
Hazardous Materials for which the Borrower or any Subsidiary Guarantor is,
or is claimed to be, responsible.
"Indebtedness" of a Person means at any date the total
liabilities of such Person at such time determined in accordance with GAAP
consistently applied.
"Indebtedness for Borrowed Money" of a Person means at any time
the sum at such time of (a) Indebtedness of such Person for borrowed money
or for the deferred purchase price of property or services, (b) any
obligations of such Person in respect of letters of credit, banker's or
other acceptances or similar obligations issued or created for the account
of such Person, (c) Lease Obligations of such Person with respect to
Capital Leases, (d) all liabilities secured by any Lien on any property
owned by such Person, to the extent attached to such Person's interest in
such property, even though such Person has not assumed or become personally
liable for the payment thereof, (e) obligations of third parties which are
being guarantied or indemnified against by such Person or which are secured
by the property of such Person; (f) any obligation of such Person or a
Commonly Controlled Entity to a Multiemployer Plan; and (h) any
obligations, liabilities or indebtedness, contingent or otherwise, under or
in connection with, any interest rate or currency swap agreements, cap,
floor, and collar agreements, currency spot, foreign exchange and forward
contracts and other similar agreements and arrangements; but excluding
trade and other accounts payable in the ordinary course of business in
accordance with customary trade terms and which are not more than thirty
(30) days past due (as determined in accordance with customary trade
practices) or which are being disputed in good faith by such Person and for
which adequate reserves are being provided on the books of such Person in
accordance with GAAP.
"Indenture" means that certain indenture dated as of April 21,
1994 by and between the Borrower and the United States Trust Company of New
York, as trustee, entered into in connection with the Subordinated Debt, as
the same may be amended, restated supplemented or otherwise modified.
"Installment Payment Date" means the first day of each February,
May, August and November commencing on May 1, 1997.
"Instrument" means a negotiable instrument (as defined under
Article 3 of the Uniform Commercial Code), a "certificated security" (as
defined under Article 8 of the Uniform Commercial Code), or any other
writing which evidences a right to payment of money and is not itself a
security agreement or lease and is of a type which is in the ordinary
course of business transferred by delivery with any necessary indorsement.
"Interest Coverage Ratio" means as to the Borrower and each of
the Subsidiary Guarantors, on a consolidated basis, for any period of
determination thereof the ratio of (a) EBITDA to (b) cash interest expense,
all determined on a consolidated basis in accordance with GAAP consistently
applied.
"Interest Period" means as to any LIBOR Loan, the period
commencing on and including the date such LIBOR Loan is made (or on the
effective date of the Borrower's election to convert any Base Rate Loan to
a LIBOR Loan in accordance with the provisions of this Agreement) and
ending on and including the day which is 30, 60, 90 or 180 days thereafter,
as selected by the Borrower in accordance with the provisions of this
Agreement, and thereafter, each period commencing on the last day of the
then preceding Interest Period for such LIBOR Loan and ending on and
including the day which is 30, 60, 90 or 180 days thereafter, as selected
by the Borrower in accordance with the provisions of this Agreement;
provided, however that:
(a) the first day of any Interest Period shall be a Eurodollar
Business Day;
(b) if any Interest Period would end on a day that shall not be a
Eurodollar Business Day, such Interest Period shall be extended to the
next succeeding Eurodollar Business Day unless such next succeeding
Eurodollar Business Day would fall in the next calendar month, in
which case, such Interest Period shall end on the next preceding
Eurodollar Business Day; and
(c) no Interest Period shall extend beyond the Revolving Credit
Expiration Date or the scheduled maturity date of the Term Loan, as
appropriate.
"Interest Rate Election Notice" has the meaning described in
Section 2.6.2(e).
"Interest Rate Protection Agreement" means any interest rate or
currency swap agreements, cap, floor, and collar agreements, currency spot,
foreign exchange and forward contracts and other similar agreements and
arrangements.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended from time to time, and the Income Tax Regulations issued and
proposed to be issued thereunder.
"Inventory" means all inventory of the Borrower and each
Subsidiary Guarantor and all right, title and interest of the Borrower and
each Subsidiary Guarantor in and to all of its and their now owned and
hereafter acquired goods, merchandise and other personal property furnished
under any contract of service or intended for sale or lease, including,
without limitation, all raw materials, work-in-progress, finished goods and
materials and supplies of any kind, nature or description which are used or
consumed in the business of the Borrower and any Subsidiary Guarantor, as
appropriate, or are or might be used in connection with the manufacture,
packing, shipping, advertising, selling or finishing of such goods,
merchandise and other licenses, warranties, franchises, general
intangibles, personal property and all Documents or documents relating to
the same and all proceeds (cash and non-cash) of the foregoing.
"Iowa Bond Letter of Credit - NB" means that certain irrevocable
letter of credit issued or to be issued by the Agent for the account of the
Borrower or BIC as security for the Iowa Bond Letter of Credit and the Iowa
Bond Standby Credit Agreement, as the same may be amended, restated,
reissued, renewed, supplemented, replaced or otherwise modified at any time
and from time to time. Subsequent to the Closing Date, but on or before
the expiration date of the Iowa Bond Letter of Credit, the Agent intends to
issue (a) an irrevocable letter of credit to replace the Iowa Bond Letter
of Credit and (b) deliver a standby credit line to replace the Iowa Bond
Standby Credit Agreement, in which case the term "Iowa Bond Letter of
Credit - NB" shall mean collectively such replacement letter of credit and
such replacement standby credit line, as the same may be amended, restated,
reissued, renewed, supplemented, replaced or otherwise modified at any time
and from time to time. The Agent and the Lenders understand and agree that
if the Iowa Bond Letter of Credit - NB is issued for the account of BIC,
only the Borrower, and not BIC, shall be the primary reimbursement obligor
with respect to the Iowa Bond Letter of Credit Obligations.
"Iowa Bond Letter of Credit" means that certain irrevocable
letter of credit dated March 13, 1996, as amended by Amendment No. 1 dated
March 13, 1996, issued by Fleet National Bank of Connecticut in the
original amount of $6,025,810, for the account of BIC, for the benefit of
State Street Bank and Trust Company, as trustee, and as security for the
Iowa Bonds, as the same may be amended, restated, reissued, renewed,
supplemented, replaced or otherwise modified at any time and from time to
time.
"Iowa Bond Letter of Credit Agreement" means that certain letter
of credit reimbursement agreement by and between the Agent and the Borrower
pursuant to which the Borrower will agree to reimburse the Agent for any
amounts drawn under the Iowa Bond Letter of Credit - NB and to pay certain
fees, interest and other amounts payable to the Agent with respect to the
Iowa Bond Letter of Credit - NB, as the same may be amended, restated,
supplemented, replaced or otherwise modified at any time and from time to
time.
"Iowa Bond Letter of Credit Agreement Documents - Bonds" means
all instruments, agreements or documents previously, simultaneously or
hereafter executed and delivered by the Borrower, any Guarantor and/or any
other Person, singly or jointly with another Person or Persons, evidencing,
securing, guarantying or in connection with the Iowa Bond Letter of Credit
- NB, the Iowa Bond Standby Credit Agreement (prior to the date on which
the Agent is a party thereto), and/or any or all of the Iowa Bonds, all as
the same may be amended, restated, supplemented, replaced or otherwise
modified at any time and from time to time.
"Iowa Bond Letter of Credit Agreement Documents - NB" means the
Iowa Bond Letter of Credit Agreement and any other instrument, agreement or
document previously, simultaneously or hereafter executed and delivered by
the Borrower, any Guarantor and/or any other Person, singly or jointly with
another Person or Persons, evidencing, securing, guarantying or in
connection with the Iowa Bond Letter of Credit - NB, the Iowa Bond Standby
Letter of Credit Agreement (but only after such date as the Agent is a
party thereto) and/or any or all of the Iowa Bond Letter of Credit
Obligations, all as the same may be amended, restated, supplemented,
replaced or otherwise modified at any time and from time to time.
"Iowa Bond Letter of Credit Obligations" means the collective
reference to all Obligations of the Borrower under and with respect to the
Iowa Letter of Credit - NB, the Iowa Bond Letter of Credit Agreement,
and/or any of the Iowa Bond Letter of Credit Agreement Documents.
"Iowa Bond Standby Credit Agreement" means that certain Standby
Credit Agreement among BIC, The First National Bank of Boston, as prior
Iowa Bond Trustee, and Barclays Bank, PLC, New York Branch, dated as of
February 1, 1995; all of the obligations and rights of Barclays Bank PLC,
New York Branch, having been assigned to and assumed by Fleet National Bank
of Connecticut pursuant to an Amendment, Assignment and Assumption
Agreement dated March 13, 1996, by and among BIC, Fleet Capital
Corporation, Barclays Bank PLC, New York Branch, The First National Bank of
Boston, as remarketing agent, and State Street Bank and Trust Company, as
Iowa Bond Trustee, as the same may be amended, restated, reissued, renewed,
supplemented, replaced or otherwise modified at any time and from time to
time. Subsequent to the Closing Date, but on or before the expiration date
of the Iowa Bond Letter of Credit, the Agent intends to deliver a standby
line of credit to replace the line of credit described in the Iowa Bond
Standby Credit Agreement in which case a new Iowa Bond Standby Credit
Agreement will be executed and delivered among the Agent, BIC and the Iowa
Bond Trustee and other necessary persons, if any, and all references to the
term Iowa Bond Standby Credit Agreement shall be to such replacement
agreement to which the Agent is a party, as the same may be amended,
restated, reissued, supplemented, replaced or otherwise modified at any
time and from time to time.
"Iowa Bond Trust Agreement" means that certain loan and trust
agreement dated as of August 30, 1988 by and among the Iowa Bond Trustee,
The City of Iowa Falls, Iowa, Genpak Corporation and Canadian Imperial Bank
of Commerce (New York), relating to the Iowa Bonds, as supplemented by the
Supplemental Agreement dated as of September 27, 1990, and as amended by
the Amendment to Loan and Trust Agreement dated as of February 12, 1992,
and the Second Amendment to Loan and Trust Agreement dated as of April 21,
1994, and as subsequently amended, restated, supplemented or otherwise
modified at any time and from time to time.
"Iowa Bond Trustee" means State Street Bank and Trust Company,
and its successors and assigns, as trustee under the Iowa Bond Trust
Agreement.
"Iowa Bonds" means the City of Iowa Falls Flexible Mode
Industrial Development Revenue Refunding Bonds (▇▇▇▇▇ Iowa Corporation
Project), Series 1988, issued by the City of Iowa Falls, Iowa in the
original aggregate principal amount of Five Million Four Hundred Thousand
Dollars ($5,400,000).
"Item of Payment" means each check, draft, cash, money,
instrument, item, and other remittance in payment or on account of payment
of any Collateral, including, without limitation, cash proceeds of any
returned, rejected or repossessed goods, the sale or lease of which gave
rise to an Account, and other proceeds of Collateral; and "Items of
Payment" means the collective reference to all of the foregoing.
"Laws" means all ordinances, statutes, rules, regulations,
orders, injunctions, writs, or decrees of any Governmental Authority or
political subdivision or agency thereof, or any court or similar entity
established by any thereof.
"Lease Obligations" of a Person means for any period the rental
commitments of such Person for such period under leases for real and/or
personal property.
"Letter of Credit" and "Letters of Credit" shall have the
meanings described in Section 2.3.1 hereof.
"Letter of Credit Agreement" means the collective reference to
each letter of credit application and agreement substantially in the form
of the Agent's then standard form of application for letter of credit or
such other form as may be approved by the Agent, executed and delivered by
the Borrower in connection with the issuance of a Letter of Credit (other
than any of the Bond Letters of Credit), as the same may from time to time
be amended, restated, supplemented or modified; and "Letter of Credit
Agreements" means all of the foregoing in effect at any time and from time
to time. The Agent and the Lenders agree that if the provisions of any
Letter of Credit Agreement conflict with the provisions of this Agreement,
the provisions of this Agreement shall control.
"Letter of Credit Commitment" means the agreement of the Agent
relating to the issuance of the Letters of Credit and the agreement of a
Lender to purchase a participating interest in any Letter of Credit
Obligations with respect to such Letters of Credit, all subject to and in
accordance with the provisions of this Agreement; and "Letter of Credit
Commitments" means the collective reference to the Letter of Credit
Commitment of the Agent and each of the Lenders.
"Letter of Credit Committed Amount" has the meaning given such
term in Section 2.3.1.
"Letter of Credit Documents" means any and all drafts under or
purporting to be under a Letter of Credit, any Letter of Credit Agreement,
and any other instrument, document or agreement executed and/or delivered
by the Borrower or any other Person under, pursuant to or in connection
with a Letter of Credit or any Letter of Credit Agreement.
"Letter of Credit Facility" means the facility established
pursuant to Section 2.3(Letter of Credit Facility) of this Agreement.
"Letter of Credit Fee" and "Letter of Credit Fees" have the
meanings described in Section 2.3.2 hereof.
"Letter of Credit Fronting Fee" and "Letter of Credit Fronting
Fees" have the meanings described in Section 2.3.2 hereof.
"Letter of Credit Obligations" means the collective reference to
all Obligations of the Borrower with respect to the Letters of Credit and
the Letter of Credit Agreements.
"Liabilities" means at any date all liabilities that in
accordance with GAAP consistently applied should be classified as
liabilities on a consolidated balance sheet of the Borrower and its
Subsidiaries.
"LIBOR Base Rate" means for any Interest Period with respect to
any LIBOR Loan, the rate per annum (rounded upward, if necessary, to the
nearest next 1/100 of 1%) appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in United States
Dollars at approximately 11:00 a.m. (London time) two (2) Eurodollar
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "LIBOR Base Rate" shall mean, for any LIBOR Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in United States
Dollars at approximately 11:00 a.m. (London time) two (2) Eurodollar
Business Days prior to the first day of such Interest Period; PROVIDED,
HOWEVER, if more than one rate is specified on Reuters Screen LIBO Page,
the applicable rate shall be the arithmetic mean of all such rates. For
purposes of this definition, Telerate Page 3750 refers to the British
Bankers Association Libor Rates (determined at approximately 11:00 a.m
(London time)) that are published by Dow ▇▇▇▇▇ Telerate, Inc.
"LIBOR Loan" means any Loan for which interest is to be computed
with reference to the LIBOR Rate.
"LIBOR Rate" means for any Interest Period with respect to any
LIBOR Loan, (i) the Applicable Margin, PLUS (ii) the per annum rate of
interest calculated pursuant to the following formula:
LIBOR BASE RATE
1.00 - Reserve Percentage
"Lien" means any mortgage, deed of trust, deed to secure debt,
grant, pledge, security interest, assignment, encumbrance, lien,
hypothecation, or charge of any kind, whether perfected or unperfected,
avoidable or unavoidable, including, without limitation, any conditional
sale or other title retention agreement, any lease in the nature thereof,
and the filing of any financing statement under the Uniform Commercial Code
of any jurisdiction, excluding the precautionary filing of any financing
statement by any lessor in a true lease transaction, by any ▇▇▇▇▇▇ in a
true bailment transaction or by any consignor in a true consignment
transaction under the Uniform Commercial Code of any jurisdiction or the
agreement to give any financing statement by any lessee in a true lease
transaction, by any bailee in a true bailment transaction or by any
consignee in a true consignment transaction.
"Loan" means each of the Revolving Loan or a Term Loan, as the
case may be, and "Loans" means the collective reference to the Revolving
Loan and the Term Loans.
"Loan Notice" has the meaning described in Section 2.1.2(Procedure
for Making Advances).
"Loan Restructuring Transaction" means the closing and
consummation of each of the following events, all in accordance with
applicable Laws, all on terms and conditions acceptable to the Agent:
(i) the execution and delivery of all amendments to the
Subordinated Debt Loan Documents necessary to enable all of the Subsidiary
Guarantors to guaranty payment and performance of all of the Obligations
and to grant to the Agent for the benefit of the Lenders ratably and the
Agent, a first priority Lien on, and security interest in, all Assets of
the Borrower and each Subsidiary Guarantor, subject only to the Permitted
Liens (the "Subordinated Debt Amendments");
(ii) the execution and delivery to the Agent of all Financing
Documents (including Security Documents) by the Borrower and each of the
Subsidiary Guarantors, as appropriate, pursuant to which each of the
Subsidiary Guarantors (a) shall unconditionally and irrevocably and jointly
and severally guaranty payment and performance of all of the Obligations
(on substantially the same terms as set forth in the Guaranty) and (b)
shall grant to the Agent for the benefit of the Lenders ratably and the
Agent, a first priority Lien on, and security interest in, all Assets of
each Subsidiary Guarantor, subject only to the Permitted Liens (on
substantially the same terms set forth in this Agreement and in any of the
other currently existing Financing Documents and Security Documents); and
(iii) the delivery to the Agent of:
(a) a certificate of the Secretary or an Assistant Secretary
of the Borrower and each Subsidiary Guarantor, as appropriate,
certifying as to (1) true and complete copies of all agreements,
documents and instruments (including releases and terminations)
executed and delivered in connection with the closing and
consummation of the transactions contemplated by subsections (i)
and (ii) above, and (2) true and complete copies of the
resolutions of the Board of Directors of the Borrower and each
Subsidiary Guarantor, as appropriate, authorizing (w) the closing
and consummation of all aspects of the Loan Restructuring
Transaction, (x) the execution, delivery and performance of all
Financing Documents, including all Security Documents, required
by the Agent in connection with the Loan Restructuring
Transaction and all Subordinated Debt Amendments, (y) the
granting and/or ratification of all Liens and security interests
contemplated by any and all such Security Documents; and (z) the
guaranty of all of the Obligations,
(b) the favorable opinion of counsel for the Borrower and
all of the Subsidiary Guarantors addressed to the Agent and the
Lenders in form and content satisfactory to the Agent opining as
to (i) the due authorization of the execution and delivery of the
Financing Documents and the Security Documents required by the
Agent in connection with the Loan Restructuring Transaction and
the Subordinated Debt Amendments, (ii) the validity, binding
nature and enforceability of all such Financing Documents, all
Security Documents, and all Subordinated Debt Amendments, and
(iii) such other matters as the Agent may reasonably require, and
(c) copies of all agreements, documents and instruments
relating to any aspect of the Loan Restructuring Transaction and
such other information and items as the Agent may reasonably
request with respect to the Loan Restructuring Transaction.
"Loan Restructuring Transaction Documents" means all agreements,
documents and instruments now or hereafter executed and delivered in
connection with the Loan Restructuring Transaction, as the same may from
time to time be amended, restated, supplemented or otherwise modified.
"Lockbox" has the meaning described in Section 2.1.8(The Collateral
Account).
"Multiemployer Plan" means a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"Net Outstandings" of any Lender means, at any time, the sum of
(a) all amounts paid by such Lender (other than pursuant to Section 8.5
(Indemnification)) to the Agent in respect to the Revolving Loan or
otherwise under this Agreement, MINUS (b) all amounts paid by the Agent to
such Lender which are received by the Agent and which, pursuant to this
Agreement, are paid over to such Lender for application in reduction of the
outstanding principal balance of the Revolving Loan.
"Net Casualty Proceeds", when used with respect to any
condemnation awards or insurance proceeds allocable to any Collateral,
means the gross proceeds from any casualty or condemnation remaining after
payment of all expenses (including attorneys' fees) incurred in the
collection of such gross proceeds.
"Net Proceeds" means gross proceeds (cash and non-cash) or other
consideration paid to, or received by, the Borrower or any Subsidiary of
the Borrower from (i) any Asset Disposition (including, without limitation,
issuance or assumption of Indebtedness or the issuance of Securities), net
of customary and reasonable settlement costs, fees, expenses and Taxes
payable in connection with such Asset Disposition or (ii) any sale,
issuance or other offering of Indebtedness or Securities, net of customary
and reasonable closing costs, fees and expenses.
"Nevada Bond Letter of Credit - NB" means that certain
irrevocable letter of credit issued or to be issued by the Agent for the
account of the Borrower as security for the Nevada Bond Letter of Credit,
as the same may be amended, restated, reissued, renewed, supplemented,
replaced or otherwise modified at any time and from time to time.
Subsequent to the Closing Date, but on or before the expiration date of the
Nevada Bond Letter of Credit, the Agent may issue a irrevocable letter of
credit to replace the Nevada Bond Letter of Credit, in which case the term
"Nevada Bond Letter of Credit - NB" shall mean such replacement letter of
credit, as the same may be amended, restated, reissued, renewed,
supplemented, replaced or otherwise modified at any time and from time to
time.
"Nevada Bond Letter of Credit" means that certain irrevocable
letter of credit dated April 21, 1995, issued by Barclays Bank PLC in the
original stated amount of $6,271,233, for the account of the Borrower, for
the benefit of the Manufacturers and Traders Trust Company, as Trustee, and
as security for the Nevada Bonds, as the same may be amended, restated,
reissued, renewed, supplemented, replaced or otherwise modified at any time
and from time to time.
"Nevada Bond Letter of Credit Agreement" means that certain
letter of credit reimbursement agreement by and between the Agent and the
Borrower pursuant to which the Borrower will agree to reimburse the Agent
for any amounts drawn under the Nevada Bond Letter of Credit - NB and to
pay certain fees, interest and other amounts payable to the Agent with
respect to the Nevada Bond Letter of Credit - NB, as the same may be
amended, restated, supplemented, replaced or otherwise modified at any time
and from time to time.
"Nevada Bond Letter of Credit Agreement Documents" means all
instruments, agreements or documents previously, simultaneously or
hereafter executed and delivered by the Borrower, any Guarantor and/or any
other Person, singly or jointly with another Person or Persons, evidencing,
securing, guarantying or in connection with the Nevada Bond Letter of
Credit, and/or any or all of the Nevada Bonds, all as the same may be
amended, restated, supplemented, replaced or otherwise modified at any time
and from time to time.
"Nevada Bond Letter of Credit Agreement Documents - NB" means the
Nevada Bond Letter of Credit Agreement and any other instrument, agreement
or document previously, simultaneously or hereafter executed and delivered
by the Borrower, any Guarantor and/or any other Person, singly or jointly
with another Person or Persons, evidencing, securing, guarantying or in
connection with the Nevada Bond Letter of Credit - NB and/or any or all of
the Nevada Bond Letter of Credit Obligations, all as the same may be
amended, restated, supplemented, replaced or otherwise modified at any time
and from time to time.
"Nevada Bond Letter of Credit Obligations" means the collective
reference to all Obligations of the Borrower under and with respect to the
Nevada Letter of Credit - NB, the Nevada Bond Letter of Credit Agreement,
and/or any of the Nevada Bond Letter of Credit Agreements.
"Nevada Bond Trust Agreement" means that certain trust indenture
dated as of April 1, 1991 by and between the Nevada Trustee and The City of
▇▇▇▇▇▇▇▇▇, Nevada Public Improvement Trust, relating to the Nevada Bonds,
as amended, restated, supplemented or otherwise modified at any time and
from time to time.
"Nevada Bond Trustee" means Manufacturers and Traders Trust
Company, and its successors and assigns, as trustee under the Nevada Bond
Trust Agreement.
"Nevada Bonds" means the City of ▇▇▇▇▇▇▇▇▇, Nevada Public
Improvement Trust Variable Rate Demand Refunding Bonds (▇▇▇▇▇ Plastics
Corporation Project), Series 1991, issued by the City of ▇▇▇▇▇▇▇▇▇ Nevada
Public Improvement Trust in the original aggregate principal amount of
Eight Million Dollars ($8,000,000).
"Non-Ratable Loan" means an advance under the Revolving Loan made
by the Agent in accordance with the provisions of Section 2.8.3(c).
"Note" means any Revolving Credit Note or any Term Note, as the
case may be, and "Notes" means collectively each Revolving Credit Note and
each Term Note, and any other promissory note which may from time to time
evidence all or any portion of the Obligations.
"Obligations" means and includes all present and future
indebtedness, obligations, and liabilities, whether now existing or
contemplated or hereafter arising, of the Borrower to the Lenders and/or
Agent under, arising pursuant to, in connection with and/or on account of
the provisions of this Agreement, each Note, each Security Document, and/or
any of the other Financing Documents, the Loans, and/or any of the Credit
Facilities including, without limitation, the principal of, and interest
on, each Note, late charges, the Fees, Enforcement Costs, and prepayment
fees (if any), letter of credit fees or fees charged with respect to any
guaranty of any letter of credit; also means and includes all other present
and future indebtedness, liabilities and obligations, whether now existing
or contemplated or hereafter arising, of the Borrower and/or any Subsidiary
Guarantor to the Agent and/or to any Lender any/or any of its or their
Affiliates under or in connection with, any Interest Rate Protection
Agreements; and also means any and all renewals, extensions, substitutions,
amendments, restatements and rearrangements of any such debts, obligations
and liabilities. FOR PURPOSES OF THE INDENTURE, ALL OBLIGATIONS UNDER AND
IN CONNECTION WITH THE CREDIT FACILITIES CONSTITUTE AND ARE HEREBY DEEMED
"DESIGNATED SENIOR INDEBTEDNESS" AS DEFINED IN THE INDENTURE.
"Outstanding Bond Letter of Credit Obligations" has the meaning
described in Section 2.4.3 hereof.
"Outstanding Letter of Credit Obligations" has the meaning
described in Section 2.3.3 hereof.
"PAC" means PackerWare Acquisition Corporation, a corporation
organized and existing under the laws of the State of Kansas, and its
successors and assigns.
"PackerWare" means PackerWare Corporation, a corporation
organized and existing under the laws of the State of Kansas, and its
successors and assigns.
"PackerWare Merger Agreement" means that certain Agreement and
Plan of Reorganization dated as of January 14, 1997 by and among the
Borrower, PAC, PackerWare and the Seller, as amended, restated,
supplemented or otherwise modified.
"PackerWare Merger Agreement Documents" means collectively the
PackerWare Merger Agreement and any and all other agreements, documents or
instruments (together with any and all amendments, modifications, and
supplements thereto, restatements thereof, and substitutes therefor)
previously, now or hereafter executed and delivered by the Borrower,
PackerWare, PAC, or any other Person in connection with the PackerWare
Merger Transaction.
"PackerWare Merger Transaction" means the merger of PAC with and
into PackerWare in accordance with the provisions of the PackerWare Merger
Agreement
"Parent" means BPC Holding Corporation, a corporation organized
and existing under the laws of the State of Delaware, and its successors
and assigns.
"Patents" means and includes, in each case whether now existing
or hereafter arising, all of the rights, title and interest of the Borrower
and each Subsidiary Guarantor in and to (a) any and all patents and patent
applications, (b) any and all inventions and improvements described and
claimed in such patents and patent applications, (c) reissues, divisions,
continuations, renewals, extensions and continuations-in-part of any
patents and patent applications, (d) income, royalties, damages, claims and
payments now or hereafter due and/or payable under and with respect to any
patents or patent applications, including, without limitation, damages and
payments for past and future infringements, (e) rights to ▇▇▇ for past,
present and future infringements of patents, and (f) all rights
corresponding to any of the foregoing throughout the world.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Acquisition" means (A) the acquisition or purchase of,
or investment in, any Person, any operating division or unit of any Person,
or the stock or Assets of any Person or the combination with any Person
(each individually, a "Subject Transaction") regardless of the structure of
the Subject Transaction, engaged principally in the lines of business set
forth in Section 6.1.7 or in a business reasonably related thereto; provided,
however that:
(i) the aggregate purchase price of, investment in, acquisition
expenditures relating to (excluding customary and reasonable
transaction costs), and assumed Liabilities in connection with, any
such Subject Transaction shall not exceed the lesser of:
(x) the product of (a) the actual EBITDA for the Borrower
and each of the Subsidiary Guarantors, calculated on a
consolidated basis, for the then preceding twelve (12) month
period after giving effect to such Subject Transaction (subject
to such proforma adjustments as shall be acceptable to the Agent
in its sole and absolute discretion), and (b) five (5), or
(y) Fifteen Million Dollars ($15,000,000),
(ii) the aggregate purchase prices of, investments in,
acquisition expenditures relating to (excluding customary and
reasonable transaction costs), and assumed Liabilities in connection
with, all Subject Transactions made on or after the Closing Date shall
not exceed Thirty Million Dollars ($30,000,000),
(iii) such Subject Transaction shall not otherwise constitute or
give rise to a Default or an Event of Default,
(iv) the Borrower shall have furnished financial projections in
form and content reasonably acceptable to the Agent which give effect
to such Subject Transaction and which project that such Subject
Transaction would not cause a Default or Event of Default (provided
that the Agent and the Lenders agree that such projections shall not
constitute a guaranty of actual performance),
(v) if requested by the Agent, a Phase I environmental assessment
of any real property to be acquired or purchased or owned by any
Person to be acquired or purchased or owned by any Person in which the
Borrower or any Subsidiary intends to make an investment, has been
performed by a reputable and recognized environmental consulting firm
engaged by the Borrower and reasonably acceptable to the Requisite
Lenders and has revealed no material Hazardous Materials Contamination
or material violations of any Environmental Laws, the non-remediation
of or non-compliance with which would result in a material Liability
not reflected in the purchase price,
(vi) if and to the extent the Subject Transaction consists of the
purchase or acquisition of a Person which is to be a Subsidiary of the
Borrower or merged into a Subsidiary of the Borrower created for the
express purpose of consummating the proposed acquisition:
(1) the Borrower shall execute all documents and take such
other actions as the Agent may reasonably require to grant to the
Agent and the Lenders a first priority Lien on one hundred
percent (100%) of the stock of such Subsidiary, and
(2) such Subsidiary shall be designated and qualify
immediately after the closing of the Subject Transaction as a
Subsidiary Guarantor in accordance with the terms of Section
6.2.2,
(vii) after giving effect to any borrowings under the Revolving
Loan, if any, needed to finance the Subject Transaction, the Borrower
and the Subsidiary Guarantors shall have availability under the
Revolving Loan in an amount at least equal to Ten Million Dollars
($10,000,000) and are reasonably expected to have such minimum
availability for a period of ten (10) Business Days after closing and
consummation of the Subject Transaction,
(viii) all legal matters incident to the Subject Transaction
shall be acceptable to the Agent in its reasonable discretion,
(ix) the Agent shall have been given no less than thirty (30)
days prior written notice of any proposed Subject Transaction and
shall have been provided with all information which it may have
reasonably requested in connection with such proposed Subject
Transaction,
(x) if requested by the Agent, the Agent shall have received,
prior to or simultaneously with the closing of a Subject Transaction
an opinion of counsel reasonably acceptable to the Agent in all
respects covering the Borrower's or the relevant Subsidiary's, as the
case may be, due incorporation, valid existence, good standing and
power and authority to enter into the documents contemplated by this
Agreement and the Subject Transaction and such other matters as may be
reasonably requested by the Agent,
(xi) unless otherwise agreed by the Requisite Lenders, no Subject
Transaction shall be permitted by the terms of this Agreement if the
Borrower and the Subsidiary Guarantors, on a consolidated basis and
taken as a whole, have had, immediately prior to the date of the
closing of such Subject Transaction, three (3) consecutive months of
net operating losses, and
(xii) the aggregate purchase price of, investment in, acquisition
expenditures relating to (excluding customary and reasonable
transaction costs), and assumed Liabilities in connection with, all
Subject Transactions in any given fiscal year shall not exceed Fifteen
Million Dollars ($15,000,000);
and (B) the Container Purchase Transaction. The Borrower understands and
agrees that the Agent shall have no obligation or commitment to include any
of the assets or properties of any Person acquired in the Borrowing Base
pursuant to a Subject Transaction. The Agent and the Lenders agree,
however, that if after completion and review of a satisfactory field
examination of the Assets and properties which constitute or are part of a
Permitted Acquisition, such Assets and properties shall be included in the
Borrowing Base if the results of such field examination and audit are
reasonably acceptable in all respects to the Agent in its discretion and
such Assets and properties otherwise satisfy the eligibility criteria for
inclusion in the Borrowing Base.
"Permitted Asset Disposition" means any one of the following
Asset Dispositions; provided that no such Asset Disposition shall be
permitted at any time following the occurrence of a Default or an Event of
Default or if and to the extent any such Asset Disposition would give rise
to a Default or an Event of Default, unless otherwise agreed in writing by
the Requisite Lenders:
(a) an Asset Disposition which satisfies the following
conditions:
(i) the sum of (i) the Net Proceeds to be paid to or
received by the Borrower and/or any Subsidiary of the Borrower
with respect to such Asset Disposition, plus (ii) the aggregate
amount of all Net Proceeds paid to or received by the Borrower
and/or any or all of its Subsidiaries, is less than or equal to
Five Hundred Thousand Dollars ($500,000) during any fiscal year,
and
(ii) none of the Assets sold under this clause (a)
constitute molds used in the business of the Borrower or any
Subsidiary Guarantor.
(b) the sale of the property owned by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ located
at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇;
(c) sales of Inventory in the ordinary course of business,
(d) the licensing of Patents, Trademarks and/or Copyrights,
in the ordinary course of business,
(e) dispositions of worn, used, surplus or obsolete
Equipment in the ordinary course of business,
(f) dispositions of Assets (including Net Casualty Proceeds)
to the extent such Assets are replaced with Assets of similar kind and
function, provided that the replacement Assets shall be purchased no
later than ninety (90) days following the Asset Disposition, the
replacement Assets (which shall constitute Collateral) shall be free
and clear of Liens other than Permitted Liens that are not Liens
securing purchase money or finance lease arrangements, and the
Borrower or the Subsidiary Guarantor, as the case may be, shall give
the Agent at least ten (10) days prior written notice of such Asset
Disposition, except for an Asset Disposition which constitutes a
casualty,
(g) intercompany sales, leases or other dispositions of
Assets among and between the Borrower and any and all Subsidiary
Guarantors, including, without limitation, the BTP/Borrower
Transaction (if such BTP/Borrower Transaction constitutes a sale and
leaseback transaction in accordance with the provisions of this
Agreement) and the BIC/Borrower Transaction (if such BIC/Borrower
Transaction constitutes a sale and leaseback transaction or a sale
transaction in accordance with the provisions of this Agreement);
provided, that any such Assets sold, leased or otherwise disposed of
as between the Borrower and any and all Subsidiary Guarantors shall
remain subject to the Liens of the Agent and the Lenders under this
Agreement and under the other Financing Documents,
(h) the sale of any Fixed or Capital Assets acquired by the
Borrower or any Subsidiary Guarantor and the leaseback of such Assets
within thirty (30) days of acquisition, but only as contemplated and
required as part of an intended Capital Lease transaction at the time
of acquisition,
(i) the sale of molds by the Borrower or any Subsidiary
Guarantor; provided that the aggregate Net Proceeds of any and all
such molds outside the ordinary course of business shall not exceed
Five Hundred Thousand Dollars ($500,000) in any fiscal year,
(j) the termination of the lease for PackerWare's Reno, Nevada
location; provided, that all Assets of PackerWare at such location are
transferred to one or more locations of the Borrower and/or any Subsidiary
Guarantor such that the Agent and the Lenders would have a properly
perfected Lien on, and security interest in, such Assets, and
(k) the sale of a portion of the Assets acquired by
the Borrower as part of the Container Purchase Transaction;
provided, that (i) any such sales are made within one (1) year
after the Closing Date and (ii) the Net Proceeds of any and all
such Assets shall not exceed Three Hundred Thousand Dollars ($300,000);
and the termination of any leases in connection therewith.
"Permitted Liens" means: (a) Liens for Taxes (x) which are not
delinquent or (y) which (i) are being diligently contested in good faith
and by appropriate proceedings, (ii) the Borrower or the Subsidiary
Guarantor, as appropriate, has the financial ability to pay, with all
penalties and interest, at all times without materially and adversely
affecting the Borrower or the Subsidiary Guarantor, as appropriate, and
(iii) are not, and will not be with appropriate filing, the giving of
notice and/or the passage of time, entitled to priority over any Lien of
the Agent and/or the Lenders unless and to the extent that a reserve has
been established against the Borrowing Base in an amount equal to the
maximum liability under and in connection with such Taxes, which reserve
shall be established by the Agent upon the Borrower's request; (b) deposits
or pledges to secure obligations under workers' compensation, social
security or similar laws, or under unemployment insurance in the ordinary
course of business; (c) Liens securing the Obligations; (d) judgment Liens
to the extent the entry of such judgment does not constitute an Event of
Default under the terms of this Agreement or result in the sale or levy of,
or execution on, any of the Collateral; (e) such other Liens, if any, as
are set forth on SCHEDULE attached hereto and made a part hereof; (f)
deposits, liens or pledges to secure payments of unemployment and other
insurance, old-age pensions or other social security obligations, or the
performance of bids, tenders, leases, contracts, public or statutory
obligations, surety, stay or appeal bonds, or other similar obligations
arising in the ordinary course of business; (g) statutory mechanics',
workers', repairmen's, warehousemen's, vendors' or carriers' Liens or other
similar statutory Liens arising in the ordinary course of business and
securing sums which are not more than thirty (30) days past due, provided
that such statutory Liens do not materially impair or affect the use or
value of any of the Collateral; (h) statutory landlord's Liens under leases
to which the Borrower or any of its Subsidiaries is a party; (i) zoning
restrictions, easements, rights of way, licenses and restrictions on the
use of real property or minor irregularities in title thereto which do not
materially impair the use or value of any such real property; (j)
"Permitted Encumbrances" (as defined in each of the Deeds of Trust); (k)
Liens securing Indebtedness for Borrowed Money permitted by the provisions
of Section 6.2.4(g); and (l) Liens securing obligations under Capital
Leases to the extent such Capital Leases are permitted by the provisions of
this Agreement.
"Permitted Uses" means (i) the acquisition of one hundred percent
(100%) of the capital stock of Packerware through the PackerWare Merger
Transaction by the Borrower, (ii) the refinancing and payment of all
obligations of the Borrower and one or more of the Subsidiary Guarantors to
any lenders with respect to any Indebtedness for Borrowed Money existing as
of the Closing Date, (iii) the payment of all costs and expenses reasonably
incurred in connection with the closing and consummation of the
transactions contemplated by this Agreement, including the PackerWare
Merger Transaction, (iv) the payment of expenses incurred in the ordinary
course of business of the Borrower or any Subsidiary Guarantor, (v) the
acquisition of any Permitted Acquisition as and to the extent permitted by
the provisions of this Agreement, (vi) the payment of all costs and
expenses reasonably incurred in connection with the closing and
consummation of a Permitted Acquisition and (vii) for general corporate
purposes of the Borrower or any Subsidiary Guarantor.
"Person" means and includes an individual, a corporation, a
partnership, a joint venture, a limited liability company or partnership, a
trust, an unincorporated association, a Governmental Authority, or any
other organization or entity.
"Plan" means any pension plan which is covered by Title IV of
ERISA and in respect of which the Borrower, any Subsidiary of the Borrower
or a Commonly Controlled Entity is an "employer" as defined in Section 3 of
ERISA.
"Post-Default Rate" means with respect to the principal balance
of any of the Obligations, the then applicable rate of interest on such
Obligations, plus two percent (2%) per annum.
"Post-Expiration Date Letter of Credit" and "Post-Expiration Date
Letters of Credit" have the meanings described in Section 2.3.3
"Prepayment" means a Revolving Loan Mandatory Prepayment, a
Revolving Loan Optional Prepayment, a Term Loan Mandatory Prepayment, or a
Term Loan Optional Prepayment, as the case may be, and "Prepayments" mean
collectively all Revolving Loan Mandatory Prepayments, all Revolving Loan
Optional Prepayments, all Term Loan Mandatory Prepayments and all Term Loan
Optional Prepayments.
"Pricing Ratio" means as to the Borrower and the Subsidiary
Guarantors, on a consolidated basis, the ratio of (i) Funded Debt to (ii)
EBITDA.
"Prime Rate" means the floating and fluctuating per annum prime
commercial lending rate of interest of the Agent, as established by the
Agent at any time or from time to time. The Prime Rate shall be adjusted
automatically, without notice, as of the effective date of any change in
such prime commercial lending rate. The Prime Rate does not necessarily
represent the lowest rate of interest charged by the Agent to borrowers.
"Proforma Financial Projections" has the meaning described in
Section 4.1.12 (Proforma Financial Statements) below.
"Proforma Financial Statements" has the meaning described in
Section 4.1.12(Proforma Financial Statements) below.
