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EXHIBIT 10.3
SECURED CREDIT AGREEMENT
Dated as of November 15, 1996
among
THE FINANCIAL INSTITUTIONS NAMED HEREIN,
as Lenders,
FIRST SOURCE FINANCIAL LLP,
as Collateral Agent,
UNION BANK OF CALIFORNIA, N.A.
as Administrative Agent,
and
S-O OPERATING CORP.,
as Borrower
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TABLE OF CONTENTS
SECTION 1 CERTAIN DEFINITIONS......................................................................... 1
1.1 Certain Definitions.................................................................. 2
Account Debtor................................................................................ 2
Account Receivable............................................................................ 2
Accounts...................................................................................... 2
Acquisition................................................................................... 2
Acquisition Instruments....................................................................... 2
Adjusted Operating Profit..................................................................... 2
Administrative Agent.......................................................................... 2
Affiliate..................................................................................... 2
Agent and Agents.............................................................................. 3
Agent Bank.................................................................................... 3
Agreement..................................................................................... 3
Asset Purchase Agreement...................................................................... 3
Asset Sale.................................................................................... 3
Asset Sale Proceeds........................................................................... 3
Assignment and Acceptance..................................................................... 3
B&L........................................................................................... 3
Guaranty...................................................................................... 4
Bank Agency Agreement......................................................................... 4
Borrower...................................................................................... 4
Borrower Equity Interests..................................................................... 4
Borrower Pledge Agreement..................................................................... 4
Borrowing Certificate......................................................................... 4
Business Day.................................................................................. 4
Cap Amount.................................................................................... 4
Capital Expenditure Loan and Capital Expenditure Loans........................................ 5
Capital Expenditure Loan Commitment........................................................... 5
Capital Expenditure Loan Commitment Reduction Amount.......................................... 5
Capital Expenditure Loan Commitment Reduction Date............................................ 5
Capital Expenditure Loan Termination Date..................................................... 5
Capital Expenditure Note...................................................................... 5
Cash Equivalents.............................................................................. 5
Cash Instruments.............................................................................. 5
Chattel Paper................................................................................. 5
Closing Date.................................................................................. 5
Code.......................................................................................... 5
Collateral.................................................................................... 5
Collateral Agent.............................................................................. 6
Collateral Assignment of Asset Purchase Agreement............................................. 6
Collateral Documents.......................................................................... 6
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Collected Balances............................................................................ 6
Commitment.................................................................................... 6
Commitments................................................................................... 6
Compliance Certificate........................................................................ 6
Contingent Obligation......................................................................... 6
Contractual Obligation........................................................................ 7
Controlled Group.............................................................................. 7
Current Assets................................................................................ 7
Current Liabilities........................................................................... 7
Daily Settlement Date......................................................................... 8
Default Interest Period....................................................................... 8
Default Rate.................................................................................. 8
Dollar(s)..................................................................................... 8
Domestic International Sales Corporation...................................................... 8
1818.......................................................................................... 8
1818 Warrants................................................................................. 8
Eligible Assignee............................................................................. 8
Employee Benefit Plan......................................................................... 8
Employment Agreements......................................................................... 9
Equipment..................................................................................... 9
Equitable..................................................................................... 9
Equity Instruments............................................................................ 9
Equity Interests.............................................................................. 9
Equity Sale................................................................................... 9
Equity Sale Proceeds.......................................................................... 9
ERISA......................................................................................... 9
Event of Default.............................................................................. 9
Exeter Lenders................................................................................ 9
Exeter Partners............................................................................... 9
Fee Letter Agreement.......................................................................... 9
Financed Equipment............................................................................ 9
Financing Statements.......................................................................... 10
Fiscal Quarter................................................................................ 10
Fiscal Year................................................................................... 10
Force Majeure................................................................................. 10
Foreign Sales Corporation..................................................................... 10
FSFP.......................................................................................... 10
Funding Date.................................................................................. 10
GAAP.......................................................................................... 10
General Intangible............................................................................ 10
Gross Capital Expenditures.................................................................... 10
Guaranty...................................................................................... 10
Hazardous Material............................................................................ 10
Indebtedness.................................................................................. 11
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Indebtedness to be Refinanced................................................................. 11
Initial Equity Contribution................................................................... 11
Intangible Assets............................................................................. 11
Interest Expense.............................................................................. 11
Interest Period............................................................................... 11
Investor...................................................................................... 12
Issuer........................................................................................ 12
Key-Man Life Insurance........................................................................ 12
LC Exposure................................................................................... 12
LC Guaranty................................................................................... 12
LC Guaranty Request........................................................................... 12
LC Reimbursement Agreement.................................................................... 12
LC Utilization................................................................................ 12
Lease Obligations............................................................................. 12
Lenders....................................................................................... 12
Lender Party.................................................................................. 12
Letter of Credit.............................................................................. 12
Letter of Credit Commitment................................................................... 13
Liabilities................................................................................... 13
LIBOR Interest Payment Date................................................................... 13
LIBOR Interest Rate Determination Date........................................................ 13
LIBOR Rate.................................................................................... 13
LIBOR Rate Loans.............................................................................. 13
LIBOR Reserve Percentage...................................................................... 13
Lien.......................................................................................... 14
Loan and Loans................................................................................ 14
Lockbox....................................................................................... 14
Management Agreement.......................................................................... 14
Management Fees............................................................................... 14
Master Account................................................................................ 14
Material Adverse Effect....................................................................... 14
Material Intellectual Property Right.......................................................... 14
Maximum Amount of the Working Capital Commitment.............................................. 14
Mortgage and Mortgages........................................................................ 14
Multiemployer Plan............................................................................ 14
Net Cash Generated............................................................................ 14
Net Income.................................................................................... 15
Note and Notes................................................................................ 15
Notice of LIBOR Activity...................................................................... 15
Operating Account............................................................................. 15
Parent........................................................................................ 15
Parent Equity Interests....................................................................... 15
PBGC.......................................................................................... 15
Pension Plan.................................................................................. 15
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Permitted LC.................................................................................. 15
Permitted Liens............................................................................... 15
Permitted Prior Liens......................................................................... 17
Person........................................................................................ 17
Pledge Agreement.............................................................................. 17
Prepayment Premium............................................................................ 17
Property...................................................................................... 17
Pro Rata Share................................................................................ 17
Reference Rate................................................................................ 17
Reference Rate Loans.......................................................................... 17
Register...................................................................................... 17
Registration Rights Agreement................................................................. 17
Reimbursement Obligations..................................................................... 18
Related Documents............................................................................. 18
Related Transactions.......................................................................... 18
Reportable Event.............................................................................. 18
Requirement of Law............................................................................ 18
Requisite Lenders............................................................................. 18
Revolving Loan and Revolving Loans............................................................ 18