"Pro Rata Share" means at any time and as to any Lender, the
percentage derived by dividing the unpaid principal amount of the Loans,
Bond Letter of Credit Obligations and Letter of Credit Obligations owing to
that Lender by the aggregate unpaid principal amount of all Loans, Bond
Letter of Credit Obligations and Letter of Credit Obligations then
outstanding; or if no Loans, Bond Letter of Credit Obligations or Letter of
Credit Obligations are outstanding, by dividing the total amount of such
Lender's Commitments by the total amount of the Commitments of the Agent
and all of the Lenders.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder.
"Responsible Officer" means for the Borrower, its chief executive
officer, any vice president or president or, with respect to financial
matters, its chief financial officer.
"Requisite Lenders" means at any time of determination one or
more of the Lenders holding at least sixty-six and two-thirds percent (66-
2/3%) of the Commitments.
"Reserve Percentage" means, at any time, the then current maximum
rate for which reserves (including any basic, supplemental, marginal and
emergency reserves) are required to be maintained by member banks of the
Federal Reserve System under Regulation D of the Board of Governors of the
Federal Reserve System against "Eurocurrency liabilities", as that term is
defined in Regulation D. The LIBOR Rate shall be adjusted automatically on
and as of the effective date of any change in the Reserve Percentage. The
Agent hereby advises the Borrower that as of the Closing Date, the Reserve
Percentage is equal to zero.
"Revolving Credit Commitment" means the agreement of a Lender
relating to the making the Revolving Loan and advances thereunder subject
to and in accordance with the provisions of this Agreement; and "Revolving
Credit Commitments" means the collective reference to the Revolving Credit
Commitment of each of the Lenders.
"Revolving Credit Commitment Period" means the period of time
from the Closing Date to the Business Day preceding the Revolving Credit
Termination Date.
"Revolving Credit Committed Amount" has the meaning described in
Section 2.1.1(Revolving Credit Facility).
"Revolving Credit Facility" means the facility established by the
Lenders pursuant to Section 2.1(Revolving Credit Facility) of this Agreement.
"Revolving Credit Note" and "Revolving Credit Notes" have the
meanings described in Section 2.1.5(Revolving Credit Notes).
"Revolving Credit Optional Reduction" and "Revolving Credit
Optional Reductions" have the meanings described in Section 2.1.13.
"Revolving Credit Pro Rata Share" has the meaning described in
Section 2.1.1.
"Revolving Credit Termination Date" means the earlier of (i) the
fifth anniversary date of the Closing Date, (ii) the repayment or
prepayment of the Term Loan in full, or (iii) the date on which the
Revolving Credit Commitments are terminated pursuant to Section 7.2 or
otherwise.
"Revolving Credit Unused Line Fee" and "Revolving Credit Unused
Line Fees" have the meanings described in Section 2.1.10(Revolving Credit
Unused Line Fee).
"Revolving Loan" has the meaning described in Section 2.1.1
(Revolving Credit Facility).
"Revolving Loan Account" has the meaning described in Section 2.1.9
(Revolving Loan Account).
"Revolving Loan Mandatory Prepayment" and "Revolving Loan
Mandatory Prepayments" have the meanings described in Section 2.1.6(Mandatory
Prepayments).
"Revolving Loan Optional Prepayment" and "Revolving Loan Optional
Prepayments" have the meanings described in Section 2.1.7(Revolving Loan
Optional Prepayment).
"Securities" means the collective reference to each and every
certificated or uncertificated security which constitutes a "security"
under the provisions of Title 8 of the Uniform Commercial Code, and all
proceeds (cash and non-cash) of the foregoing.
"Security Agreement" means that certain security agreement dated
the date hereof from PackerWare, BIC, BTP, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and AeroCon, Inc.
to the Agent for the benefit of the Lenders, ratably and the Agent, as
amended, restated, supplemented or otherwise modified in writing at any
time and from time to time.
"Security Documents" means collectively any assignment, pledge
agreement, security agreement, mortgage, deed of trust, deed to secure
debt, financing statement and any similar instrument, document or agreement
under or pursuant to which a Lien is now or hereafter granted to, or for
the benefit of, the Agent and/or the Lenders on any real or personal
property of any Person to secure all or any portion of the Obligations, all
as the same may from time to time be amended, restated, supplemented or
otherwise modified, including, without limitation, this Agreement, the
Guaranty, the Stock Pledge Agreement, the Deeds of Trust, the Security
Agreement, the Assignment of Patents and the Assignment of Trademarks.
"Security Procedures" means the rules, policies and procedures
adopted and implemented by the Agent and its Affiliates at any time and
from time to time with respect to security procedures and measures relating
to electronic funds transfers, all as the same may be amended, restated,
supplemented, terminated, or otherwise modified at any time and from time
to time by the Agent in its sole and absolute discretion.
"Seller" means all of the shareholders of PackerWare immediately
prior to consummation of the PackerWare Merger Transaction.
"Settlement Date" means each Business Day after the Closing Date
selected by the Agent in its sole discretion subject to and in accordance
with the provisions of Section 2.8.3 as of which a Settlement Report is
delivered by the Agent and on which settlement is to be made among the
Lenders in accordance with the provisions of Section 2.8.3.
"Settlement Report" means each report prepared by the Agent and
delivered to each Lender and setting forth, among other things, as of the
Settlement Date indicated thereon and as of the next preceding Settlement
Date, the aggregate outstanding principal balance of the Revolving Loan,
each Lender's Revolving Credit Pro Rata Share thereof, each Lender's Net
Outstandings and all Non-Ratable Loans made, and all payments of principal,
interest and Fees received by the Agent from the Borrower during the period
beginning on such next preceding Settlement Date and ending on such
Settlement Date.
"State" means the State of Maryland.
"Stock Pledge Agreement" means that certain pledge, assignment
and security agreement dated the date hereof from the Borrower to the Agent
for the benefit of the Lenders ratably and the Agent, as the same may from
time to time be amended, restated, supplemented or otherwise modified,
which Stock Pledge Agreement grants, pledges and assigns to the Agent for
the benefit of the Lenders ratably and the Agent, a first priority pledge
and assignment of one hundred percent (100%) of the capital stock of each
Subsidiary Guarantor.
"Senior Secured Debt - Parent" means that certain Indebtedness
for Borrowed Money of the Parent (and all guarantees thereof by the
Borrower and its Subsidiaries) in favor of First Trust of New York,
National Association, as trustee for the holders of the 12-1/2% Series A
Senior Secured Notes due 2006 and the 12-1/2% Series B Secured Notes due
2006 in a stated principal amount of One Hundred Five Million Dollars
($105,000,000).
"Senior Secured Debt Loan Documents" means any and all promissory
notes, agreements, documents or instruments now or at any time evidencing,
securing, guarantying or otherwise executed and delivered in connection
with the Senior Secured Debt - Parent, as the same may from time to time be
amended, restated, supplemented or modified.
"Stockholder's Equity" means as to the Borrower and each of the
Subsidiary Guarantors, on a consolidated basis, for any date of
determination thereof, the total of capital stock (except treasury stock
and net of any note receivable received upon the issuance of any shares of
capital stock) and contributed capital, as determined in accordance with
GAAP consistently applied, after eliminating all intercompany items.
"Subordinated Debt" means that certain Indebtedness for Borrowed
Money of the Borrower (and all guarantees thereof by the Borrower and its
Subsidiaries) in favor of United States Trust Company of New York, as
trustee for the holders of the 12-1/4% Senior Subordinated Notes due 2004
in a stated principal amount of One Hundred Million Dollars ($100,000,000).
"Subordinated Debt Loan Documents" means any and all promissory
notes, agreements, documents or instruments now or at any time evidencing,
securing, guarantying or otherwise executed and delivered in connection
with the Subordinated Debt, as the same may from time to time be amended,
restated, supplemented or modified.
"Subordinated Indebtedness" means all Indebtedness, including,
without limitation, the Subordinated Debt, incurred at any time by the
Borrower as and to the extent permitted by the provisions of Section 6.2.4 of
this Agreement, which is subordinated to the Obligations, as set forth in
one or more written agreements, all in form and substance satisfactory to
the Agent in its reasonable discretion. The Agent and the Lenders agree
that Subordinated Indebtedness does not include the Senior Secured Debt -
Parent.
"Subsidiary" means any corporation the majority of the voting
shares of which at the time are owned directly by the Borrower and/or by
one or more Subsidiaries of the Borrower.
"Subsidiary Guarantor" means BIC, BTP, AeroCon, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or
any other domestic Subsidiary of the Borrower or the Parent which is
designated and qualifies as a Subsidiary Guarantor in accordance with the
provisions of Section 6.2.2, or any of their respective successors and
assigns, as the case may be; and, "Subsidiary Guarantors" means BIC, BTP,
AeroCon, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ each other domestic Subsidiary of the Borrower
designated and qualified as a "Subsidiary Guarantor" in accordance with the
provisions of Section 6.2.2, and all of their respective successors and
assigns.
"Tangible Capital Funds" means as to the Borrower and each of the
Subsidiary Guarantors, on a consolidated basis, for any date of
determination thereof, the total of (i) all Stockholder's Equity, less (ii)
all Assets which would be classified as intangible assets under GAAP
consistently applied, plus (iii) Subordinated Indebtedness.
"Taxes" means all taxes and assessments whether general or
special, ordinary or extraordinary, or foreseen or unforeseen, of every
character (including all penalties or interest thereon), which at any time
shall be assessed, levied, confirmed or imposed by any Governmental
Authority on the Borrower, any Subsidiary Guarantor or any of its or their
properties or Assets or any part thereof or in respect of any of its or
their franchises, businesses, income or profits.
"Term Loan" and "Term Loans" have the meanings described in
Section 2.2.1.
"Term Loan Commitment" and "Term Loan Commitments" have the
meanings described in Section 2.2.1.
"Term Loan Committed Amount" has the meaning described in Section
2.2.1.
"Term Loan Facility" means the facility established by the
Lenders pursuant to Section 2.2(Term Loan Facility) of this Agreement.
"Term Loan Mandatory Prepayment" and "Term Loan Mandatory
Prepayments" have the meanings described in Section 2.2.3.
"Term Loan Optional Prepayment" and "Term Loan Optional
Prepayments" have the meanings described in Section 2.2.4.
"Term Loan Pro Rata Share" has the meaning described in Section 2.2.1.
"Term Note" and "Term Notes" have the meaning described in
Section 2.2.2.
"Total Revolving Credit Committed Amount" has the meaning
described in Section 2.1.1.
"Total Term Loan Committed Amount" has the meaning described in
Section 2.2.1.
"Trademarks" means and includes in each case whether now existing
or hereafter arising, all of the Borrower's rights, title and interest in
and to (a) any and all trademarks (including service marks), trade names
and trade styles, and applications for registration thereof and the
goodwill of the business symbolized by any of the foregoing, (b) any and
all licenses of trademarks, service marks, trade names and/or trade styles,
whether as licensor or licensee, (c) any renewals of any and all
trademarks, service marks, trade names, trade styles and/or licenses of any
of the foregoing, (d) income, royalties, damages and payments now or
hereafter due and/or payable with respect thereto, including, without
limitation, damages, claims, and payments for past, present and future
infringements thereof, (e) rights to ▇▇▇ for past, present and future
infringements of any of the foregoing, including the right to settle suits
involving claims and demands for royalties owing, and (f) all rights
corresponding to any of the foregoing throughout the world.
"Uniform Commercial Code" means, unless otherwise provided in
this Agreement, the Uniform Commercial Code as adopted by and in effect
from time to time in the State or in any other jurisdiction, as applicable.
"Wholly Owned Subsidiary" means any domestic United States Person
all the shares of stock or other equity interests of all classes of which
(other than directors' qualifying shares) at the time are owned directly or
indirectly by the Borrower and/or by one or more Wholly Owned Subsidiaries
of the Borrower.
"Wire Transfer Procedures" means the rules, policies and
procedures adopted and implemented by the Agent and its Affiliates at any
time and from time to time with respect to electronic funds transfers,
including, without limitation, the Security Procedures, all as the same may
be amended, restated, supplemented, terminated or otherwise modified at any
time and from time to time by the Agent upon notice to the Borrower in its
reasonable discretion.
SECTION 0.1.2 ACCOUNTING TERMS AND OTHER DEFINITIONAL PROVISIONS.
Unless otherwise defined herein, as used in this Agreement and in any
certificate, report or other document made or delivered pursuant hereto,
accounting terms not otherwise defined herein, and accounting terms only
partly defined herein, to the extent not defined, shall have the respective
meanings given to them under GAAP. Unless otherwise defined herein, all
terms used herein which are defined by the Uniform Commercial Code shall
have the same meanings as assigned to them by the Uniform Commercial Code
unless and to the extent varied by this Agreement. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and article, section, subsection,
schedule and exhibit references are references to articles, sections or
subsections of, or schedules or exhibits to, as the case may be, this
Agreement unless otherwise specified. As used herein, the singular number
shall include the plural, the plural the singular and the use of the
masculine, feminine or neuter gender shall include all genders, as the
context may require. Reference to any one or more of the Financing
Documents shall mean the same as the foregoing may from time to time be
amended, restated, substituted, extended, renewed, supplemented or
otherwise modified. Notwithstanding the foregoing, the Agent and the
Lenders agree that if GAAP at any time changes and such changes have an
affect on the computation of any of the covenants contained in Section 6.1.13
of this Agreement, the Agent, the Lenders and the Borrower will negotiate in
good faith to revise any such affected covenants so as to reverse the
effect of such change in GAAP.
ARTICLE 2
THE CREDIT FACILITIES
SECTION 0.2.1 THE REVOLVING CREDIT FACILITY.
0.2.1.1 REVOLVING CREDIT FACILITY. Subject to and upon
the terms of this Agreement, the Lenders collectively, but severally,
establish a revolving credit facility in favor of the Borrower. The
aggregate of all advances under the Revolving Credit Facility are sometimes
referred to in this Agreement collectively as the "Revolving Loan".
The amount set forth below opposite each Lender's name is herein
called such Lender's "Revolving Credit Committed Amount" and the total of
each Lender's Revolving Credit Committed Amount is herein called the "Total
Revolving Credit Committed Amount". The proportionate share set forth
below opposite each Lender's name is herein called such Lender's "Revolving
Credit Pro Rata Share":
-1-
Revolving Credit Revolving Credit
LENDER COMMITTED AMOUNT PRO RATA SHARE
NationsBank $21,000,000 100%
Total Revolving
Credit Committed
Amount: $21,000,000 100%
Neither the Agent nor any of the Lenders shall be responsible for the
Revolving Credit Commitment of any other Lender, nor will the failure of
any Lender to perform its obligations under its Revolving Credit Commitment
in any way relieve any other Lender from performing its obligations under
its Revolving Credit Commitment.
During the Revolving Credit Commitment Period, the Borrower may
request advances under the Revolving Credit Facility in accordance with the
provisions of this Agreement; provided that after giving effect to the
Borrower's request:
(i) the outstanding principal balance of each Lender's Pro Rata Share
of the Revolving Loan and of the Letter of Credit Obligations would not
exceed the lesser of (a) such Lender's Pro Rata Share of the Revolving Loan
and of the Letter of Credit Obligations or (b) such Lender's Pro Rata Share
of the Borrowing Base; and,
(ii) the aggregate outstanding principal balance of the Revolving Loan
and all Letter of Credit Obligations would not exceed the lesser of (a) the
Total Revolving Credit Committed Amount or (b) the Borrowing Base.
0.2.1.2 PROCEDURE FOR MAKING ADVANCES UNDER THE REVOLVING
LOAN.
The Borrower may borrow under the Revolving Credit Facility on any
Business Day. Advances under the Revolving Loan shall be deposited to a
demand deposit account of the Borrower with the Agent or shall be otherwise
applied as directed by the Borrower, which direction the Agent may require
to be in writing. Not later than 11:00 a.m. (Baltimore City Time) on the
date of the requested borrowing, the Borrower shall give the Agent oral or
written notice (a "Loan Notice") of the amount and (if requested by the
Agent) the purpose of the requested borrowing. Any oral Loan Notice shall
be confirmed in writing by the Borrower within three (3) Business Days
after the making of the requested advance under the Revolving Loan. At any
time within three (3) hours prior to funding, the Borrower may revoke a
Loan Notice; provided, that the Borrower shall pay to each Lender, as the
case may be, any amounts which may be due to such Lender under Section 2.6.4
by reason of such Lender having taken action in reliance on the Loan Notice.
Upon receipt of any such Loan Notice, the Agent shall promptly notify each
Lender of the amount of each advance to be made by such Lender on the
requested borrowing date under such Lender's Revolving Credit Commitment.
Not later than 1:00 p.m. (Baltimore City Time) on each requested
borrowing date for the making of advances under the Revolving Loan, each
Lender shall, if it has received timely notice from the Agent of the
Borrower's request for such advances, make available to the Agent, in funds
immediately available to the Agent at the Agent's office set forth in
Section 9.1, such Lender's Pro Rata Share of the advances to be made on such
date.
In addition, the Borrower hereby irrevocably authorizes the Lenders at
any time and from time to time, without further request from or notice to
the Borrower, to make advances under the Revolving Loan which the Agent, in
its sole and absolute discretion, deems necessary or appropriate to protect
the interests of the Agent and/or any or all of the Lenders under this
Agreement, including, without limitation, advances under the Revolving Loan
made to cover debit balances in the Revolving Loan Account, to pay
principal of, and/or interest on, any Loan, including any Term Loan, the
Obligations (including any Letter of Credit Obligations and any Bond Letter
of Credit Obligations), and/or Enforcement Costs, prior to, on, or after
the termination of other advances under this Agreement, regardless of
whether the outstanding principal amount of the Revolving Loan which the
Lenders may advance hereunder exceeds the Total Revolving Credit Committed
Amount.
0.2.1.3 BORROWING BASE. As used in this Agreement, the
term "Borrowing Base" means at any time, an amount equal to the aggregate
of (a) eighty-five percent (85%) of the amount of Eligible Receivables,
plus (b) the lesser of (x) sixty-five percent (65%) of the amount of
Eligible Inventory or (y) the greater of (i) Ten Million Five Hundred
Thousand Dollars ($10,500,000) or (ii) fifty percent (50%) of the Total
Revolving Credit Committed Amount.
The Borrowing Base shall be computed based on the Borrowing Base
Report most recently delivered to and accepted by the Agent in its
reasonable discretion. In the event the Borrower fails to furnish a
Borrowing Base Report required by Section 2.1.4 below, the Agent may, in its
reasonable discretion exercised from time to time and without limiting
other rights and remedies under this Agreement, direct the Lenders to
suspend the making of or limit advances under the Revolving Loan. The
Borrowing Base shall be reduced by all amounts credited to the Collateral
Account (if and to the extent a Collateral Account is required by the terms
of this Agreement) since the date of the most recent Borrowing Base Report
and by the amount of any Account or any Inventory which was included in the
Borrowing Base, but which the Agent determines fails to meet the respective
criteria applicable from time to time for Eligible Receivables or Eligible
Inventory.
If at any time the total of the aggregate principal amount of the
Revolving Loan and Outstanding Letter of Credit Obligations exceeds the
Borrowing Base, a borrowing base deficiency ("Borrowing Base Deficiency")
shall exist. Each time a Borrowing Base Deficiency exists, the Borrower,
at the sole and absolute discretion of the Agent exercised from time to
time, shall pay the Borrowing Base Deficiency ON DEMAND to the Agent for
the benefit of the Lenders from time to time.
Without implying any limitation on the Agent's discretion with respect
to the Borrowing Base, the criteria for Eligible Receivables and for
Eligible Inventory contained in the respective definitions of Eligible
Receivables and of Eligible Inventory are in part based upon the business
operations of the Borrower and the Subsidiary Guarantors existing on or
about the Closing Date and upon information and records furnished to the
Agent by the Borrower and the Subsidiary Guarantors. If at any time or
from time to time hereafter, the business operations of the Borrower and/or
any of the Subsidiary Guarantors change in any material respect or such
information and records furnished to the Agent are materially incorrect or
misleading, the Agent in its reasonable discretion, may at any time and
from time to time during the duration of this Agreement change such
criteria, add new criteria, make existing criteria less onerous, or remove
existing criteria; provided, however, that any such change in, or addition
or removal of criteria shall be effective only after notice thereof from
the Agent to the Borrower. Except in emergency circumstances, the Agent
agrees to use its commercially reasonable efforts to consult with the
Borrower prior to the effective date of any addition to, or change in,
eligibility criteria, but that the Agent shall have no obligation or duty
to reach an agreement with the Borrower as a condition of, or prior to,
imposing any changes in, or additions to, eligibility criteria. The Agent
shall communicate such changed or additional criteria to the Borrower from
time to time either orally or in writing.
0.2.1.4 BORROWING BASE REPORT. The Borrower will furnish
to the Agent no less frequently than monthly, as soon as available, but in
any event within twenty (20) days of the end of each fiscal month, and,
upon the occurrence of an Event of Default or as otherwise provided in this
Section 2.1.4, at such other times as may be requested by the Agent a
report of the Borrowing Base in the form attached hereto as Exhibit A (each
a "Borrowing Base Report"; collectively, the "Borrowing Base Reports") in
the form required from time to time by the Agent, appropriately completed
and duly signed. The Borrowing Base Report shall contain the amount and
payments on the Accounts, the value of Inventory, and the calculations of
the Borrowing Base, all in such detail, and accompanied by such supporting
and other information, as the Agent may from time to time reasonably
request. Upon the Agent's request and upon the creation of any Accounts,
the Borrower will provide the Agent with (a) confirmatory assignment
schedules; (b) copies of Account Debtor invoices; (c) evidence of shipment
or delivery; and (d) such further schedules, documents and/or information
regarding the Accounts and the Inventory as the Agent may reasonably
require. The items to be provided under this subsection shall be in form
reasonably satisfactory to the Agent, and certified as true and correct by
a Responsible Officer, and delivered to the Agent from time to time solely
for the Agent's convenience in maintaining records of the Collateral. The
Borrower's failure to deliver any such items to the Agent shall not affect,
terminate, modify, or otherwise limit the Liens of the Agent and the
Lenders in the Collateral. Notwithstanding the foregoing, the Borrower
acknowledges and agrees that the Agent, at its option, may require that the
Borrower furnish to the Agent weekly and, if requested by the Agent, daily
Borrowing Base Reports if any one of the following events occur (i) the
Borrower's and Subsidiary Guarantors' collective aggregate availability
under the Revolving Loan is at any times less than or equal to Ten Million
Dollars ($10,000,000), (ii) the Borrower and the Subsidiary Guarantors, on
a consolidated basis, incur three (3) consecutive months of net operating
losses, or (iii) the occurrence of an Event of Default (each of the
aforementioned events are herein called a "Borrowing Base Trigger Event").
The Agent agrees that it shall not be entitled to require that the Borrower
furnish weekly or daily Borrowing Base Reports solely as the result of the
occurrence of a Borrowing Base Trigger Event, if the Agent fails to so
notify the Borrower within ninety (90) days of the date that the Borrower
has cured the Borrowing Base Trigger Event to the reasonable satisfaction
of the Agent. The foregoing sentence, however, shall not prevent the Agent
from later requiring more frequent Borrowing Base Reports following the
occurrence of any subsequent Borrowing Base Trigger Event; provided, that
the Agent so notifies the Borrower within ninety (90) days of date that the
Borrower has cured the Borrowing Base Trigger Event to the reasonable
satisfaction of the Agent.
0.2.1.5 REVOLVING CREDIT NOTES. The obligation of the
Borrower to pay each Lender's Pro Rata Share of the Revolving Loan, with
interest, shall be evidenced by a series of promissory notes (as from time
to time extended, amended, restated, supplemented or otherwise modified,
collectively the "Revolving Credit Notes" and individually a "Revolving
Credit Note") substantially in the form of EXHIBIT "B-1" attached hereto
and made a part hereof, with appropriate insertions. Each Lender's
Revolving Credit Note shall be dated as of the Closing Date, shall be
payable to the order of such Lender at the times provided in the Revolving
Credit Note, and shall be in the principal amount of such Lender's
Revolving Credit Committed Amount. The Borrower acknowledges and agrees
that, if the outstanding principal balance of the Revolving Loan
outstanding from time to time exceeds the aggregate stated amount of the
Revolving Credit Notes, the excess shall bear interest at the rates
provided from time to time for advances under Revolving Loan evidenced by
the Revolving Credit Notes and shall be payable, with accrued interest, ON
DEMAND. The Revolving Credit Notes shall not operate as a novation of any
of the Obligations or nullify, discharge, or release any such Obligations
or the continuing contractual relationship of the parties hereto in
accordance with the provisions of this Agreement.
0.2.1.6 MANDATORY PREPAYMENTS OF REVOLVING LOAN. Subject
to the provisions of Section 2.6.4(Indemnity) and in addition to any mandatory
prepayment required by the provisions of Section 2.2.3 (Term Loan Mandatory
Prepayments), upon the request of the Agent pursuant to Section 2.1.3
(Borrowing Base), the Borrower shall make mandatory prepayments (each a
"Revolving Loan Mandatory Prepayment" and collectively, the "Revolving Loan
Mandatory Prepayments") of the Revolving Loan at any time and from time to
time in order to cover any Borrowing Base Deficiency.
0.2.1.7 OPTIONAL PREPAYMENTS OF REVOLVING LOAN. Subject to
the provisions of Section 2.6.4(Indemnity), the Borrower shall have the option
at any time and from time to time prepay (each a "Revolving Loan Optional
Prepayment" and collectively the "Revolving Loan Optional Prepayments") the
Revolving Loan, in whole or in part without premium or penalty. Revolving
Loan Optional Prepayments shall be made following a timely and proper
written notice to the Agent with respect thereto specifying the date and
amount of any intended Revolving Loan Optional Prepayment. The amount to
be prepaid shall be paid by the Borrower to the Agent on the date specified
for such prepayment. Any amounts repaid or prepaid may be readvanced and
reborrowed subject to the provisions of this Agreement.
0.2.1.8 THE COLLATERAL ACCOUNT. Upon demand by the Agent
following a Borrowing Base Trigger Event, the Borrower will deposit, or
cause to be deposited, all Items of Payment to a bank account designated by
the Agent and from which the Agent alone has power of access and withdrawal
(the "Collateral Account"). Each deposit shall be made not later than the
next Business Day after the date of receipt of the Items of Payment. The
Items of Payment shall be deposited in precisely the form received, except
for the endorsements of the Borrower where necessary to permit the
collection of any such Items of Payment, which endorsement the Borrower
hereby agree to make. In the event the Borrower fails to do so, the
Borrower hereby authorizes the Agent to make the endorsement in the name of
the Borrower. Prior to such a deposit, the Borrower will not commingle any
Items of Payment with the Borrower's other funds or property, but will hold
them separate and apart in trust and for the account of the Agent for the
benefit of the Lenders ratably and the Agent. The Agent agrees that it
shall not demand that the Borrower deposit or cause to be deposited all
Items of Deposit to the Collateral Account at any time prior to the
occurrence of a Borrowing Base Trigger Event. Once the Agent has so made
demand on the Borrower, unless otherwise agreed by the Agent in writing,
the Borrower shall continue to so deposit or cause to be deposited all
Items of Payment to the Collateral Account notwithstanding that subsequent
to such demand the Borrowing Base Trigger Event has been cured, waived,
otherwise remedied or is no longer applicable.
In addition, if the Agent has so made demand, if so directed by the
Agent, the Borrower shall direct the mailing of all Items of Payment from
its Account Debtors to one or more post-office boxes designated by the
Agent, or to such other additional or replacement post-office boxes
pursuant to the request of the Agent from time to time (collectively, the
"Lockbox"). The Agent shall have unrestricted and exclusive access to the
Lockbox.
Subject to the provisions of this Section, the Borrower hereby
authorizes the Agent to inspect all Items of Payment, and deposit such
Items of Payment in the Collateral Account. The Agent reserves the right,
exercised in its reasonable discretion from time to time, to provide to the
Collateral Account credit prior to final collection of an Item of Payment
and to disallow credit for any Item of Payment prior to final collection
which is reasonably unsatisfactory to the Agent. In the event Items of
Payment are returned to the Agent for any reason whatsoever, the Agent may,
in the exercise of its reasonable discretion from time to time, forward
such Items of Payment a second time. Any returned Items of Payment shall
be charged back to the Collateral Account, the Revolving Loan Account, or
other account, as appropriate.
The Agent will apply the whole or any part of the collected funds
credited to the Collateral Account against the Revolving Loan (or with
respect to Items for Payments which are not proceeds of Accounts or
Inventory or after a Default or an Event of Default, against any of the
Obligations) or credit such collected funds to a depository account of the
Borrower with the Agent, the order and method of such application to be in
the sole discretion of the Agent. Notwithstanding the foregoing, the Agent
agrees that prior to the occurrence of an Event of Default, the Agent shall
use its best efforts to apply collected funds credited to the Collateral
Account to the Obligations so as to avoid or minimize any amounts which
would be due under Section 2.6.4 by reason of any such application.
Notwithstanding the foregoing, the Agent agrees that it shall not be
entitled to require establishment of the Collateral Account and/or the
Lockbox as the result of the occurrence of a Borrowing Base Trigger Event,
if the Agent fails to so notify the Borrower within ninety (90) days of the
date that the Borrower has cured the Borrowing Base Trigger Event to the
reasonable satisfaction of the Agent. The foregoing sentence, however,
shall not prevent the Agent from later requiring establishment of the
Collateral Account and/or a Lockbox following the occurrence of any
subsequent Borrowing Base Trigger Event; provided, that the Agent so
notifies the Borrower within ninety (90) days of the date that the Borrower
has cured the Borrowing Base Trigger Event to the reasonable satisfaction
of the Agent.
0.2.1.9 REVOLVING LOAN ACCOUNT. The Agent will establish
and maintain a loan account on its books (the "Revolving Loan Account") to
which the Agent will (a) DEBIT (i) the principal amount of each advance
under the Revolving Loan made by the Lenders hereunder as of the date made,
(ii) the amount of any interest accrued on the Revolving Loan as and when
due, and (iii) any other amounts due and payable by the Borrower to the
Agent and/or the Lenders from time to time under the provisions of this
Agreement in connection with the Revolving Loan, including, without
limitation, Enforcement Costs, Fees, late charges, and service, collection
and audit fees, as and when due and payable, and (b) CREDIT all payments
made by the Borrower to the Agent on account of the Revolving Loan as of
the date made including, without limitation, funds credited to the
Revolving Loan Account from the Collateral Account. The Agent may debit
the Revolving Loan Account for the amount of any Item of Payment which is
returned to the Agent unpaid. All credit entries to the Revolving Loan
Account are conditional and shall be readjusted as of the date made if
final and indefeasible payment is not received by the Agent in cash or
solvent credits. The Borrower hereby promises to pay to the order of the
Agent for the ratable benefit of the Lenders, on the Revolving Credit
Termination Date, an amount equal to the excess, if any, of all debit
entries over all credit entries recorded in the Revolving Loan Account
under the provisions of this Agreement. Any and all periodic or other
statements or reconciliations, and the information contained in those
statements or reconciliations, of the Revolving Loan Account shall be
presumed conclusively to be correct, and shall constitute an account stated
between the Agent, the Lenders and the Borrower unless the Agent receives
specific written objection thereto from the Borrower and/or any Lender
within thirty (30) Business Days after such statement or reconciliation
shall have been sent by the Agent. Any and all periodic or other
statements or reconciliations, and the information contained in those
statements or reconciliations, of the Revolving Loan Account shall be
final, binding and conclusive upon the Borrower in all respects, absent
manifest error, unless the Agent receives specific written objection
thereto from the Borrower within thirty (30) Business Days after such
statement or reconciliation shall have been sent by the Agent.
0.2.1.10 REVOLVING CREDIT UNUSED LINE FEE. The Borrower
shall pay to the Agent for the ratable benefit of the Lenders a quarterly
Revolving Credit Facility fee (collectively, the "Revolving Credit Unused
Line Fees" and individually, a "Revolving Credit Unused Line Fee") in an
amount equal to thirty (30) basis points per annum (calculated on the basis
of actual number of days elapsed in a year of 360 days) and calculated on
average daily unused and undisbursed portion of the Total Revolving Credit
Committed Amount in effect from time to time accruing during each quarterly
period. The accrued and unpaid Revolving Credit Unused Line Fee shall be
paid by the Borrower to the Agent on the first day of each quarter, in
arrears, commencing on the first such date following the date hereof, and
on the Revolving Credit Termination Date.
0.2.1.11 EARLY TERMINATION FEE. In the event of the
termination of the Revolving Credit Commitments, the Borrower shall pay a
fee to the Agent for the benefit of the Lenders ratably (the "Early
Termination Fee"), equal to following amount at the following times:
PERIOD EARLY TERMINATION FEE
Closing Date, through and 2% of the Total Revolving Credit
including, day preceding Committed Amount
the first anniversary date
of the Closing Date
-2-
First anniversary date 1% of the Total Revolving Credit
of the Closing Date, Committed Amount
through and including,
the day preceding the
second anniversary date
of the Closing Date
Second anniversary date 1/2% of the Total Revolving
of the Closing Date, Credit Committed Amount
through and including,
the day preceding the
third anniversary date
of the Closing Date
In the event of a partial reduction of the Revolving Credit
Commitments, the Borrower shall pay to the Agent for the benefit of the
Lenders ratably, an Early Termination Fee equal to following amount at the
following times:
PERIOD EARLY TERMINATION FEE
Closing Date, through and 2% of the amount of the
including, day preceding Revolving Credit Optional
the first anniversary date Reduction
of the Closing Date
First anniversary date 1% of the amount of the
of the Closing Date, Revolving Credit Optional
through and including, Reduction
the day preceding the
second anniversary date
of the Closing Date
Second anniversary date 1/2% of the amount of the
of the Closing Date, Revolving Credit Optional
through and including, Reduction
the day preceding the
third anniversary date
In the event the Term Loans are refinanced or replaced with the
proceeds of Indebtedness for Borrowed Money, in whole or in part, the
Borrower shall pay to the Agent for the benefit of the Lenders ratably, an
Early Termination Fee equal to following amount at the following times:
-3-
PERIOD EARLY TERMINATION FEE
Closing Date, through and 2% of the amount prepaid
including, day preceding
the first anniversary date
of the Closing Date
First anniversary date 1% of the amount prepaid
of the Closing Date,
through and including,
the day preceding the
second anniversary date
of the Closing Date
Second anniversary date 1/2% of the amount prepaid
of the Closing Date,
through and including,
the day preceding the
third anniversary date
Notwithstanding the foregoing, the Borrower shall not be required to
pay the Early Termination Fee in connection with such a refinancing or
replacement of the Term Loans and the termination or partial reduction of
the Revolving Credit Commitments from the proceeds of a public offering of
Securities by the Borrower or the Parent. Nothing contained in this
Section shall be deemed a waiver by the Agent or any Lender of any Default
or Event of Default which results from any such public offering of
Securities by the Borrower and/or the closing of a purchase, acquisition or
investment otherwise prohibited by the provisions of this Agreement, which
does not result in a prepayment of all Obligations and a termination of all
Letters of Credit, all Bond Letters of Credit and Commitments.
In addition, if the Borrower requests that the Requisite Lenders
consent to the purchase or acquisition of, or investment in, any Person
which would not otherwise be permitted by the provisions of this Agreement,
and the Requisite Lenders refuse to agree and consent to any such purchase,
acquisition or investment, the Borrower may, at its option, prepay all of
the Obligations in full and terminate all of the Commitments and shall have
no obligation to pay an Early Termination Fee in connection with any such
prepayment and termination; provided, that (i) all Letters of Credit and
all Bond Letters of Credit are terminated or otherwise secured by the
issuance of one or more back-to-back letters of credit from an issuer and
containing terms reasonably acceptable to the Agent, (ii) all Obligations
are paid in full, (iii) all Commitments are terminated, and (iv) to the
extent the Borrower intends to finance such purchase, acquisition or
investment, any one of the Lenders have not agreed to provide such
financing after having been first offered the opportunity by the Borrower
to provide such financing substantially on the same terms and conditions as
are actually proposed to the Borrower from another lender or financial
institution. A Lender shall be deemed to have so declined to provide the
requested financing for the proposed acquisition, purchase or other
investment unless such Lender has otherwise notified the Borrower in
writing within fifteen (15) days of its receipt of all proposed material
terms and conditions of the proposed acquisition, purchase or investment
and any requested financing that such Lender wishes to participate in such
financing. The Lenders understand and agree that the Borrower shall be
required only to furnish to the Agent and the Lenders a term sheet
summarizing the proposed terms for such financing to be prepared by the
Borrower based on actual terms proposed by such other lender or financial
institution, and that neither the Borrower nor any such other lender or
financial institution shall have any obligation to furnish to the Agent or
the Lenders copies of actual commitments, proposals or correspondence from
such other lender or financial institution or independent verification of
any such proposed terms.
Payment of all or any portion of the Obligations relating to the
Revolving Loan and/or the Term Loans and/or termination or reduction of any
of the Commitments, in whole or in part, by or on behalf of the Borrower,
by court order or otherwise, following and as a result of the institution
of any bankruptcy proceeding by or against the Borrower, shall be deemed to
be a prepayment of the Revolving Loan and the Term Loans, and/or
termination or reduction of the Commitments, as appropriate, subject to
payment of the Early Termination Fee provided in this subsection if any or
all of the Obligations are actually paid and/or any or all of the
Commitments are terminated or reduced at any time during the periods set
forth above. All Early Termination Fees shall be paid to the Agent for the
ratable benefit of the Lenders.
0.2.1.12 REQUIRED AVAILABILITY UNDER THE REVOLVING CREDIT
FACILITY.
On the Closing Date, the aggregate principal amount of the Revolving
Loan and all Outstanding Letter of Credit Obligations shall not exceed an
amount equal to the lesser of (x) the Borrowing Base or (y) the Total
Revolving Credit Commitment Amount, MINUS Ten Million Dollars
($10,000,000). In addition, the Borrower agrees that at all times prior to
consummation of the Loan Restructuring Transaction, there shall be a
reserve against the Borrowing Base in an amount equal to Six Million Six
Hundred Thousand Dollars ($6,600,000) and that at all times prior to
consummation of the BIC/Borrower Transaction, there shall be an additional
reserve against the Borrowing Base in an amount equal to Two Million Six
Hundred Thousand Dollars ($2,600,000).
0.2.1.13 OPTIONAL REDUCTION OF REVOLVING CREDIT COMMITTED
AMOUNT.
Subject to the provisions of Section 2.1.11( Early Termination Fee),
the Borrower shall have the right to reduce permanently (each a "Revolving
Credit Optional Reduction" and collectively the "Revolving Credit Optional
Reductions") the Total Revolving Credit Committed Amount in effect from
time to time in the amount of any integral multiple of Five Hundred
Thousand Dollars ($500,000), upon at least five (5) Business Days prior
written notice to the Agent specifying the date and amount of such
Revolving Credit Optional Reduction; provided, that no Revolving Credit
Optional Reduction shall be permitted if, after giving effect thereto and
to any Revolving Loan Optional Prepayment made on the effective date
thereof, the then outstanding principal amount of the Revolving Loan and
Outstanding Letter of Credit Obligations exceeds the Total Revolving Credit
Committed Amount as so reduced. Such notice shall be irrevocable as to the
amount and date of such Revolving Credit Optional Reduction. After each
such Revolving Credit Optional Reduction, the Revolving Credit Unused Line
Fee provided for in Section 2.1.10 hereof and the Early Termination Fee, if
any, provided for in Section 2.1.11 shall be calculated with respect to the
Revolving Credit Committed Amount as so reduced. Any Revolving Credit Optional
Reduction shall be made to each Lender's Revolving Credit Commitment in
accordance with its Pro Rata Share of such Revolving Credit Optional
Reduction.
SECTION 0.2.2 THE TERM LOAN FACILITY.
0.2.2.1 TERM LOAN COMMITMENTS. Subject to and upon the
terms of this Agreement, each Lender severally agrees to make a loan (each
a "Term Loan"; and collectively, the "Term Loans") to the Borrower on the
Closing Date in the principal amount set forth below opposite such Lender's
name (herein called such Lender's "Term Loan Committed Amount"). The total
of each Lender's Term Loan Committed Amount is herein called the "Total
Term Loan Committed Amount". The proportionate share set forth below
opposite each Lender's name is herein called such Lender's "Term Loan Pro
Rata Share":
Term Loan Term Loan
LENDER COMMITTED AMOUNT PRO RATA SHARE
NationsBank $27,000,000 100%
TOTAL TERM LOAN
COMMITTED AMOUNT: $27,000,000 100%
The obligation of each Lender to make a Term Loan is several and is
limited to its Term Loan Committed Amount, and such obligation of each
Lender is herein called its "Term Loan Commitment". The Term Loan
Commitment of each of the Lenders are herein collectively referred to as
the "Term Loan Commitments". The Agent shall not be responsible for the
Term Loan Commitment of any Lender; and similarly, none of the Lenders
shall be responsible for the Term Loan Commitment of any of the other
Lenders; the failure, however, of any Lender to perform its Term Loan
Commitment shall not relieve any of the other Lenders from the performance
of their respective Term Loan Commitments.