Revolving Loan Commitment..................................................................... 18
Revolving Loan Commitment Reduction Amount.................................................... 18
Revolving Loan Commitment Reduction Date...................................................... 18
Revolving Loan Termination Date............................................................... 18
Revolving Note................................................................................ 18
Scheduled Reduction in the Capital Expenditure Loan Commitment................................ 18
Scheduled Reduction in the Revolving Loan Commitment.......................................... 19
Scheduled Reduction in the Term Loan Commitment............................................... 19
Security Agreement............................................................................ 19
Securities Purchase Agreement................................................................. 19
Seller........................................................................................ 19
LLC.......................................................................................... 19
SOMC.......................................................................................... 19
S-O Principals................................................................................ 19
S-O Warrants.................................................................................. 19
Stated Amount................................................................................. 19
Steri-Oss..................................................................................... 19
Stockholders Agreement........................................................................ 19
Subordinated Debt Warrants.................................................................... 19
Subordinated Indebtedness..................................................................... 19
Subordinated Lender........................................................................... 20
Subordinated Loan............................................................................. 20
Subordinated Loan Instruments................................................................. 20
Subordinated Note............................................................................. 20
Subordinated Note Agreement................................................................... 20
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Subordination Agreement....................................................................... 20
Subsidiary.................................................................................... 20
Subsidiary Equity Interests................................................................... 20
Subsidiary Guaranties......................................................................... 20
Term Loan and Term Loans...................................................................... 20
Term Loan Commitment.......................................................................... 21
Term Loan Commitment Reduction Amount......................................................... 21
Term Loan Commitment Reduction Date........................................................... 21
Term Note..................................................................................... 21
Term Loan Termination Date.................................................................... 21
Total Fixed Charges........................................................................... 21
Total Funded Debt............................................................................. 21
Total WC Exposure............................................................................. 21
Unapplied Insurance or Condemnation Proceeds.................................................. 21
Uniform Commercial Code....................................................................... 22
Union Bank.................................................................................... 22
Unmatured Event of Default.................................................................... 22
Warrant....................................................................................... 22
Welfare Plan.................................................................................. 22
Working Capital Commitment.................................................................... 22
Working Capital Commitment Extension Request.................................................. 22
Working Capital Loan and Working Capital Loans................................................ 22
Working Capital Loan Termination Date......................................................... 22
Working Capital Note.......................................................................... 22
1.2 Accounting and Financial Determinations.............................................. 22
1.3 Cross References; Headings........................................................... 23
SECTION 2 COMMITMENTS OF LENDERS; LOAN REQUESTS; REDUCTION OR TERMINATION OF THE COMMITMENTS;
PREPAYMENTS; MAKING OF PAYMENTS; SETOFF..................................................... 23
2.1 Commitments.......................................................................... 23
2.1.1. Revolving Loan Commitment.................................................... 23
2.1.2. Working Capital Commitment................................................... 23
2.1.3. Letter of Credit Commitment.................................................. 24
2.1.4. Term Loan Commitment......................................................... 24
2.1.5. Capital Expenditure Loan Commitment.......................................... 24
2.2 Extension of Working Capital Loan Termination Date................................... 25
2.3 Loan Requests; Settlement Procedures................................................. 25
2.4 Certain Waivers...................................................................... 26
2.5 Reduction or Termination of the Revolving Loan Commitment............................ 27
2.6 Reduction or Termination of the Working Capital Commitment and
Letter of Credit Commitment.......................................................... 28
2.7 Reduction or Termination of the Term Loan Commitment................................. 29
2.8 Reduction or Termination of the Capital Expenditure Loan Commitment.................. 30
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2.9 Mandatory Prepayments................................................................ 31
2.10 Voluntary Prepayments................................................................ 32
2.11 Prepayment Premium................................................................... 33
2.12 Making of Payments................................................................... 33
2.13 Due Date Extension................................................................... 34
2.14 Setoff............................................................................... 34
2.15 Certain Matters Relating to LC Guaranties............................................ 34
2.15.1. Reimbursement Obligation.................................................... 34
2.15.2. Reimbursement Obligations Absolute.......................................... 35
2.15.3. Indemnification............................................................. 36