0.2.2.2 AMORTIZATION OF TERM LOANS; THE TERM NOTES.
The unpaid principal balance of the Term Loans shall be due and
payable in quarterly installments of principal on each Installment Payment
Date, each in the following amounts at the following times:
DUE DATE AMOUNT
May 1, 1997 $750,000
August 1, 1997 $750,000
November 1, 1997 $750,000
February 1, 1998 $750,000
May 1, 1998 $1,125,000
August 1, 1998 $1,125,000
November 1, 1998 $1,125,000
February 1, 1999 $1,125,000
May 1, 1999 $1,375,000
August 1, 1999 $1,375,000
November 1, 1999 $1,375,000
February 1, 2000 $1,375,000
May 1, 2000 $1,625,000
August 1, 2000 $1,625,000
November 1, 2000 $1,625,000
February 1, 2001 $1,625,000
May 1, 2001 $1,875,000
August 1, 2001 $1,875,000
November 1, 2001 $1,875,000
February 1, 2002 $1,875,000
Unless sooner paid, the unpaid principal balance of the Term Loans,
together with interest accrued and unpaid thereon, shall be due and payable
in full on the Revolving Credit Termination Date.
The obligation of the Borrower to pay the Term Loans with interest
shall be evidenced by a series of promissory notes (each as from time to
time extended, amended, restated, supplemented or otherwise modified, the
"Term Note" and collectively, the "Term Notes") substantially in the form
of EXHIBIT "B-2" attached hereto and made a part hereof with appropriate
insertions. Each Term Note shall be dated as of the Closing Date, shall be
payable to the order of a Lender at the times provided in the Term Note,
and shall be in the principal amount of such Lender's Term Loan Committed
Amount.
0.2.2.3 MANDATORY PREPAYMENTS OF TERM LOAN. Subject to
the provisions of Section 2.6.4(Indemnity), the Borrower shall make the
following mandatory prepayments (each a "Term Loan Mandatory Prepayment"
and collectively the "Term Loan Mandatory Prepayments") of the Term Loans
to the Agent for the ratable benefit of the Lenders:
(a) One hundred percent (100%) of the Net Proceeds of
any Asset Disposition (including the sale and issuance of any Securities)
by the Borrower or any Subsidiary Guarantor shall be paid to the Agent as a
Term Loan Mandatory Prepayment, or if the Term Loans have been paid in full
shall be paid to the Agent as a Revolving Loan Mandatory Prepayment.
Notwithstanding the foregoing, the Borrower shall not be required to make a
Term Loan Mandatory Prepayment in connection with any public, private or
Rule 144(a) offering of Securities which does not generate any proceeds
(other than nominal proceeds), including, for example, the issuance or
exercise of warrants with registration rights or the issuance of a resale
prospectus for any existing shares of capital stock. In addition, the
Borrower shall not be required to make a Term Loan Mandatory Prepayment to
the extent of any non-cash Net Proceeds which are Indebtedness for Borrowed
Money received by the Borrower or any Subsidiary Guarantor in payment of
the purchase price of an Asset which is the subject of a Permitted Asset
Disposition; provided that, upon the Agent's demand, the Borrower and/or
the Subsidiary Guarantor, as the case may, shall take all such actions as
shall be reasonably requested by the Agent to grant to the Agent for its
benefit and the ratable benefit of the Lenders a perfected Lien on any such
Indebtedness for Borrowed Money and provided further that the principal
amount of all such Indebtedness for Borrowed Money shall not exceed at any
time in the aggregate Five Hundred Thousand Dollars ($500,000).
(b) Immediately upon closing and consummation of any
public or private offering of Indebtedness by the Borrower or any
Subsidiary Guarantor, except for Indebtedness for Borrowed Money permitted
by Section 6.2.4, other than subsection (d) of Section 6.2.4,the Borrower
shall make a Term Loan Mandatory Prepayment in an amount equal to one hundred
percent (100%) of the Net Proceeds of such public or private offering;
provided that a Term Loan Mandatory Prepayment shall not be required as the
result of the issuance of Indebtedness by the Borrower or any Subsidiary
Guarantor, if (i) such Indebtedness is issued pursuant to and is permitted
by subsection (d) of Section 6.2.4 and such Indebtedness constitutes a
"Refinancing Indebtedness" as defined in subsection (m) of Section 6.2.4,
(ii) if the Net Proceeds of such Indebtedness are used, in whole, to
finance a Permitted Acquisition or Capital Expenditures as and to the
extent permitted by the provisions of this Agreement; and (iii) the
aggregate amount of Indebtedness under subsections (i) and (ii) do not
exceed Twenty Million Dollars ($20,000,000).
The Borrower shall pay to the Agent on the date of each required Term
Loan Mandatory Prepayment accrued interest to such date on the amount
prepaid. Each partial Term Loan Mandatory Prepayment shall be applied as
follows: (i) fifty percent (50%) to all of the remaining principal
installments due on account of the Term Loans on a pro rata basis and (ii)
fifty percent (50%) to principal against the principal installments of the
Term Loans in the inverse order of their maturities. Notwithstanding
anything to the contrary contained herein, the Borrower shall not be
required to pay an Early Termination Fee as the result of a Term Loan
Mandatory Prepayment.
0.2.2.4 OPTIONAL PREPAYMENTS OF TERM LOANS. Subject to
the provisions of Section 2.6.4(Indemnity), the Borrower may, at its option,
at any time and from time to time, prepay (each a "Term Loan Optional
Prepayment" and collectively the "Term Loan Optional Prepayments") the Term
Loans, in whole or in part, upon five (5) Business Days prior written
notice, specifying the date and amount of prepayment. The amount to be so
prepaid, together with interest accrued thereon to date of prepayment if
the amount is intended as a prepayment of the Term Loans in whole, shall be
paid by the Borrower to the Agent for the ratable benefit of the Lenders on
the date specified for such prepayment. Partial Term Loan Optional
Prepayments shall be applied as follows: (i) fifty percent (50%) to all of
the remaining principal installments due on account of the Term Loans on a
pro rata basis and (ii) fifty percent (50%) to principal against the
principal installments of the Term Loans in the inverse order of their
maturities.
SECTION 0.2.3 THE LETTER OF CREDIT FACILITY.
0.2.3.1 LETTERS OF CREDIT. Subject to and upon the
provisions of this Agreement, and as a part of the Revolving Credit
Commitments, the Borrower may obtain standby or commercial letters of
credit (as the same may from time to time be amended, supplemented or
otherwise modified, each a "Letter of Credit" and collectively the "Letters
of Credit") from the Agent from time to time from the Closing Date until
the Business Day preceding the Revolving Credit Termination Date. The
Borrower will not be entitled to obtain a Letter of Credit unless (a) the
Borrower is then able to obtain a Revolving Loan from the Lenders in an
amount not less than the proposed stated amount of the Letter of Credit
requested by the Borrower, and (b) the sum of the then Outstanding Letter
of Credit Obligations (including the amount of the requested Letter of
Credit) does not exceed Five Million Dollars ($5,000,000) (the "Letter of
Credit Committed Amount").
0.2.3.2 LETTER OF CREDIT FEES.
(a) The Borrower shall pay to the Agent, for its own
account, an issuance fee of one-quarter of one percent (1/4%) per annum of
the stated amount of the Letter of Credit without regard for provisions
contained in the Letters of Credit which may give rise to a reduction in
the stated amount thereof unless such reduction has actually occurred (each
a "Letter of Credit Fronting Fee" and collectively, the "Letter of Credit
Fronting Fees"). The Letter of Credit Fronting Fees shall be paid upon the
opening of each Letter of Credit and upon each anniversary thereof, if any.
In addition, the Borrower shall pay to the Agent all other reasonable and
customary negotiation, processing, transfer or other fees to the extent and
as and when required by the provisions of any Letter of Credit Agreement.
All Letter of Credit Fronting Fees and all such other additional fees are
included in and are a part of the "Fees" payable by the Borrower under the
provisions of this Agreement and are for the sole and exclusive benefit of
the Agent and are a part of the Agent's Obligations.
(b) In addition and in connection with each Letter of
Credit, the Borrower shall pay to the Agent for the ratable benefit of the
Lenders quarterly, in arrears, a letter of credit fee (each a "Letter of
Credit Fee" and collectively the "Letter of Credit Fees") in an amount
equal to one hundred seventy-five (175) basis points per annum (calculated
on the basis of actual number of days elapsed in a year of 360 days) of the
stated amount of each such Letter of Credit without regard for provisions
contained in the Letters of Credit which may give rise to a reduction in
the stated amount thereof unless such reduction has actually occurred. The
accrued and unpaid portion of each Letter of Credit Fee shall be paid by
the Borrower to the Agent on the first day of each February, May, August
and November, commencing on the first such date following the date hereof,
and on the expiration or termination date of the respective Letter of
Credit.
0.2.3.3 TERMS OF LETTERS OF CREDIT; POST-EXPIRATION DATE
LETTERS OF CREDIT.
Each Letter of Credit shall (a) be opened pursuant to a Letter of
Credit Agreement and (b) expire on a date not later than the Business Day
preceding the Revolving Credit Termination Date; provided, however, if any
Letter of Credit does have an expiration date later than the Business Day
preceding the Revolving Credit Termination Date (each a "Post-Expiration
Date Letter of Credit" and collectively, the "Post-Expiration Date Letters
of Credit"), effective as of the Business Day preceding the Revolving
Credit Termination Date and without prior notice to or the consent of the
Borrower, the Lenders shall make advances under the Revolving Loan for the
account of the Borrower in the aggregate stated amount of all such Letters
of Credit. The amount of each Lender's advance shall be equal to its
Revolving Credit Pro Rata Share of the aggregate stated amount of all such
Letters of Credit. The Agent shall deposit the proceeds of such advances
into one or more non-interest bearing accounts with and in the name of the
Agent and over which the Agent alone shall have exclusive power of access
and withdrawal (collectively, the "Letter of Credit Cash Collateral
Account"). The Letter of Credit Cash Collateral Account is to be held by
the Agent, for the ratable benefit of the Lenders, as additional collateral
and security for any Letter of Credit Obligations relating to the Post-
Expiration Date Letters of Credit. The Borrower hereby assigns, pledges,
grants and sets over to the Agent, for the ratable benefit of the Lenders,
a first priority security interest in, and Lien on, all of the funds on
deposit in the Letter of Credit Cash Collateral Account, together with any
and all proceeds (cash and non-cash) and products thereof as additional
collateral and security for the Letter of Credit Obligations relating to
the Post-Expiration Date Letters of Credit. The Borrower acknowledges and
agrees that the Agent shall be entitled to fund any draw or draft on any
Post-Expiration Date Letter of Credit from the monies on deposit in the
Letter of Credit Cash Collateral Account without notice to or consent of
the Borrower or any of the Lenders so long as the drawing request
substantially complied with the requirements of any such Letter of Credit.
The Borrower further acknowledges and agrees that the Agent's election to
fund any draw or draft on any Post-Expiration Date Letter of Credit from
the Letter of Credit Cash Collateral shall in no way limit, impair, lessen,
reduce, release or otherwise adversely affect the Borrower's obligation to
pay any unpaid Letter of Credit Obligations under or relating to the Post-
Expiration Date Letters of Credit. At such time as all Post-Expiration
Date Letters of Credit have expired and all Letter of Credit Obligations
relating to the Post-Expiration Date Letters of Credit have been paid in
full, the Agent agrees to apply the amount of any remaining funds on
deposit in the Letter of Credit Cash Collateral Account to the then unpaid
balance of the Obligations under the Revolving Credit Facility in such
order and manner as the Agent shall determine in its reasonable discretion
in accordance with the provisions of this Agreement.
Each Letter of Credit shall be issued for the sole purpose of a
Permitted Use. The aggregate stated amount of all Letters of Credit at any
one time outstanding and issued by the Agent pursuant to the provisions of
this Agreement, including, without limitation, any and all Post-Expiration
Date Letters of Credit, plus the amount of any unpaid Letter of Credit Fees
and Letter of Credit Fronting Fees accrued, and less the aggregate amount
of all drafts issued under such Letters of Credit that have been paid by
the Agent and for which the Agent has been reimbursed by the Borrower in
full in accordance with Section 2.3.5 below and the Letter of Credit
Agreements, and for which the Agent has no further obligation or commitment
to restore all or any portion of the amounts drawn and reimbursed, is
herein called the "Outstanding Letter of Credit Obligations".
0.2.3.4 PROCEDURES FOR LETTERS OF CREDIT. The Borrower
shall give the Agent written notice at least five (5) Business Days prior
to the date on which the Borrower desires the Agent to issue a Letter of
Credit. Such notice shall be accompanied by a duly executed Letter of
Credit Agreement specifying, among other things: (a) the name and address
of the intended beneficiary of the Letter of Credit, (b) the requested
stated amount of the Letter of Credit, (c) whether the Letter of Credit is
to be revocable or irrevocable, (d) the Business Day on which the Letter of
Credit is to be opened and the date on which the Letter of Credit is to
expire, (e) the terms of payment of any draft or drafts which may be drawn
under the Letter of Credit, and (f) any other terms or provisions the
Borrower desire to be contained in the Letter of Credit. Such notice shall
also be accompanied by such other information, certificates, confirmations,
and other items as the Agent may reasonably require to assure that the
Letter of Credit is to be issued in accordance with the provisions of this
Agreement and a Letter of Credit Agreement. In the event of any conflict
between the provisions of this Agreement and the provisions of a Letter of
Credit Agreement, the provisions of this Agreement shall prevail and
control unless otherwise expressly provided in the Letter of Credit
Agreement. Upon (i) receipt of such notice, (ii) payment of all Letter of
Credit Fronting Fees and all other Fees payable in connection with the
issuance of such Letter of Credit, and (iii) receipt of a duly executed
Letter of Credit Agreement, the Agent shall process such notice and Letter
of Credit Agreement in accordance with its customary procedures and open
such Letter of Credit on the Business Day specified in such notice.
0.2.3.5 PAYMENTS OF LETTERS OF CREDIT. The Borrower
hereby promises to pay to the Agent, ON DEMAND and in United States
Dollars, the following which are herein collectively referred to as the
"Current Letter of Credit Obligations":
(a) the amount which the Agent has paid under each draft or draw
on a Letter of Credit, whether such demand be in advance of the
Agent's payment or for reimbursement for such payment;
(b) any and all reasonable charges and expenses which the Agent
may pay or incur relative to the Letter of Credit and/or such draws or
drafts; and
(c) interest on the amounts described in (a) and (b) not paid by
the Borrower as and when due and payable under the provisions of (a)
and (b) above from the day the same are due and payable until paid in
full at a rate per annum equal to the then current highest rate of
interest on the Revolving Loan.
In addition, the Borrower hereby promises to pay any and all other
Letter of Credit Obligations as and when due and payable in accordance with
the provisions of this Agreement and the Letter of Credit Agreements. The
obligation of the Borrower to pay Current Letter of Credit Obligations and
all other Letter of Credit Obligations shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower or any other account
party may have or have had against the beneficiary of such Letter of
Credit, the Agent, any of the Lenders, or any other Person, including,
without limitation, any defense based on the failure of any draft or draw
to conform to the terms of such Letter of Credit, any draft or other
document proving to be forged, fraudulent or invalid, or the legality,
validity, regularity or enforceability of such Letter of Credit, any draft
or other documents presented with any draft, any Letter of Credit
Agreement, this Agreement, or any of the other Financing Documents, all
whether or not the Agent or any of the Lenders had actual or constructive
knowledge of the same, and irrespective of any Collateral, security or
guarantee therefor or right of offset with respect thereto and irrespective
of any other circumstances whatsoever which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower
for any Letter of Credit Obligations, in bankruptcy or otherwise; PROVIDED,
HOWEVER, that the Borrower shall not be obligated to reimburse the Agent
for any wrongful payment under such Letter of Credit made as a result of
the Agent's willful misconduct or gross negligence. The obligation of the
Borrower to pay the Letter of Credit Obligations shall not be conditioned
or contingent upon the pursuit by the Agent or any other Person at any time
of any right or remedy against any Person which may be or become liable in
respect of all or any part of such obligation or against any Collateral,
security or guarantee therefor or right of offset with respect thereto.
The Letter of Credit Obligations shall continue to be effective, or be
reinstated, as the case may be, if at any time payment of all or any
portion of the Letter of Credit Obligations is rescinded or must otherwise
be restored or returned by the Agent or any of the Lenders upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of any
Person, or upon or as a result of the appointment of a receiver,
intervenor, or conservator of, or trustee or similar officer for, any
Person, or any substantial part of such Person's property, all as though
such payments had not been made.
All payments by the Agent and the Lenders with respect to any of the
Current Letter of Credit Obligations shall be deemed to be advances under
the Revolving Loan contemporaneously as of the date any such Current Letter
of Credit Obligations due and owing; the proceeds of each such advance
shall be used to pay Current Letter of Credit Obligations in the amount of
such advance.
SECTION 0.2.4 THE BOND LETTER OF CREDIT FACILITY.
0.2.4.1 BOND LETTERS OF CREDIT. Subject to and upon the
provisions of the Bond Letter of Credit Agreements, the Agent has agreed to
issue the Bond Letters of Credit for the period commencing on the Closing
Date and ending on the Revolving Credit Termination Date (the "Bond Letter
of Credit Commitment"). The Agent shall have no obligation or commitment
to issue a Bond Letter of Credit if the aggregate stated amount of all Bond
Letters of Credit then outstanding or proposed to be issued exceeds Twelve
Million Dollars ($12,000,000) (the "Bond Letter of Credit Committed
Amount").
-4-
0.2.4.2 BOND LETTER OF CREDIT FEES.
(a) The Borrower shall pay to the Agent, for its own
account, an issuance fee of one-quarter of one percent (1/4%) per annum of
the stated amount of each Bond Letter of Credit, without regard for
provisions contained in the Bond Letter of Credit which may give rise to a
reduction in the stated amount thereof unless such reduction has actually
occurred (each a "Bond Letter of Credit Fronting Fee" and collectively, the
"Bond Letter of Credit Fronting Fees"). The Bond Letter of Credit Fronting
Fees shall be paid upon the issuance of each Bond Letter of Credit and upon
each anniversary thereof, if any. In addition, the Borrower shall pay to
the Agent all other reasonable and customary negotiation, processing,
transfer or other fees to the extent and as and when required by the
provisions of any Bond Letter of Credit Agreement. All Bond Letter of
Credit Fronting Fees and all such other additional fees are included in and
are a part of the "Fees" payable by the Borrower under the provisions of
this Agreement and are for the sole and exclusive benefit of the Agent and
are a part of the Agent's Obligations.
(b) In addition and in connection with each Bond Letter of
Credit, the Borrower shall pay to the Agent for the ratable benefit of the
Lenders quarterly, in arrears, a letter of credit fee (each a "Bond Letter
of Credit Fee" and collectively the "Bond Letter of Credit Fees") in an
amount equal to one hundred seventy-five (175) basis points per annum
(calculated on the basis of actual number of days elapsed in a year of 360
days) of the stated amount of each such Bond Letter of Credit, without
regard for provisions contained in the Bond Letter of Credit which may give
rise to a reduction in the stated amount thereof unless such reduction has
actually occurred. The accrued and unpaid portion of each Bond Letter of
Credit Fee shall be paid by the Borrower to the Agent, for the ratable
benefit of the Lenders, on the first day of each February, May, August and
November, commencing on the first such date following the date hereof, and
on the expiration or termination date of the respective Bond Letter of
Credit.
0.2.4.3 TERMS OF BOND LETTERS OF CREDIT.
Each Bond Letter of Credit shall (a) be issued pursuant to a Bond
Letter of Credit Agreement and (b) expire on a date not later than the
Business Day preceding the Revolving Credit Termination Date; provided,
however, that (i) the initial Iowa Bond Letter of Credit - NB issued as
security for the Iowa Bond Letter of Credit and the Iowa Bond Standby
Credit Agreement shall expire on the expiry date of the Iowa Bond Letter of
Credit and Iowa Bond Standby Credit Agreement, and (ii) the initial Nevada
Bond Letter of Credit - NB issued as security for the Nevada Bond Letter of
Credit shall expire on the expiry date of the Nevada Bond Letter of Credit.
Each Bond Letter of Credit shall be issued for the sole purpose of
providing collateral for the Iowa Bonds, the Nevada Bonds, the Iowa Bond
Letter of Credit, or the Nevada Bond Letter of Credit or for any other
purposes required by the Nevada Bonds or the Iowa Bonds. The aggregate
stated amount of all Bond Letters of Credit at any one time outstanding and
issued by the Agent pursuant to the provisions of this Agreement, plus the
amount of any unpaid Bond Letter of Credit Fees and Bond Letter of Credit
Fronting Fees accrued or scheduled to accrue thereon, and less the
aggregate amount of all drafts drawn under or purporting to have been drawn
under such Bond Letters of Credit that have been paid by the Agent and for
which the Agent has been reimbursed by the Borrower in full in accordance
with Section 2.4.5 below and the Bond Letter of Credit Agreements, and for
which the Agent has no further obligation or commitment to restore all or
any portion of the amounts drawn and reimbursed, is herein called the
"Outstanding Bond Letter of Credit Obligations".
0.2.4.4 PROCEDURES FOR BOND LETTERS OF CREDIT. The
Borrower shall give the Agent written notice at least five (5) Business
Days prior to the date on which the Borrower desires the Agent to issue a
Bond Letter of Credit. Such notice shall be accompanied by a duly executed
Bond Letter of Credit Agreement specifying, among other things: (a) the
name and address of the intended beneficiary of the Bond Letter of Credit,
(b) the requested stated amount of the Bond Letter of Credit, (c) that the
Bond Letter of Credit is to be irrevocable, (d) the Business Day on which
the Bond Letter of Credit is to be issued and the date on which the Bond
Letter of Credit is to expire, (e) the terms of payment of any draft or
drafts which may be drawn under the Bond Letter of Credit, and (f) any
other terms or provisions the Borrower desire to be contained in the Bond
Letter of Credit. Such notice shall also be accompanied by such other
information, certificates, confirmations, and other items as the Agent may
reasonably require to assure that the Bond Letter of Credit is to be issued
in accordance with the provisions of this Agreement and a Bond Letter of
Credit Agreement. In the event of any conflict between the provisions of
this Agreement and the provisions of a Bond Letter of Credit Agreement, the
provisions of this Agreement shall prevail and control unless otherwise
expressly provided in the Bond Letter of Credit Agreement. Upon (i)
receipt of such notice, (ii) payment of all Bond Letter of Credit Fronting
Fees and all other Fees payable in connection with the issuance of such
Bond Letter of Credit, and (iii) receipt of a duly executed Bond Letter of
Credit Agreement, the Agent shall process such notice and Bond Letter of
Credit Agreement in accordance with its customary procedures and issue such
Bond Letter of Credit on the Business Day specified in such notice, subject
to compliance by all parties with the requirements of the Iowa Bond Trust
Agreement and the Nevada Bond Trust Agreement pertaining to the replacement
of credit enhancement and liquidity facilities relating to the Iowa Bonds
and the Nevada Bonds, respectively.
0.2.4.5 PAYMENTS OF BOND LETTERS OF CREDIT. (a) Subject
to the provisions of paragraph (b) below, the Borrower hereby promises to
pay to the Agent, ON DEMAND and in United States Dollars, the following
which are herein collectively referred to as the "Current Bond Letter of
Credit Obligations":
(i) the amount which the Agent has paid under each draft or draw
on a Bond Letter of Credit, whether such demand be in advance of the
Agent's payment or for reimbursement for such payment;
(ii) any and all reasonable charges and expenses which the Agent
may pay or incur relative to the Bond Letter of Credit and/or such
draws or drafts; and
(iii) interest on the amounts described in (i) and (ii) not paid
by the Borrower as and when due and payable under the provisions of
(i) and (ii) above from the day the same are due and payable until
paid in full at a rate per annum equal to the then current highest
rate of interest on the Revolving Loan.
(b) Notwithstanding the provisions of paragraph (a) above, as long as
no Event of Default has occurred, any drawing under the Iowa Bond Letter of
Credit - NB to redeem Iowa Bonds purchased with a drawing under the Iowa
Bond Standby Credit Agreement and any drawing under the Nevada Bond Letter
of Credit - NB to purchase Nevada Bonds, in each case relating to Bonds
which were tendered for purchase by the holders thereof and which were not
remarketed in a timely fashion, are not required to be reimbursed to the
Agent ON DEMAND; provided that BIC or the Borrower, as appropriate, make
monthly payments of interest to the Agent at the reimbursement rate
provided under the applicable Bond Letter of Credit and the principal
amount of such drawing is repaid in equal quarterly payments over the
remaining term to expiry of the Bond Letter of Credit Facility; final
payment of all outstanding amounts to be made no later than expiry of the
Bond Letter of Credit Facility. In addition, the Agent and the Lenders
agree that upon the expiration of the Iowa Bond Letter of Credit and any
resulting draw on the Iowa Bond Letter of Credit by the Iowa Bond Trustee,
and provided that there does not exist a Default or an Event of Default, a
portion of the Iowa Bond Letter of Credit Obligations in an amount equal to
Three Million Four Hundred Thousand Dollars ($3,400,000) may be repaid in
equal quarterly installments over the then remaining term of the Bond
Letter of Credit Facility.
In the event that any of the payments required by this paragraph (b) are
not made when due or an Event of Default occurs, all of the foregoing
amounts shall be immediately due and payable ON DEMAND.
(c) In addition, the Borrower hereby promises to pay any and all
other Bond Letter of Credit Obligations as and when due and payable in
accordance with the provisions of this Agreement and the Bond Letter of
Credit Agreements. The obligation of the Borrower to pay Current Bond
Letter of Credit Obligations and all other Bond Letter of Credit
Obligations shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower or any other account party may have or have had
against the beneficiary of such Bond Letter of Credit, the Agent, any of
the Lenders, or any other Person, including, without limitation, any
defense based on the failure of any draft or draw to conform to the terms
of such Bond Letter of Credit, any draft or other document proving to be
forged, fraudulent or invalid, or the legality, validity, regularity or
enforceability of such Bond Letter of Credit, any draft or other documents
presented with any draft, any Bond Letter of Credit Agreement, this
Agreement, any of the Bond Letter of Credit Agreement Documents, or any of
the other Financing Documents, all whether or not the Agent or any of the
Lenders had actual or constructive knowledge of the same, and irrespective
of any Collateral, security or guarantee therefor or right of offset with
respect thereto and irrespective of any other circumstances whatsoever
which constitutes, or might be construed to constitute, an equitable or
legal discharge of the Borrower for any Bond Letter of Credit Obligations,
in bankruptcy or otherwise; PROVIDED, HOWEVER, that the Borrower shall not
be obligated to reimburse the Agent for any wrongful payment under such
Bond Letter of Credit made as a result of the Agent's willful misconduct or
gross negligence. The obligation of the Borrower to pay the Bond Letter of
Credit Obligations shall not be conditioned or contingent upon the pursuit
by the Agent or any other Person at any time of any right or remedy against
any Person which may be or become liable in respect of all or any part of
such obligation or against any Collateral, security or guarantee therefor
or right of offset with respect thereto.
The Bond Letter of Credit Obligations shall continue to be effective,
or be reinstated, as the case may be, if at any time payment of all or any
portion of the Bond Letter of Credit Obligations is rescinded or must
otherwise be restored or returned by the Agent or any of the Lenders upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of
any Person, or upon or as a result of the appointment of a receiver,
intervenor, or conservator of, or trustee or similar officer for, any
Person, or any substantial part of such Person's property, all as though
such payments had not been made.
SECTION 0.2.5 GENERAL LETTER OF CREDIT PROVISIONS.
0.2.5.1 PROCEDURES FOR LETTERS OF CREDIT AND BOND LETTERS
OF CREDIT.
If any change after the Closing Date in any law or regulation or in
the interpretation thereof by any court or other Governmental Authority
charged with the administration thereof shall either (a) impose, modify or
deem applicable any reserve, special deposit or similar requirement against
Letters of Credit or Bond Letters of Credit issued by the Agent, or (b)
impose on the Agent or any of the Lenders any other condition regarding
this Agreement, any Letter of Credit or any Bond Letter of Credit, and the
result of any event referred to in clauses (a) or (b) above shall be to
increase the cost to the Agent of issuing, maintaining or extending the
Letter of Credit or the Bond Letter of Credit or the cost to any of the
Lenders of funding any obligation under or in connection with the Letter of
Credit or the Bond Letter of Credit (which increase in cost shall be the
result of the Agent's reasonable allocation of the aggregate of such cost
increases resulting from such events), then, upon demand by the Agent, the
Borrower shall immediately pay to the Agent from time to time as specified
by the Agent, additional amounts which shall be sufficient to compensate
the Agent and the Lenders for such increased cost, together with interest
on each such amount from the date demanded until payment in full thereof at
a rate per annum equal to the then highest current rate of interest on the
Revolving Loan. A certificate as to such increased cost incurred by the
Agent and/or any of the Lenders, submitted by the Agent to the Borrower,
shall be conclusive, absent manifest error.
0.2.5.2 GENERAL LETTER OF CREDIT PROVISIONS. The Borrower
hereby instructs the Agent to pay any draft complying with the terms of any
Letter of Credit or any Bond Letter of Credit irrespective of any
instructions of the Borrower to the contrary. The Borrower assume all
risks of the acts and omissions of the beneficiary and other users of any
Letter of Credit or any Bond Letter of Credit. The Agent, the Lenders and
their respective branches, Affiliates and/or correspondents shall not be
responsible for and the Borrower hereby indemnifies and holds the Agent,
the Lenders and their respective branches, Affiliates and/or correspondents
harmless from and against all liability, loss and expense (including
reasonable attorney's fees and costs) incurred by the Agent, the Lenders
and/or their respective branches, Affiliates and/or correspondents relative
to and/or as a consequence of (a) any failure by the Borrower to perform
the agreements hereunder and under any Letter of Credit Agreement or under
any Bond Letter of Credit Agreement, (b) any Letter of Credit Agreement,
any Bond Letter of Credit Agreement, this Agreement, any Letter of Credit,
any Bond Letter of Credit and any draft, draw and/or acceptance under or
purported to be under any Letter of Credit or any Bond Letter of Credit,
(c) any action taken or omitted by the Agent, any of the Lenders and/or any
of their respective branches, Affiliates and/or correspondents at the
request of the Borrower, other than acts of willful misconduct and gross
negligence, (d) any failure or inability to perform in accordance with the
terms of any Letter of Credit or any Bond Letter of Credit by reason of any
control or restriction rightfully or wrongfully exercised by any DE FACTO
or DE JURE Governmental Authority, group or individual asserting or
exercising governmental or paramount powers, and/or (e) any consequences
arising from causes beyond the control of the Agent, any of the Lenders
and/or any of their respective branches, Affiliates and/or correspondents.
Except for willful misconduct and gross negligence, the Agent,
the Lenders and their respective branches, Affiliates and/or
correspondents, shall not be liable or responsible in any respect for any
(a) error, omission, interruption or delay in transmission, dispatch or
delivery of any one or more messages or advices in connection with any
Letter of Credit or any Bond Letter of Credit, whether transmitted by
cable, telegraph, mail or otherwise and despite any cipher or code which
may be employed, and/or (b) action, inaction or omission which may be taken
or suffered by it or them in good faith or through inadvertence in
identifying or failing to identify any beneficiary or otherwise in
connection with any Letter of Credit or any Bond Letter of Credit.
Any Letter of Credit or any Bond Letter of Credit may be amended,
modified or revoked only upon the receipt by the Agent from the Borrower
and the beneficiary (including any transferee and/or assignee of the
original beneficiary), of a written consent and request therefor.
If any Laws, order of court and/or ruling or regulation of any
Governmental Authority of the United States (or any state thereof) and/or
any country other than the United States permits a beneficiary under a
Letter of Credit or a Bond Letter of Credit to require the Agent, the
Lenders and/or any of their respective branches, Affiliates and/or
correspondents to pay drafts under or purporting to be under a Letter of
Credit or a Bond Letter of Credit after the expiration date of the Letter
of Credit or the Bond Letter of Credit, respectively, the Borrower shall
reimburse the Agent and the Lenders, as appropriate, for any such payment
pursuant to provisions of Section 2.3.5 or 2.4.5, as appropriate.
Except as may otherwise be specifically provided in a Letter of
Credit, a Bond Letter of Credit, a Letter of Credit Agreement or a Bond
Letter of Credit Agreement, the laws of the State of Maryland and the
Uniform Customs and Practice for Documentary Credits, 1993 Revision,
International Chamber of Commerce Publication No. 500 shall govern the
Letters of Credit and the Bond Letters of Credit. The Laws, rules,
provisions and regulations of the Uniform Customs and Practice for
Documentary Credits are hereby incorporated by reference. In the event of
a conflict between the Uniform Customs and Practice for Documentary Credits
and the laws of the State of Maryland, the Uniform Customs and Practice for
Documentary Credits shall prevail.
0.2.5.3 PARTICIPATIONS IN THE LETTERS OF CREDIT AND THE
BOND LETTERS OF CREDIT.
Each Lender hereby irrevocably authorizes the Agent to issue Letters
of Credit and the Bond Letters of Credit in accordance with the provisions
of this Agreement. As of the date each Letter of Credit or each Bond
Letter of Credit is opened or issued by the Agent pursuant to the
provisions of this Agreement, each Lender shall have an undivided
participating interest in (i) the rights and obligations of the Agent under
each such Letter of Credit and each such Bond Letter of Credit, and (ii)
the Outstanding Letter of Credit Obligations and the Outstanding Bond
Letter of Credit Obligations of the Borrower with respect to such Letter of
Credit and Bond Letter of Credit, as appropriate, in an amount equal to
each Lender's Pro Rata Share of such Outstanding Letter of Credit
Obligations and Outstanding Bond Letter of Credit Obligations.
0.2.5.4 PAYMENTS BY THE LENDERS TO THE AGENT. If the
Borrower fails to pay to the Agent any Current Letter of Credit Obligations
or any Current Bond Letter of Credit Obligations as and when due and
payable, the Agent shall promptly notify each of the Lenders and shall
demand payment from each of the Lenders such Lender's Revolving Credit Pro
Rata Share of such unpaid Current Letter of Credit Obligations and unpaid
Current Bond Letter of Credit Obligations, as appropriate. In addition, if
any amount paid to the Agent on account of Current Letter of Credit
Obligations or any Current Bond Letter of Credit Obligations is rescinded
or required to be restored or turned over by the Agent upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or
upon or as a result of the appointment of a receiver, intervenor, trustee,
conservator or similar officer for the Borrower, or is otherwise not
indefeasibly covered by an advance under the Revolving Loan, the Agent
shall promptly notify each of the Lenders and shall demand payment from
each of the Lenders of its Revolving Credit Pro Rata Share of its portion
of the Current Letter of Credit Obligations and/or Current Bond Letter of
Credit Obligations to be remitted to the Borrower.
Each of the Lenders irrevocably and unconditionally agrees to
honor any such demands for payment under this Section and promises to pay
to the Agent's account on the same Business Day as demanded the amount of
its Revolving Credit Pro Rata Share of the Current Letter of Credit
Obligations and Current Bond Letter of Credit Obligations, as appropriate,
in immediately available funds, without any setoff, counterclaim or
deduction of any kind. Any payment by a Lender hereunder shall in no way
release, discharge or lessen the obligation of the Borrower to pay Current
Letter of Credit Obligations or to pay Current Bond Letter of Credit
Obligations to the Agent in accordance with the provisions of this
Agreement.
The obligation of each of the Lenders to remit the amounts of its
Revolving Credit Pro Rata Share of Current Letter of Credit Obligations and
Current Bond Letter of Credit Obligations for the account of the Agent
pursuant to this Section shall be unconditional and irrevocable under any
and all circumstances and may not be terminated, suspended or delayed for
any reason whatsoever, provided that all payments of such amounts by each
of the Lenders shall be without prejudice to the rights of each of the
Lenders with respect to the Agent's alleged willful misconduct. Any claim
any Lender may have against the Agent as a result of the Agent's alleged
willful misconduct may be brought by such Lender in a separate action
against the Agent but may not be used as a defense to payment under the
provisions of this Section.
No failure of any Lender to remit the amount of its Revolving
Credit Pro Rata Share of Current Letter of Credit Obligations and/or
Current Bond Letter of Credit Obligations to the Agent pursuant to this
Section shall affect the obligations of the Agent under any Letter of
Credit or under any Bond Letter of Credit, and if any Lender does not remit
to the Agent the amount of its Revolving Credit Pro Rata Share of Current
Letter of Credit Obligations and/or Current Bond Letter of Credit
Obligations on the same day as demanded, then without limiting such
Lender's obligation to transmit funds on the same Business Day as demanded,
such Lender shall be obligated to pay, on demand of the Agent and without
setoff, counterclaim or deduction of any kind whatsoever interest on the
unpaid amount at the Federal Funds Rate for each day from the date such
amount shall be due and payable to the Agent until the date such amount
shall have been paid in full to the Agent by such Lender.
SECTION 0.2.6 INTEREST.
0.2.6.1 APPLICABLE INTEREST RATES.
(a) Each Loan shall bear interest until maturity
(whether by acceleration, declaration, extension or otherwise) at either
the Alternate Base Rate or the LIBOR Rate, as selected and specified by the
Borrower in an Interest Rate Election Notice furnished to the Agent in
accordance with the provisions of Section 2.6.2(e), or as otherwise
determined in accordance with the provisions of this Section 2.6,
and as may be adjusted from time to time in accordance with the provisions
of Section 2.6.3.
(b) Notwithstanding the foregoing, following the
occurrence and during the continuance of an Event of Default, at the option
of the Agent, all Loans and all other Obligations shall bear interest at
the Post-Default Rate.
(c) The Applicable Margin for (i) LIBOR Loans shall be
two hundred (200) basis points per annum, and (ii) Base Rate Loans shall be
fifty (50) basis points per annum unless and until a change is required by
the operation of Section 2.6.1 (d).
(d) Subsequent to the first anniversary date of the
Closing Date, changes in the Applicable Margin may be made, but not more
frequently than one such change per quarter based on the Borrower's Pricing
Ratio, tested as of the end of each fiscal quarter and the end of each
fiscal year, determined by the Agent based on the annual and quarterly
financial statements required by Section 6.1.1 (a) and (c), as appropriate.
Any change in the Applicable Margin shall be effective as of the test date
of the Pricing Ratio, as appropriate. The Applicable Margin shall vary
depending upon the Borrower's Pricing Ratio, as follows:
Applicable Margin for Applicable Margin for
Pricing Ratio LIBOR Loans Base Rate Loans
greater than or equal to 5.25 to 1.0 250 b.p. 100 b.p.
greater than or equal to 4.5 to 1.0, but 225 b.p. 75 b.p.
less than 5.25 to 1.0
greater than or equal to 3.5 to 1.0, but 200 b.p. 50 b.p.
less than 4.5 to 1.0
greater than or equal to 2.75 to 1.0, but 175 b.p. 25 b.p.
less than 3.5 to 1.0
less than 2.75 to 1.0 150 b.p. 0 b.p.
0.2.6.2 SELECTION OF INTEREST RATES.
(a) The Borrower may select the initial Applicable
Interest Rate or Applicable Interest Rates to be charged on the Loans.
(b) From time to time after the date of this Agreement
as provided in this Section, by a proper and timely Interest Rate Election
Notice furnished to the Agent in accordance with the provisions of Section
2.6.2(e), the Borrower may select an initial Applicable Interest Rate or
Applicable Interest Rates for any Loans or may convert the Applicable
Interest Rate and, when applicable, the Interest Period, for any existing
Loan to any other Applicable Interest Rate or, when applicable, any other
Interest Period.