SECTION 3 NOTES; RECORDKEEPING........................................................................ 37
3.1 Revolving Note....................................................................... 37
3.2 Working Capital Note................................................................. 37
3.3 Term Note............................................................................ 37
3.4 Capital Expenditure Loan Note........................................................ 37
3.5 Recordkeeping........................................................................ 37
SECTION 4 INTEREST.................................................................................... 37
4.1 Interest Rates on Revolving Loans.................................................... 37
4.2 Interest Rates on Working Capital Loans.............................................. 38
4.3 Interest Rates on Term Loans......................................................... 38
4.4 Interest Rates on Capital Expenditure Loans.......................................... 39
4.5 Default Interest..................................................................... 39
4.6 Conversion or Continuation........................................................... 39
4.7 Special Provisions Governing LIBOR Rate Loans........................................ 40
(a) Determination of Interest Period............................................ 40
(b) Determination of Interest Rate.............................................. 41
(c) Substituted Rate of Borrowing............................................... 41
(d) Illegality.................................................................. 42
(e) Options of Borrower......................................................... 42
(f) Compensation................................................................ 42
(g) Manner of Funding of LIBOR Rate Loans....................................... 43
(h) LIBOR Rate Loans After Default.............................................. 43
4.8 Interest Payment Dates............................................................... 43
4.9 Setting of Rates..................................................................... 43
4.10 Computation of Interest.............................................................. 43
SECTION 5 FEES........................................................................................ 44
5.1 Revolving Loan Non-Use Fee........................................................... 44
5.2 Working Capital Loan Non-Use Fee..................................................... 44
5.3 Capital Expenditure Loan Non-Use Fee................................................. 44
5.4 Closing Fee.......................................................................... 45
5.5 Computation of Fees.................................................................. 45
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5.6 Letter of Credit Fees................................................................ 45
SECTION 6 ACCOUNT AGREEMENTS; ACCOUNTS; LIST OF ACCOUNTS AND ACCOUNT STATEMENTS....................... 45
6.1 Account Agreements................................................................... 45
6.2 Accounts............................................................................. 46
(a) Master Account and Lockbox.................................................. 46
(b) Operating Account........................................................... 46
(c) Other Accounts.............................................................. 46
6.3 List of Accounts and Account Statements.............................................. 47
SECTION 7 PROCEEDS OF COLLATERAL; APPLICATION OF FUNDS; DEEMED LOANS.................................. 47
7.1 Proceeds of Collateral; Notices to Account Debtors; Lockbox.......................... 47
7.2 Application of Funds Available for Operating Expenses................................ 47
7.3 Application of Funds Available for Loan Repayments................................... 48
7.4 Application Upon an Event of Default................................................. 48
7.5 Deemed Loans......................................................................... 49
SECTION 8 INCREASED COSTS AND OTHER SPECIAL PROVISIONS................................................ 50
8.1 Increased Costs...................................................................... 50
8.2 Funding Losses....................................................................... 50
8.3 Conclusiveness of Statements; Survival of Provisions................................. 50
8.4 Discretion of Lenders as to Manner of Funding........................................ 51
SECTION 9 COLLATERAL SECURITY......................................................................... 51
9.1 Borrower............................................................................. 51
9.1.1. Personal Property........................................................... 51
9.1.2. Real Estate................................................................. 51
9.1.3. Subsidiary Guaranties....................................................... 51
9.1.4. Subsidiary Pledge Agreement................................................. 51
9.2 Parent............................................................................... 52
9.2.1. Pledge Agreement............................................................ 52
9.2.2. Guaranty.................................................................... 52
9.3 B&L.................................................................................. 52
9.4 Warrant.............................................................................. 52
9.5 Change of Location or Name........................................................... 52
9.5 Deliveries; Further Assurances....................................................... 53
9.6 Subsequently Acquired Property....................................................... 53
9.7 Asset Sales and Equity Sales......................................................... 54
SECTION 10 REPRESENTATIONS AND WARRANTIES............................................................. 54
10.1 Due Organization, Authorization...................................................... 55
10.2 Certain Agreements................................................................... 55
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10.3 Financial Information; Financial Condition........................................... 55
10.4 Litigation and Contingent Obligations................................................ 57
10.5 Liens................................................................................ 57
10.6 Absence of Default................................................................... 57
10.7 Employee Benefit Plans............................................................... 58
10.8 Investment Company Act; Public Utility Holding Company Act........................... 59
10.9 Regulations G, U and X............................................................... 59
10.10 Proceeds............................................................................. 59
10.11 Acquisition Instruments.............................................................. 59
10.12 Insurance............................................................................ 60
10.13 Material Disruptions................................................................. 60