(c) The Borrower's selection of an Applicable Interest
Rate and/or an Interest Period, the Borrower's election to convert an
Applicable Interest Rate and/or an Interest Period to another Applicable
Interest Rate or Interest Period, and any other adjustments in an interest
rate are subject to the following limitations:
(i) the Borrower shall not at any time select or
change to an Interest Period that extends beyond the Revolving Credit
Termination Date in the case of the Revolving Loan or beyond the
scheduled maturity of the Term Loan in the case of the Term Loan,
(ii) no change from the LIBOR Rate to the
Alternate Base Rate shall become effective on a day other than a
Business Day and so long as the Lenders receive any compensation
payable pursuant to Section 2.6.4, on a day which is the last day of
the then current Interest Period, no change of an Interest Period
shall become effective on a day other than the last day of the then
current Interest Period, and no change from the Alternate Base Rate to
the LIBOR Rate shall become effective on a day other than a day which
is a Eurodollar Business Day.
(iii) any Applicable Interest Rate change for any
Loan to be effective on a date on which any principal payment on
account of such Loan is scheduled to be paid shall be made only after
such payment shall have been made,
(iv) no more than three (3) different LIBOR Rates
may be outstanding at any time and from time to time with respect to
the Revolving Loan,
(v) no more than two (2) different LIBOR Rates may
be outstanding at any time and from time to time with respect to the
Term Loan,
(vi) the first day of each Interest Period shall
be a Eurodollar Business Day,
(vii) as of the effective date of a selection,
there shall not exist a Default or an Event of Default, and
(viii) the minimum principal amount of a LIBOR
Loan shall be One Million Dollars ($1,000,000).
(d) If a request for an advance under the Loans is not
accompanied by an Interest Rate Election Notice or does not otherwise
include a selection of an Applicable Interest Rate and, if applicable, an
Interest Period, or if, after having made a selection of an Applicable
Interest Rate and, if applicable, an Interest Period, the Borrower fails or
is not otherwise entitled under the provisions of this Agreement to
continue such Applicable Interest Rate or Interest Period, the Borrower
shall be deemed to have selected the Alternate Base Rate as the Applicable
Interest Rate until such time as the Borrower shall have selected a
different Applicable Interest Rate and specified an Interest Period in
accordance with, and subject to, the provisions of this Section.
(e) The Lenders will not be obligated to make Loans,
to convert the Applicable Interest Rate on Loans to another Interest Rate,
or to change Interest Periods, unless the Agent shall have received an
irrevocable written or telephonic notice (an "Interest Rate Election
Notice") from the Borrower specifying the following information:
(i) the amount to be borrowed or converted,
(ii) a selection of the Alternate Base Rate or the
LIBOR Rate,
(iii) the length of the Interest Period if the
Applicable Interest Rate selected is the LIBOR Rate, and
(iv) the requested date on which such election is
to be effective.
Any telephonic notice must be confirmed in writing within three (3)
Business Days. Each Interest Rate Election Notice must be received by the
Agent not later than 10:00 a.m. (Baltimore City Time) on the Business Day
of any requested borrowing or conversion in the case of a selection of the
Alternate Base Rate and not later than 10:00 a.m. (Baltimore City Time) on
the third Business Day before the effective date of any requested borrowing
or conversion in the case of a selection of the LIBOR Rate.
0.2.6.3 INABILITY TO DETERMINE LIBOR BASE RATE.
In the event that (i) the Agent shall have determined that, by reason of
circumstances affecting the London interbank eurodollar market, adequate
and reasonable means do not exist for ascertaining the LIBOR Base Rate for
any requested Interest Period with respect to a Loan the Borrower shall
have requested to be made or to be converted to a LIBOR Loan or (ii) the
Agent shall determine that the LIBOR Base Rate for any requested Interest
Period with respect to a Loan the Borrower shall have requested to be made
or to be converted to a LIBOR Loan does not adequately and fairly reflect
the cost to the Lenders of funding or converting such Loan, the Agent shall
give telephonic or written notice of such determination to the Borrower at
least one (1) day prior to the proposed date for funding or converting such
Loan. If such notice is given, any request for a LIBOR Loan shall be made
or converted to a Alternate Base Rate Loan. Until such notice has been
withdrawn by the Agent, the Borrower will not request that any Loan be made
or converted to a LIBOR Loan.
0.2.6.4 INDEMNITY. The Borrower agrees to indemnify and
reimburse the Lenders and to hold the Lenders harmless from any loss, cost
(including administrative costs) or expense which any one or more of the
Agent or the Lenders may sustain or incur as a consequence of (a) a default
by the Borrower in payment when due of the principal amount of or interest
on any LIBOR Loan, (b) the failure of the Borrower to make, or convert the
Applicable Interest Rate of, a LIBOR Loan after the Borrower has given a
Loan Notice or an Interest Rate Election Notice, (c) the failure of the
Borrower to make any prepayment of a LIBOR Loan after the Borrower have
given notice of such intention to make such a prepayment, and/or (d) the
making by the Borrower of a prepayment of a LIBOR Loan on a day which is
not the last day of the Interest Period for such LIBOR Loan, calculated as
provided in the following paragraph, including, without limitation, any
such loss or expense arising from the reemployment of funds obtained by the
Agent and/or any of the Lenders to maintain any LIBOR Loan or from fees
payable to terminate the deposits from which such funds were obtained.
This agreement and covenant of the Borrower shall survive termination or
expiration of this Agreement and payment of the other Obligations.
Contemporaneously with any prepayment of principal of a
LIBOR Loan, a prepayment fee shall be due and payable to the Lenders in an
amount equal to any loss or expense (other than loss of anticipated
profits) arising from the reemployment of funds obtained by any Lender to
fund or maintain any LIBOR Loan or from fees payable to terminate the
deposits from which such funds were obtained. The Agent and the Lender
shall not be obligated to accept any prepayment of principal unless it is
accompanied by the prepayment fee, if any, due in connection therewith as
calculated pursuant to the provisions of this paragraph. No prepayment fee
payable in connection herewith shall in any event or under any
circumstances be deemed or construed as a penalty.
0.2.6.5 PAYMENT OF INTEREST.
(a) Unpaid and accrued interest on any Base Rate Loan shall be paid monthly,
in arrears, on the first day of each calendar month, commencing on the first
such date after the date of this Agreement, and on the first day of each
calendar month thereafter, and at maturity (whether by acceleration,
declaration, extension or otherwise).
(b) Notwithstanding the foregoing, any and all unpaid
and accrued interest on any Base Rate Loan converted to a LIBOR Loan or
prepaid shall be paid immediately upon such conversion and/or prepayment,
as appropriate.
(c) Unpaid and accrued interest on any LIBOR Loan
shall be paid monthly, in arrears, on the first day of each calendar month,
commencing on the first such date after the date of this Agreement, and on
the first day of each calendar month thereafter, and at maturity (whether
by acceleration, declaration, extension or otherwise). Notwithstanding
anything to the contrary contained herein, the Agent agrees that the
Borrower shall have no obligation to make any payment pursuant to the
provisions of Section 2.6.4 resulting solely from the payment of accrued
interest on a date other than the expiration date of an Interest Period.
SECTION 0.2.7 GENERAL FINANCING PROVISIONS.
0.2.7.1 BORROWER'S REPRESENTATIVES.
(a) The Borrower hereby represents and warrants to the
Agent and the Lenders that the Borrower and each Subsidiary Guarantor will
derive benefits, directly and indirectly, from each Letter of Credit, from
each Bond Letter of Credit and from each Loan, both in their separate
capacity and as a member of the integrated group to which the Borrower and
each Subsidiary Guarantor belongs and because (i) the successful operation
of the integrated group is dependent upon the continued successful
performance of the functions of the integrated group as a whole, (ii) this
financing is enabling the PackerWare Merger Transaction, (iii) the terms of
the consolidated financing provided under this Agreement are more favorable
than would otherwise would be obtainable by the Borrower and any Subsidiary
Guarantor individually, and (iv) the Borrower's additional administrative
and other costs and reduced flexibility associated with individual
financing arrangements which would otherwise be required if obtainable
would substantially reduce the value to the Borrower of such financings.
(b) The Borrower hereby irrevocably authorizes each of
the Lenders to make Loans to the Borrower, and hereby irrevocably
authorizes the Agent to issue Letters of Credit and Bond Letters of Credit
for the account of the Borrower, pursuant to the provisions of this
Agreement upon the written, oral or telephone request of any one of the
Persons who is from time to time a Responsible Officer of the Borrower
under the provisions of the most recent certificate of corporate
resolutions of the Borrower on file with the Agent and also upon the
written, oral or telephone request of any one of the Persons who is from
time to time a Responsible Officer of the Borrower under the provisions of
the most recent certificate of corporate resolutions and/or incumbency for
the Borrower on file with the Agent.
(c) Neither the Agent nor any of the Lenders assumes
any responsibility or liability for any errors, mistakes, and/or
discrepancies in the oral, telephonic, written or other transmissions of
any instructions, orders, requests and confirmations between the Agent and
the Borrower or the Agent and any of the Lenders in connection with the
Credit Facilities, any Loan, any Letter of Credit, any Bond Letter of
Credit or any other transaction in connection with the provisions of this
Agreement, except for acts of willful misconduct and gross negligence.
0.2.7.2 USE OF PROCEEDS OF THE LOANS. The proceeds of
each Loan shall be used by the Borrower and the Subsidiary Guarantors for
Permitted Uses, and for no other purposes except as may otherwise be agreed
by the Requisite Lenders in writing.
0.2.7.3 FIELD EXAMINATION FEES. The Borrower shall pay to
the Agent for the exclusive benefit of the Agent an annual field
examination fee (the "Field Examination Fee"), which Field Examination Fee
shall be payable quarterly in advance on the Closing Date and on the first
day of each February, May, August and November of each year commencing on
the first such date following the Closing Date, and continuing until the
last such date prior to which all Obligations arising out of, or under, the
Credit Facilities then outstanding have been paid in full. The Field
Examination Fee shall be in the amount of Forty Thousand Dollars ($40,000)
per annum. The Agent agrees that the initial portion of the Field
Examination Fee payable on the Closing Date shall be pro rated for the
actual number of days for the period commencing on the Closing Date and
ending on January 31, 1997.
0.2.7.4 COMPUTATION OF INTEREST AND FEES. All applicable
Fees and interest shall be calculated on the basis of a year of 360 days
for the actual number of days elapsed. Any change in the interest rate on
any of the Obligations resulting from a change in the Alternate Base Rate
shall become effective as of the opening of business on the day on which
such change in the Alternate Base Rate is announced.
0.2.7.5 PAYMENTS. All payments of the Obligations,
including, without limitation, principal, interest, Prepayments, and Fees,
shall be paid by the Borrower without setoff or counterclaim to the Agent
(except as otherwise provided herein) at the Agent's office specified in
Section 9.1 in immediately available funds not later than 2:00 p.m. (Baltimore
City Time) on the due date of such payment. All payments received by the
Agent after such time shall be deemed to have been received by the Agent
for purposes of computing interest and Fees and otherwise as of the next
Business Day. Payments shall not be considered received by the Agent until
such payments are paid to the Agent in immediately available funds.
0.2.7.6 LIENS; SETOFF. The Borrower hereby grants to the
Agent and to the Lenders a continuing Lien for all of the Obligations
(including, without limitation, the Agent's Obligations) upon any and all
monies, securities, and other cash deposits of the Borrower and the
proceeds thereof, now or hereafter held or received by or in transit to,
the Agent, any of the Lenders, and/or any Affiliate of the Agent and/or any
of the Lenders, from or for the Borrower, and also upon any and all deposit
accounts (general or special) and credits of the Borrower, if any, with the
Agent, any of the Lenders or any Affiliate of the Agent or any of the
Lenders, at any time existing, excluding any deposit accounts held by the
Borrower in its capacity as trustee for Persons who are not Affiliates or
Subsidiaries of the Borrower. Without implying any limitation on any other
rights the Agent and/or the Lenders may have under the Financing Documents
or applicable Laws, during the continuance of an Event of Default, the
Agent is hereby authorized by the Borrower at any time and from time to
time, without notice to the Borrower, to set off, appropriate and apply any
or all items hereinabove referred to against all Obligations (including,
without limitation, the Agent's Obligations) then outstanding (whether or
not then due), all in such order and manner as shall be determined by the
Agent in its sole and absolute discretion.
0.2.7.7 REQUIREMENTS OF LAW. In the event that any Lender
shall have determined in good faith that (a) the adoption of any Laws after
the Closing Date regarding capital adequacy, or (b) any change in or in the
interpretation or application of any Laws, or (c) compliance by such Lender
or any corporation controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from
any central bank or Governmental Authority, does or shall have the effect
of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender, as a consequence of the obligations of
the such Lender hereunder to a level below that which such Lender or any
corporation controlling such Lender would have achieved but for such
adoption, change or compliance (taking into consideration the policies of
such Lender and the corporation controlling such Lender, with respect to
capital adequacy) by an amount deemed by such Lender to be material, then
from time to time, after submission by such Lender to the Borrower of a
written request therefor and a statement of the basis for such
determination, the Borrower shall pay to such Lender such additional amount
or amounts in order to compensate for such reduction. The Agent and the
Lenders agree that the Borrower shall be entitled, at its option, to
require that any Lender which demands payment of any amounts under this
Section 2.7.7 assign one hundred percent (100%) of its Commitments and
Obligations to one or more other lenders or financial institutions as shall
be acceptable to the Borrower and the Agent; provided that any such
assignment is effected in accordance with the provisions of Section 9.5.
0.2.7.8 FUNDS TRANSFER SERVICES.
(a) The Borrower acknowledges that the Agent has made
available to the Borrower the Agent's Wire Transfer Procedures a copy of
which is attached to this Agreement as EXHIBIT C and which includes a
description of security procedures regarding funds transfers executed by
the Agent or an Affiliate bank at the request of the Borrower (the
"Security Procedures"). The Borrower and the Agent agree that the Security
Procedures are commercially reasonable. The Borrower further acknowledges
that the full scope of the Security Procedures which the Agent or such
Affiliate bank offers and strongly recommends is available only if the
Borrower communicates directly with the Agent or such Affiliate bank as
applicable in accordance with said procedures. If the Borrower attempts to
communicate by any other method or otherwise not in accordance with the
Security Procedures, the Agent or such Affiliate bank, as applicable, shall
not be required to execute such instructions, but if the Agent or such
Affiliate bank, as applicable, does so, the Borrower will be deemed to have
refused the Security Procedures that the Agent or such Affiliate bank as
applicable offers and strongly recommends, and the Borrower will be bound
by any funds transfer, whether or not authorized, which is issued in the
Borrower's name and accepted by the Agent or such Affiliate bank, as
applicable, in good faith. The Agent or such Affiliate bank, as
applicable, may modify Wire Transfer Procedures upon notice to the
Borrower, including, without limitation, the Security Procedures at such
time or times and in such manner as the Agent or such Affiliate bank, as
applicable, in its reasonable discretion, deems appropriate to meet
prevailing standards of good banking practice. By continuing to use the
Agent's or such Affiliate bank's, as applicable, wire transfer services
after receipt of any modification of the Wire Transfer procedures
including, without limitation, the Security Procedures, the Borrower agrees
that the Security Procedures, as modified, are likewise commercially
reasonable. Neither the Agent nor any Affiliate bank is responsible for
detecting any error in payment order sent by the Borrower to the Agent or
any of the Lenders unless due to the willful misconduct or gross negligence
of the Agent or any such Affiliate bank.
(b) The Agent or such Affiliate bank, as applicable,
will generally use the Fedwire funds transfer system for domestic funds
transfers, and the funds transfer system operated by the Society for
Worldwide International Financial Telecommunication (SWIFT) for
international funds transfers. International funds transfers may also be
initiated through the Clearing House InterBank Payment System (CHIPs) or
international cable. However, the Agent or such Affiliate bank, as
applicable, may use any means and routes that the Agent or such Affiliate
bank, as applicable, in its reasonable discretion, may consider suitable
for the transmission of funds. Each payment order, or cancellation
thereof, carried out through a funds transfer system or a clearinghouse
will be governed by all applicable funds transfer system rules and clearing
house rules and clearing arrangements, whether or not the Agent or such
Affiliate bank, as applicable, is a member of the system, clearinghouse or
arrangement and the Borrower acknowledges that the Agent's or such
Affiliate bank's, as applicable, right to reverse, adjust, stop payment or
delay posting of an executed payment order is subject to the laws,
regulations, rules, circulars and arrangements described herein.
SECTION 0.2.8 SETTLEMENT AMONG LENDERS.
0.2.8.1 TERM LOANS. The Agent shall pay to each Lender on
each date on which a payment of principal and/or interest on the Loans,
such Lender's ratable share of all payments received by the Agent in
immediately available funds on account of the Term Loans, net of any
amounts payable by such Lender to the Agent, by wire transfer of same day
funds; the amount payable to each Lender shall be based on the principal
amount of the Term Loans owing to such Lender.
0.2.8.2 REVOLVING LOAN. It is agreed that each Lender's
Net Outstandings are intended by the Lenders to be equal at all times to
such Lender's Revolving Credit Pro Rata Share of the aggregate outstanding
principal amount of the Revolving Loan outstanding. Notwithstanding such
agreement, the several and not joint obligation of each Lender to fund the
Revolving Loan made in accordance with the terms of this Agreement ratably
in accordance with such Lender's Revolving Credit Pro Rata Share and each
Lender's right to receive its ratable share of principal payments on the
Revolving Loan in accordance with its Revolving Credit Pro Rata Share, the
Lenders agree that in order to facilitate the administration of this
Agreement and the Financing Documents that settlement among them may take
place on a periodic basis in accordance with the provisions of this Section
2.8.
0.2.8.3 SETTLEMENT PROCEDURES AS TO REVOLVING LOAN.
(a) IN GENERAL. To the extent and in the manner
hereinafter provided in this Section 2.8.3, settlement among the Lenders as to
the Revolving Loan may occur periodically on Settlement Dates determined
from time to time by the Agent, which may occur before or after the
occurrence or during the continuance of a Default or Event of Default and
whether or not all of the conditions set forth in Section 5.2 have been met.
On each Settlement Date payments shall be made by or to the Lenders in the
manner provided in this Section 2.8.3 in accordance with the Settlement Report
delivered by the Agent pursuant to the provisions of this Section 2.8.3 in
respect of 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's Net Outstandings shall equal such Lender's Revolving
Credit Pro Rata Share of the Revolving Loan outstanding.
(b) SELECTION OF SETTLEMENT DATES. If the Agent
elects, in its discretion, but subject to the consent of NationsBank, to
settle accounts among the Lenders with respect to principal amounts of
Revolving Loan less frequently than each Business Day, then the Agent shall
designate periodic Settlement Dates which may occur on any Business Day
after the Closing Date; provided, however, that the Agent shall designate
as a Settlement Date any Business Day which is payment date; and provided
further, that a Settlement Date shall occur at least once during each
seven-day period. The Agent shall designate a Settlement Date by
delivering to each Lender a Settlement Report not later than 12:00 noon
(Baltimore City Time) on the proposed Settlement Date, which Settlement
Report shall be with respect to the period beginning on the next preceding
Settlement Date and ending on such designated Settlement Date.
(c) NON-RATABLE LOANS AND PAYMENTS. Between
Settlement Dates, the Agent shall request and NationsBank may (but shall
not be obligated to) advance to the Borrower out of NationsBank's own
funds, the entire principal amount of any advance under the Revolving Loan
requested or deemed requested pursuant to Section 2.1.2(any such advance under
the Revolving Loan being referred to as a "Non-Ratable Loan"). The making
of each Non-Ratable Loan by NationsBank shall be deemed to be a purchase by
NationsBank of a 100% participation in each other Lender's Revolving Credit
Pro Rata Share of the amount of such Non-Ratable Loan. All payments of
principal, interest and any other amount with respect to such Non-Ratable
Loan shall be payable to and received by the Agent for the account of
NationsBank. Upon demand by NationsBank, with notice to the Agent, each
other Lender shall pay to NationsBank, as the repurchase of such
participation, an amount equal to 100% of such Lender's Revolving Credit
Pro Rata Share of the principal amount of such Non-Ratable Loan. Any
payments received by the Agent between Settlement Dates which in accordance
with the terms of this Agreement are to be applied to the reduction of the
outstanding principal balance of Revolving Loan, shall be paid over to and
retained by NationsBank for such application, and such payment to and
retention by NationsBank shall be deemed, to the extent of each other
Lender's Revolving Credit Pro Rata Share of such payment, to be a purchase
by each such other Lender of a participation in the advance under the
Revolving Loan (including the repurchase of participations in Non-Ratable
Loans) made by NationsBank. Upon demand by another Lender, with notice
thereof to the Agent, NationsBank shall pay to the Agent, for the account
of such other Lender, as a repurchase of such participation, an amount
equal to such other Lender's Revolving Credit Pro Rata Share of any such
amounts (after application thereof to the repurchase of any participations
of NationsBank in such other Lender's Revolving Credit Pro Rata Share of
any Non-Ratable Loans) paid only to NationsBank by the Agent.
(d) NET DECREASE IN OUTSTANDINGS. If on any
Settlement Date the increase, if any, in the dollar amount of any Lender's
Net Outstandings which is required to comply with the first sentence of
Section 2.8.2 is less than such Lender's Revolving Credit Pro Rata Share of
amounts received by the Agent but paid only to NationsBank since the next
preceding Settlement Date, such Lender and the Agent, in their respective
records, shall apply such Lender's Revolving Credit Pro Rata Share of such
amounts to the increase in such Lender's Net Outstandings, and NationsBank
shall pay to the Agent, for the account of such Lender, the excess
allocable to such Lender.
(e) NET INCREASE IN OUTSTANDINGS. If on any
Settlement Date the increase, if any, in the dollar amount of any Lender's
Net Outstandings which is required to comply with the first sentence of
Section 2.8.2 exceeds such Lender's Revolving Credit Pro Rata Share of amounts
received by the Agent but paid only to NationsBank since the next preceding
Settlement Date, such Lender and the Agent, in their respective records,
shall apply such Lender's Revolving Credit Pro Rata Share of such amounts
to the increase in such Lender's Net Outstandings, and such Lender shall
pay to the Agent, for the account of NationsBank, any excess.
(f) NO CHANGE IN OUTSTANDINGS. If a Settlement Report
indicates that no advance under the Revolving Loan has been made during the
period since the next preceding Settlement Date, then such Lender's
Revolving Credit Pro Rata Share of any amounts received by the Agent but
paid only to NationsBank shall be paid by NationsBank to the Agent, for the
account of such Lender. If a Settlement Report indicates that the increase
in the dollar amount of a Lender's Net Outstandings which is required to
comply with the first sentence of Section 2.8.2 is exactly equal to such
Lender's Revolving Credit Pro Rata Share of amounts received by the Agent
but paid only to NationsBank since the next preceding Settlement Date, such
Lender and the Agent, in their respective records, shall apply such
Lender's Revolving Credit Pro Rata Share of such amounts to the increase in
such Lender's Net Outstandings.
(g) RETURN OF PAYMENTS. If any amounts received by
NationsBank in respect of the Obligations are later required to be returned
or repaid by NationsBank to the Borrower or any other obligor or their
respective representatives or successors in interest, whether by court
order, settlement or otherwise, in excess of the NationsBank's Revolving
Credit Pro Rata Share of all such amounts required to be returned by all
Lenders, each other Lender shall, upon demand by NationsBank with notice to
the Agent, pay to the Agent for the account of NationsBank, an amount equal
to the excess of such Lender's Revolving Credit Pro Rata Share of all such
amounts required to be returned by all Lenders over the amount, if any,
returned directly by such Lender.
(h) PAYMENTS TO AGENT, LENDERS.
(i) Payment by any Lender to the Agent shall be
made not later than 12:00 p.m. noon (Baltimore City Time) on the Business
Day such payment is due, provided that if such payment is due on demand by
another Lender, such demand is made on the paying Lender not later than
10:00 a.m. (Baltimore City Time) on such Business Day. Payment by the
Agent to any Lender shall be made by wire transfer, promptly following the
Agent's receipt of funds for the account of such Lender and in the type of
funds received by the Agent, provided that if the Agent receives such funds
at or prior to 12:00 p.m. noon (Baltimore City Time), the Agent shall pay
such funds to such Lender by 2:00 p.m. (Baltimore City Time) on such
Business Day. If a demand for payment is made after the applicable time
set forth above, the payment due shall be made by 2:00 p.m. (Baltimore City
Time) on the first Business Day following the date of such demand.
(ii) If a Lender shall, at any time, fail to make
any payment to the Agent required hereunder, the Agent may, but shall not
be required to, retain payments that would otherwise be made to such Lender
hereunder and apply such payments to such Lender's defaulted obligations
hereunder, at such time, and in such order, as the Agent may elect in its
sole discretion. In addition, if a Lender shall default in its obligation
to fund its Pro Rata Share of any requested advance of the Revolving Loan
and the Agent elects not to fund such defaulting Lender's Pro Rata Share of
that advance, then the defaulting Lender, at the Agent's option, shall not
be entitled to receive any payments of principal of or interest on its Pro
Rata Share of any of the Obligations or its Pro Rata Share of any Fees,
unless and until (x) all of the Obligations have been paid in full or (y)
the defaulting Lender cures its default by funding its Pro Rata Share of
the requested Revolving Loan advance. Interest and Fees which would be
payable to the defaulting Lender except for the provisions of this
subsection, instead shall be payable to the other Lenders in accordance
with their respective Pro Rata Shares. In addition, for so long as the
defaulting Lender shall remain in default under its obligations under this
Agreement, for purposes of voting on matters with respect to this Agreement
and/or any of the Financing Documents, such defaulting Lender shall be
deemed not to be a "Lender" and such Lender's Pro Rata Share of the
Commitments and the Obligations shall be deemed to be zero. No Commitment
of any Lender shall be increased or otherwise affected by the default of
any other Lender nor shall the Agent have any obligation to fund any
amounts not funded by a defaulting Lender.
(iii) With respect to the payment of any funds
under this Section 2.8.3, whether from the Agent to a Lender or from a Lender
to the Agent, the party failing to make full payment when due pursuant to the
terms hereof shall, upon demand by the other party, pay such amount
together with interest on such amount at the Federal Funds Rate.
0.2.8.4 SETTLEMENT OF OTHER OBLIGATIONS. All other
amounts received by the Agent on account of, or applied by the Agent to the
payment of, any Obligation owed to the Lenders (including, without
limitation, Fees payable to the Lenders and proceeds from the sale of, or
other realization upon, all or any part of the Collateral following an
Event of Default) that are received by the Agent not later than 11:00 a.m.
(Baltimore City Time) on a Business Day will be paid by the Agent to each
Lender on the same Business Day, and any such amounts that are received by
the Agent after 11:00 a.m. (Baltimore City Time) will be paid by the Agent
to each Lender on the following Business Day. Unless otherwise stated
herein, the Agent shall distribute Fees payable to the Lenders ratably to
the Lenders based on each Lender's Revolving Credit Pro Rata Share and
shall distribute proceeds from the sale of, or other realization upon, all
or any part of the Collateral following an Event of Default ratably to the
Lenders based on the amount of the Obligations then owing to each Lender.
0.2.8.5 PRESUMPTION OF PAYMENT.
(a) Unless the Agent shall have received notice from a
Lender prior to 12:00 p.m. noon (Baltimore City Time) on the date of the
requested date for the making of advances under the Revolving Loan that
such Lender will not make available to the Agent, such Lender's Revolving
Credit Pro Rata Share of the advances to be made on such date, the Agent
may assume that such Lender has made such amount available to the Agent on
such date in accordance with this Section 2.8, and the Agent, in its sole
discretion may, in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount on behalf of such Lender.
(b) If and to the extent such Lender shall not have so
made available to the Agent its Revolving Credit Pro Rata Share of the
advances under the Revolving Loan made on such date, and the Agent shall
have so made available to the Borrower a corresponding amount on behalf of
such Lender, such Lender shall, on demand, pay to the Agent such
corresponding amount, together with interest thereon, at the Federal Funds
Rate, for each day from the date such corresponding amount shall have been
so available by the Agent to the Borrower until the date such amount shall
have been repaid to the Agent. Such Lender shall not be entitled to
payment of any interest which accrues on the amount made available by the
Agent to the Borrower for the account of such Lender until such time as
such Lender reimburses the Agent for such amount, together with interest
thereon, as provided in this Section 2.8.5.
(c) A certificate of the Agent submitted to any Lender
with respect to any amounts owing to the Agent by such Lender under this
Section 2.8. shall be conclusive and binding on such Lender, absent manifest
error. If such Lender does not pay such amounts to the Agent promptly upon
the Agent's demand, the Agent shall promptly notify the Borrower of such
Lender's failure to make payment, and the Borrower shall immediately repay
such amounts to the Agent, together with accrued interest thereon at the
applicable rate on the Revolving Loan, all without prejudice to the rights
and remedies of the Agent against any defaulting Lender. Any and all
amounts due and payable to the Agent by the Borrower under this Section
2.8 constitute and shall be part of the Agent's Obligations.
(d) Unless the Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Agent
that the Borrower will not make such payment in full, the Agent may assume
that the Borrower have made such payment in full to the Agent on such date
and the Agent in its sole discretion may, in reliance upon such assumption,
cause to be distributed to each Lender on such due date an amount equal to
the amount then due such Lender. If and to the extent the Borrower shall
not have so made such payment in full to the Agent and the Agent shall have
distributed to any Lender all or any portion of such amount, such Lender
shall repay to the Agent on demand the amount so distributed to such
Lender, together with interest thereon at the Federal Funds Rate, for each
day from the date such amount is distributed to such Lender until the date
such Lender repays such amount to the Agent.
ARTICLE 3
THE COLLATERAL
SECTION 0.3.1 DEBT AND OBLIGATIONS SECURED. All property and Liens
assigned, pledged or otherwise granted under or in connection with this
Agreement (including, without limitation, those under Section 3.2(Grant of
Liens) below) or any of the Financing Documents shall, subject to the
terms, conditions and limitations, if any, set forth in this Agreement or
in any of the Financing Documents, secure (a) the payment of all of the
Obligations, including, without limitation, any and all Outstanding Letter
of Credit Obligations, all Outstanding Bond Letter of Credit Obligations
and any and all Agent's Obligations, and (b) the performance, compliance
with and observance by the Borrower of the provisions of this Agreement and
all of the other Financing Documents or otherwise under the Obligations.
The security interest and Lien of each Lender in such property shall rank
equally in priority with the interest of each other Lender, but the
security interest and Lien of the Agent with respect to the Agent's
Obligations shall be superior and paramount to the security interest and
Lien of the Lenders. Notwithstanding the foregoing, the security interest
and Lien of the Agent and/or any Lender with respect to any Obligations
under or in connection with, any interest rate or currency swap agreements,
cap, floor, and collar agreements, currency spot, foreign exchange and
forward contracts and other similar agreements and arrangements permitted
by the provisions of this Agreement shall be junior and subordinate to the
security interest and Lien of the Agent with respect to the Agent's
Obligations and junior and subordinate to the security interest and Lien of
the Lender with respect to all other Obligations.
SECTION 0.3.2 GRANT OF LIENS. The Borrower hereby assigns, pledges
and grants to the Agent, for the ratable benefit of the Lenders and for the
benefit of the Agent with respect to the Agent's Obligations, and agrees
that the Agent and the Lenders shall have a perfected and continuing
security interest in, and Lien on, (a) all of the Borrower's Accounts,
Inventory, Chattel Paper, Documents, Instruments, Equipment, Securities,
and General Intangibles, whether now owned or existing or hereafter
acquired or arising, (b) all returned, rejected or repossessed goods, the
sale or lease of which shall have given or shall give rise to an Account or
Chattel Paper, (c) all insurance policies relating to the foregoing, (d)
all books and records in whatever media (paper, electronic or otherwise)
recorded or stored, with respect to the foregoing and all equipment and
general intangibles necessary or beneficial to retain, access and/or
process the information contained in those books and records, and (e) all
cash and non-cash proceeds and products of the foregoing. The Borrower
further agrees that the Agent, for the ratable benefit of the Lenders and
for the benefit of the Agent with respect to the Agent's Obligations, shall
have in respect thereof all of the rights and remedies of a secured party
under the Uniform Commercial Code as well as those provided in this
Agreement, under each of the other Financing Documents and under applicable
Laws. Notwithstanding anything to the contrary contained herein, the
Collateral shall not include any rights of the Borrower under any Capital
Leases of Equipment or any other agreements if and to the extent any such
Capital Leases or other agreements prohibit the collateral assignment or
pledge of the Borrower's interest therein, and such prohibition has not
been waived by the respective Person.
Without implying any limitation to the foregoing, as additional
Collateral and security for the Obligations, the Borrower hereby assigns to
the Agent, for the ratable benefit of the Lenders and for the benefit of
the Agent with respect to the Agent's Obligations, all of its rights, title
and interest in, to, and under, the PackerWare Merger Agreement, all of the
PackerWare Merger Agreement Documents, including, without limitation, all
of the benefits of any representations and warranties provided by the
Seller and any and all rights of the Borrower to indemnification from the
Seller or any other Person contained therein. The Borrower agrees that
neither the assignment to the Agent, for the ratable benefit of the Lenders
and for the benefit of the Agent with respect to the Agent's Obligations,
nor any other provision contained in this Agreement or any of the other
Financing Documents shall impose on the Agent or any of the Lenders any
obligation or liability of the Borrower under the PackerWare Merger
Agreement and under any of the other PackerWare Merger Agreement Documents.
The Borrower hereby agrees to indemnify the Agent and each of the Lenders
and hold the Agent and each of the Lenders harmless from any and all
claims, actions, suits, losses, damages, costs, expenses, fees, obligations
and liabilities which may be incurred by or imposed upon the Agent and/or
any of the Lenders by virtue of the assignment of and Lien on each of the
Borrower's rights, title and interest in, to, and under the PackerWare
Merger Agreement and the PackerWare Merger Agreement Documents, unless due
to the gross negligence or willful misconduct of the Agent and/or any of
the Lenders. The Borrower further acknowledges and agrees that following
the occurrence of an Event of Default, the Agent, with the consent of the
Requisite Lenders, shall be entitled to enforce any and all rights and
remedies available to the Borrower under the PackerWare Merger Agreement
under any or all of the PackerWare Merger Agreement Documents, and under
applicable Laws with respect to the PackerWare Merger Transaction.
SECTION 0.3.3 COLLATERAL DISCLOSURE LIST. On or prior to the Closing
Date, the Borrower shall deliver to the Agent one or more lists
(collectively, the "Collateral Disclosure List") which shall contain such
information with respect to the business and real and personal property of
the Borrower and each Subsidiary Guarantor as the Agent may require and
shall be certified by a Responsible Officer of the Borrower and each
Subsidiary Guarantor, as appropriate, all in the form provided to the
Borrower by the Agent. Promptly after demand by the Agent, the Borrower
shall furnish and shall cause each Subsidiary Guarantor to furnish to the
Agent an update of the information contained in the Collateral Disclosure
List at any time and from time to time as may be requested by the Agent.
SECTION 0.3.4 PERSONAL PROPERTY. The Borrower acknowledges and
agrees that it is the intention of the parties to this Agreement that the
Agent, for the ratable benefit of the Lenders and for the benefit of the
Agent with respect to the Agent's Obligations, except as otherwise
expressly provided in Section 3.2 of this Agreement, shall have a first
priority, perfected Lien (except that the Agent acknowledges and agrees
that the Lien on the Fixed and Capital Assets of the Borrower located in
the State of Nevada, including, without limitation, the real property owned
by the Borrower in the State of Nevada shall be a second priority Lien,
subject to first priority Liens as set forth in Schedule 4.1.22), in form
and substance reasonably satisfactory to the Agent and its counsel, on all
of the personal property of the Borrower and of each Subsidiary Guarantor
of any kind and nature whatsoever, whether now owned or hereafter acquired,
subject only to the Permitted Liens, if any. In furtherance of the
foregoing:
0.3.4.1 SECURITIES, CHATTEL PAPER, PROMISSORY NOTES, ETC.
(a) On the Closing Date and without implying any
limitation on the scope of Section 3.2(Grant of Liens) above, the Borrower
shall deliver and shall cause each Subsidiary Guarantor to deliver to the
Agent, for the ratable benefit of the Lenders and for the benefit of the
Agent with respect to the Agent's Obligations, all originals of all of
letters of credit, Securities, Chattel Paper, Documents and Instruments
owned or held by the Borrower and/or any Subsidiary Guarantor, and, if the
Agent so requires, shall execute and deliver and, shall cause each
Subsidiary Guarantor to execute and deliver, a separate pledge, assignment
and security agreement in form and content acceptable to the Agent, which
pledge, assignment and security agreement shall assign, pledge and ▇▇▇▇▇ ▇
▇▇▇▇ to the Agent, for the ratable benefit of the Lenders and for the
benefit of the Agent with respect to the Agent's Obligations on all of the
letters of credit, Securities, Chattel Paper, Documents and Instruments of
the Borrower and each Subsidiary Guarantor, as the case may be. In
addition, the Borrower agrees to endorse to the order of the Agent any and
all Instruments which constitute or evidence all or any portion of the
Collateral.
(b) In the event that the Borrower or any Subsidiary
Guarantor shall acquire after the Closing Date any letters of credit,
Securities, Chattel Paper, Documents or Instruments, the Borrower shall
promptly so notify the Agent and deliver the originals of all of the
foregoing to the Agent promptly and in any event within thirty (30) days of
each acquisition.
(c) All letters of credit, Securities, Chattel Paper,
Documents and Instruments to be delivered hereunder shall be delivered to
the Agent endorsed and/or assigned as required by the pledge, assignment
and security agreement and/or as the Agent may require and, if applicable,
shall be accompanied by blank irrevocable and unconditional stock or bond
powers.
0.3.4.2 PATENTS, COPYRIGHTS AND OTHER PROPERTY REQUIRING
ADDITIONAL STEPS TO PERFECT.
On the Closing Date and without implying any limitation on the scope
of Section 3.2 above, the Borrower shall execute and deliver and, shall cause
each Subsidiary Guarantor, as appropriate, to execute and deliver, all
Financing Documents and take all actions requested by the Agent in order to
perfect a first priority assignment of Patents, Copyrights, Trademarks,
customer lists or any other type or kind of intellectual property acquired
by the Borrower or any Subsidiary Guarantor after the Closing Date.
SECTION 0.3.5 RECORD SEARCHES. As of the Closing Date and
thereafter, as determined by the Agent, at the time any Financing Document
is executed and delivered by the Borrower or any Subsidiary Guarantor
pursuant to this Article 3 or any other Section of this Agreement, the
Agent shall, in its reasonable discretion and if requested, have received,
in form and substance satisfactory to the Agent, such Lien or record
searches with respect to the Borrower, each Subsidiary Guarantor and/or any
other Person who may be an obligor or pledgor with respect to any of the
Obligations, as appropriate, and the property covered by such Financing
Document showing that the Lien of such Financing Document will be a
perfected first priority Lien on the property covered by such Financing
Document subject only to Permitted Liens or to such other Liens or matters
as the Agent may approve. Notwithstanding the foregoing, the Agent
acknowledges and agrees that the Borrower shall be obligated to reimburse
the Agent only for actual out-of-pocket costs and expenses relating to Lien
and record searches and only to the extent ordered by the Agent (i) one-
time only after the Closing Date to confirm the due filing and Lien
priority of the Agent and the Lenders, (ii) not more frequently than once
in any given calendar year after the Closing Date prior to the occurrence
of a Default or an Event of Default, and (iii) in addition, at any time
following the occurrence of a Default or an Event of Default.
SECTION 0.3.6 REAL PROPERTY. The Borrower acknowledges and agrees
that it is the intention of the parties to this Agreement that the Agent,
for the ratable benefit of the Lenders and for the benefit of the Agent
with respect to the Agent's Obligations, shall have a first priority,
perfected Lien, in form and substance satisfactory to the Agent and its
counsel, on all real property of any kind and nature whatsoever, whether
now owned or hereafter acquired by the Borrower or any Subsidiary
Guarantor, subject only to the Permitted Liens, if any, and subject to the
provisions of Section 3.7 below, excluding, however, any real property
leased by the Borrower or any Subsidiary Guarantor.
With respect to each parcel of real property now owned by the
Borrower and/or a Subsidiary Guarantor (other than the real property
located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇), the Borrower shall
execute and deliver and, subject to the terms of Section 3.7 below, shall
cause each Subsidiary Guarantor, as appropriate, to execute and deliver, on
the Closing Date, a deed of trust or a mortgage or other document, as
appropriate, which deed of trust, mortgage and/or other document shall be
included among the Financing Documents. With respect to real property
acquired in fee by the Borrower or any Subsidiary Guarantor after the
Closing Date (whether by merger or otherwise, including, without
limitation, Assets acquired by the Borrower upon closing and consummation
of the BTP/Borrower Transaction and/or BIC/Borrower Transaction), the
Borrower shall grant and, subject to the terms of Section 3.7 below, shall
cause each Subsidiary Guarantor, as appropriate, to grant, promptly after
acquisition thereof, a Lien covering such real property to the Agent, for
the ratable benefit of the Lenders and for the benefit of the Agent with
respect to the Agent's Obligations, under the provisions of a mortgage,
deed of trust or other document, as appropriate. Each Financing Document
to be executed and delivered pursuant hereto shall:
(a) be in form and substance reasonably satisfactory to
the Agent;
(b) create a first priority Lien in such real property
in favor of the Agent, for the ratable benefit of the Lenders and for
the benefit of the Agent with respect to the Agent's Obligations,
subject only to Permitted Liens, zoning ordinances, and such other
matters as the Agent may approve;
(c) be accompanied by a current survey reasonably
satisfactory in all respects to the Agent of the subject real
property, prepared by a registered land surveyor or engineer
reasonably satisfactory to the Agent;
(d) be accompanied by evidence reasonably satisfactory
to the Agent regarding the current and past pollution control
practices at such real property in connection with the discharge,
emission, handling, disposal or existence of Hazardous Materials,
which may include, at the Agent's request, an environmental audit of
such real property prepared by a person or firm reasonably acceptable
to the Agent;
(e) be accompanied by a mortgagee's title insurance
policy or marked-up commitment or binder for such insurance in form
and substance reasonably satisfactory to the Agent and issued by a
title insurance company reasonably satisfactory to the Agent; and
(f) upon request of the Agent, be accompanied by a
signed opinion of counsel addressed to the Agent and each of the
Lenders, in form and substance reasonably satisfactory to the Agent.
SECTION 0.3.7 SUBSIDIARY GUARANTOR ASSETS. As of the Closing Date
and until final closing and consummation of the Loan Restructuring
Transaction, the Borrower agrees that (i) all Obligations shall be secured
by a direct first priority Lien (subject only to Permitted Liens) on all
Assets and properties of the Borrower and (ii) all Obligations with respect
to each Subsidiary Guarantor's guaranty of the Revolving Loan, including,
without limitation, any Letters of Credit issued under as part of the
Revolving Credit Facility in an aggregate principal amount up to the
greater of (1) Twenty-eight Million Dollars ($28,000,000) or (2) the
"Borrowing Base" (as defined in the Indenture), shall be secured by a
direct first priority Lien (subject only to Permitted Liens) on all Assets
and properties of each of the Subsidiary Guarantors. The Borrower further
covenants and agrees upon closing and consummation of the Loan
Restructuring Transaction, the Borrower shall take such actions and shall
cause each of the Subsidiary Guarantors to take such actions as shall be
reasonably required by the Agent to grant to the Agent for the benefit of
the Lenders ratably and the Agent a first priority Lien (subject only to
Permitted Liens) on all Assets and properties of the Borrower and each of
the Subsidiary Guarantors as additional security for all of the Obligations
and to cause each Subsidiary Guarantor to unconditionally and irrevocably
and jointly and severally guaranty payment and performance of all of the
Obligations in accordance with the terms of the Guaranty. In addition, the
Borrower further covenants and agrees upon closing and consummation of the
BTP/Borrower Transaction or the BIC/Borrower Transaction, the Borrower
shall take such actions as shall be reasonably required by the Agent to
grant to the Agent for the benefit of the Lenders ratably and the Agent a
first priority Lien (subject only to Permitted Liens) on all Assets and
properties of the Borrower previously owned by BTP and/or BIC, as
appropriate.
SECTION 0.3.8 COSTS. The Borrower agrees to pay, as part of the
Enforcement Costs and to the fullest extent permitted by applicable Laws,
on demand all reasonable costs, fees and expenses incurred by the Agent
and/or any of the Lenders in connection with the taking, perfection,
preservation, protection and/or release of a Lien on the Collateral,
including, without limitation, with respect to all actions required to
effect any of the provisions of Section 3.7 above, and any of the
following:
(a) customary reasonable fees and expenses incurred by
the Agent and/or any of the Lenders in preparing, reviewing,
negotiating and finalizing the Financing Documents from time to time
(including, without limitation, reasonable attorneys' fees incurred in
connection with preparing, reviewing, negotiating, and finalizing any
of the Financing Documents, including, any amendments and supplements
thereto);
(b) all filing and/or recording taxes or fees;
(c) all title insurance premiums and costs;
(d) all costs of Lien and record searches;
(e) reasonable attorneys' fees in connection with all
legal opinions required;
(f) appraisal and/or survey costs; and
(g) all related reasonable costs, fees and expenses.
SECTION 0.3.9 RELEASE. Upon the payment and performance of all
Obligations of the Borrower and all obligations and liabilities of each
other Subsidiary Guarantor, under this Agreement and/or under any or all
other Financing Documents, the termination and/or expiration of all of the
Commitments, all Letters of Credit, all Bond Letters of Credit, all
Outstanding Bond Letter of Credit Obligations, and all Outstanding Letter
of Credit Obligations, upon the Borrower's request and at the Borrower's
sole cost and expense, the Agent shall release and/or terminate the Liens
of any and all of the Financing Documents.
SECTION 0.3.10 INCONSISTENT PROVISIONS. In the event that the
provisions of any Financing Document directly conflict with any provision
of this Agreement, the provisions of this Agreement shall govern.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 0.4.1 REPRESENTATIONS AND WARRANTIES. The Borrower
represents and warrants to the Agent and the Lenders, as follows:
0.4.1.1 SUBSIDIARIES. The Borrower owns the Subsidiaries
listed on the Collateral Disclosure List attached hereto and made a part
hereof and no others, as updated from time to time pursuant to the
provisions of this Agreement. Each of the Subsidiaries is a Wholly Owned
Subsidiary except as shown on the Collateral Disclosure List, as updated
from time to time pursuant to the provisions of this Agreement, which
correctly indicates the nature and amount of the Borrower's ownership
interests therein.
0.4.1.2 GOOD STANDING. Each of the Borrower and its
Subsidiaries (a) is a corporation duly organized, existing and in good
standing under the laws of the jurisdiction of its incorporation, (b) has
the corporate power to own its property and to carry on its business as now
being conducted, and (c) is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the properties
owned by it therein or in which the transaction of its business makes such
qualification necessary or where such non-qualification would have a
materially adverse effect on the Borrower and its Subsidiaries taken as a
whole or would otherwise impair the ability of the Agent to collect or
realize upon any of the Collateral.
0.4.1.3 POWER AND AUTHORITY. Each of the Borrower and its
Subsidiaries has full corporate power and authority to execute and deliver
this Agreement, the other Financing Documents, the PackerWare Merger
Agreement Documents, the BTP/Borrower Transaction Documents, the
BIC/Borrower Transaction Documents, and the Loan Restructuring Transaction
Documents to which it is a party, to make the borrowings and request
Letters of Credit and Bond Letters of Credit under this Agreement, to close
and consummate the PackerWare Merger Transaction, the BTP/Borrower
Transaction, the BIC/Borrower Transaction Documents, and the Loan
Restructuring Transaction, as appropriate and to incur and perform the
Obligations whether under this Agreement, the other Financing Documents,
the BTP/Borrower Transaction Documents, the BIC/Borrower Transaction
Documents, the Loan Restructuring Documents or otherwise, all of which have
been duly authorized by all proper and necessary corporate action. No
consent or approval of shareholders or any creditors of the Borrower or any
Subsidiary of the Borrower, and no consent, approval, filing or
registration with or notice to any Governmental Authority on the part of
the Borrower or any Subsidiary of the Borrower, is required as a condition
to the execution, delivery, validity or enforceability of this Agreement,
the other Financing Documents, any of the BTP/Borrower Transaction
Documents, any of the BIC/Borrower Transaction Documents, any of the Loan
Restructuring Transaction Documents or any of the PackerWare Merger
Agreement Documents, the performance by the Borrower of the Obligations or
the closing and consummation of the PackerWare Merger Transaction, the
BTP/Borrower Transaction, the BIC/Borrower Transaction, or the Loan
Restructuring Transaction, in each case, if required, the same has been
duly obtained.
0.4.1.4 BINDING AGREEMENTS. This Agreement and the other
Financing Documents executed and delivered by the Borrower and/or any of
its Subsidiaries have been properly executed and delivered and constitute
the valid and legally binding obligations of the Borrower and its
Subsidiaries, respectively, and are fully enforceable against the Borrower
and its Subsidiaries in accordance with their respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of
general applications affecting the rights and remedies of creditors and
secured parties, and general principles of equity regardless of whether
applied in a proceeding in equity or at law.
0.4.1.5 NO CONFLICTS. Neither the execution, delivery and
performance of the terms of this Agreement or of any of the other Financing
Documents executed and delivered by the Borrower or any of its Subsidiaries
nor the consummation of the transactions contemplated by this Agreement
will conflict with, violate or be prevented by (a) the charter or bylaws of
the Borrower or any of its Subsidiaries, (b) any existing mortgage,
indenture, contract or agreement binding on the Borrower or any of its
Subsidiaries or affecting any of its or their property, or (c) any Laws.
0.4.1.6 NO DEFAULTS, VIOLATIONS. As of the Closing Date:
(a) No Default or Event of Default has occurred and is
continuing.
(b) Neither the Borrower nor any of its Subsidiaries
is in material default under any existing mortgage, indenture, contract or
agreement binding on it or them or affecting its or their property in any
respect which would be materially adverse to the business, operations,
property or financial condition of the Borrower and its Subsidiaries, taken
as a whole, or which would materially adversely affect the ability of the
Borrower and its Subsidiaries, taken as a whole to perform their
obligations under this Agreement or under any of the other Financing
Documents to which the Borrower and/or any of its Subsidiaries is a party.
0.4.1.7 COMPLIANCE WITH LAWS. Neither the Borrower nor
any of its Subsidiaries is in violation of any applicable Laws (including,
without limitation, any Laws relating to employment practices, to
environmental, occupational and health standards and controls) or order,
writ, injunction, decree or demand of any court, arbitrator, or any
Governmental Authority affecting the Borrower, any of its Subsidiaries or
any of its or their properties, the violation of which, considered in the
aggregate, would materially adversely affect the business, operations or
properties of the Borrower and/or any of its Subsidiaries taken as a whole.
0.4.1.8 MARGIN STOCK. None of the proceeds of the Loans
will be used, directly or indirectly, by the Borrower or any Subsidiary for
the purpose of purchasing or carrying, or for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or
carry, any "margin security" within the meaning of Regulation G (12 CFR
Part 207), or "margin stock" within the meaning of Regulation U (12 CFR
Part 221), of the Board of Governors of the Federal Reserve System or for
any other purpose which would make the transactions contemplated in this
Agreement a "purpose credit" within the meaning of said Regulation G or
Regulation U, or cause this Agreement to violate any other regulation of
the Board of Governors of the Federal Reserve System or the Securities
Exchange Act of 1934 or the Small Business Investment Act of 1958, as
amended, or any rules or regulations promulgated under any of such
statutes.
0.4.1.9 INVESTMENT COMPANY ACT; MARGIN SECURITIES.
Neither the Borrower nor any of its Subsidiaries is an investment
company within the meaning of the Investment Company Act of 1940, as
amended, nor is it, directly or indirectly, controlled by or acting on
behalf of any Person which is an investment company within the meaning of
said Act. Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying "margin
security" within the meaning of Regulation G (12 CFR Part 207), or "margin
stock" within the meaning of Regulation U (12 CFR Part 221), of the Board
of Governors of the Federal Reserve System.
0.4.1.10 LITIGATION. Except as otherwise disclosed on
SCHEDULE attached to and made a part of this Agreement, there are no
proceedings, actions or investigations pending or, so far as the Borrower
knows, threatened before or by any court, arbitrator any Governmental
Authority which, in any one case or in the aggregate, if determined
adversely to the interests of the Borrower or any Subsidiary, would have a
material adverse effect on the business, properties, condition (financial
or otherwise) or operations, present or prospective, of the Borrower or any
of its Subsidiaries taken as a whole.
0.4.1.11 FINANCIAL CONDITION. The consolidated financial
statements of the Borrower and its Subsidiaries dated as of September 30,
1996, are complete and correct and fairly present the financial position of
the Borrower and its Subsidiaries and the results of their operations as of
the date and for the period referred to and have been prepared in
accordance with GAAP applied on a consistent basis throughout the period
involved. There are no material liabilities, direct or indirect, fixed or
contingent, of the Borrower or any Subsidiary as of the date of such
financial statements which are not reflected therein. There has been no
materially adverse change in the financial condition or operations of the
Borrower or any Subsidiary since the date of such financial statements and
to the Borrower's knowledge no such materially adverse change is pending.
Except as permitted by the provisions of Section 6.2.5, neither the
Borrower nor any Subsidiary has guaranteed the obligations of, or made any
investment in or advances to, any Person (other than the Borrower or any
Subsidiary Guarantor), except as disclosed in such financial statements and
except that the Borrower and/or any or all of the Subsidiary Guarantors may
have guaranteed one or more leases under which the Borrower and/or a
Subsidiary Guarantor is a tenant or lessee, as of the Closing Date.
0.4.1.12 PROFORMA FINANCIAL STATEMENTS. The Borrower has
furnished to the Agent a proforma consolidated balance sheet of the
Borrower and its Subsidiaries as of immediately after consummation of the
PackerWare Merger Transaction and the transactions incident thereto (the
"Proforma Balance Sheet") together with proforma financial projections of
the Parent for the five-year period subsequent to the PackerWare Merger
Transaction (the "Proforma Financial Projections"). A copy of the Proforma
Balance Sheet and the Proforma Financial Projections are attached hereto as
Exhibits D-1 and D-2, respectively. The Proforma Balance Sheet is correct
and complete, has been prepared in accordance with GAAP, and fairly
presents the consolidated financial condition of the Borrower and its
Subsidiaries as of immediately after consummation of the PackerWare Merger
Transaction and the transactions incident thereto. The Proforma Financial
Projections represent the best estimate of the future operations of the
Parent and are based on reasonable and conservative assumptions, but do not
constitute a guaranty of actual performance.
0.4.1.13 FULL DISCLOSURE. The financial statements
referred to in Section 4.1.11 (Financial Condition) of this Agreement and the
statements, reports or certificates furnished by the Borrower in connection
with the Financing Documents (a) do not contain any untrue statement of a
material fact and (b) when taken in their entirety, do not omit any
material fact necessary to make the statements contained therein not
misleading. There is no fact known to the Borrower which the Borrower has
not disclosed to the Agent and the Lenders in writing prior to the date of
this Agreement with respect to the transactions contemplated by the
Financing Documents which materially and adversely affects or in the future
would, in the reasonable opinion of the Borrower materially adversely
affect the condition, financial or otherwise, results of operations,
business, or assets of the Borrower and its Subsidiaries, taken as a whole.
0.4.1.14 INDEBTEDNESS FOR BORROWED MONEY. As of the
Closing Date, except for the Obligations and except as set forth in
SCHEDULE attached to and made a part of this Agreement, the Borrower has
no Indebtedness for Borrowed Money. The Agent has received photocopies of
all promissory notes evidencing any Indebtedness for Borrowed Money set
forth in SCHEDULE , together with any and all material subordination
agreements, other agreements, documents, or instruments securing,
evidencing, guarantying or otherwise executed and delivered in connection
therewith.
0.4.1.15 SUBORDINATED DEBT; SENIOR SECURED DEBT. None of
the Subordinated Debt Loan Documents nor any of the Senior Secured Debt
Loan Documents in effect prior to the Closing Date have been amended,
supplemented, restated or otherwise modified except as otherwise disclosed
to the Agent in writing on or before the Closing Date. In addition, the
Borrower has furnished copies of each amendment, supplement, restatement or
other modification to any of the Subordinated Debt Loan Documents executed
on or before the Closing Date. In addition, there does not exist any
default or any event which upon notice or lapse of time or both would
constitute a default under the terms of any of the Subordinated Debt Loan
Documents or any of the Senior Secured Debt Loan Documents.
0.4.1.16 TAXES. The Borrower and its Subsidiaries have
filed all returns, reports and forms for all material Taxes which, to the
knowledge of the Borrower, are required to be filed, and have paid all such
Taxes as shown on such returns or on any assessment received by it, to the
extent that such Taxes have become due, unless and to the extent only that
such Taxes, assessments and governmental charges are currently contested in
good faith and by appropriate proceedings by the Borrower, such Taxes are
not the subject of any Liens other than Permitted Liens, and adequate
reserves therefor have been established as required under GAAP. All tax
liabilities of the Borrower and its Subsidiaries were as of the date of
audited financial statements referred to in Section 4.1.11(Financial Condition)
above, and are now, adequately provided for on the books of the Borrower
and its Subsidiaries, as appropriate. No tax liability has been asserted
by the Internal Revenue Service or any state or local authority against the
Borrower or any of its Subsidiaries for Taxes in excess of those already
paid, except that the Agent and the Lenders understand that PackerWare is
to be the subject of an audit by the Internal Revenue Service, but that
such audit, to the Borrower's knowledge, is not the result of any claimed
or actual non-compliance with any Laws.
0.4.1.17 ERISA. With respect to any "pension plan" as
defined in SECTION 3(2) of ERISA, which plan is now or previously has been
maintained or contributed to by the Borrower and/or any of its Subsidiaries
and/or by any commonly controlled entity: (a) no "accumulated funding
deficiency" as defined in Code 412 or ERISA 302 has
occurred, whether or not that accumulated funding deficiency has been
waived; (b) no Reportable Event has occurred; (c) no termination of any
plan subject to Title IV of ERISA has occurred; (d) no Borrower, Subsidiary
nor any commonly controlled entity (as defined under ERISA) has incurred a
"complete withdrawal" within the meaning of ERISA 4203 from any
Multiemployer Plan; (e) no Borrower, Subsidiary nor any commonly controlled
entity has incurred a "partial withdrawal" within the meaning of ERISA
4205 with respect to any Multiemployer Plan; (f) no Multiemployer
Plan to which the Borrower, any of its Subsidiaries or any commonly
controlled entity has an obligation to contribute is in "reorganization"
within the meaning of ERISA 4241 nor has notice been received by
the Borrower, any of its Subsidiaries or any commonly controlled entity
that such a Multiemployer Plan will be placed in "reorganization".
0.4.1.18 TITLE TO PROPERTIES. Each of the Borrower and its
Subsidiaries has good title to all of its and their respective properties,
including, without limitation, the Collateral and the properties and assets
reflected in the balance sheets described in Section 4.1.11
(Financial Condition)above, subject to any minor imperfections in title
which do not significantly detract from the use thereof. The Borrower and
each of its Subsidiaries have legal, enforceable and uncontested rights to
use freely such property and assets.
0.4.1.19 PATENTS, TRADEMARKS, ETC. Each of the Borrower
and its Subsidiaries owns, possesses, or has the right to use all necessary
Patents, licenses, Trademarks, Copyrights, permits and franchises to own
its properties and to conduct its business as now conducted, without known
conflict with the rights of any other Person. Any and all obligations to
pay royalties or other charges with respect to such properties and assets
are properly reflected on the financial statements described in Section
4.1.11(Financial Condition) above.
0.4.1.20 EMPLOYEE RELATIONS. Except as disclosed on
Schedule attached hereto and made a part hereof, as updated from time to
time, (a) no Borrower nor any Subsidiary thereof nor the Borrower's or
Subsidiary's employees is subject to any collective bargaining agreement,
(b) to the Borrower's knowledge, no petition for certification or union
election is pending with respect to the employees of the Borrower or any
Subsidiary and no union or collective bargaining unit has sought such
certification or recognition with respect to the employees of the Borrower,
and (c) as of the Closing Date, there are no strikes, slowdowns, work
stoppages or controversies pending or, to the best knowledge of the
Borrower after due inquiry, threatened between the Borrower and its
employees. Hours worked and payments made to the employees of any one or
more of the Borrower have not been in violation of the Fair Labor Standards
Act or any other applicable law dealing with such matters. All payments
due from the Borrower or any of its Subsidiaries or for which any claim may
be made against the Borrower or any of its Subsidiaries, on account of
wages and employee and retiree health and welfare insurance and other
benefits have been paid or accrued as a liability on its or their books, as
appropriate.
0.4.1.21 PRESENCE OF HAZARDOUS MATERIALS OR HAZARDOUS
MATERIALS CONTAMINATION.
To the best of the Borrower's knowledge and except as disclosed in
writing to the Agent in Schedule hereof with respect to any matters
existing as of the Closing Date and except as hereafter disclosed in
writing to the Agent with respect to any matters arising after the Closing
Date, (a) no Hazardous Materials are located on any real property owned,
controlled or operated by the Borrower or any of its Subsidiaries or for
which the Borrower or any of its Subsidiaries is, or is claimed to be,
responsible, except for reasonable quantities of necessary supplies for use
by the Borrower and/or its Subsidiaries any of their respective tenants in
the ordinary course of its or their current lines of business and stored,
used and disposed in accordance with applicable Laws; and (b) no property
owned, controlled or operated by the Borrower or any of its Subsidiaries or
for which the Borrower or any of its Subsidiaries has, or is claimed to
have, responsibility is affected by any material Hazardous Materials
Contamination at any other property.
In addition, as of the Closing Date, the Borrower represents and
warrants that it has no existing monitoring or observation ▇▇▇▇▇ located at
Lawrence, Kansas (including Aeroquip); Evansville, Indiana; Indian Trail,
North Carolina; and Reno, Nevada properties from which groundwater can be
sampled and analyzed.
0.4.1.22 PERFECTION AND PRIORITY OF COLLATERAL. The Agent
and the Lenders have, or upon execution and recording of UCC-1 financing
statements and possession of Securities, Documents, Instruments, Chattel
Paper and Instruments will have, and will continue to have as security for
the Obligations (subject to the terms of Section 3.7), a valid and
perfected Lien on and security interest in all Collateral, free of all
other Liens, claims and rights of third parties whatsoever except Permitted
Liens, including, without limitation, those described on SCHEDULE .
0.4.1.23 PLACES OF BUSINESS AND LOCATION OF COLLATERAL.
The information contained in the Collateral Disclosure List, as
updated annually and at such other times as shall be determined by the
Borrower at any time prior to the occurrence of a Default or an Event of
Default and as shall be determined by the Agent at any time following the
occurrence of a Default or an Event of Default, is complete and correct in
all material respects. The Collateral Disclosure List completely and
accurately identifies the address of (a) the chief executive office of the
Borrower and each of the Subsidiary Guarantors, (b) any and each other
place of business of the Borrower or any of the Subsidiary Guarantors, (c)
the location of all books and records pertaining to the Collateral, and (d)
each location, other than the foregoing, where any of the Collateral is
located. The legally required places to file financing statements with
respect to the Collateral within the meaning of the Uniform Commercial Code
are the filing offices for those jurisdictions in which the Borrower and/or
any Subsidiary Guarantor, as appropriate, maintains a place of business as
identified on the Collateral Disclosure List.
0.4.1.24 BUSINESS NAMES AND ADDRESSES. Except as set forth
in Schedule attached hereto and made a part hereof, in the five (5) years
preceding the date hereof, neither the Borrower nor any of its Subsidiaries
(other than PAC) has changed its name, identity or corporate structure, has
conducted business under any name other than its current name, and has
conducted its business in any jurisdiction other than those disclosed on
the Collateral Disclosure List.
0.4.1.25 EQUIPMENT. No equipment is held by the Borrower
or any Subsidiary Guarantor on a sale on approval basis.
0.4.1.26 INVENTORY. All material portions of the Inventory
of the Borrower and each Subsidiary Guarantor included in the Borrowing
Base, conform to the eligibility criteria set forth in the definition of
Eligible Inventory. Except as disclosed in the Collateral Disclosure List,
no goods offered for sale by the Borrower or any Subsidiary are consigned
to or held on sale or return terms by the Borrower or any Subsidiary.
0.4.1.27 ACCOUNTS. All material portions of the Accounts
included in the Borrowing Base conform to the eligibility criteria set
forth in the definition of Eligible Receivables
0.4.1.28 PACKERWARE MERGER TRANSACTION. The Agent has
received true and correct photocopies of the PackerWare Merger Agreement
and each of the other PackerWare Merger Agreement Documents, executed,
delivered and/or furnished on or before the Closing Date in connection with
the PackerWare Merger Transaction. Neither the PackerWare Merger Agreement
nor any of the other PackerWare Merger Agreement Documents have been
modified, changed, supplemented, canceled, amended or otherwise altered,
except as otherwise disclosed to the Agent in writing on or before the
Closing Date. The PackerWare Merger Transaction has been effected, closed
and consummated pursuant to, and in accordance with, the terms and
conditions of the PackerWare Merger Agreement and with all applicable Laws.
0.4.1.29 CONTAINER PURCHASE AGREEMENT TRANSACTION. The
Agent has received true and correct photocopies of the Container Purchase
Agreement and each of the other Container Purchase Agreement Documents,
executed, delivered and/or furnished on or before the Closing Date in
connection with the Container Purchase Agreement Transaction. Neither the
Container Purchase Agreement nor any of the other Container Purchase
Agreement Documents have been modified, changed, supplemented, canceled,
amended or otherwise altered, except as otherwise disclosed to the Agent in
writing on or before the Closing Date.
0.4.1.30 BTP/BORROWER TRANSACTION. Immediately upon
closing and consummation of the BTP/Borrower Transaction, the Agent shall
have received true and correct photocopies of each of the BTP/Borrower
Transaction Documents. None of the BTP/Borrower Transaction Documents have
been or shall have been modified, changed, supplemented, canceled, amended
or otherwise altered, except as otherwise disclosed to the Agent in writing
on or before the closing and consummation of the BTP/Borrower Transaction.
The BTP/Borrower Transaction has been or shall be effected, closed and
consummated pursuant to, and in accordance with, the terms and conditions
of the BTP/Borrower Transaction Documents and all applicable agreements and
contracts and with all applicable Laws.
0.4.1.31 LOAN RESTRUCTURING TRANSACTION. Immediately upon
closing and consummation of the Loan Restructuring Transaction, the Agent
shall have received true and correct photocopies of each of the Loan
Restructuring Documents. None of the Loan Restructuring Documents have
been or shall have been modified, changed, supplemented, canceled, amended
or otherwise altered, except as otherwise disclosed to the Agent in writing
on or before the closing and consummation of the Loan Restructuring
Transaction. The Loan Restructuring Transaction has been or shall be
effected, closed and consummated pursuant to, and in accordance with, the
terms and conditions of the Loan Restructuring Transaction Documents and
all applicable agreements and contracts and with all applicable Laws.
0.4.1.32 BIC/BORROWER TRANSACTION. Immediately upon
closing and consummation of the BIC/Borrower Transaction, the Agent shall
have received true and correct photocopies of each of the BIC/Borrower
Transaction Documents. None of the BIC/Borrower Transaction Documents have
been or shall have been modified, changed, supplemented, canceled, amended
or otherwise altered, except as otherwise disclosed to the Agent in writing
on or before the closing and consummation of the BIC/Borrower Transaction.
The BIC/Borrower Transaction has been or shall be effected, closed and
consummated pursuant to, and in accordance with, the terms and conditions
of the BIC/Borrower Transaction Documents and all applicable agreements and
contracts and with all applicable Laws.
0.4.1.33 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. The Borrower, the Seller and
all other necessary Persons, as appropriate, have made such filings as may
be required by the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended, and have provided such supplemental information that may be
required by such Act, with respect to the sale contemplated by the
PackerWare Merger Transaction and/or the Container Purchase Agreement
Transaction. The waiting periods under such Act have terminated or
expired.
SECTION 0.4.2 SURVIVAL; UPDATES OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties contained in or made under or in
connection with this Agreement and the other Financing Documents shall
survive the Closing Date, the making of any advance under the Loans and
extension of credit made hereunder, and the incurring of any other
Obligations and shall be deemed to have been made at the time of the making
of each advance under the Loans or the issuance of each Letter of Credit
and/or each Bond Letter of Credit, except that (i) representations and
warranties which relate to a specific date need only be true and correct as
of such date, and (ii) the representations and warranties which relate to
financial statements which are referred to in Section 4.1.11, shall also
be deemed to cover financial statements furnished from time to time to the
Agent and the Lenders pursuant to Section 6.1.1 (Financial Statements) of
this Agreement. The Borrower shall have the right from time to time to modify
or supplement any of the Schedules and/or the Collateral Disclosure List
referred to in this Article IV, and following any such modification or
supplement the representations in this Article shall be deemed to refer to
such Schedules and Collateral Disclosure List as so modified or
supplemented; provided, that the Borrower will be deemed to have
represented at the time of delivery of any such modification or supplement
that the modifications of and supplements to such Schedules and/or
Collateral Disclosure List after the Closing Date do not relate to events
or circumstances which individually or in the aggregate have resulted in a
material adverse change in the business or operations of the Borrower and
its Subsidiaries taken as a whole or which would otherwise constitute a
Default or an Event of Default.
ARTICLE 5
CONDITIONS PRECEDENT
SECTION 0.5.1 CONDITIONS TO THE INITIAL ADVANCE AND INITIAL LETTER OF
CREDIT.
The making of the initial advance under the Loans and the issuance of
the initial Letter of Credit and the initial Bond Letter of Credit are
subject to the fulfillment on or before the Closing Date of the following
conditions precedent in a manner reasonably satisfactory in form and
substance to the Agent and its counsel:
0.5.1.1 ORGANIZATIONAL DOCUMENTS - BORROWER. The Agent
shall have received for the Borrower:
(a) a certificate of good standing certified by the
Secretary of State, or other appropriate Governmental Authority, of
the state of incorporation of the Borrower;
(b) a certificate of qualification to do business for
the Borrower certified by the Secretary of State or other Governmental
Authority of each state in which the Borrower conducts business;
(c) a certificate dated as of the Closing Date by the
Secretary or an Assistant Secretary of the Borrower covering:
(i) true and complete copies of that
Borrower's corporate charter, bylaws, and all amendments
thereto;
(ii) true and complete copies of the
resolutions of its Board of Directors authorizing (i) the
execution, delivery and performance of the Financing
Documents and the PackerWare Merger Agreement Documents to
which it is a party, (ii) the borrowings hereunder, (iii)
the granting of the Liens contemplated by this Agreement and
the Financing Documents to which the Borrower is a party,
and (iv) the PackerWare Merger Transaction;
(iii) the incumbency, authority and
signatures of the officers of the Borrower authorized to
sign this Agreement and the other Financing Documents to
which the Borrower is a party; and
(iv) the identity of the Borrower's current
directors, common stock holders and other equity holders, as
well as their respective percentage ownership interests.
0.5.1.2 OPINION OF BORROWER'S COUNSEL. The Agent shall
have received the favorable opinion of counsel for the Borrower and its
Subsidiaries addressed to the Agent and the Lenders in form satisfactory to
the Agent. The Agent agrees that local counsel opinions shall be required
only for the States of Nevada, North Carolina, Kansas, Indiana and Iowa.
-5-
0.5.1.3 ORGANIZATIONAL DOCUMENTS - SUBSIDIARY GUARANTOR.
The Agent shall have received for each Subsidiary Guarantor:
(a) a certificate of good standing certified by the
Secretary of State, or other appropriate Governmental Authority, of
the state of incorporation;
(b) a certificate of qualification to do business
certified by the Secretary of State or other Governmental Authority of
each state in which each Subsidiary Guarantor conducts business;
(c) a certificate dated as of the Closing Date by the
Secretary or an Assistant Secretary of each Corporate Guarantor
covering:
(i) true and complete copies of the its
corporate charter, bylaws, and all amendments thereto;
(ii) true and complete copies of the
resolutions of it's Board of Directors authorizing the
execution, delivery and performance of the Financing
Documents to which it is a party and the granting of the
Liens contemplated by any of the Financing Documents to
which it is a party;
(iii) the incumbency, authority and
signatures of its officers to sign the Guaranty and all
other Financing Documents to which it is a party;
(iv) the identity of it's current directors,
common stock holders and other equity holders, as well as
their respective percentage ownership interests;
(d) the favorable opinion of counsel for the Subsidiary
Guarantors addressed to the Agent and the Lenders and in form
satisfactory to the Agent.
0.5.1.4 CONSENTS, LICENSES, APPROVALS, ETC.The Agent shall
have received copies of all consents, licenses and approvals, required in
connection with the execution, delivery, performance, validity and
enforceability of the Financing Documents, and the PackerWare Merger
Agreement Documents, and such consents, licenses and approvals shall be in
full force and effect.
0.5.1.5 NOTES. The Agent shall have received for delivery
to each of the Lenders the Term Notes and the Revolving Credit Notes, each
conforming to the requirements hereof and executed by a Responsible Officer
of the Borrower and attested by a duly authorized representative of the
Borrower.
0.5.1.6 FINANCING DOCUMENTS AND COLLATERAL. The Borrower
and each Subsidiary Guarantor shall have executed and delivered the
Financing Documents to be executed by it, and shall have delivered original
Chattel Paper, Instruments, Securities, and related Collateral and all
opinions, title insurance, and other documents contemplated by Article 3
hereof.
0.5.1.7 OTHER FINANCING DOCUMENTS. In addition to the
Financing Documents to be delivered by the Borrower, the Agent shall have
received the Financing Documents duly executed and delivered by Persons
other than the Borrower.
0.5.1.8 OTHER DOCUMENTS, ETC. The Agent shall have
received such other certificates, opinions, documents and instruments
confirmatory of or otherwise relating to the transactions contemplated
hereby as may have been reasonably requested by the Agent.
0.5.1.9 PAYMENT OF FEES. The Agent and the Lenders shall
have received payment of any Fees due on or before the Closing Date.
0.5.1.10 COLLATERAL DISCLOSURE LIST. The Borrower shall
have delivered the Collateral Disclosure List required under the provisions
of Section 3.3 (Collateral Disclosure List) hereof duly executed by a
Responsible Officer of the Borrower and each Subsidiary Guarantor, as
appropriate.
0.5.1.11 RECORDINGS AND FILINGS. The Borrower and each
Subsidiary Guarantor, as appropriate, shall have: (a) executed and
delivered all Financing Documents (including, without limitation, UCC-1 and
UCC-3 statements) required to be filed, registered or recorded in order to
create, in favor of the Agent and the Lenders, a perfected Lien in the
Collateral (subject only to the Permitted Liens) in form and in sufficient
number for filing, registration, and recording in each office in each
jurisdiction in which such filings, registrations and recordations are
required, and (b) delivered such evidence as the Agent may deem
satisfactory that all necessary filing fees and all recording and other
similar fees, and all Taxes and other expenses related to such filings,
registrations and recordings will be or have been paid in full.
0.5.1.12 INSURANCE CERTIFICATE. The Agent shall have
received an insurance certificate in accordance with the provisions of
Section 6.1.17 (Insurance)and Section 6.1.17 (Insurance With Respect to
Equipment and Inventory) of this Agreement.
0.5.1.13 LANDLORD'S WAIVERS. Unless otherwise agreed by
the Agent, the Agent shall have received a landlord's waiver from each
landlord of each and every business premise leased by the Borrower and/or
any Subsidiary Guarantor and on which any of the Collateral is or may
hereafter be located, which landlords' waivers must be reasonably
acceptable to the Agent and its counsel in their sole and absolute
discretion.
0.5.1.14 BAILEE ACKNOWLEDGEMENTS. Unless otherwise agreed
by the Agent, the Agent shall have received an agreement acknowledging the
Liens of the Agent and the Lender from each bailee, warehouseman, consignee
or similar third party which has possession of any of the Collateral, which
agreements must be reasonably acceptable to the Agent and its counsel in
their sole and absolute discretion.
0.5.1.15 FIELD EXAMINATION. The Agent shall have completed
a field examination and audit of the business, operations and income of the
Borrower and each Subsidiary Guarantor, the results of which field
examination and audit shall be in all respects acceptable to the Agent in
its sole and absolute discretion and shall include reference discussions
with key customers and vendors.
0.5.1.16 APPRAISAL. The Agent shall have received
appraisals of all real and personal property owned by the Borrower and/or
each Subsidiary Guarantor, all of which appraisals shall be performed by
one or more appraisers satisfactory in all respects to the Agent, shall be
in such form and content as may be required by the Agent.
0.5.1.17 PROFORMA BALANCE SHEET AND PROJECTIONS. The Agent
shall have received and approved the Borrower's Proforma Balance Sheet and
Proforma Financial Projections, which Proforma Balance Sheet and Proforma
Financial Projections must be in form and content acceptable to the Agent
in its sole and absolute discretion.
0.5.1.18 STOCK CERTIFICATES AND STOCK POWERS. The Agent
shall have received all of the original stock certificates of each
Subsidiary Guarantor and fully executed irrevocable stock powers from the
holders of all such stock certificates.
0.5.1.19 PACKERWARE MERGER AGREEMENT TRANSACTION.
(a) The PackerWare Merger Transaction shall have been
completed and closed prior to or simultaneously herewith upon terms and
conditions reasonably satisfactory to the Agent, in accordance with the
PackerWare Merger Agreement and all applicable Laws.
(b) The Agent shall have received photocopies of all
PackerWare Merger Agreement Documents executed, delivered and/or furnished
in connection with the PackerWare Merger Transaction, together with a
certificate signed by a Responsible Officer of the Borrower certifying that
the PackerWare Merger Agreement and the other PackerWare Merger Agreement
Documents furnished to the Agent are true, correct, in full force and
effect and the provisions thereof have not been in any way modified,
amended or waived, except as otherwise disclosed in writing to the Agent on
or before the Closing Date.
0.5.1.20 ENVIRONMENTAL REPORTS. The Agent shall have
received and reviewed a Phase I environmental assessment for each parcel of
real property owned or leased by the Borrower or any Subsidiary Guarantor,
each of which environmental assessment has been performed by a reputable
and recognized environmental consulting firm acceptable to the Agent and
has revealed no material Hazardous Materials Contamination or material
violations of any Environmental Laws, and shall otherwise be in all
respects acceptable to the Agent.
0.5.1.21 FINANCIAL STATEMENTS. The Agent shall have
received and reviewed copies of the annual audited financial statements in
reasonable detail satisfactory to the Agent relating to the Borrower and
its Subsidiaries for the fiscal years 1993, 1994 and 1995, prepared in
accordance with GAAP, which financial statements shall include a
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as of the end of each such fiscal year and consolidated and
consolidating statements of income, cash flows and changes in shareholders
equity of the Borrower and its Subsidiaries for each such fiscal year,
except that the 1993 and 1994 financial statements include only
consolidated information. In addition, the Agent shall have received and
reviewed copies of the most recent interim monthly financial statements for
the Borrower and its Subsidiaries for fiscal years 1995 and 1996, all
prepared in accordance with GAAP.
SECTION 0.5.2. CONDITIONS TO ALL EXTENSIONS OF CREDIT. The making of
all advances under the Loans and the issuance of all Letters of Credit and
all Bond Letters of Credit is subject to the fulfillment of the following
conditions precedent in a manner reasonably satisfactory in form and
substance to the Agent:
0.5.2.1 DEFAULT. There shall exist no Event of Default or
Default hereunder.
0.5.2.2 REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Borrower contained among the
provisions of this Agreement shall be true and with the same effect as
though such representations and warranties had been made at the time of the
making of, and of the request for, each advance under the Loans or the
issuance of each Letter of Credit or Bond Letter of Credit, except that (i)
the representations and warranties which relate to a specific date need
only be true and correct as of such date and (ii) the representations and
warranties which relate to financial statements which are referred to in
Section 4.1.11, shall also be deemed to cover financial statements furnished
from time to time to the Agent pursuant to Section 6.1.1(Financial Statements)
of this Agreement.
0.5.2.3 ADVERSE CHANGE. No material adverse change shall
have occurred in the condition (financial or otherwise), operations or
business of the Borrower or any Subsidiary Guarantor which would, in the
good faith judgment of the Agent, materially impair the ability of the
Borrower or any Subsidiary Guarantor to pay or perform any of the
Obligations.
0.5.2.4 LEGAL MATTERS. All legal documents incident to
each advance under the Loans and each of the Letters of Credit and Bond
Letters of Credit shall be reasonably satisfactory to the Agent.