10.14 Patents, Trademarks.................................................................. 60
10.15 Ownership of Properties; Property Schedule........................................... 60
10.16 Business Locations; Trade Names...................................................... 61
10.17 Accuracy of Information.............................................................. 61
10.18 Subsidiaries......................................................................... 61
10.19 Hazardous Materials.................................................................. 61
10.20 Agent's Fees......................................................................... 61
10.21 Taxes................................................................................ 61
10.22 Securities Laws...................................................................... 62
10.23 Governmental Authorizations.......................................................... 62
10.24 Compliance with Laws................................................................. 62
10.25 Employees and Labor.................................................................. 63
SECTION 11 COVENANTS.................................................................................. 63
11.1 Reports, Certificates and other Information.......................................... 63
11.1.1. Initial Balance Sheet....................................................... 63
11.1.2. Audit Report................................................................ 63
11.1.3. Quarterly Reports........................................................... 64
11.1.4. Monthly Reports............................................................. 64
11.1.5. Business Plan............................................................... 64
11.1.6. Compliance Certificates; Management Reports................................. 65
11.1.7. Auditors' Materials......................................................... 65
11.1.8. Reports to SEC and to Shareholders.......................................... 65
11.1.9. Notice of Default, Litigation, Intellectual Property and
ERISA Matters............................................................... 65
11.1.10. Insurance Reports........................................................... 66
11.1.11. Withdrawal Liability........................................................ 66
11.1.12. Information Concerning Parent and its Subsidiaries.......................... 66
11.1.13. List of Officers and Directors.............................................. 67
11.1.14. Tax Returns and Receipts.................................................... 67
11.1.15. Other Information........................................................... 67
11.2 Corporate Existence; Foreign Qualification........................................... 67
11.3 Books, Records and Inspections....................................................... 67
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11.4 Insurance............................................................................ 67
11.5 Taxes and Liabilities................................................................ 68
11.6 Environmental Liabilities............................................................ 68
11.7 Compliance with Laws................................................................. 69
11.8 Maintenance of Permits............................................................... 69
11.9 Collateral Documents................................................................. 69
11.10 Employee Benefit Plans............................................................... 69
11.11 Indebtedness......................................................................... 70
11.12 Liens................................................................................ 70
11.13 Current Ratio........................................................................ 70
11.14 Adjusted Operating Profit............................................................ 70
11.15 Net Cash Ratio....................................................................... 71
11.16 Leverage Ratio....................................................................... 72
11.17 Gross Capital Expenditures........................................................... 73
11.18 Leases............................................................................... 73
11.19 Restricted Payments to Equity Holders................................................ 73
11.20 Restricted Payments of Indebtedness.................................................. 74
11.21 Transactions with Affiliates......................................................... 75
11.22 Mergers, Acquisitions, Consolidations, Sales......................................... 75
11.23 Guaranties, Loans, Advances or Investments........................................... 75
11.24 Business Activities.................................................................. 76
11.25 Subsidiaries......................................................................... 76
11.26 Fiscal Year.......................................................................... 76
11.27 Unconditional Purchase Obligations................................................... 76
11.28 Regulations G, U and X............................................................... 76
11.29 Other Agreements..................................................................... 76
11.30 No Amendment of Certain Documents.................................................... 76
11.31 Steri-Oss Name Change................................................................ 76
SECTION 12 CONDITIONS................................................................................. 77
12.1 Initial Loan......................................................................... 77
12.1.1. Acquisition................................................................. 77
12.1.2. No Default.................................................................. 77
12.1.3. Warranties and Representations.............................................. 77
12.1.4. Lender Approval of Certain Documents........................................ 77
12.1.5. Litigation.................................................................. 77
12.1.6. Fees........................................................................ 78
12.1.7. Establishment of Accounts................................................... 78
12.1.8. Indebtedness to be Refinanced............................................... 78
12.1.9. Documents................................................................... 78
(a) Certain Related Documents........................................... 78
(b) Leases and Landlord Consents........................................ 78
(c) Resolutions......................................................... 79
(d) Incumbency and Signatures........................................... 79
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(e) Articles and By-Laws................................................ 79
(f) List of Directors and Officers...................................... 79
(g) Good Standing Certificates.......................................... 79
(h) Financial Statements................................................ 79
(i) Evidence of Financial Condition..................................... 79
(j) Opinions of Counsel................................................. 80
(k) Consents............................................................ 80