ARTICLE 6
COVENANTS OF THE BORROWER
SECTION 0.6.1 AFFIRMATIVE COVENANTS. So long as any of the
Obligations (or any the Commitments therefor) shall be outstanding
hereunder, the Borrower agrees jointly and severally with the Agent and the
Lenders as follows:
0.6.1.1 FINANCIAL STATEMENTS. The Borrower shall furnish
to the Agent for distribution to the Lenders:
(a) ANNUAL STATEMENTS AND CERTIFICATES. The Borrower
shall furnish to the Agent for distribution to the Lenders as soon as
available, but in no event more than ninety (90) days after the close of
the Borrower's fiscal years, (i) a copy of the annual consolidated and
consolidating financial statements in reasonable detail satisfactory to the
Agent relating to the Borrower and its Subsidiaries, prepared in accordance
with GAAP and examined and certified by independent certified public
accountants satisfactory to the Agent, which financial statements shall
include a consolidated and consolidating balance sheet of the Borrower and
its Subsidiaries as of the end of such fiscal year and consolidated and
consolidating statements of income, cash flows and changes in shareholders
equity of the Borrower and its Subsidiaries for such fiscal year, and (ii)
a Compliance Certificate, in substantially the form attached to this
Agreement as EXHIBIT E, containing a detailed computation of each financial
covenant in this Agreement which is applicable for the period reported, a
certification that no change has occurred to the information contained in
the Collateral Disclosure List (except as set forth any schedule attached
to the certification) and (iii) a management letter in the form prepared by
the Borrower's independent certified public accountants, but only if and to
the extent customarily obtained by the Borrower. The Agent agrees that any
one of the "Big 6" accounting firms is satisfactory to the Agent for
purposes of this Section 6.1.1(a), except to the extent the Agent in its
reasonable discretion and based on good faith and legitimate concerns
determines that any such accounting firm would be unacceptable because of
any conflict of interest or any material adverse change affecting such
firm's reliability or financial viability.
(b) ANNUAL OPINION OF ACCOUNTANT. The Borrower shall
furnish to the Agent for distribution to the Lenders as soon as available,
but in no event more than ninety (90) days after the close of the
Borrower's fiscal years, a letter or opinion of the accounting firm which
examined and certified the annual financial statement relating to the
Borrower and its Subsidiaries stating whether anything in such accounting
firm's examination has revealed the occurrence of a Default or an Event of
Default hereunder, and, if so, stating the facts with respect thereto.
(c) QUARTERLY STATEMENTS AND CERTIFICATES. The
Borrower shall furnish to the Agent for distribution to the Lenders as soon
as available, but in no event more than forty-five (45) days after the
close of the Borrower's fiscal quarters (other than the final fiscal
quarter), consolidated and consolidating balance sheets of the Borrower and
its Subsidiaries as of the close of such period, consolidated and
consolidating income, cash flows and changes in shareholders equity
statements for such period, and a Compliance Certificate, in substantially
the form attached to this Agreement as EXHIBIT E, containing a detailed
computation of each financial covenant in this Agreement which is
applicable for the period reported, each prepared by a Responsible Officer
of or on behalf of the Borrower in a format acceptable to the Agent, all as
prepared and certified by a Responsible Officer of the Borrower and
accompanied by a certificate of that officer stating whether any event has
occurred which constitutes a Default or an Event of Default hereunder, and,
if so, stating the facts with respect thereto.
(d) MONTHLY STATEMENTS AND CERTIFICATES. The Borrower
shall furnish to the Agent for distribution to the Lenders as soon as
available, but in no event more than thirty-five (35) days after the close
of the Borrower's fiscal months, consolidated and consolidating balance
sheets of the Borrower and its Subsidiaries as of the close of such period,
consolidated and consolidating income, cash flows and changes in
shareholders equity statements for such period, and a detailed computation
of each financial covenant in this Agreement which is applicable for the
period reported, all as prepared and certified by a Responsible Officer of
the Borrower and accompanied by a certificate of that officer stating
whether any event has occurred which constitutes a Default or an Event of
Default hereunder, and, if so, stating the facts with respect thereto.
(e) MONTHLY REPORTS. As part of the Borrowing Base
Certificate, the Borrower shall furnish to the Agent for distribution to
the Lenders within twenty (20) days after the end of each fiscal month, a
report containing the following information:
(i) a detailed aging schedule of all Accounts for
the Borrower and each Subsidiary Guarantor by Account Debtor, in such
detail, and accompanied by such supporting information, as the Agent
may from time to time reasonably request;
(ii) a detailed aging of all accounts payable by
supplier, in such detail, and accompanied by such supporting
information, as the Agent may from time to time reasonably request;
and
(iii) a listing of all Inventory of the Borrower and
each Subsidiary Guarantor by component, category and location, in such
detail, and accompanied by such supporting information as the Agent
may from time to time reasonably request.
(f) ANNUAL BUDGET AND PROJECTIONS. Commencing with
fiscal year 1997, the Borrower shall furnish to the Lender as soon as
available, but in no event later than the 10th day before the end of each
fiscal year:
(i) a consolidated and consolidating budget and
pro forma financial statements on a month-to-month basis for the
following fiscal year, and
(ii) three-year financial projections or financial
projections for such lesser or greater period to the extent routinely
prepared by the Borrower in the ordinary course of its business, which
projections shall include both consolidated and consolidating
projections with respect to the Borrower and its Subsidiaries.
(g) AMENDMENTS TO SUBORDINATED DEBT LOAN DOCUMENTS.
The Borrower will furnish copies of each amendment, supplement, restatement
or other modification to any of the Subordinated Debt Loan Documents
executed at any time after the Closing Date on or before the effective date
of such amendment, supplement, restatement or other modification.
(h) ADDITIONAL REPORTS AND INFORMATION. The Borrower
shall furnish to the Agent for distribution to the Lenders promptly, such
additional information, reports or statements as the Agent and/or any of
the Lenders may from time to time reasonably request.
0.6.1.2 REPORTS TO SEC AND TO STOCKHOLDERS. The Borrower
will furnish to the Agent for distribution to the Lenders, promptly upon
the filing or making thereof, at least one (1) copy of all reports, notices
and proxy statements sent by the Parent, the Borrower or any of their
respective Subsidiaries to its stockholders, and of all regular and other
reports filed by the Parent, the Borrower or any of their respective
Subsidiaries with the Securities and Exchange Commission.
0.6.1.3 RECORDKEEPING, RIGHTS OF INSPECTION, FIELD
EXAMINATION, ETC.
(a) The Borrower shall, and shall cause each of the
Subsidiary Guarantors to, maintain (i) a standard system of accounting in
accordance with GAAP, and (ii) proper books of record and account in which
full, true and correct entries are made of all dealings and transactions in
relation to its properties, business and activities.
(b) The Borrower shall, and shall cause each of its
Subsidiaries to, permit authorized representatives of the Agent and any of
the Lenders to visit and inspect the properties of the Borrower and its
Subsidiaries, to review, audit, check and inspect the Collateral at any
time with reasonable prior notice prior to the occurrence of an Event of
Default, and without notice at any time on or after the occurrence of an
Event of Default, to review, audit, check and inspect the other books of
record of the Borrower and its Subsidiaries at any time with or without
notice and to make abstracts and photocopies thereof, and to discuss the
affairs, finances and accounts of the Borrower and its Subsidiaries, with
the officers, directors, employees and other representatives of the
Borrower and its Subsidiaries and their respective accountants, all at such
times during normal business hours and other reasonable times and as often
as the Agent and/or any of the Lenders may reasonably request.
(c) The Borrower hereby irrevocably authorizes and
directs all accountants and auditors employed by the Borrower and/or any of
its Subsidiaries at any time prior to the repayment in full of the
Obligations to exhibit and deliver to the Agent for distribution to the
Lenders copies of any and all of the financial statements, trial balances,
management letters, or other accounting records of any nature of the
Borrower and/or any or all of its Subsidiaries in the accountant's or
auditor's possession, and to disclose to the Agent and any of the Lenders
any information they may have concerning the financial status and business
operations of the Borrower and/or any or all of its Subsidiaries. Further,
the Borrower hereby authorizes all Governmental Authorities to furnish to
the Agent for distribution to the Lenders copies of reports or examinations
relating to the Borrower and/or any or all Subsidiaries, whether made by
the Borrower or otherwise. The Agent agrees that it shall not request any
of the foregoing items directly from any accountants or auditors employed
by the Borrower or any Subsidiary at any time prior to the occurrence of an
Event of Default unless (i) the Agent shall have first requested such items
from the Borrower and the Borrower shall have failed or is unable to
furnish the requested items promptly and (ii) the Agent shall have notified
the Borrower and/or the respective Subsidiary, as appropriate. Upon the
Borrower's request, the Agent will furnish copies of all items obtained by
the Agent from any accountants or auditors for the Borrower unless the
Agent is legally prohibited from so doing.
(d) All reasonable costs and expenses incurred by, or
on behalf of, the Agent in connection with the conduct of any of the
foregoing shall be part of the Enforcement Costs and shall be payable to
the Agent upon demand. The Borrower acknowledges and agrees that such
expenses may include, but shall not be limited to, any and all out-of-
pocket costs and expenses of the Agent's employees and agents in, and when,
travelling to any of the facilities of the Borrower or any Subsidiary
Guarantor.
0.6.1.4 CORPORATE EXISTENCE. Except in connection with
consummation of those transactions permitted by Section 6.2.1, the Borrower
shall maintain, and shall cause each of its Subsidiaries to maintain, its
corporate existence in good standing in the jurisdiction in which it is
incorporated and in each other jurisdiction where it is required to
register or qualify to do business if the failure to do so in such other
jurisdiction would have a material adverse effect (i) on the ability of the
Borrower or any Subsidiary Guarantor to perform the Obligations, (ii) on
the conduct of the operations of the Borrower and the Subsidiary
Guarantors, taken as a whole, (iii) on the consolidated financial condition
of the Borrower and its Subsidiaries, taken as a whole, or (iv) on the
value of, or the ability of the Agent and the Lenders to realize upon, any
of the Collateral.
0.6.1.5 COMPLIANCE WITH LAWS. The Borrower shall comply,
and shall cause each of its Subsidiaries to comply, with all applicable
Laws and observe the valid requirements of all Governmental Authorities,
the noncompliance with or the nonobservance of which would have a material
adverse effect (i) on the ability of the Borrower or any Subsidiary
Guarantor to perform the Obligations, (ii) on the conduct of the operations
of the Borrower and the Subsidiary Guarantors, taken as a whole, (iii) on
the consolidated financial condition of the Borrower and its Subsidiaries,
taken as a whole, or (iv) on the value of, or the ability of the Agent and
the Lenders to realize upon, any of the Collateral.
0.6.1.6 PRESERVATION OF PROPERTIES. Except as otherwise
expressly permitted by the provisions of this Agreement, the Borrower will,
and will cause each of its Subsidiaries to, at all times (a) maintain,
preserve, protect and keep its material properties, whether owned or
leased, in good operating condition, working order and repair (ordinary
wear and tear excepted), and from time to time will make all proper
repairs, maintenance, replacements, additions and improvements thereto
needed to maintain such properties in good operating condition, working
order and repair, and (b) do or cause to be done all things necessary to
preserve and to keep in full force and effect its material franchises,
leases of real and personal property, trade names, patents, trademarks and
permits which are necessary for the orderly continuance of its business.
0.6.1.7 LINE OF BUSINESS. The Borrower will continue and,
will cause its Subsidiaries to continue, to engage substantially only in
the business of manufacturing, marketing, selling and distributing plastic
products.
0.6.1.8 INSURANCE. The Borrower will, and will cause each
of its Subsidiaries to, at all times maintain with "A" or better rated
insurance companies such insurance as is required by applicable Laws and
such other insurance, in such amounts, of such types and against such
risks, hazards, liabilities, casualties and contingencies as are usually
insured against in the same geographic areas by business entities engaged
in the same or similar business. Without limiting the generality of the
foregoing, the Borrower will, and will cause each of its Subsidiaries to,
keep adequately insured all of its property against loss or damage
resulting from fire or other risks insured against by extended coverage and
maintain public liability insurance against claims for personal injury,
death or property damage occurring upon, in or about any properties
occupied or controlled by it, or arising in any manner out of the
businesses carried on by it. The Borrower shall deliver to the Agent on
the Closing Date (and thereafter on each date there is a material change in
the insurance coverage) a certificate of a Responsible Officer of the
Borrower containing a detailed list of the insurance then in effect and
stating the names of the insurance companies, the types, the amounts and
rates of the insurance, dates of the expiration thereof and the properties
and risks covered thereby.
0.6.1.9 TAXES. Except to the extent that the validity or
amount thereof is being contested in good faith and by appropriate
proceedings, the Borrower will, and will cause each of its Subsidiaries, to
pay and discharge all Taxes prior to the date when the failure to pay such
Taxes will give rise to a Default or an Event of Default. The Borrower
shall furnish to the Agent at such times as the Agent may require proof
satisfactory to the Agent of the making of payments or deposits required by
applicable Laws including, without limitation, payments or deposits with
respect to amounts withheld by the Borrower and/or any Subsidiary Guarantor
from wages and salaries of employees and amounts contributed by the
Borrower and/or any Subsidiary Guarantor on account of federal and other
income or wage taxes and amounts due under the Federal Insurance
Contributions Act, as amended.
0.6.1.10 ERISA. The Borrower will, and will cause each of
its Subsidiaries and Affiliates to, comply with the funding requirements of
ERISA with respect to employee pension benefit plans for its respective
employees. The Borrower will not permit, and will not allow any Subsidiary
to permit, with respect to any employee benefit plan or plans covered by
Title IV of ERISA (a) any prohibited transaction or transactions under
ERISA or the Internal Revenue Code, which results, or would result, in any
material liability of the Borrower and/or any of its Subsidiaries and
Affiliates, or (b) any Reportable Event if, upon termination of the plan or
plans with respect to which one or more such Reportable Events shall have
occurred, there is or would be any material liability of the Borrower
and/or any of its Subsidiaries and Affiliates to the PBGC. Upon the
Agent's request, the Borrower will deliver to the Agent a copy of the most
recent actuarial report, financial statements and annual report completed
with respect to any "defined benefit plan", as defined in ERISA.
0.6.1.11 NOTIFICATION OF EVENTS OF DEFAULT AND ADVERSE
DEVELOPMENTS.
The Borrower shall promptly notify the Agent and the Lenders upon
obtaining knowledge of the occurrence of:
(a) any Event of Default;
(b) any Default;
(c) any litigation instituted or threatened against the
Borrower or any of its Subsidiaries and of the entry of any judgment
or Lien (other than any Permitted Liens) against any of the assets or
properties of the Borrower or any Subsidiary where the claims against
the Borrower or any Subsidiary exceed One Million Dollars ($1,000,000)
and are not covered by insurance;
(d) the receipt by the Borrower or any Subsidiary
Guarantor of any notice, claim or demand from any Governmental
Authority which alleges that the Borrower or any Subsidiary Guarantor
is in material violation of any of the terms of, or has failed to
comply with any applicable material Laws regulating its operation and
business, including, but not limited to, the Occupational Safety and
Health Act and the Environmental Protection Act, the noncompliance
with which would have a materially adverse effect on the Borrower and
the Subsidiary Guarantors, taken as a whole;
(e) the proposed and actual closing and consummation of
the BTP/Borrower Transaction, the BIC/Borrower Transaction, and the
Loan Restructuring Transaction or the inability or failure to close
and consummate any aspect of the BTP/Borrower Transaction or the
BIC/Borrower Transaction for any reason as and when required by the
provisions of this Agreement; and
(f) any other development in the business or affairs of
the Borrower or any of its Subsidiaries which is materially adverse to
the Borrower and its Subsidiaries taken as a whole;
in each case describing in detail satisfactory to the Agent the nature
thereof and the action the Borrower or any Subsidiary, as the case may be,
proposes to take, if any, with respect thereto.
0.6.1.12 HAZARDOUS MATERIALS; CONTAMINATION. The Borrower
agrees to:
(a) give notice to the Agent immediately upon
acquiring knowledge of the presence of any Hazardous Materials or
any Hazardous Materials Contamination on any property owned,
operated or controlled by the Borrower or any Subsidiary
Guarantor or for which the Borrower or any Subsidiary Guarantor
is, or is claimed to be, responsible (provided that such notice
shall not be required for Hazardous Materials placed or stored on
such property in accordance with applicable Laws in the ordinary
course (including, without limitation, quantity) of the line of
business expressly described in this Agreement or as described in
any Phase I environmental assessments expressly referenced herein
or in any schedule attached hereto), with a full description
thereof;
(b) promptly comply with any Laws, the
noncompliance with which would have a materially adverse effect
on the Borrower and the Subsidiary Guarantors, taken as a whole
or on the value of any material portion of the Collateral or the
ability of the Agent to realize upon the value of any such
Collateral requiring the removal, treatment or disposal of
Hazardous Materials or Hazardous Materials Contamination and
provide the Agent with reasonably satisfactory evidence of such
compliance;
(c) as part of the Obligations, defend, indemnify
and hold harmless the Agent, each of the Lenders and each of
their respective agents, employees, trustees, successors and
assigns from any and all claims which may now or in the future
(whether before or after the termination of this Agreement) be
asserted as a result of the presence of any Hazardous Materials
or any Hazardous Materials Contamination on any property owned,
operated or controlled by the Borrower or any Subsidiary
Guarantor for which the Borrower or any Subsidiary Guarantor is,
or is claimed to be, responsible which claims relate to the
financing and/or Liens contemplated by this Agreement, but which
claims do not arise out of the gross negligence or willful
misconduct of the Agent or any of the Lenders. The Borrower
acknowledges and agrees that this indemnification shall survive
the termination of this Agreement and the Commitments and the
payment and performance of all of the other Obligations.
(d) Within two (2) months of the Closing Date, (i)
use its commercially reasonable efforts to cause the removal of a
sump pump at the Aeroquip facility, located at Lawrence, Kansas;
and (ii) furnish to the Agent such reports and other information
as shall be available to the Borrower regarding the removal of
impacted contaminated soils located at the Evansville, Indiana
property at the drum storage pad and waste oil tank area based on
a delineation of the scope and extent of contamination; and
(e) Within nine (9) months of the Closing Date
produce a report from a qualified environmental consultant, who
is reasonably acceptable to the Agent and who certifies as to the
removal of impacted soils from the Reno, Nevada location (as
identified in ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Inc.'s Phase II Environmental
Site Assessment, dated January 13, 1997) exhibiting TPH
concentrations that exceed the State of Nevada action level of
100 mg/kg.
0.6.1.13 FINANCIAL COVENANTS.
(a) TANGIBLE CAPITAL FUNDS. The Borrower and
each of the Subsidiary Guarantors, on a consolidated basis, will
attain a Tangible Capital Funds of not less than the following amounts
as of the following dates:
DATE AMOUNT
March 31, 1997 $47,000,000
June 30, 1997 $48,000,000
September 30, 1997 $49,000,000
December 31, 1997 $51,600,000
March 31, 1998 $52,000,000
June 30, 1998 $54,000,000
September 30, 1998 $56,000,000
December 31, 1998 $58,300,000
March 31, 1999 $59,000,000
June 30, 1999 $62,500,000
September 30, 1999 $64,000,000
December 31, 1999 $67,000,000
March 31, 2000 $69,000,000
June 30, 2000 $73,000,000
September 30, 2000 $75,000,000
December 31, 2000 $77,500,000
March 31, 2001 $79,000,000
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June 30, 2001 $81,000,000
September 30, 2001 $85,000,000
December 31, 2001 $88,000,000
(b) FUNDED DEBT TO EBITDA . The Borrower and
each Subsidiary Guarantor, on a consolidated basis, will not at any
time permit the ratio of (x) Funded Debt to (y) EBITDA, for the prior
twelve (12) month period, to be greater than the following amounts as
of the following dates:
DATE RATIO
March 31, 1997 4.50 to 1.00
June 30, 1997 4.50 to 1.00
September 30, 1997 4.50 to 1.00
December 31, 1997 4.50 to 1.00
March 31, 1998 4.00 to 1.00
June 30, 1998 4.00 to 1.00
September 30, 1998 3.75 to 1.00
December 31, 1998 3.50 to 1.00
March 31, 1999 3.50 to 1.00
June 30, 1999 3.50 to 1.00
September 30, 1999 3.50 to 1.00
December 31, 1999 3.50 to 1.00
March 31, 2000 3.50 to 1.00
June 30, 2000 3.50 to 1.00
September 30, 2000 3.50 to 1.00
December 31, 2000 2.50 to 1.00
March 31, 2001 2.50 to 1.00
June 30, 2001 2.50 to 1.00
September 30, 2001 2.50 to 1.00
December 31, 2001 2.00 to 1.00
(c) INTEREST COVERAGE RATIO. The Borrower and
each Subsidiary Guarantor will maintain, on a consolidated basis and
tested as of the last day of each fiscal quarter in each fiscal year
for the three (3), six (6), nine (9) or twelve (12) month period of
such fiscal year, as appropriate, ending on that date, an Interest
Coverage Ratio of not less than the following amounts as of the
following dates:
PERIOD RATIO
March 31, 1997 1.30 to 1.00
June 30, 1997 1.75 to 1.00
September 30, 1997 2.00 to 1.00
December 31, 1997 2.00 to 1.00
March 31, 1998 1.50 to 1.00
June 30, 1998 2.20 to 1.00
September 30, 1998 2.25 to 1.00
December 31, 1998 2.50 to 1.00
March 31, 1999 1.75 to 1.00
June 30, 1999 2.50 to 1.00
September 30, 1999 2.75 to 1.00
December 31, 1999 2.75 to 1.00
March 31, 2000 1.75 to 1.00
June 30, 2000 2.50 to 1.00
September 30, 2000 2.75 to 1.00
December 31, 2000 3.00 to 1.00
March 31, 2001 1.75 to 1.00
June 30, 2001 2.50 to 1.00
September 30, 2001 2.75 to 1.00
December 31, 2001 3.00 to 1.00
(d) FIXED CHARGE COVERAGE RATIO. The Borrower
and each of the Subsidiary Guarantor will maintain, on a consolidated
basis and tested as of the last day of each fiscal quarter in each
fiscal year for the three (3), six (6), nine (9) or twelve (12) month
period of such fiscal year, as appropriate, ending on that date, a
Fixed Charge Coverage Ratio of not less than the following amounts as
of the following dates:
PERIOD RATIO
June 30, 1997 0.10 to 1.00
September 30, 1997 0.50 to 1.00
December 31, 1997 1.00 to 1.00
June 30, 1998 0.50 to 1.00
September 30, 1998 0.70 to 1.00
December 31, 1998 1.00 to 1.00
March 31, 1999 0.50 to 1.00
June 30, 1999 1.00 to 1.00
September 30, 1999 1.00 to 1.00
December 31, 1999 1.10 to 1.00
March 31, 2000 0.50 to 1.00
June 30, 2000 1.00 to 1.00
September 30, 2000 1.00 to 1.00
December 31, 2000 1.15 to 1.00
March 31, 2001 1.00 to 1.00
June 30, 2001 1.00 to 1.00
September 30, 2001 1.00 to 1.00
December 31, 2001 1.15 to 1.00
0.6.1.14 COLLECTION OF ACCOUNTS. Until the occurrence
of an Event of Default, the Borrower and its Subsidiaries shall at
their own expense have the privilege for the account of, and in trust
for, the Agent and the Lenders of collecting their Accounts and
receiving in respect thereto all Items of Payment and shall otherwise
completely service all of the Accounts including (a) the billing,
posting and maintaining of complete records applicable thereto, (b)
the taking of such action with respect to the Accounts as each of the
Borrower and each of the Subsidiaries may deem advisable; and (c) the
granting, in the ordinary course of business, to any Account Debtor,
any rebate, refund or adjustment to which the Account Debtor may be
lawfully entitled, and may accept, in connection therewith, the return
of goods, the sale or lease of which shall have given rise to an
Account and may take such other actions relating to the settling of
any Account Debtor's claim as may be commercially reasonable. The
Agent may, at its option, at any time or from time to time after and
during the continuance of an Event of Default hereunder, revoke the
collection privilege given in this Agreement to the Borrower and its
Subsidiaries by either giving notice of its assignment of, and Lien on
the Collateral to the Account Debtors or giving notice of such
revocation to the Borrower. The Agent shall not have any duty to, and
the Borrower hereby releases the Agent and the Lenders from all claims
of loss or damage caused by the delay or failure to collect or enforce
any of the Accounts or to preserve any rights against any other party
with an interest in the Collateral, unless due to the gross negligence
or willful misconduct of the Agent and/or any of the Lenders.
0.6.1.15 GOVERNMENT ACCOUNTS. The Borrower will
immediately notify the Agent if any of the Accounts arise out of
contracts with the United States or with any other Governmental
Authority, which Accounts, individually or in the aggregate, exceed
One Hundred Thousand Dollars ($100,000) and, as appropriate, execute
and, cause each Subsidiary Guarantor to execute, any Financing
Documents and take any steps required by the Agent in order to comply
with the Federal Assignment of Claims Act or any other applicable
Laws.
0.6.1.16 INVENTORY. With respect to the Inventory,
the Borrower and its Subsidiaries will keep correct and accurate
records itemizing and describing the kind, type, and quantity of
Inventory, the Borrower's and Subsidiaries' cost therefor and the
selling price thereof, all of which records shall be available to the
officers, employees or agents of the Agent upon demand for inspection
and copying thereof. The Borrower and its Subsidiaries shall be
permitted to sell Inventory in the ordinary course of business until
such time as the Agent notifies the Borrower to the contrary following
the occurrence of an Event of Default.
0.6.1.17 INSURANCE WITH RESPECT TO EQUIPMENT AND
INVENTORY.
The Borrower will (a) maintain and cause each of its Subsidiaries
to maintain hazard insurance with fire and extended coverage and
naming the Agent as an additional insured with loss payable to the
Agent as its respective interest may appear on the Equipment and
Inventory in an amount at least equal to the fair market value of the
Equipment and Inventory (but in any event sufficient to avoid any co-
insurance obligations) and with a specific endorsement to each such
insurance policy pursuant to which the insurer agrees to give the
Agent at least thirty (30) days written notice before any alteration
or cancellation of such insurance policy and that no act or default of
the Borrower or any Subsidiary shall affect the right of the Agent to
recover under such policy in the event of loss or damage; and (b)
file, and cause each of its Subsidiaries to file, with the Agent, upon
its request, a detailed list of the insurance then in effect and
stating the names of the insurance companies, the amounts and rates of
the insurance, dates of the expiration thereof and the properties and
risks covered thereby.
0.6.1.18 MAINTENANCE OF THE COLLATERAL. Except as
permitted by Section 6.2.1, the Borrower will maintain, and will cause
each of the Subsidiary Guarantors to maintain, the Collateral in good
working order, saving and excepting ordinary wear and tear.
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0.6.1.19 DEFENSE OF TITLE AND FURTHER ASSURANCES.
At its expense, the Borrower will defend the title to the
Collateral (and any part thereof), and will immediately execute,
acknowledge and deliver and, cause each Subsidiary Guarantor to
execute, acknowledge and deliver, any financing statement, renewal,
affidavit, deed, assignment, continuation statement, security
agreement, certificate or other document which the Agent may require
in order to perfect, preserve, maintain, continue, protect and/or
extend the Lien or security interest granted or required to be granted
to the Agent, for the benefit of the Lenders ratably and the Agent,
under the terms of this Agreement and/or under any of the other
Financing Documents and the first priority of that Lien, subject only
to the Permitted Liens. The Borrower will from time to time do, and,
will cause each of the Subsidiary Guarantors to do, whatever the Agent
may reasonably require by way of obtaining, executing, delivering,
and/or filing financing statements, landlords' or mortgagees' waivers,
notices of assignment and other notices and amendments and renewals
thereof and the Borrower will take and, will cause each of the
Subsidiary Guarantors to take, any and all steps and observe such
formalities as the Agent may require, in order to create and maintain
a valid Lien upon, pledge of, or paramount security interest in
(subject only to Permitted Liens), the Collateral (including as and to
the extent required to comply with the provisions of Section 3.7 of
this Agreement), subject only to the Permitted Liens. The Agent
understands and will require that the Borrower only use commercially
reasonable efforts to obtain landlord's and mortgagee's waivers
requested by the Agent. The Borrower shall pay to the Agent on demand
all taxes, costs and expenses incurred by the Agent in connection with
the preparation, execution, recording and filing of any such document
or instrument. To the extent that the proceeds of any of the Accounts
are expected to become subject to the control of, or in the possession
of, a party other than the Borrower or a Subsidiary Guarantor or the
Agent, the Borrower shall use commercially reasonable efforts to cause
all such parties to execute and deliver security documents, financing
statements or other documents as requested by the Agent and as may be
necessary to evidence and/or perfect the security interest of the
Agent, for the benefit of the Lenders ratably and the Agent in those
proceeds. The Borrower agrees that a copy of a fully executed
security agreement and/or financing statement shall be sufficient to
satisfy for all purposes the requirements of a financing statement as
set forth in Article 9 of the applicable Uniform Commercial Code. The
Borrower hereby irrevocably appoints the Agent as the Borrower's
attorney-in-fact, with power of substitution, in the name of the Agent
or in the name of the Borrower or otherwise, for the use and benefit
of the Agent for itself and the Lenders, but at the cost and expense
of the Borrower and without notice to the Borrower, to execute and
deliver any and all of the instruments and other documents and take
any action which the Lender may require pursuant to the foregoing
provisions of this Section 6.1.19.
0.6.1.20 BUSINESS NAMES; LOCATIONS. The Borrower will
notify and cause each of the Subsidiary Guarantors to notify the Agent
not less than thirty (30) days prior to (a) any change in the name
under which the Borrower or the applicable Subsidiary Guarantor
conducts its business, (b) any change of the location of the chief
executive office of the applicable Borrower or Subsidiary Guarantor,
and (c) the opening of any new place of business, and (d) any change
in the location of the places where the Collateral, or any part
thereof, or the books and records, or any part thereof, are kept to
the extent any such change in location would in and of itself then or
with the passage of time result in any Lien of the Agent and the
Lenders not being perfected unless action is taken by the Agent and/or
any other Person to continue, extend or effect the perfection of such
Lien.
0.6.1.21 SUBSEQUENT OPINION OF COUNSEL AS TO RECORDING
REQUIREMENTS.
In the event that the Borrower or any Subsidiary Guarantor shall
transfer its principal place of business or the office where it keeps
its records pertaining to the Collateral, upon the Agent's reasonable
request the Borrower will provide to the Agent a subsequent opinion of
counsel as to the filing, recording and other requirements with which
the Borrower and the Subsidiary Guarantors have complied to maintain
the Lien and security interest in favor of the Agent, for the ratable
benefit of the Lenders and for the benefit of the Agent with respect
to the Agent's Obligations, in the Collateral.
0.6.1.22 USE OF PREMISES AND EQUIPMENT. The Borrower
agrees that until the Obligations are fully paid and all of the
Commitments and the Letters of Credit and Bond Letters of Credit have
been terminated or have expired, the Agent (a) after and during the
continuance of a Default or an Event of Default, may use the
Borrower's owned or leased lifts, hoists, trucks and other facilities
or equipment for handling or removing the Collateral; and (b) shall
have, and is hereby granted, a right of ingress and egress to the
places where the Collateral is located, and may proceed over and
through the Borrower's owned or leased property.
0.6.1.23 PROTECTION OF COLLATERAL. The Borrower
agrees that the Agent may at any time following an Event of Default
take such steps as the Agent deems reasonably necessary to protect the
interest of the Agent and the Lenders in, and to preserve the
Collateral, including, the hiring of such security guards or the
placing of other security protection measures as the Agent deems
appropriate, may employ and maintain at the Borrower's premises a
custodian who shall have full authority to do all acts necessary to
protect the interests of the Agent and the Lenders in the Collateral.
The Borrower agrees to cooperate fully with the Agent's efforts to
preserve the Collateral and will take such actions to preserve the
Collateral as the Agent may reasonably direct. All of the Agent's
reasonable expenses of preserving the Collateral, including any
reasonable expenses relating to the compensation and bonding of a
custodian, shall part of the Enforcement Costs.
0.6.1.24 APPLICATION OF NET CASUALTY PROCEEDS. The
Borrower agrees that Net Casualty Proceeds with respect to any Assets
of the Borrower and/or any Subsidiary Guarantor must be applied to
either (a) the payment of the Obligations or (b) the repair,
replacement and/or restoration of the Assets affected, and without the
prior written consent of the Agent for no other purpose. The Agent
shall determine, in its sole discretion, the manner in which Net
Casualty Proceeds are to be applied if the amount of the Net Casualty
Proceeds exceeds, individually or in the aggregate, One Million
Dollars ($1,000,000) or if there exists a Default or an Event of
Default.
0.6.1.25 BTP/BORROWER TRANSACTION. The Borrower
agrees to close and consummate the BTP/Borrower Transaction as soon as
commercially possible, but in any event within sixty (60) days of the
Closing Date. The BTP/Borrower Transaction shall be closed and
consummated in accordance with all applicable Laws and on terms and
conditions reasonably acceptable to the Agent. The Borrower agrees to
furnish to the Agent copies of all BTP/Borrower Transaction Documents
as soon as available (including, without limitation, articles of
merger, if applicable) and such other information and items as the
Agent may reasonably request with respect to the BTP/Borrower
Transaction.
If the BTP/Borrower Transaction consists of a merger of BTP and
the Borrower, then (i) the Borrower must be the surviving corporation,
(ii) contemporaneously with the closing and consummation of the
BTP/Borrower Transaction, the Borrower shall execute and deliver to
the Agent, at the Borrower's expense, such additional Security
Documents as the Agent shall reasonably require to continue, grant,
confirm, affirm, ratify and extend the Lien of the Agent and the
Lenders on all Assets formerly owned by BTP, including, without
limitation, Security Documents which shall provide that all such
Assets shall secure repayment of all Obligations, (iii) the Agent
shall have received as soon as available, but in any event within ten
(10) days of the closing of the BTP/Borrower Transaction:
(a) a certificate of good standing certified by the
Secretary of State, or other appropriate Governmental Authority
of the Borrower's state of incorporation, dated subsequent to the
effective date of the BTP/Borrower Transaction;
(b) a certificate dated as of the effective date of the
BTP/Borrower Transaction by the Secretary or an Assistant
Secretary of the Borrower covering (1) true and complete copies
of the articles of merger and all amendments to the Borrower's
corporate charter and bylaws, if any, after the Closing Date, (2)
true and complete copies of the resolutions of the Board of
Directors of the Borrower and BTP, as appropriate, authorizing
(i) the closing and consummation of the BTP/Borrower Transaction,
(ii) the execution, delivery and performance of the Security
Documents required by the Agent in connection with the
BTP/Borrower Transaction, and (iii) the granting and/or
ratification of the Liens contemplated by the Security Documents;
and
(c) the favorable opinion of counsel for the Borrower and
BTP addressed to the Agent and the Lenders in form and content
satisfactory to the Agent opining as to (i) the due authorization
of the execution and delivery of the Security Documents required
by the Agent in connection with the BTP/Borrower Transaction and
all BTP/Borrower Transaction Documents, (ii) the validity,
binding nature and enforceability of all such Security Documents
and BTP/Borrower Transaction Documents, and (iii) such other
matters as the Agent may reasonably require.
If the BTP/Borrower Transaction consists of a sale-leaseback
transaction, then (i) all Assets of BTP (other than Inventory,
Accounts and General Intangibles) must be sold to the Borrower for
fair value and thereafter immediately leased back to BTP in accordance
with the terms of a written lease agreement reasonably acceptable to
the Agent, (ii) contemporaneously with the closing and consummation of
the BTP/Borrower Transaction, the Borrower and BTP, as appropriate,
shall execute and deliver to the Agent, at the Borrower's expense, (a)
such additional Security Documents as the Agent shall reasonably
require to continue, grant, confirm, affirm, ratify and extend the
Lien of the Agent and the Lenders on all Assets formerly owned by BTP,
including, without limitation, Security Documents which shall provide
that all such Assets shall secure repayment of all Obligations and (b)
a written subordination agreement in form and content acceptable to
the Agent which shall provide for the subordination of BTP's lease of
the Assets to the Lien of the Agent and the Lenders, (iii) the Agent
shall have received as soon as available, but in any event within ten
(10) days of the closing of the BTP/Borrower Transaction:
(a) a certificate dated as of the effective date of the
BTP/Borrower Transaction by the Secretary or an Assistant
Secretary of the Borrower and BTP covering true and complete
copies of the resolutions of the Board of Directors of the
Borrower and BTP, as appropriate, authorizing (i) the closing and
consummation of the BTP/Borrower Transaction, (ii) the execution,
delivery and performance of the Security Documents required by
the Agent in connection with the BTP/Borrower Transaction and all
other agreements, documents and instruments required to close and
consummate the BTP/Borrower Transaction, including, without
limitation, all bills of sale, deeds, and leases, and (iii) the
granting and/or ratification of the Liens contemplated by the
Security Documents; and
(b) the favorable opinion of counsel for the Borrower and
BTP addressed to the Agent and the Lenders in form and content
satisfactory to the Agent opining as to (i) the due authorization
of the execution and delivery of the Security Documents required
by the Agent in connection with the BTP/Borrower Transaction and
the BTP/Borrower Transaction Documents, (ii) the validity,
binding nature and enforceability of all such Security Documents
and BTP/Borrower Transaction Documents, and (iii) such other
matters as the Agent may reasonably require.
Notwithstanding the foregoing, the Agent and the Lenders agree that if
the Borrower consummates the Loan Restructuring Transaction in
accordance with the provisions of this Agreement, the Borrower shall
not be required to consummate the BTP/Borrower Transaction pursuant to
this Section 6.1.25. In addition, if the Borrower consummates the
BTP/Borrower Transaction, and then subsequently consummates the Loan
Restructuring Transaction, the Borrower shall be permitted to take
such actions as may be appropriate to unwind the BTP/Borrower
Transaction; provided, that after giving effect to any such actions to
unwind the BTP/Borrower Transaction the Liens of the Agent and the
Lenders on all Assets of the Borrower and each Subsidiary Guarantor
and the respective obligations of the Borrower and the Subsidiary
Guarantors to the Agent and the Lenders shall continue uninterrupted
by any such actions in any material respect.
0.6.1.26 BIC/BORROWER TRANSACTION. The Borrower
agrees to close and consummate the BIC/Borrower Transaction as soon as
commercially possible, but in any event within one (1) year of the
Closing Date. The BIC/Borrower Transaction shall be closed and
consummated in accordance with all applicable Laws and on terms and
conditions reasonably acceptable to the Agent. The Borrower agrees to
furnish to the Agent copies of all BIC/Borrower Transaction Documents
as soon as available (including, without limitation, articles of
merger, if any) and such other information and items as the Agent may
reasonably request with respect to the BIC/Borrower Transaction.
If the BIC/Borrower Transaction consists of a merger of BIC and
the Borrower, then (i) the Borrower must be the surviving corporation,
(ii) contemporaneously with the closing and consummation of the
BIC/Borrower Transaction, the Borrower shall execute and deliver to
the Agent, at the Borrower's expense, such additional Security
Documents as the Agent shall reasonably require to continue, grant,
confirm, affirm, ratify and extend the Lien of the Agent and the
Lenders on all Assets formerly owned by BIC, including, without
limitation, Security Documents which shall provide that all such
Assets shall secure repayment of all Obligations, (iii) the Agent
shall have received as soon as available, but in any event within ten
(10) days of the closing of the BIC/Borrower Transaction:
(a) a certificate of good standing certified by the
Secretary of State, or other appropriate Governmental Authority
of the Borrower's state of incorporation, dated subsequent to the
effective date of the BIC/Borrower Transaction;
(b) a certificate dated as of the effective date of the
BIC/Borrower Transaction by the Secretary or an Assistant
Secretary of the Borrower covering (1) true and complete copies
of the articles of merger and all amendments to the Borrower's
corporate charter and bylaws, if any, after the Closing Date, (2)
true and complete copies of the resolutions of the Board of
Directors of the Borrower and BIC, as appropriate, authorizing
(i) the closing and consummation of the BIC/Borrower Transaction,
(ii) the execution, delivery and performance of the Security
Documents required by the Agent in connection with the
BIC/Borrower Transaction, and (iii) the granting and/or
ratification of the Liens contemplated by the Security Documents;
and
(c) the favorable opinion of counsel for the Borrower and
BIC addressed to the Agent and the Lenders in form and content
satisfactory to the Agent opining as to (i) the due authorization
of the execution and delivery of the Security Documents required
by the Agent in connection with the BIC/Borrower Transaction and
the BIC/Borrower Transaction Documents, (ii) the validity,
binding nature and enforceability of all such Security Documents
and the BIC/Borrower Transaction Documents, and (iii) such other
matters as the Agent may reasonably require.