(l) Insurance........................................................... 80
(m) Licenses and Permits................................................ 80
(n) Subordinated Loan Instruments....................................... 80
(o) Acquisition Instruments............................................. 80
(p) Equity Instruments.................................................. 80
(q) Employment Agreements.............................................. 80
(r) Management Agreement................................................ 80
(s) Confirmatory Certificate............................................ 80
(t) Other............................................................... 81
12.1.10. Subordinated Loan Instruments............................................... 81
12.1.11. Initial Equity Contribution................................................. 81
12.2 Initial Revolving Loan and Working Capital Loan; Maximum Loan
Balance at Closing.......................................................... 81
12.2.1. Order of Funding............................................................ 81
12.2.2. Maximum Loan Balance at Closing............................................. 81
12.3 All Loans; LC Guaranties.................................................... 81
12.3.1. No Default; Reaffirmation of Warranties and
Representations............................................................. 81
12.3.2. Litigation; Adverse Changes................................................. 81
12.3.3. Borrowing Certificate and Other Confirmations............................... 82
12.3.4. Minimum Loan Balance........................................................ 82
SECTION 13 EVENTS OF DEFAULT AND THEIR EFFECT......................................................... 82
13.1 Events of Default........................................................... 82
13.1.1. Non-Payment of Loans or Reimbursement Obligations........................... 82
13.1.2. Non-Payment of Fees or Other Amounts........................................ 82
13.1.3. Non-Payment of Other Indebtedness........................................... 82
13.1.4. Intentionally Omitted....................................................... 83
13.1.5. Bankruptcy, Insolvency, etc................................................. 83
13.1.6. Non-compliance with Certain Provisions...................................... 83
13.1.7. Non-compliance With Other Provisions of this
Agreement or the Related Documents.......................................... 83
13.1.8. Indebtedness to be Refinanced............................................... 84
13.1.9. Warranties and Representations.............................................. 84
13.1.10. Employee Benefit Plans...................................................... 84
13.1.11. Related Documents........................................................... 84
13.1.12. Collateral.................................................................. 84
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13.1.13. Change in Ownership........................................................ 84
13.1.14. Subordinated Loan Instruments.............................................. 85
13.1.15. Litigation................................................................. 85
13.2 Effect of Event of Default........................................................... 85
SECTION 14 GENERAL.................................................................................... 85
14.1 Waiver; Amendments................................................................... 85
14.2 Confirmations........................................................................ 86
14.3 Notices.............................................................................. 86
14.4 Costs, Expenses and Taxes............................................................ 86
14.5 Indemnification...................................................................... 87
14.6 SUBMISSION TO JURISDICTION........................................................... 89
14.7 Governing Law........................................................................ 90
14.8 Entry Into Agreement................................................................. 90
14.9 Legal Opinions....................................................................... 90
14.10 JURY TRIAL........................................................................... 90
14.11 Successors and Assigns............................................................... 91
14.12 Confidentiality...................................................................... 91
SECTION 15 ASSIGNMENT AND PARTICIPATION; AGENTS....................................................... 92
15.1 Assignments and Participations in Loans and Notes.................................... 92
15.2 Appointment of Agents................................................................ 93
15.3 Investigation........................................................................ 94
15.4 Indemnification...................................................................... 95
15.5 Set Off and Sharing of Payments...................................................... 95
15.6 Disbursement of Funds................................................................ 96
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SCHEDULES
SCHEDULE I Revolving Loan Commitment Reduction Dates and Amounts (Section 2.1.1)
SCHEDULE II Term Loan Commitment Reduction Dates and Amounts (Section 2.1.4)
SCHEDULE III Capital Expenditure Loan Commitment Reduction Dates and Amounts (Section 2.1.5)
SCHEDULE IV Locations of Bank Accounts (Section 6.2 and 6.3)
SCHEDULE V Litigation (Section 10.4)
SCHEDULE VI Insurance (Section 10.12)
SCHEDULE VII Intellectual Property Rights (Section 10.14)
SCHEDULE VIII Certain Property of Borrower (Section 10.15)
SCHEDULE IX Business Locations; Trade Names; Real Estate (Section 10.16)
SCHEDULE X Hazardous Materials (Section 10.19)
SCHEDULE XI Business Activities (Section 11.24)
SCHEDULE XII Indebtedness (including Indebtedness to be
Refinanced); Liens (Sections 10.5 and 11.11);
Contingent Obligations (Section 10.4)
EXHIBITS
EXHIBIT A LC Guaranty (Section 2.1.3)
EXHIBIT B LC Reimbursement Agreement (Section 2.1.3)
EXHIBIT C Working Capital Commitment Extension Request (Section 2.2)
EXHIBIT D Notice of LIBOR Activity (Section 2.3(a))
EXHIBIT E Revolving Note (Section 3.1)
EXHIBIT F Working Capital Note (Section 3.2)
EXHIBIT G Term Note (Section 3.3)
EXHIBIT H Capital Expenditure Loan Note (Section 3.4)
EXHIBIT I Compliance Certificate (Section 11.1.6)
EXHIBIT J Borrowing Certificate (Section 12.3.3)
EXHIBIT K LC Guaranty Request (Section 12.3.3)
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SECURED CREDIT AGREEMENT
THIS SECURED CREDIT AGREEMENT, dated as of November 15, 1996, is among
S-O OPERATING CORP., a Delaware corporation ("Borrower"), FIRST SOURCE FINANCIAL
LLP, an Illinois registered limited liability partnership (in its individual
capacity, together with its successors and assigns, "FSFP"), for itself, as a
Lender, and as collateral agent for all other Lenders (this and all other
capitalized terms used herein are defined in Section 1 of this Agreement), and
UNION BANK OF CALIFORNIA, N.A., a national banking association (in its
individual capacity, together with its successors and assigns, "Union Bank"),
for itself, as a Lender, and as administrative agent for all other Lenders.