If the BIC/Borrower Transaction consists of a sale-leaseback
transaction, then (i) all Assets of BIC (other than Inventory,
Accounts and General Intangibles) must be sold to the Borrower for
fair value and thereafter immediately leased back to BIC in accordance
with the terms of a written lease agreement reasonably acceptable to
the Agent, (ii) contemporaneously with the closing and consummation of
the BIC/Borrower Transaction, the Borrower and BIC, as appropriate,
shall execute and deliver to the Agent, at the Borrower's expense, (a)
such additional Security Documents as the Agent shall reasonably
require to continue, grant, confirm, affirm, ratify and extend the
Lien of the Agent and the Lenders on all Assets formerly owned by BIC,
including, without limitation, Security Documents which shall provide
that all such Assets shall secure repayment of all Obligations and (b)
a written subordination agreement in form and content acceptable to
the Agent which shall provide for the subordination of BIC's lease of
the Assets to the Lien of the Agent and the Lenders, (iii) the Agent
shall have received as soon as available, but in any event within ten
(10) days of the closing of the BIC/Borrower Transaction:
(a) a certificate dated as of the effective date of the
BIC/Borrower Transaction by the Secretary or an Assistant
Secretary of the Borrower and BIC covering true and complete
copies of the resolutions of the Board of Directors of the
Borrower and BIC, as appropriate, authorizing (i) the closing and
consummation of the BIC/Borrower Transaction, (ii) the execution,
delivery and performance of the Security Documents required by
the Agent in connection with the BIC/Borrower Transaction and all
other agreements, documents and instruments required to close and
consummate the BIC/Borrower Transaction, including, without
limitation, all bills of sale, deeds, and leases, and (iii) the
granting and/or ratification of the Liens contemplated by the
Security Documents; and
(b) the favorable opinion of counsel for the Borrower and
BIC addressed to the Agent and the Lenders in form and content
satisfactory to the Agent opining as to (i) the due authorization
of the execution and delivery of the Security Documents required
by the Agent in connection with the BIC/Borrower Transaction and
the BIC/Borrower Transaction Documents, (ii) the validity,
binding nature and enforceability of all such Security Documents
and BIC/Borrower Transaction, and (iii) such other matters as the
Agent may reasonably require.
If the BIC/Borrower Transaction consists of a sale of all or
substantially all of the Assets of BIC, without a lease back of any
Assets to BIC, then (i) all Assets of BIC must be sold to the Borrower
for fair value and in accordance with all applicable Laws, (ii)
contemporaneously with the closing and consummation of the
BIC/Borrower Transaction, the Borrower and BIC, as appropriate, shall
execute and deliver to the Agent, at the Borrower's expense, (a) such
additional Security Documents as the Agent shall reasonably require to
continue, grant, confirm, affirm, ratify and extend the Lien of the
Agent and the Lenders on all Assets formerly owned by BIC, including,
without limitation, Security Documents which shall provide that all
such Assets shall secure repayment of all Obligations and (b) bills of
sale, deeds and assignments and such other documents which effect a
transfer of title, all to be in form in form and content acceptable to
the Agent, (iii) the Agent shall have received as soon as available,
but in any event within ten (10) days of the closing of the
BIC/Borrower Transaction:
(a) a certificate dated as of the effective date of the
BIC/Borrower Transaction by the Secretary or an Assistant
Secretary of the Borrower and BIC covering true and complete
copies of the resolutions of the Board of Directors of the
Borrower and BIC, as appropriate, authorizing (i) the closing and
consummation of the BIC/Borrower Transaction, (ii) the execution,
delivery and performance of the Security Documents required by
the Agent in connection with the BIC/Borrower Transaction and all
other agreements, documents and instruments required to close and
consummate the BIC/Borrower Transaction, including, without
limitation, all bills of sale, and deeds, and (iii) the granting
and/or ratification of the Liens contemplated by the Security
Documents; and
(b) the favorable opinion of counsel for the Borrower and
BIC addressed to the Agent and the Lenders in form and content
satisfactory to the Agent opining as to (i) the due authorization
of the execution and delivery of the Security Documents required
by the Agent in connection with the BIC/Borrower Transaction and
all BIC/Borrower Transaction Documents, (ii) the validity,
binding nature and enforceability of all such Security Documents
and BIC/Borrower Transaction Documents, and (iii) such other
matters as the Agent may reasonably require.
Notwithstanding the foregoing, the Agent and the Lenders agree that if
the Borrower consummates the Loan Restructuring Transaction in
accordance with the provisions of this Agreement, the Borrower shall
not be required to consummate the BIC/Borrower Transaction pursuant to
this Section 6.1.26. In addition, if the Borrower consummates the
BIC/Borrower Transaction, and then subsequently consummates the Loan
Restructuring Transaction, the Borrower shall be permitted to take
such actions as may be appropriate to unwind the BIC/Borrower
Transaction; provided, that after giving effect to any such actions to
unwind the BIC/Borrower Transaction the Liens of the Agent and the
Lenders on all Assets of the Borrower and each Subsidiary Guarantor
and the respective obligations of the Borrower and the Subsidiary
Guarantors to the Agent and the Lenders shall continue uninterrupted
by any such actions in any material respect.
SECTION 0.6.2 NEGATIVE COVENANTS. So long as any of the
Obligations or the Commitments or Letters of Credit or Bond Letters of
Credit shall be outstanding, the Borrower agrees with the Agent and
the Lenders that:
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0.6.2.1 CAPITAL STRUCTURE, MERGER, ACQUISITION OR
SALE OF ASSETS.
Except as otherwise permitted by the provisions of Section
6.2.3, the Borrower will not alter or amend, or permit any Subsidiary
Guarantor to alter or amend, its capital structure, authorize any
additional class of equity, issue any stock or equity of any class,
enter into any merger or consolidation or amalgamation, windup or
dissolve themselves (or suffer any liquidation or dissolution) or
acquire all or substantially all the Assets of any Person, or sell,
lease or otherwise dispose of any of its Assets; except that prior to
the occurrence of a Default or an Event of Default, the following
shall be permitted:
(a) Permitted Acquisitions;
(b) Permitted Asset Dispositions;
(c) mergers or consolidations (i) among and between the
Borrower and/or any Subsidiary Guarantor and (ii) among and
between any Subsidiaries of the Borrower other than Subsidiary
Guarantors; provided, that after closing and consummation of any
such merger or consolidation involving the Borrower or any
Subsidiary Guarantor (x) the Borrower is the surviving entity if
the Borrower is a party to such merger or consolidation, (y) the
Agent and the Lenders retain a first priority Lien on, and
assignment of, one hundred percent (100%) of the capital stock of
all surviving Subsidiary Guarantors, subject only to Permitted
Liens, and a first priority Lien on all of the Assets of the
Borrower and of each surviving Subsidiary Guarantor which had
been pledged or required to be pledged under the provisions of
this Agreement prior to such merger or consolidation, subject
only to Permitted Liens, and (z) in any merger or consolidation
involving only Subsidiary Guarantors, the surviving entity
qualifies or continues to qualify as a Subsidiary Guarantor in
accordance with the provisions of Section 6.2.2 of this
Agreement;
(d) investments as and to the extent permitted by the
provisions of Section 6.2.5 of this Agreement, including, without
limitation, the issuance of equity by any Subsidiary to the
Borrower or another Subsidiary;
(e) the use and disposition of Net Casualty Proceeds,
but only as and to the extent permitted by the provisions of
Section 6.1.24 of this Agreement;
(f) the sale of any Assets purchased by the Borrower
under the provisions of the Container Purchase Agreement, except
to the extent that any such Assets are at any time included in
the Borrowing Base;
(g) the BTP/Borrower Transaction; and
(h) the BIC/Borrower Transaction.
Any consent of the Agent to an Asset disposition which does not
constitute a Permitted Asset Disposition may be conditioned on a
specified use of the Net Proceeds generated by such Asset Disposition.
0.6.2.2 SUBSIDIARIES. The Borrower will not create
or acquire, or permit any Subsidiary to create or acquire, any
Subsidiaries other than (i) the Subsidiaries identified on the
Collateral Disclosure List as of the Closing Date and (ii) the
creation or acquisition of Subsidiary Guarantors. In order to
qualify, after the Closing Date, as a Subsidiary Guarantor under the
provisions of this Agreement, a Subsidiary must (i) be an acquisition
permitted by the provisions of this Agreement or be created solely to
consummate an acquisition permitted by the provisions of this
Agreement, (ii) execute and deliver to the Agent a guaranty agreement
substantially in the form of the Guaranty, (iii) grant to the Agent
and the Lenders a first priority Lien on all Assets and property of
such Subsidiary, subject only to Permitted Liens, all in accordance
with the terms of one or more Financing Documents as and to the extent
reasonably required by the Agent, and (iv) be a domestic Subsidiary.
0.6.2.3 PURCHASE OR REDEMPTION OF SECURITIES,
DIVIDEND RESTRICTIONS.
The Borrower will not (i) purchase, redeem or otherwise acquire,
or permit any Subsidiary to purchase, redeem or otherwise acquire, any
shares of the Borrower's capital stock or warrants now or hereafter
outstanding, (ii) declare or pay any Distributions (other than stock
dividends) or set aside any funds therefor, or (iii) apply any of its
property or Assets to the purchase, redemption or other retirement of,
set apart any sum for the payment of any Distributions on, or for the
purchase, redemption, or other retirement of, make any Distributions
by reduction of capital or otherwise in respect of, any shares of any
class of capital stock or warrants of the Borrower, except for (i)
Distributions by the Borrower to the Parent pursuant to a certain Tax
Sharing Agreement dated as of April 21, 1994 by and between the
Borrower and the Parent, as amended through the Closing Date, and as
the same may be further amended from time to time in a manner that is
not materially adverse to the Borrower, (ii) Distributions by the
Borrower to the Parent to enable the Parent to pay its operating and
administrative expenses, including, without limitation, directors
fees, legal and audit expenses, Securities and Exchange Commission
compliance expenses and corporate franchise and other Taxes, not to
exceed in any fiscal year Five Hundred Thousand Dollars ($500,000),
(iii) Distributions by the Borrower to the Parent to pay management
fees not to exceed Seven Hundred Fifty Thousand Dollars ($750,000) in
any fiscal year of the Borrower, and (iv) Distributions to the Parent
to enable the Parent to repurchase any capital stock owned by any
Person employed by the Parent and/or the Borrower if such Person is no
longer so employed, provided, that the aggregate amount of
Distributions for this purpose shall not exceed One Million Dollars
($1,000,000) per annum.
0.6.2.4 INDEBTEDNESS. The Borrower will not create,
incur, assume or suffer to exist, or permit any Subsidiary to create,
incur, assume or suffer to exist, any Indebtedness for Borrowed Money,
except:
(a) the Obligations;
(b) current accounts payable arising in the
ordinary course;
(c) Indebtedness secured by Permitted Liens;
(d) Subordinated Indebtedness; provided that the
principal amount of all such Subordinated Indebtedness shall not
at any time exceed, in the aggregate, Twenty Million Dollars
($20,000,000);
(e) Indebtedness of the Borrower and/or any
Subsidiary existing on the date hereof and reflected on the
financial statements furnished pursuant to Section 4.1.11 (Financial
Condition);
(f) Unsecured letters of credit, bankers'
acceptances and/or (1) secured Interest Rate Protection
Agreements between the Borrower or a Subsidiary Guarantor and
NationsBank and/or (2) unsecured Interest Rate Protection
Agreements between the Borrower or a Subsidiary Guarantor and any
other financial institution, providing for the transfer or
mitigation of foreign exchange risks or interest rate risks
either generally or under specific contingencies;
(g) Indebtedness for Borrowed Money incurred by
the Borrower or any Subsidiary Guarantor incurred after the
Closing Date; provided, that (i) such Indebtedness for Borrowed
Money is incurred on account of purchase money or finance lease
arrangements of Assets (other than real property) acquired by the
Borrower or a Subsidiary Guarantor after the Closing Date, (ii)
each such purchase money or finance lease arrangement does not
exceed the cost of the Assets acquired or leased, (iii) any Lien
securing such purchase money or finance lease arrangement does
not extend to any Assets or property other than that purchased or
leased, and (iv) the aggregate amount of Indebtedness for
Borrowed Money under and in connection with all such purchase
money and/or finance lease arrangements shall not exceed, in the
aggregate, the sum of Five Hundred Thousand Dollars ($500,000);
(h) Capital Leases;
(i) Indebtedness for Borrowed Money of the
Borrower to any Guarantor or of any Guarantor to the Borrower or
any other Guarantor;
(j) Indebtedness for Borrowed Money as set forth
on Schedule of this Agreement;
(k) Other unsecured Indebtedness for Borrowed
Money in aggregate principal amount not to exceed at any time One
Million Dollars ($1,000,000); and
(l) Indebtedness permitted under the provisions
of Section 6.2.5.
(m) any refinancing, replacement, repurchase,
defeasance, redemption or refunding of any existing Indebtedness
for Borrowed Money permitted by the provisions of this Agreement;
provided, that (1) the principal amount of any Indebtedness for
Borrowed Money used to refinance, replace, repurchase, defease,
redeem or refund such existing Indebtedness for Borrowed Money
(each a "Refinancing Indebtedness") does not exceed the then
outstanding principal balance of the Indebtedness for Borrowed
Money so refinanced, replaced, repurchased, defeased, redeemed or
refunded, (2) the Weighted Average Life to Maturity of any
Refinancing Indebtedness is equal to or greater than the Weighted
Average Life to Maturity of the Indebtedness for Borrowed Money
being so refinanced, replaced, repurchased, defeased, redeemed or
refunded by the Refinancing Indebtedness, (3) the terms of the
Refinancing Indebtedness are not materially more restrictive or
limiting on the Borrower or any Subsidiary Guarantor, as the case
may be, than the terms of the Indebtedness for Borrowed Money
being refinanced, replaced, repurchased, defeased, redeemed or
refunded, as determined by the Agent in its reasonable
discretion, and (4) if and to the extent the Refinancing
Indebtedness is intended to refinance, replace, repurchase,
defeasance, redemption or refund Subordinated Indebtedness, then
the Refinancing Indebtedness is subordinated in right of payment
to the Obligations on terms at least as favorable to the Agent
and the Lenders as those then governing the Subordinated
Indebtedness to be refinanced, replaced, repurchased, defeased,
redeemed or refunded. As used herein, the term "Weighted Average
Life to Maturity" when applied to any Indebtedness for Borrowed
Money (including any Refinancing Indebtedness) means at any date,
the number of years obtained by dividing (a) the sum of the
products obtained by multiplying (x) the amount of each then
remaining installment, sinking fund, serial maturity or other
required payment of principal, including payment at final
maturity, in respect thereof, by (y) the number of years
(calculated to the nearest one-twelfth) that will elapse between
each such date and the making of each such payment, by (b) the
then outstanding principal amount of such Indebtedness for
Borrowed Money.
Notwithstanding the foregoing, neither the Borrower nor any Subsidiary
Guarantor shall be permitted to create, incur, assume or suffer to
exist any additional Indebtedness for Borrower Money at any time after
the occurrence of a Default or an Event of Default or if and to the
extent any such additional Indebtedness for Borrowed Money would give
rise to a Default or an Event of Default.
0.6.2.5 INVESTMENTS, LOANS AND OTHER TRANSACTIONS.
Except as otherwise provided in this Agreement, the Borrower will
not, and will not permit any of its Subsidiaries to, (a) make, assume,
acquire or continue to hold any investment in any real property
(unless used in connection with their business) or any Person, whether
by stock purchase, capital contribution, acquisition of Indebtedness
of such Person or otherwise (including, without limitation,
investments in any joint venture or partnership), except for (i)
Permitted Acquisitions, (ii) replacements of Assets which are the
subject of a Permitted Asset Disposition made pursuant to clause (f)
of the definition of Permitted Asset Disposition, (iii) those
investments existing as of the Closing Date and reflected on the
financial statements furnished pursuant to Section 4.1.11 (Financial
Condition), (iv) any investments in Cash Equivalents, which, if
requested by the Agent, are pledged to the Agent, for the ratable
benefit of the Lenders and for the benefit of the Agent with respect
to the Agent's Obligations, as collateral and security for the
Obligations (v) those investments more particularly set forth in
Schedule attached hereto and made a part hereof (the "Permitted
Investments"), (vi) the Borrower's acquisition, creation or ownership
of any Subsidiary Guarantor, including, the Borrower's existing or
additional capital contributions in any such Subsidiary Guarantor,
(vii) the receipt of Indebtedness for Borrowed Money by the Borrower
or any Subsidiary Guarantor which represents payment to the Borrower
or a Subsidiary Guarantor, as the case may be, of a portion of the
purchase price payable to the Borrower in connection with a Permitted
Asset Disposition; provided that, upon the Agent's demand, the
Borrower and/or the Subsidiary Guarantor, as the case may, shall take
all such actions as shall be reasonably requested by the Agent to
grant to the Agent for its benefit and the ratable benefit of the
Lenders a perfected Lien on any such Indebtedness for Borrowed Money
and provided further that the principal amount of all such
Indebtedness for Borrowed Money shall not exceed at any time in the
aggregate Five Hundred Thousand Dollars ($500,000), (viii) investments
permitted by Section 6.2.1, and (ix) the Borrower's acquisition of the
Assets of BTP as contemplated by the BTP/Borrower Transaction and/or
the Borrower's acquisition of the Assets of BIC as contemplated by the
BIC/Borrower Transaction, (b) guaranty or otherwise become
contingently liable for the Indebtedness or obligations of any Person,
except that the Borrower and any Subsidiary Guarantor shall be
permitted to guaranty (1) any Indebtedness for Borrowed Money of the
Borrower or any Subsidiary Guarantor otherwise permitted by the
provisions of Section 6.2.4 of this Agreement, (2) the endorsement of
negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business, (3) the obligations
of the Borrower under the Subordinated Debt and the Senior Secured
Debt, and (4) the Obligations, or (c) make any loans or advances, or
otherwise extend credit to any Person, except (1) any advance to an
officer or employee of the Borrower or any Subsidiary for travel or
other business expenses in the ordinary course of business, provided
that the aggregate amount of all such advances by all of the Borrower
and its Subsidiaries (taken as a whole) outstanding at any time shall
not exceed Five Hundred Thousand Dollars ($500,000), (2) trade credit
extended to customers in the ordinary course of business, and (3)
ordinary course working capital advances and loans to and from the
Borrower to any Guarantor and to and from any Guarantor to the
Borrower or any other Guarantor.
0.6.2.6 CAPITAL EXPENDITURES. Except for Permitted
Acquisitions and permitted reinvestments of Permitted Asset
Dispositions, the Borrower will not, and will not permit any
Subsidiary to, directly or indirectly, make any Capital Expenditures
in the aggregate for the Borrower and its Subsidiaries (taken as a
whole) in amount which exceed the following amounts at any time during
the following fiscal years (for each fiscal year, the "Capital
Expenditure Ceiling"):
FISCAL YEAR CAPITAL EXPENDITURE CEILING
1997 $22,500,000
1998 $21,000,000
1999 $21,000,000
2000 $23,000,000
2001 $25,000,000
If in any given fiscal year, the total Capital Expenditures of the
Borrower and its Subsidiaries, taken as a whole, are less than the
applicable Capital Expenditure Ceiling for that fiscal year, the
unused portion of the amount permitted for Capital Expenditures (the
"Carry Forward Amount') may be used to increase the applicable Capital
Expenditure Ceiling for the then next succeeding fiscal year. The
Carry Forward Amount for any given fiscal year cannot be carried
forward for more than one (1) fiscal year.
0.6.2.7 STOCK OF SUBSIDIARIES. The Borrower will not
sell or otherwise dispose of any shares of capital stock of any
Subsidiary (except as necessary or incident to any transaction
permitted by Sections 6.2.1 or 6.2.6 above) or permit any Subsidiary
to issue any additional shares of its capital stock except PRO RATA to
its stockholders.
0.6.2.8 SUBORDINATED INDEBTEDNESS. The Borrower will
not, and will not permit any Subsidiary to make:
(a) (i) any payment on account of the Subordinated
Debt in violation of the subordination provisions relating to
such Subordinated Debt, or (ii) any payment on account of any
other Subordinated Indebtedness in violation of the subordination
provisions relating to such Subordinated Indebtedness;
(b) any amendment or modification of to the
documents evidencing or securing the Subordinated Indebtedness,
other than as contemplated by the Loan Restructuring Transaction;
and
(c) any payment of principal or interest on the
Subordinated Indebtedness other than when due, except that
Subordinated Indebtedness may be prepaid, redeemed, repurchased,
refinanced, replaced, refunded or defeased from the proceeds of
any offering of Securities or Indebtedness by the Parent or the
Borrower; provided that at the time of such prepayment there does
not exist a Default or an Event of Default and provided that such
offering of Securities or Indebtedness is otherwise permitted by
the provisions of this Agreement.
0.6.2.9 LIENS. The Borrower agrees that it (a) will
not create, incur, assume or suffer to exist any Lien upon any of its
properties or Assets, whether now owned or hereafter acquired, or
permit any Subsidiary so to do, except for (i) Liens securing the
Obligations and (ii) Permitted Liens, (b) will not allow or suffer to
exist any Permitted Liens to be superior to Liens securing the
Obligations, or permit any Subsidiary so to do, except for (i)
statutory landlord's Liens with respect to which the Agent has not
obtained a landlord's waiver and subordination, (ii) existing Liens
securing Indebtedness for Borrowed Money under and in connection with
the Bonds, and (iii) Liens which have priority as a matter of law and
which do not otherwise constitute or give rise to a Default or an
Event of Default and for which the Agent has established a reserve
against the Borrowing Base in an amount to be determined by the Agent
in its reasonable discretion, (c) except as otherwise permitted by the
provisions of this Agreement, will not enter into any contracts for
the consignment of goods, will not execute or suffer the filing of any
financing statements or the posting of any signs giving notice of
consignments, and will not, as a material part of its business, engage
in the sale of goods belonging to others, or permit any Subsidiary so
to do, and (d) will not allow or suffer to exist the failure of any
Lien described in the Security Documents to attach to, and/or remain
at all times perfected on, any of the property described in the
Security Documents, except with respect to any Assets disposed of as
part of a Permitted Asset Disposition.
0.6.2.10 TRANSACTIONS WITH AFFILIATES. Neither the
Borrower nor any of its Subsidiaries will enter into any transaction
with any Affiliate except in the ordinary course of business, in each
case, upon terms no less favorable to the Borrower or any Subsidiary
then would be obtained in an arms-length, third party transaction.
The foregoing provision shall not restrict (i) any employment
agreement entered into by the Borrower or any of its Subsidiaries in
the ordinary course of business and consistent with the past practices
of the Borrower and/or any such Subsidiary, (ii) transactions between
or among the Borrower and/or the Subsidiary Guarantors, (iii)
transactions between First Atlantic Capital, Ltd. ("First Atlantic"),
pursuant to the Second Amended and Restated Management Agreement dated
as of June 18, 1996, as amended to the date hereof or otherwise
amended with the Agent's prior written consent (solely for purposes of
this Section 6.2.10), between the Borrower and First Atlantic, (iv)
the payment of Distributions permitted by Section 6.2.3, (v) the closing
and consummation of the BTP/Borrower Transaction, (vi) the closing and
consummation of the BIC/Borrower Transaction, and (vii) any
transaction fee payable to First Atlantic not to exceed $1,250,000 per
transaction.
0.6.2.11 ERISA COMPLIANCE. Neither the Borrower nor
any Commonly Controlled Entity shall: (a) engage in or permit any
"prohibited transaction" (as defined in ERISA); (b) cause any
"accumulated funding deficiency" as defined in ERISA and/or the
Internal Revenue Code; (c) terminate any pension plan in a manner
which could result in the imposition of a lien on the property of the
Borrower pursuant to ERISA; (d) terminate or consent to the
termination of any Multiemployer Plan; or (e) incur a complete or
partial withdrawal with respect to any Multiemployer Plan.
0.6.2.12 PROHIBITION ON HAZARDOUS MATERIALS. The
Borrower shall not place, manufacture or store or permit to be placed,
manufactured or stored any Hazardous Materials on any property owned,
operated or controlled by the Borrower or for which the Borrower is
responsible other than Hazardous Materials placed or stored on such
property in accordance with applicable Laws in the ordinary course of
the Borrower's or any tenant's business expressly described in this
Agreement, or permit any Subsidiary to do so.
0.6.2.13 AMENDMENTS. The Borrower will not amend or
agree to amend any of the Subordinated Debt Loan Documents, any of the
Senior Secured Debt Loan Documents, any of the PackerWare Merger
Agreement Documents, any of the BIC/Borrower Transaction Documents
and/or any of the BTP/Borrower Transaction Documents, other than in
the normal course of business or other than as contemplated by the
Loan Restructuring Transaction.
0.6.2.14 METHOD OF ACCOUNTING; FISCAL YEAR. The
Borrower agrees that:
(a) it shall not change, or permit any Subsidiary
to change, the method of accounting employed in the preparation of any
financial statements furnished to the Agent under the provisions of
Section 6.1.1 (Financial Statements) of this Agreement, unless required to
conform to GAAP and on the condition that the Borrower's accountants
shall furnish such information as the Agent may request to reconcile
the changes with the Borrower's prior financial statements.
(b) it will not change or permit any Subsidiary
to change, its fiscal year from a year ending on or about December 31.
0.6.2.15 TRANSFER OF COLLATERAL. Neither the Borrower
nor any of its Subsidiaries will transfer, or permit the transfer, to
another location of any of the Collateral or the books and records
related to any of the Collateral, except (i) for transfers among the
Borrower and the Subsidiary Guarantors, if and to the extent the first
priority Lien (subject to Permitted Liens) of the Agent and the
Lenders would be unaffected by any such transfers, (ii) transfers of
Inventory in the ordinary course of business to bailees, warehousemen,
consignees or similar third parties if and to the extent that either
(1) such bailees, warehousemen, consignees or similar third parties
have entered into an agreement with the Agent in which such bailees,
warehousemen, consignees or similar third parties consent and agree to
the superior Lien of the Agent and the Lenders on such Inventory and
to such other terms and conditions as may be reasonably required by
the Agent or (2) the Agent has established reserves against the
Borrowing Base with respect to any such Inventory so transferred in
accordance with the provisions set forth in the definition of Eligible
Inventory, which reserves the Agent shall establish upon the
Borrower's request, (iii) transfers contemplated by the BTP/Borrower
Transaction, and (iv) transfers contemplated by the BIC/Borrower
Transaction.
0.6.2.16 SALE AND LEASEBACK. The Borrower nor any of
the Subsidiaries will directly or indirectly enter into any
arrangement to sell or transfer all or any substantial part of its
fixed assets and thereupon or within one year thereafter rent or lease
the assets so sold or transferred, except as contemplated by
subsection (h) of the definition of Permitted Asset Disposition and
except as contemplated by the BTP/Borrower Transaction and the
BIC/Borrower Transaction.
ARTICLE 7
DEFAULT AND RIGHTS AND REMEDIES
SECTION 0.7.1 EVENTS OF DEFAULT. The occurrence of any one or
more of the following events shall constitute an "Event of Default"
under the provisions of this Agreement:
0.7.1.1 FAILURE TO PAY. The failure of the Borrower
to pay any of the Obligations within three (3) days of the date as and
when due and payable in accordance with the provisions of this
Agreement, the Notes and/or any of the other Financing Documents;
0.7.1.2 BREACH OF REPRESENTATIONS AND WARRANTIES.
Any representation or warranty made in this Agreement, in any of
the other Financing Documents, or in any report, statement, schedule,
certificate, opinion, financial statement or other document furnished
in connection with this Agreement, any of the other Financing
Documents, or the Obligations, shall prove to have been false or
misleading when made (or, if applicable, when reaffirmed) in any
material respect.
0.7.1.3 FAILURE TO COMPLY WITH CERTAIN COVENANTS.
The failure of the Borrower to perform, observe or comply, or to cause
any Subsidiary Guarantor to perform, observe or comply, as
appropriate, with any covenant, condition or agreement contained in
Sections 6.1.1(Financial Statements),Section 6.1.3(a)(Bookkeeping, Rights of
Inspection, Field Examination, Etc.) with respect to inspection rights
only, Section 6.1.8(Insurance),Section 6.1.13(Financial Covenants), Section
6.1.17(Insurance with Respect to Equipment),Section 6.1.19 (Defense of Title
anD Further Assurances), Section 6.1.19 (Business Names; Locations), or
Section 6.2 (Negative Covenants).
0.7.1.4 FAILURE TO COMPLY WITH OTHER COVENANTS. The
failure of the Borrower to perform, observe or comply, or to cause any
Subsidiary Guarantor to perform, observe or comply, as appropriate,
with any covenant, condition or agreement contained in this Agreement
other than those set forth in Section 7.1.1, 7.1.2 or 7.1.3 above,
which failure shall remain unremedied for a period of thirty (30) days
after written notice thereof to the Borrower by the Agent.
0.7.1.5 DEFAULT UNDER OTHER FINANCING DOCUMENTS OR
OBLIGATIONS.
The failure of the Borrower and/or any other Person (other than
the Agent or any of the Lenders) which is a party to any of the
Financing Documents, to perform, observe or comply with any covenant,
condition or agreement contained in any such Financing Documents which
is not otherwise covered by any other Section of this Article 7, which
failure shall remain unremedied for a period of thirty (30) days after
written notice thereof to the Borrower by the Agent or the occurrence
of an Event of Default under any of the other Financing Documents as
defined therein.
0.7.1.6 RECEIVER; BANKRUPTCY. The Borrower or any
Guarantor shall (a) apply for or consent to the appointment of a
receiver, trustee or liquidator of itself or any of its property, (b)
admit in writing its inability to pay its debts as they mature, (c)
make a general assignment for the benefit of creditors, (d) be
adjudicated a bankrupt or insolvent, (e) file a voluntary petition in
bankruptcy or a petition or an answer seeking or consenting to
reorganization or an arrangement with creditors or to take advantage
of any bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation law or statute, or an answer admitting the
material allegations of a petition filed against it in any proceeding
under any such law, or take corporate action for the purposes of
effecting any of the foregoing, or (f) by any act indicate its consent
to, approval of or acquiescence in any such proceeding or the
appointment of any receiver of or trustee for any of its property, or
suffer any such receivership, trusteeship or proceeding to continue
undischarged for a period of sixty (60) days, or (g) by any act
indicate its consent to, approval of or acquiescence in any order,
judgment or decree by any court of competent jurisdiction or any
Governmental Authority enjoining or otherwise prohibiting the
operation of all or substantially all of the Borrower's or any
Guarantor's business or the use or disposition of all or substantially
all of the Borrower's or any Guarantor's assets.
0.7.1.7 INVOLUNTARY BANKRUPTCY, ETC. (a) An order
for relief shall be entered in any involuntary case brought against
the Borrower or any Guarantor under the Bankruptcy Code, or (b) any
such case shall be commenced against the Borrower or any Guarantor
and shall not be dismissed within sixty (60) days after the filing of
the petition, or (c) an order, judgment or decree under any other Law
is entered by any court of competent jurisdiction or by any other
Governmental Authority on the application of a Governmental Authority
or of a Person other than the Borrower or any Guarantor (i)
adjudicating the Borrower, or any Guarantor bankrupt or insolvent, or
(ii) appointing a receiver, trustee or liquidator of the Borrower or
of any Guarantor, or of a material portion of the Borrower's or any
Guarantor's assets, or (iii) enjoining, prohibiting or otherwise
limiting the operation of all or substantially all of the Borrower's
or any Guarantor's business or the use or disposition of all or
substantially all of the Borrower's or any Guarantor's assets, and
such order, judgment or decree continues unstayed and in effect for a
period of thirty (30) days from the date entered.
0.7.1.8 JUDGMENT. Unless adequately insured in the
reasonable opinion of the Agent, the entry of a final judgment for the
payment of money involving more than $1,000,000 (individually and in
the aggregate) against the Borrower and/or any or all of the
Guarantors, and the failure by the Borrower or such Guarantor to
discharge the same, or cause it to be discharged, within sixty (60)
days from the date of the order, decree or process under which or
pursuant to which such judgment was entered, or to secure a stay of
execution pending appeal of such judgment.
0.7.1.9 EXECUTION; ATTACHMENT. Any execution or
attachment shall be levied against the Collateral, or any part
thereof, and such execution or attachment shall not be set aside,
discharged or stayed within sixty (60) days after the same shall have
been levied.
0.7.1.10 DEFAULT UNDER OTHER BORROWINGS. An event of
default shall be made with respect to any Indebtedness for Borrowed
Money in a principal amount in excess of Two Million Dollars
($2,000,000), either individually or in the aggregate, of the Borrower
and/or any or all of the Guarantors, other than the Loans, if the
effect of such event of default is to accelerate the maturity of such
Indebtedness for Borrowed Money or to permit the holder or obligee
thereof or other party thereto to cause such Indebtedness for Borrowed
Money to become due prior to its stated maturity.
0.7.1.11 CHALLENGE TO AGREEMENTS. The Borrower or any
Guarantor shall challenge the validity and binding effect of any
provision of any of the Financing Documents or any of the Financing
Documents shall for any reason (except to the extent permitted by its
express terms) cease to be effective or to create a valid and
perfected first priority Lien (except for Permitted Liens, certain of
which Permitted Liens, to the extent expressly permitted by the
provisions of this Agreement, may constitute superior and prior Liens)
on, or security interest in, any of the Collateral purported to be
covered thereby, unless due to the gross negligence or willful
misconduct of the Agent.
0.7.1.12 MATERIAL ADVERSE CHANGE. The Requisite
Lender, in their sole discretion, determine in good faith that a
material adverse change has occurred in the financial condition of the
Borrower and/or the Subsidiary Guarantors, taken as a whole.
0.7.1.13 CHANGE IN OWNERSHIP. (1) The Borrower shall
cease to own and control, beneficially and of record, directly or
indirectly, at least one hundred percent (100%) of the issued and
outstanding capital stock of each Subsidiary Guarantor (except
pursuant to any transaction permitted by Section 6.2.1 or Section
6.2.2), (2) the Parent shall cease to own and control, beneficially
and of record, directly or indirectly, at least one hundred percent
(100%) of the issued and outstanding capital stock of the Borrower, or
(3) Atlantic Equity Partners International II, L.P. ("AEP"), Chase
Capital Partners, and their respective Affiliates shall cease to own
and control, beneficially and of record, at least fifty-one percent
(51%) or more of the issued and outstanding voting capital stock of
the Parent.
0.7.1.14 LIQUIDATION, TERMINATION, DISSOLUTION, CHANGE
IN MANAGEMENT, ETC.
The Borrower or any Guarantor shall liquidate, dissolve or terminate
its existence, except as otherwise expressly permitted by the
provisions of Section 6.2 of this Agreement.
0.7.1.15 PARENT LINE OF BUSINESS. At any time the
Parent engages in any business other than the ownership of capital
stock of the Borrower or any other Wholly-Owned Subsidiary or such
other business as shall be mandatory under the provisions of
applicable Laws.
SECTION 0.7.2 REMEDIES. Upon the occurrence of any Event of
Default, the Agent may, in the exercise of its sole and absolute
discretion from time to time, and shall, at the direction of the
Requisite Lenders, at any time thereafter exercise any one or more of
the following rights, powers or remedies:
0.7.2.1 ACCELERATION. The Agent may declare any or
all of the Obligations to be immediately due and payable,
notwithstanding anything contained in this Agreement or in any of the
other Financing Documents to the contrary, without presentment,
demand, protest, notice of protest or of dishonor, or other notice of
any kind, all of which the Borrower hereby waives.
0.7.2.2 FURTHER ADVANCES. The Agent may from time to
time without notice to the Borrower suspend, terminate or limit any
further advances, loans or other extensions of credit under the
Commitment, under this Agreement and/or under any of the other
Financing Documents. Further, upon the occurrence of an Event of
Default specified in Sections 7.1.6 (Receiver; Bankruptcy) or 7.1.7
(InvoluntaryBankruptcy, etc.) above, the Revolving Credit Commitments, the
Letter of Credit Commitments, the Bond Letter of Credit Commitments and
any agreement in any of the Financing Documents to provide additional
credit and/or to issue Letters of Credit and/or Bond Letters of Credit
shall immediately and automatically terminate and the unpaid principal
amount of the Notes (with accrued interest thereon) and all other
Obligations then outstanding, shall immediately become due and payable
without further action of any kind and without presentment, demand,
protest or notice of any kind, all of which are hereby expressly
waived by the Borrower.
0.7.2.3 UNIFORM COMMERCIAL CODE. The Agent shall
have all of the rights and remedies of a secured party under the
applicable Uniform Commercial Code and other applicable Laws. Upon
demand by the Agent, the Borrower shall assemble the Collateral and
make it available to the Agent, at a place designated by the Agent.
The Agent or its agents may without notice from time to time enter
upon the Borrower's premises to take possession of the Collateral, to
remove it, to render it unusable, to process it or otherwise prepare
it for sale, or to sell or otherwise dispose of it.
Any written notice of the sale, disposition or other intended
action by the Agent with respect to the Collateral which is sent by
regular mail, postage prepaid, to the Borrower at the address set
forth in Section 9.1 of this Agreement, or such other address of the
Borrower which may from time to time be shown on the Agent's records,
at least ten (10) days prior to such sale, disposition or other
action, shall constitute commercially reasonable notice to the
Borrower. The Agent may alternatively or additionally give such
notice in any other commercially reasonable manner.
If any consent, approval, or authorization of any state,
municipal or other Governmental Authority or of any other Person or of
any Person having any interest therein, should be necessary to
effectuate any sale or other disposition of the Collateral, the
Borrower agrees to execute all such applications and other
instruments, and to take all other action, as may be required in
connection with securing any such consent, approval or authorization.
The Borrower recognizes that the Agent may be unable to effect a
public sale of all or a part of the Collateral consisting of
Securities by reason of certain prohibitions contained in the
Securities Act of 1933, as amended, and other applicable Federal and
state Laws. The Agent may, therefore, in its discretion, take such
steps as it may deem appropriate to comply with such Laws and may, for
example, at any sale of the Collateral consisting of securities
restrict the prospective bidders or purchasers as to their number,
nature of business and investment intention, including, without
limitation, a requirement that the Persons making such purchases
represent and agree to the satisfaction of the Agent that they are
purchasing such securities for their account, for investment, and not
with a view to the distribution or resale of any thereof. The
Borrower covenants and agrees to do or cause to be done promptly all
such acts and things as the Agent may request from time to time and as
may be necessary to offer and/or sell the Securities or any part
thereof in a manner which is valid and binding and in conformance with
all applicable Laws. Upon any such sale or disposition, the Agent
shall have the right to deliver, assign and transfer to the purchaser
thereof the Collateral consisting of securities so sold.
0.7.2.4 SPECIFIC RIGHTS WITH REGARD TO COLLATERAL.
In addition to all other rights and remedies provided hereunder
or as shall exist at law or in equity from time to time, the Agent may
(but shall be under no obligation to), without notice to the Borrower,
and upon the occurrence of an Event of Default the Borrower hereby
irrevocably appoints the Agent as its attorney-in-fact, with power of
substitution, in the name of the Agent and/or any or all of the
Lenders and/or in the name of the Borrower or otherwise, for the use
and benefit of the Agent and the Lenders, but at the cost and expense
of the Borrower:
(a) request any Account Debtor obligated on any of
the Accounts to make payments thereon directly to the Agent, with
the Agent taking control of the cash and non-cash proceeds
thereof;
(b) compromise, extend or renew any of the
Collateral or deal with the same as it may deem advisable,;
(c) make exchanges, substitutions or surrenders of
all or any part of the Collateral;
(d) copy, transcribe, or remove from any place of
business of the Borrower or any Subsidiary all books, records,
ledger sheets, correspondence, invoices and documents, relating
to or evidencing any of the Collateral or without cost or expense
to the Agent or the Lenders, make such use of the Borrower's or
any Subsidiary's place(s) of business as may be reasonably
necessary to administer, control and collect the Collateral;
(e) repair, alter or supply goods if necessary to
fulfill in whole or in part the purchase order of any Account
Debtor;
(f) demand, collect, receipt for and give
renewals, extensions, discharges and releases of any of the
Collateral;
(g) institute and prosecute legal and equitable
proceedings to enforce collection of, or realize upon, any of the
Collateral;
(h) settle, renew, extend, compromise, compound,
exchange or adjust claims in respect of any of the Collateral or
any legal proceedings brought in respect thereof;
(i) endorse or sign the name of the Borrower upon
any items of payment, certificates of title, instruments,
securities, stock powers, documents, documents of title,
financing statements, assignments, notices or other writing
relating to or part of the Collateral and on any proof of claim
in bankruptcy against an Account Debtor;
(j) notify the Post Office authorities to change
the address for the delivery of mail to the Borrower to such
address or Post Office Box as the Agent may designate and receive
and open all mail addressed to the Borrower; and
(k) take any other action necessary or beneficial
to realize upon or dispose of the Collateral or to carry out the
terms of this Agreement.