BACKGROUND
1. S-O Acquisition Corp., a Delaware corporation ("Parent"), Bausch &
Lomb Incorporated, a New York corporation ("B&L"), and Steri-Oss, Inc., a
California corporation ("Steri-Oss") (B&L and Steri-Oss sometimes hereinafter
are referred to collectively as "Seller"), have entered into an Asset Purchase
Agreement of even date herewith (the "Asset Purchase Agreement"), pursuant and
subject to the terms and conditions of which Parent has agreed to acquire all or
substantially all of the Property of Steri-Oss. Parent has assigned its rights
and delegated its duties under the Asset Purchase Agreement to Borrower pursuant
to the Assignment and Assumption dated as of October 29, 1996 between Parent and
Borrower and consented to by Seller.
2. Borrower desires that Lenders extend financing to enable Borrower to
consummate the Acquisition, to repay the Indebtedness to be Refinanced, to
provide funds for capital expenditures, to pay the transaction costs incurred in
connection with the Related Transactions and to supply the working capital loan
and other financing needs of Borrower, such financing to be comprised of the
working capital loan, capital expenditure loan, reducing revolving loan, term
loan and letter of credit facilities established by this Agreement, all on the
terms and conditions set forth herein.
3. As security for the loans and other financial accommodations to be
made by Lenders to, or for the account of, Borrower (a) Borrower will grant to
Collateral Agent a first priority lien on, and a security interest in, all of
its Property, including the Subsidiary Equity Interests, (b) Parent will
guaranty the payment and performance of the Liabilities and will grant to
Collateral Agent a first priority lien on, and a security interest in, all of
the Borrower Equity Interests, (c) each of Borrower's Subsidiaries will guaranty
the payment and performance of the Liabilities and will grant to Collateral
Agent a first priority lien on, and a security interest in, all of its Property
and (d) B&L will guaranty the payment of the Capital Expenditure Loans.
4. Accordingly, in consideration of the mutual agreements contained
herein, and subject to the terms and conditions hereof, the parties hereto agree
as follows:
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SECTION 1 CERTAIN DEFINITIONS.
SECTION 1.1 Certain Definitions. When used herein, the following terms
shall have the following meanings:
Account Debtor shall mean any Person obligated on or under any Account
Receivable, Chattel Paper or General Intangible.
Account Receivable shall mean any "accounts," as defined in the Uniform
Commercial Code, of Borrower or any of its Subsidiaries.
Accounts - see Section 6.1.
Acquisition shall mean the acquisition by Borrower of the Property of
Steri-Oss to be acquired by Borrower pursuant to the terms and
conditions of the Acquisition Instruments.
Acquisition Instruments shall mean, collectively, the Asset Purchase
Agreement and all other documents and instruments executed by Borrower
or Seller in connection with the Acquisition.