0.7.2.5 APPLICATION OF PROCEEDS. Unless otherwise
required by applicable Laws, any proceeds of sale or other disposition
of the Collateral will be applied by the Agent to the payment first of
any and all Agent's Obligations, then to any and all Enforcement
Costs, and any balance of such proceeds will be remitted to the
Lenders in like currency and funds received ratably in accordance with
their respective Pro Rata Shares of such balance. Each Lender shall
apply any such proceeds received from the Agent to its Obligations in
such order and manner as such Lender shall determine. If the sale or
other disposition of the Collateral fails to fully satisfy the
Obligations, the Borrower shall remain liable to the Agent and the
Lenders for any deficiency.
0.7.2.6 PERFORMANCE BY AGENT. If the Borrower shall
fail to pay the Obligations or otherwise fail to perform, observe or
comply with any of the conditions, covenants, terms, stipulations or
agreements contained in this Agreement or any of the other Financing
Documents, the Agent without notice to or demand upon the Borrower and
without waiving or releasing any of the Obligations or any Default or
Event of Default, may (but shall be under no obligation to) at any
time thereafter make such payment or perform such act for the account
and at the expense of the Borrower, and may enter upon the premises of
the Borrower for that purpose and take all such action thereon as the
Agent may consider necessary or appropriate for such purpose and each
of the Borrower hereby irrevocably appoints the Agent as its
attorney-in-fact upon the occurrence of an Event of Default to do so,
with power of substitution, in the name of the Agent, in the name of
any or all of the Lenders, or in the name of the Borrower or
otherwise, for the use and benefit of the Agent, but at the cost and
expense of the Borrower and without notice to the Borrower. All sums
so paid or advanced by the Agent together with interest thereon from
the date of payment, advance or incurring until paid in full at the
Post-Default Rate and all costs and expenses, shall be deemed part of
the Enforcement Costs, shall be paid by the Borrower to the Agent on
demand, and shall constitute and become a part of the Agent's
Obligations.
0.7.2.7 OTHER REMEDIES. The Agent may from time to
time proceed to protect or enforce the rights of the Agent and/or any
of the Lenders by an action or actions at law or in equity or by any
other appropriate proceeding, whether for the specific performance of
any of the covenants contained in this Agreement or in any of the
other Financing Documents, or for an injunction against the violation
of any of the terms of this Agreement or any of the other Financing
Documents, or in aid of the exercise or execution of any right, remedy
or power granted in this Agreement, the Financing Documents, and/or
applicable Laws. The Agent and each of the Lenders is authorized to
offset and apply to all or any part of the Obligations all moneys,
credits and other property of any nature whatsoever of the Borrower
now or at any time hereafter in the possession of, in transit to or
from, under the control or custody of, or on deposit with, the Agent,
any of the Lenders or any Affiliate of the Agent or any of the
Lenders.
ARTICLE 8
THE AGENT
SECTION 0.8.1 APPOINTMENT. Each Lender hereby designates and
appoints NationsBank as its agent under this Agreement and the
Financing Documents, and each Lender hereby irrevocably authorizes the
Agent to take such action or to refrain from taking such action on its
behalf under the provisions of this Agreement and the Financing
Documents and to exercise such powers as are set forth herein or
therein, together with such other powers as are reasonably incidental
thereto. The Agent agrees to act as such on the express conditions
contained in this Article . The provisions of this Article are
solely for the benefit of the Agent and the Lenders and neither the
Borrower nor any Person shall have any rights as a third party
beneficiary of any of the provisions hereof, except for those rights
expressly granted to the Borrower pursuant to Section 8.7.1, 8.8, 8.11
and 8.12. In performing its functions and duties under this
Agreement, the Agent shall act solely as an administrative
representative of the Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency
or trust with or for the Lenders, the Borrower or any Person. The
Agent may perform any of its duties hereunder, or under the Financing
Documents, by or through its agents or employees.
SECTION 0.8.2 NATURE OF DUTIES.
0.8.2.1 IN GENERAL. The Agent shall have no
duties, obligations or responsibilities except those expressly set
forth in this Agreement or in the Financing Documents. The duties of
the Agent shall be mechanical and administrative in nature. The Agent
shall not have by reason of this Agreement a fiduciary relationship in
respect of any Lender. Each Lender shall make its own independent
investigation of the financial condition and affairs of the Borrower
in connection with the extension of credit hereunder and shall make
its own appraisal of the credit worthiness of the Borrower, and the
Agent shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession
before the Closing Date or at any time or times thereafter. If the
Agent seeks the consent or approval of any of the Lenders to the
taking or refraining from taking of any action hereunder, then the
Agent shall send notice thereof to each Lender. The Agent shall
promptly notify each Lender any time that the applicable percentage of
the Lenders have instructed the Agent to act or refrain from acting
pursuant hereto.
0.8.2.2 EXPRESS AUTHORIZATION. The Agent is hereby
expressly and irrevocably authorized by each of the Lenders, as agent
on behalf of itself and the other Lenders:
(a) To receive on behalf of each of the Lenders
any payment or collection on account of the Obligations and to
distribute to each Lender its Pro Rata Share of all such payments and
collections so received as provided in this Agreement;
(b) To receive all documents and items to be
furnished to the Lenders under the Financing Documents;
(c) To act or refrain from acting in this
Agreement and in the other Financing Documents with respect to those
matters so designated for the Agent;
(d) To act as nominee for and on behalf of the
Lenders in and under this Agreement and the other Financing Documents;
(e) To arrange for the means whereby the funds of
the Lenders are to be made available to the Borrower;
(f) To distribute promptly to the Lenders, if
required by the terms of this Agreement, all written information,
requests, notices, Loan Notices, payments, Prepayments, documents and
other items received from the Borrower or other Person;
(g) To amend, modify, or waive any provisions of
this Agreement or the other Financing Documents on behalf of the
Lenders subject to the requirement that certain of the Lenders'
consent be obtained in certain instances as provided in Section 8.12;
(h) To deliver to the Borrower and other Persons,
all requests, demands, approvals, notices, and consents received from
any of the Lenders;
(i) To exercise on behalf of each Lender all
rights and remedies of the Lenders upon the occurrence of any Event of
Default and/or Default specified in this Agreement and/or in any of
the other Financing Documents or applicable Laws;
(j) To execute any of the Security Documents and
any other documents on behalf of the Lenders as the secured party for
the benefit of the Agent and the Lenders; and
(k) To take such other actions as may be
requested by the Requisite Lenders.
SECTION 0.8.3 RIGHTS, EXCULPATION, ETC. Neither the Agent nor
any of its officers, directors, employees or agents shall be liable to
any Lender for any action taken or omitted by them hereunder or under
any of the Financing Documents, or in connection herewith or
therewith, except that the Agent shall be obligated on the terms set
forth herein for performance of its express obligations hereunder, and
except that the Agent shall be liable with respect to its own gross
negligence or willful misconduct. The Agent shall not be liable for
any apportionment or distribution of payments made by it in good faith
and if any such apportionment or distribution is subsequently
determined to have been made in error the sole recourse of any Lender
to whom payment was due but not made, shall be to recover from other
the Lenders any payment in excess of the amount to which they are
determined to be entitled (and such other Lenders hereby agree to
return to such Lender any such erroneous payments received by them).
The Agent shall not be responsible to any Lender for any recitals,
statements, representations or warranties herein or for the execution,
effectiveness, genuineness, validity, enforceability, collectible, or
sufficiency of this Agreement or any of the Financing Documents or the
transactions contemplated thereby, or for the financial condition of
any Person. The Agent shall not be required to make any inquiry
concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any of the Financing
Documents or the financial condition of any Person, or the existence
or possible existence of any Default or Event of Default. The Agent
agrees to use its reasonable efforts to notify the Lenders as to the
occurrence of any material Event of Default promptly upon obtaining
actual knowledge thereof, provided, however, that the failure in good
faith of the Agent to so notify any Lender shall not give rise to any
liability on the part of the Agent nor shall it waive, discharge or
otherwise adversely affect the Agent's ability to exercise and enforce
any rights or remedies resulting from such Event of Default. The
Agent may at any time request instructions from the Lenders with
respect to any actions or approvals which by the terms of this
Agreement or of any of the Financing Documents the Agent is permitted
or required to take or to grant, and the Agent shall be absolutely
entitled to refrain from taking any action or to withhold any approval
and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of
the Financing Documents until it shall have received such instructions
from the applicable percentage of the Lenders. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against
the Agent as a result of the Agent acting or refraining from acting
under this Agreement or any of the other Financing Documents in
accordance with the instructions of the applicable percentage of the
Lenders and notwithstanding the instructions of the Lenders, the Agent
shall have no obligation to take any action if it, in good faith
believes that such action exposes the Agent to any liability.
SECTION 0.8.4 RELIANCE. The Agent shall be entitled to rely
upon any written notices, statements, certificates, orders or other
documents or any telephone message or other communication (including
any writing, telex, telecopy or telegram) believed by it in good faith
to be genuine and correct and to have been signed, sent or made by the
proper Person, and with respect to all matters pertaining to this
Agreement or any of the Financing Documents and its duties hereunder
or thereunder, upon advice of counsel selected by it. The Agent may
deem and treat the original Lenders as the owners of the respective
Notes for all purposes until receipt by the Agent of a written notice
of assignment, negotiation or transfer of any interest therein by the
Lenders in accordance with the terms of this Agreement. Any interest,
authority or consent of any holder of any of the Notes shall be
conclusive and binding on any subsequent holder, transferee, or
assignee of such Notes. The Agent shall be entitled to rely upon the
advice of legal counsel, independent accountants, and other experts
selected by the Agent in its sole discretion.
SECTION 0.8.5 INDEMNIFICATION. Each Lender, severally, agrees
to reimburse and indemnify the Agent for and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, advances or disbursements
including, without limitation, Enforcement Costs, of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted
against the Agent in any way relating to or arising out of this
Agreement or any of the Financing Documents or any action taken or
omitted by the Agent under this Agreement for any of the Financing
Documents, in proportion to each Lender's Pro Rata Share, all of the
foregoing as they may arise, be asserted or be imposed from time to
time; PROVIDED, HOWEVER, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, advances or disbursements
resulting from the Agent's gross negligence or willful misconduct.
The obligations of the Lenders under this Section 8.5 shall survive the
payment in full of the Obligations and the termination of this
Agreement.
SECTION 0.8.6 NATIONSBANK INDIVIDUALLY. With respect to its
Commitments and the Loans made by it, and the Notes issued to it,
NationsBank shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities as
and to the extent set forth herein for any other Lender. The terms
"the Lenders" or "Requisite Lenders" or any similar terms shall,
unless the context clearly otherwise indicates, include NationsBank in
its individual capacity as a Lender or one of the Requisite Lenders.
NationsBank and its Affiliates may lend money to, accept deposits from
and generally engage in any kind of banking, trust or other business
with the Borrower, any Affiliate of the Borrower, or any other Person
or any of their officers, directors and employees as if NationsBank
were not acting as the Agent pursuant hereto and the Agent may accept
fees and other consideration from the Borrower, any Affiliate of the
Borrower or any of their officers, directors and employees for
services in connection with this Agreement or otherwise without having
to account for or share the same with the Lenders.
SECTION 0.8.7 SUCCESSOR AGENT.
0.8.7.1 RESIGNATION. The Agent may resign from the
performance of all its functions and duties hereunder at any time by
giving at least thirty (30) Business Days' prior written notice to the
Borrower and the Lenders. Such resignation shall take effect upon the
acceptance by a successor Agent of appointment pursuant to Section
8.7.2 below or as otherwise provided below.
0.8.7.2 APPOINTMENT OF SUCCESSOR. Upon any such
notice of resignation pursuant to Section 8.7.1 above, the Requisite
Lenders, with the consent of NationsBank and the Borrower, shall
appoint a successor to the Agent. If a successor to the Agent shall
not have been so appointed within said thirty (30) Business Day
period, the Agent retiring, upon notice to the Borrower, shall then
appoint a successor Agent who shall serve as the Agent until such
time, as the Requisite Lenders appoint a successor the Agent as
provided above.
0.8.7.3 SUCCESSOR AGENT. Upon the acceptance of any
appointment as the Agent under the Financing Documents by a successor
Agent, such successor to the Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of
the Agent retiring, and the Agent retiring shall be discharged from
its duties and obligations under the Financing Documents. After any
Agent's resignation as the Agent under the Financing Documents, the
provisions of this Article 8 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Agent
under the Financing Documents.
SECTION 0.8.8 COLLATERAL MATTERS.
0.8.8.1 RELEASE OF COLLATERAL. The Lenders hereby
irrevocably authorize the Agent, at its option and in its discretion,
to release any Lien granted to or held by the Agent upon any property
covered by this Agreement or the Financing Documents:
(i) upon termination of the Commitments and
payment and satisfaction of all Obligations and expiration
or termination of all Letters of Credit and all Bond Letters
of Credit;
(ii) constituting property being sold or disposed
of if the Borrower or a Subsidiary Guarantor certifies to
the Agent that the sale or disposition is made in compliance
with the provisions of this Agreement (and the Agent may
rely in good faith conclusively on any such certificate,
without further inquiry);
(iii) constituting property leased to the Borrower
or any Subsidiary under a lease which has expired or been
terminated in a transaction permitted under this Agreement
or is about to expire and which has not been, and is not
intended by the Borrower or the Subsidiary to be, renewed or
extended; or
(iv) constituting property covered by Permitted
Liens with lien priority superior to those Liens in favor or
for the benefit of the Lenders.
In addition during any fiscal year of the Borrower (x) the Agent may
release Collateral having a book value of not more than 5% of the book
value of all Collateral, (y) the Agent, with the consent of Requisite
Lenders, may release Collateral having a book value of not more than
25% of the book value of all Collateral and (z) the Agent, with the
consent of the Lenders having 90% of (i) the Commitments and (ii)
Loans, may release all the Collateral.
0.8.8.2 CONFIRMATION OF AUTHORITY, EXECUTION OF
RELEASES.
Without in any manner limiting the Agent's authority to act
without any specific or further authorization or consent by the
Lenders as set forth in Section 8.8.1, each Lender agrees to confirm in
writing the authority to release any property covered by this
Agreement or the Financing Documents conferred upon the Agent under
Section 8.8.1. So long as no Event of Default is then continuing, upon
receipt by the Agent of confirmation from the requisite percentage of
the Lenders, of its authority to release any particular item or types
of property covered by this Agreement or the Financing Documents, the
Agent shall (and is hereby irrevocably authorized by the Lenders to)
execute such documents as may be necessary to evidence the release of
the Liens granted to the Agent for the benefit of the Lenders herein
or pursuant hereto upon such Collateral; PROVIDED, HOWEVER, that (i)
the Agent shall not be required to execute any such document on terms
which, in the Agent's opinion, would expose the Agent to liability or
create any obligation or entail any consequence other than the release
of such Liens without recourse or warranty, and (ii) such release
shall not in any manner discharge, affect or impair the Obligations or
any Liens upon (or obligations of any Person, in respect of), all
interests retained by any Person, including, without limitation, the
proceeds of any sale, all of which shall continue to constitute part
of the property covered by this Agreement or the Financing Documents.
0.8.8.3 ABSENCE OF DUTY. The Agent shall have no
obligation whatsoever to any Lender, the Borrower or any other Person
to assure that the property covered by this Agreement or the Financing
Documents exists or is owned by the Borrower or any Subsidiary
Guarantor or is cared for, protected or insured or has been encumbered
or that the Liens granted to the Agent on behalf of the Lenders herein
or pursuant hereto have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner
or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or
available to the Agent in this Section 8.8.3 or in any of the Financing
Documents, it being understood and agreed that in respect of the
property covered by this Agreement or the Financing Documents or any
act, omission or event related thereto, the Agent may act in any
manner it may deem appropriate, in its discretion, given the Agent's
own interest in property covered by this Agreement or the Financing
Documents as one of the Lenders and that the Agent shall have no duty
or liability whatsoever to any of the other the Lenders.
SECTION 0.8.9 AGENCY FOR PERFECTION. Each Lender hereby
appoints the Agent and each other Lender as agent for the purpose of
perfecting the Lenders' Liens in Collateral which, in accordance with
Article 9 of the Uniform Commercial Code in any applicable
jurisdiction or otherwise, can be perfected only by possession.
Should any Lender (other than the Agent) obtain possession of any such
Collateral, such Lender shall notify the Agent thereof, and, promptly
upon the Agent's request therefor, shall deliver such Collateral to
the Agent or in accordance with the Agent's instructions.
SECTION 0.8.10 EXERCISE OF REMEDIES. Each Lender agrees that it
will not have any right individually to enforce or seek to enforce
this Agreement or any Financing Document or to realize upon any
collateral security for the Loans, it being understood and agreed that
such rights and remedies may be exercised only by the Agent.
SECTION 0.8.11 CONSENTS.
(a) In the event the Agent requests the consent
of a Lender and does not receive a written denial thereof, or a
written notice from a Lender that due cause consideration of the
request requires additional time, in each case, within ten (10)
Business Days after such Lender's receipt of such request, then such
Lender will be deemed to have given such consent.
(b) In the event the Agent or the Borrower
requests the consent of a Lender and such consent is denied, then
NationsBank or the Borrower may, at its option, require such Lender to
assign its interest in the Loans to NationsBank or such other lender
as shall be acceptable to the Borrower and the Agent, for a price
equal to the then outstanding principal amount thereof, PLUS accrued
and unpaid interest, fees and costs and expenses due such Lender under
the Financing Documents, which principal, interest, fees and costs and
expenses will be paid on the date of such assignment. In the event
that NationsBank or the Borrower elects to require any Lender to
assign its interest to NationsBank or such other lender as shall be
acceptable to the Borrower and the Agent, NationsBank will so notify
such Lender in writing within thirty (30) days following such Lender's
denial, and such Lender will assign its interest to NationsBank or
such other lender as shall be acceptable to the Borrower and the
Agent, no later than five (5) days following receipt of such notice.
(c) The Lenders each hereby authorize the Agent
on their behalf to execute any and all amendments to this Agreement
and any of the other Financing Documents as may be necessary to remedy
and correct any clerical errors, omissions or inconsistencies. The
Agent agrees to give copies of any and all such executed amendments to
each of the Lenders.
SECTION 0.8.12 CIRCUMSTANCES WHERE CONSENT OF ALL OF THE LENDERS
IS REQUIRED.
Notwithstanding anything to the contrary contained herein, no
amendment, modification, change or waiver shall be effective without
the consent of all of the Lenders to:
(a) increase the principal amount of any of the
Commitments;
(b) extend the maturity or due date of payment of
principal, interest or Fees on account of the Obligations;
(c) reduce the principal amount of any
Obligations, the rate of interest on any of the Obligations or any
Fees payable, except as expressly permitted therein;
(d) change the method of calculation utilized in
connection with the computation of interest and Fees;
(e) change the manner of pro rata application by
the Agent of payments made by the Borrower, or any other payments
required hereunder or under the other Financing Documents;
(f) modify this Section or the definition of
"Requisite Lenders";
(g) release any material portion of any
Collateral, any Guarantor or any Financing Document (except to the
extent provided herein or therein); and
(h) increase the advance rates for any component
of the Borrowing Base.
SECTION 0.8.13 DISSEMINATION OF INFORMATION. The Agent will
provide the Lenders with any information received by the Agent from
the Borrower which is required to be provided to the Agent or to the
Lenders hereunder; PROVIDED, HOWEVER, that the Agent shall not be
liable to any one or more the Lenders for any failure to do so, except
to the extent that such failure is attributable to the Agent's gross
negligence or willful misconduct.
SECTION 0.8.14 DISCRETIONARY ADVANCES. The Agent may, in its
sole discretion, make, for the account of the Lenders on a pro rata
basis, advances under the Revolving Loan of up to 10% in excess of the
Borrowing Base but not in excess of the limitation set forth in
aggregate Revolving Credit Commitments for a period of not more than
thirty (30) consecutive days or, following an Event of Default, for
such longer period as the Requisite Lenders may elect.
ARTICLE 9
MISCELLANEOUS
SECTION 0.9.1 NOTICES. All notices, requests and demands to or
upon the parties to this Agreement shall be in writing and shall be
deemed to have been given or made when delivered by hand on a Business
Day, or two (2) days after the date when deposited in the mail,
postage prepaid by registered or certified mail, return receipt
requested, or when sent by overnight courier, on the Business Day next
following the day on which the notice is delivered to such overnight
courier, addressed as follows:
Borrower: ▇▇▇▇▇ PLASTICS CORPORATION
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
with a copy to:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
▇'▇▇▇▇▇▇▇▇, Graev & Karabell
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President
First Atlantic Capital, Ltd.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Agent: NATIONSBANK, N.A.
NationsBank Business Credit
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Miles & Stockbridge, P.A.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By written notice, each party to this Agreement may change the address
to which notice is given to that party, provided that such changed
notice shall include a street address to which notices may be
delivered by overnight courier in the ordinary course on any Business
Day.
SECTION 0.9.2 AMENDMENTS; WAIVERS. This Agreement and the other
Financing Documents may not be amended, modified, or changed in any
respect except by an agreement in writing signed by the Requisite
Lenders and the Borrower, and to the extent provided in Section 8.12 by an
agreement in writing signed by all of the Lenders and the Borrower.
In addition, any agreement which directly or indirectly affects any
rights, duties, obligations, liabilities or remedies of the Agent
under this Agreement, under any of other Financing Documents or
otherwise must be approved and signed by the Agent. No waiver of any
provision of this Agreement or of any of the other Financing
Documents, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing.
No course of dealing between the Borrower and the Agent and/or any of
the Lenders and no act or failure to act from time to time on the part
of the Agent and/or any of the Lenders shall constitute a waiver,
amendment or modification of any provision of this Agreement or any of
the other Financing Documents or any right or remedy under this
Agreement, under any of the other Financing Documents or under
applicable Laws.
Without implying any limitation on the foregoing, and subject to
the provisions of Section 8.12:
(a) Any waiver or consent shall be effective only
in the specific instance, for the terms and purpose for which given,
subject to such conditions as the Agent may specify in any such
instrument.
(b) No waiver of any Default or Event of Default
shall extend to any subsequent or other Default or Event of Default,
or impair any right consequent thereto.
(c) No notice to or demand on the Borrower in any
case shall entitle the Borrower to any other or further notice or
demand in the same, similar or other circumstance.
(d) No failure or delay by the Lender to insist
upon the strict performance of any term, condition, covenant or
agreement of this Agreement or of any of the other Financing
Documents, or to exercise any right, power or remedy consequent upon a
breach thereof, shall constitute a waiver, amendment or modification
of any such term, condition, covenant or agreement or of any such
breach or preclude the Agent from exercising any such right, power or
remedy at any time or times.
(e) By accepting payment after the due date of
any amount payable under this Agreement or under any of the other
Financing Documents, the Agent shall not be deemed to waive the right
either to require prompt payment when due of all other amounts payable
under this Agreement or under any of the other Financing Documents, or
to declare a Default or an Event of Default for failure to effect such
prompt payment of any such other amount.
SECTION 0.9.3 CUMULATIVE REMEDIES. The rights, powers and
remedies provided in this Agreement and in the other Financing
Documents are cumulative, may be exercised concurrently or separately,
may be exercised from time to time and in such order as the Agent
shall determine, subject to the provisions of this Agreement, and are
in addition to, and not exclusive of, rights, powers and remedies
provided by existing or future applicable Laws. In order to entitle
the Agent to exercise any remedy reserved to it in this Agreement, it
shall not be necessary to give any notice, other than such notice as
may be expressly required in this Agreement. Without limiting the
generality of the foregoing and subject to the terms of this
Agreement, the Agent may:
(a) proceed against the Borrower with or without
proceeding against any other Person (including, without
limitation, any one or more of the Guarantors) who may be liable
(by endorsement, guaranty, indemnity or otherwise) for all or any
part of the Obligations;
(b) proceed against the Borrower with or without
proceeding under any of the other Financing Documents or against
any Collateral or other collateral and security for all or any
part of the Obligations;
(c) without reducing or impairing the obligation
of the Borrower and without notice, release or compromise with
any guarantor or other Person liable for all or any part of the
Obligations under the Financing Documents or otherwise;
(d) without reducing or impairing the obligations
of the Borrower and without notice thereof: (i) fail to perfect
the Lien in any or all Collateral or to release any or all the
Collateral or to accept substitute Collateral, (ii) approve the
making of advances under the Revolving Loan under this Agreement,
(iii) waive any provision of this Agreement or the other
Financing Documents, (iv) exercise or fail to exercise rights of
set-off or other rights, or (v) accept partial payments or extend
from time to time the maturity of all or any part of the
Obligations.
SECTION 0.9.4 SEVERABILITY. In case one or more provisions, or
part thereof, contained in this Agreement or in the other Financing
Documents shall be invalid, illegal or unenforceable in any respect
under any Law, then without need for any further agreement, notice or
action:
(a) the validity, legality and enforceability of
the remaining provisions shall remain effective and binding on
the parties thereto and shall not be affected or impaired
thereby;
(b) the obligation to be fulfilled shall be
reduced to the limit of such validity;
(c) such provision or part thereof only shall be
void, and the remainder of this Agreement shall remain operative
and in full force and effect.
SECTION 0.9.5 ASSIGNMENTS BY LENDERS. Any Lender may, with the
prior written consent of the Agent and the Borrower, but without
notice to or consent of any other Lender, which consent shall not be
unreasonably withheld, delayed or conditioned, assign to any Person
(each an "Assignee" and collectively, the "Assignees") all or a
portion of such Lender's Commitments; provided that (i) the amount
assigned by such Lender must be at least equal to Five Million Dollars
($5,000,000), (ii) after giving effect to such assignment, such Lender
must continue to hold a Pro Rata Share of the Commitments at least
equal to Ten Million Dollars ($10,000,000), unless such Lender has
assigned one hundred percent (100%) of such Lender's Commitments, and
(iii) any amount assigned shall be divided pro rata among such
Lenders' Pro Rata Share of the Commitments and Obligations.
NationsBank agrees that if at any time NationsBank sells one hundred
percent (100%) of all of its Commitments, NationsBank shall resign as
Agent and the remaining Lenders shall select a replacement Agent in
accordance with the provisions of this Agreement. In addition,
NationsBank agrees that for so long as NationsBank is the Agent,
unless otherwise agreed by the Lenders, NationsBank shall continue to
hold a Pro Rata Share of the Commitments at least equal to the Pro
Rata Share of the Lender (other than NationsBank) having the highest
Pro Rata Share of the Commitments. Any Lender which elects to make
such an assignment shall pay to the Agent, for the exclusive benefit
of the Agent, an administrative fee for processing each such
assignment in the amount of Three Thousand Five Hundred Dollars
($3,500). Such Lender and its Assignee shall notify the Agent and the
Borrower in writing of the date on which the assignment is to be
effective (the "Adjustment Date"). On or before the Adjustment Date,
the assigning Lender, the Agent, the Borrower and the respective
Assignee shall execute and deliver a written assignment agreement in a
form acceptable to the Agent, which shall constitute an amendment to
this Agreement to the extent necessary to reflect such assignment.
Upon the request of any assigning Lender following an assignment made
in accordance with this Section 9.5, the Borrower shall issue new
Notes to the assigning Lender and its Assignee reflecting such
assignment, in exchange for the existing Notes held by the assigning
Lender.
In addition, notwithstanding the foregoing, any Lender may at any
time pledge all or any portion of such Lender's rights under this
Agreement, any of the Commitments or any of the Obligations to a
Federal Reserve Bank.
SECTION 0.9.6 PARTICIPATIONS BY LENDERS. Any Lender may at any
time sell to one or more financial institutions participating
interests in any of such Lender's Obligations or Commitments;
provided, however, that (a) no such participation shall relieve such
Lender from its obligations under this Agreement or under any of the
other Financing Documents to which it is a party, (b) such Lender
shall remain solely responsible for the performance of its obligations
under this Agreement and under all of the other Financing Documents to
which it is a party, (c) the Borrower, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement and the other Financing Documents, and (d) no such
participant shall be granted voting rights with respect to any matters
reserved for the Lenders under the provisions of this Agreement.
SECTION 0.9.7 DISCLOSURE OF INFORMATION BY LENDERS. (a) In
connection with any sale, transfer, assignment or participation by any
Lender in accordance with Section 9.5 or 9.6 above, each Lender shall
have the right to disclose to any actual or potential purchaser,
assignee, transferee or participant all financial records,
information, reports, financial statements and documents obtained in
connection with this Agreement and/or any of the other Financing
Documents or otherwise, provided that such actual or potential
purchaser shall agree to keep confidential any non-public information
delivered or made available to such Lender.
(b) Each of the Lenders and the Agent hereby agree to exercise
reasonable efforts to keep any non-public information delivered or
made available to it pursuant to this Agreement or any of the
Financing Documents, confidential from any other Person except (a)
Persons employed or retained by such Lender or Agent who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Obligations, (b) with the prior written consent of
Borrower, (c) as required in connection with the exercise of any
remedy under this Agreement or any of the Financing Documents or (e)
as may be required by Law, provided that in the event that any Lender,
the Agent or any of its or their representatives are requested or
compelled (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the non-public information
delivered or made available to any Lender or the Agent pursuant to
this Agreement or any of the Financing Documents, the Lenders, the
Agent and its or their representatives, as appropriate, agree to
provide Borrower with prompt notice of such request(s).
SECTION 0.9.8 SUCCESSORS AND ASSIGNS. This Agreement and all
other Financing Documents shall be binding upon and inure to the
benefit of the Borrower, the Agent and the Lenders and their
respective heirs, personal representatives, successors and assigns,
except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of
the Agent and the Requisite Lenders.
SECTION 0.9.9 CONTINUING AGREEMENTS. All covenants, agreements,
representations and warranties made by the Borrower in this Agreement,
in any of the other Financing Documents, and in any certificate
delivered pursuant hereto or thereto shall survive the making by the
Lenders of the Loans, the issuance of Letters of Credit by the Agent
and the execution and delivery of the Notes, shall be binding upon the
Borrower regardless of how long before or after the date hereof any of
the Obligations were or are incurred, and shall continue in full force
and effect so long as any of the Obligations are outstanding and
unpaid. From time to time upon the Agent's request, and as a condition
of the release of any one or more of the Security Documents, the
Borrower and other Persons obligated with respect to the Obligations
shall provide the Agent with such acknowledgments and agreements as
the Agent may require to the effect that there exists no defenses,
rights of setoff or recoupment, claims, counterclaims, actions or
causes of action of any kind or nature whatsoever against the Agent,
any or all of the Lenders, and/or any of its or their agents and
others, or to the extent there are, the same are waived and released.
SECTION 0.9.10 ENFORCEMENT COSTS. The Borrower agrees to pay to
the Agent on demand all Enforcement Costs, together with interest
thereon from the date following demand until paid in full at a per
annum rate of interest equal at all times to the Post-Default Rate.
Enforcement Costs shall be immediately due and payable at the time
advanced or incurred, whichever is earlier. Without implying any
limitation on the foregoing, the Borrower agrees, as part of the
Enforcement Costs, to pay upon demand any and all stamp and other
Taxes and fees payable or determined to be payable in connection with
the execution and delivery of this Agreement and the other Financing
Documents and to save the Agent and the Lenders harmless from and
against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay any Taxes or fees referred to in
this Section. The provisions of this Section shall survive the
execution and delivery of this Agreement, the repayment of the other
Obligations and shall survive the termination of this Agreement.
SECTION 0.9.11 APPLICABLE LAW; JURISDICTION.
0.9.11.1 As a material inducement to the Agent and the
Lenders to enter into this Agreement, the Borrower acknowledges and
agrees that the Financing Documents, including, this Agreement, shall
be governed by the Laws of the State, as if each of the Financing
Documents and this Agreement had each been executed, delivered,
administered and performed solely within the State even though for the
convenience and at the request of the Borrower, one or more of the
Financing Documents may be executed elsewhere. The Agent and the
Lenders acknowledge, however, that remedies under certain of the
Financing Documents which relate to property outside the State may be
subject to the laws of the state in which the property is located.
0.9.11.2 The Borrower irrevocably submits to the
jurisdiction of any state or federal court sitting in the State over
any suit, action or proceeding arising out of or relating to this
Agreement or any of the other Financing Documents. The Borrower
irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding brought in any such court and
any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum. Final judgment in
any such suit, action or proceeding brought in any such court shall be
conclusive and binding upon the Borrower and may be enforced in any
court in which the Borrower is subject to jurisdiction, by a suit upon
such judgment, PROVIDED that service of process is effected upon the
Borrower in one of the manners specified in this Section or as
otherwise permitted by applicable Laws.
0.9.11.3 The Borrower hereby irrevocably designates
and appoints The Corporation Trust, Incorporated, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as the Borrower's authorized agent to
receive on the Borrower's behalf service of any and all process that
may be served in any suit, action or proceeding of the nature referred
to in this Section in any state or federal court sitting in the State.
If such agent shall cease so to act, the Borrower shall irrevocably
designate and appoint without delay another such agent in the State
satisfactory to the Agent and shall promptly deliver to the Agent
evidence in writing of such other agent's acceptance of such
appointment and its agreement that such appointment shall be
irrevocable.
0.9.11.4 The Borrower hereby consents to process being
served in any suit, action or proceeding of the nature referred to in
this Section by (i) the mailing of a copy thereof by registered or
certified mail, postage prepaid, return receipt requested, to the
Borrower at the Borrower's address designated in or pursuant to
Section 9.1 hereof, and (ii) serving a copy thereof upon the agent, if
any, designated and appointed by the Borrower as the Borrower's agent
for service of process by or pursuant to this Section. The Borrower
irrevocably agrees that such service (i) shall be deemed in every
respect effective service of process upon the Borrower in any such
suit, action or proceeding, and (ii) shall, to the fullest extent
permitted by law, be taken and held to be valid personal service upon
the Borrower. Nothing in this Section shall affect the right of the
Agent to serve process in any manner otherwise permitted by law or
limit the right of the Agent otherwise to bring proceedings against
the Borrower in the courts of any jurisdiction or jurisdictions.
SECTION 0.9.12 DUPLICATE ORIGINALS AND COUNTERPARTS. This
Agreement may be executed in any number of duplicate originals or
counterparts, each of such duplicate originals or counterparts shall
be deemed to be an original and all taken together shall constitute
but one and the same instrument.
SECTION 0.9.13 HEADINGS. The headings in this Agreement are
included herein for convenience only, shall not constitute a part of
this Agreement for any other purpose, and shall not be deemed to
affect the meaning or construction of any of the provisions hereof.
SECTION 0.9.14 NO AGENCY. Nothing herein contained shall be
construed to constitute the Borrower as the agent of the Agent or any
of the Lenders for any purpose whatsoever or to permit the Borrower to
pledge any of the credit of the Agent or any of the Lenders. Neither
the Agent nor any of the Lenders shall be responsible or liable for
any shortage, discrepancy, damage, loss or destruction of any part of
the Collateral wherever the same may be located and regardless of the
cause thereof. Neither the Agent nor any of the Lenders shall, by
anything herein or in any of the Financing Documents or otherwise,
assume any of the Borrower's obligations under any contract or
agreement assigned to the Agent and/or the Lenders, and neither the
Agent nor any of the Lenders shall be responsible in any way for the
performance by the Borrower of any of the terms and conditions
thereof.
SECTION 0.9.15 WAIVER OF TRIAL BY JURY. THE BORROWER, THE AGENT
AND THE LENDERS HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO WHICH THE BORROWER, THE AGENT AND/OR ANY
OR ALL OF THE LENDERS MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY
PERTAINING TO (A) THIS AGREEMENT, (B) ANY OF THE FINANCING DOCUMENTS,
OR (C) THE COLLATERAL. THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY
JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS,
INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS
AGREEMENT.
This waiver is knowingly, willingly and voluntarily made by
the Borrower, the Agent and the Lenders, and the Borrower, the Agent
and the Lenders hereby represent that no representations of fact or
opinion have been made by any individual to induce this waiver of
trial by jury or to in any way modify or nullify its effect. The
Borrower, the Agent and the Lenders further represent that they have
been represented in the signing of this Agreement and in the making of
this waiver by independent legal counsel, selected of their own free
will, and that they have had the opportunity to discuss this waiver
with counsel.
SECTION 0.9.16 LIABILITY OF THE AGENT AND THE LENDERS. The
Borrower hereby agrees that neither the Agent nor any of the Lenders
shall be chargeable for any negligence, mistake, act or omission of
any accountant, examiner, agency or attorney employed by the Agent
and/or any of the Lenders in making examinations, investigations or
collections, or otherwise in perfecting, maintaining, protecting or
realizing upon any lien or security interest or any other interest in
the Collateral or other security for the Obligations, except for acts
of gross negligence and willful misconduct.
By inspecting the Collateral or any other properties of the
Borrower or by accepting or approving anything required to be
observed, performed or fulfilled by the Borrower or to be given to the
Agent and/or any of the Lenders pursuant to this Agreement or any of
the other Financing Documents, neither the Agent nor any of the
Lenders shall be deemed to have warranted or represented the
condition, sufficiency, legality, effectiveness or legal effect of the
same, and such acceptance or approval shall not constitute any
warranty or representation with respect thereto by the Agent and/or
the Lenders.
SECTION 0.9.17 ENTIRE AGREEMENT. THIS AGREEMENT IS INTENDED BY
THE AGENT, THE LENDERS AND THE BORROWER TO BE A COMPLETE, EXCLUSIVE
AND FINAL EXPRESSION OF THE AGREEMENTS CONTAINED HEREIN. NEITHER THE
AGENT, THE LENDERS NOR THE BORROWER SHALL HEREAFTER HAVE ANY RIGHTS
UNDER ANY PRIOR AGREEMENTS PERTAINING TO THE MATTERS ADDRESSED BY THIS
AGREEMENT BUT SHALL LOOK SOLELY TO THIS AGREEMENT FOR DEFINITION AND
DETERMINATION OF ALL OF THEIR RESPECTIVE RIGHTS, LIABILITIES AND
RESPONSIBILITIES UNDER THIS AGREEMENT.
IN WITNESS WHEREOF, each of the parties hereto have executed and
delivered this Agreement under their respective seals as of the day
and year first written above.
WITNESS OR ATTEST: ▇▇▇▇▇ PLASTICS CORPORATION
_________________________ By:_______________________(Seal)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Vice President
WITNESS: NATIONSBANK, N.A.,
in its capacity as Agent
_________________________ By:______________________(Seal)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
WITNESS: NATIONSBANK, N.A.
in its capacity as a Lender
_________________________ By:_______________________(Seal)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
-9-
LIST OF EXHIBITS
A. Form of Borrowing Base Report
B-1. Revolving Credit Note
B-2. Term Note
C. Wire Transfer Procedures
D-1. Pro Forma Financial Statements
D-2 Pro Forma Balance Sheets
E. Form of Compliance Certificate
LIST OF SCHEDULES
SCHEDULE 1.1 List of Account Debtors (concentrations)
SCHEDULE Litigation
SCHEDULE Scheduled Indebtedness for Borrowed Money
SCHEDULE Employee Relations Disclosures
SCHEDULE Hazardous Materials Disclosures
SCHEDULE Scheduled Permitted Liens
SCHEDULE 4.1.24 Information on Names, Addresses and Locations
SCHEDULE Permitted Investments