Adjusted Operating Profit shall mean, for any period, Net Income for
such period before deduction of any amount which, in conformity with
GAAP, would be set forth opposite the caption "income tax expense"
(including deferred income taxes) (or any like caption) on a
consolidated income statement of Borrower and its Subsidiaries for such
period, plus (a) (without double counting) payments made pursuant to
Section 11.19(i) during such period to the extent such payments were
subtracted in determining Net Income, less (b) any amount which, in
conformity with GAAP, would be set forth opposite the caption
"extraordinary pre-tax gain" (or any like caption) on such an income
statement, plus (c) Interest Expense to the extent deducted in
determining Net Income for such period, plus (d) an amount which, in
conformity with GAAP, would be set forth opposite the caption
"depreciation and amortization expenses" (or any like caption)
(including, without limitation, amortization of Intangible Assets) on
such an income statement for such period, to the extent the same are
deducted from the consolidated net revenues of Borrower and its
Subsidiaries, in conformity with GAAP, in determining Net Income for
such period.
Administrative Agent shall mean Union Bank or its successor appointed
pursuant to Section 15.2, as administrative agent for the benefit of
Lenders.
Affiliate of any Person shall mean (a) any director (or Person holding
the equivalent position) or officer (or Person holding the equivalent
position) of such Person or of any Affiliate of such Person and (b) any
other Person which, directly or indirectly, controls or is controlled
by or under common control with such Person (excluding any trustee
under, or any committee with responsibility for administering, any
Pension Plan). Parent, Investor and Seller shall be deemed to be
Affiliates of Borrower. None of Collateral
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Agent, Administrative Agent, any Lender or Subordinated Lender shall be
deemed to be an Affiliate of Borrower, Parent or any of their
respective Subsidiaries or other Affiliates. A Person shall be deemed
to be
(a) "controlled by" any other Person if such other Person
possesses, directly or indirectly, power
(i) to vote 10% or more of the securities
having at the time of any determination hereunder
voting power for the election of directors of such
Person (or Persons holding equivalent positions); or
(ii) to direct or cause the direction of the
management and policies of such Person, whether by
contract or otherwise; or
(b) "controlled by" or "under common control with" such
other Person if such other Person is a member of the
immediate family of such Person or is the executor,
administrator, or other personal representative of such
Person.
Agent and Agents shall mean, collectively, Collateral Agent and
Administrative Agent, and individually, either such Person.
Agent Bank shall mean any bank serving in the capacity of agent for
Lenders under the Bank Agency Agreement. The initial Agent Bank shall
be Union Bank.
Agreement shall mean this Secured Credit Agreement, as the same may be
amended, restated, modified or supplemented from time to time with the
prior written consent of the Requisite Lenders.
Asset Purchase Agreement - see Background.
Asset Sale shall mean any sale, assignment, conveyance, transfer or
other disposition of any Property of Borrower or any of its
Subsidiaries other than (a) any sale, lease or license of inventory or
Intangible Assets in the ordinary course of business, (b) any sale or
trade-in of items of equipment which promptly are replaced and (c) any
other sale of any Property of Borrower in an arm's length transaction
for fair value provided the aggregate value of all such Property sold
in any Fiscal Year does not exceed $50,000.
Asset Sale Proceeds shall mean the aggregate cash proceeds payable to
Borrower or any of its Subsidiaries in connection with any Asset Sale,
after deduction of all reasonable and customary costs and expenses of
such Asset Sale.
Assignment and Acceptance - see Section 15.1.
B&L - see Background.
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B&L Guaranty - see Section 9.3.
Bank Agency Agreement - see Section 6.1.
Borrower - see Preamble.
Borrower Equity Interests shall mean all of the capital stock and
options, warrants and other rights to acquire capital stock of
Borrower.
Borrower Pledge Agreement - see Section 9.1.5.
Borrowing Certificate - see Section 12.3.3.
Business Day shall mean (a) for all purposes other than as covered by
clause (b) below, any day of the year (other than any Saturday or
Sunday) on which the Federal Reserve Bank is open for business in
Chicago, Illinois and Los Angeles, California and (b) with respect to
all notices, determinations, fundings and payments in connection with
the LIBOR Rate and/or LIBOR Rate Loans, any day that is a Business Day
pursuant to clause (a) and that is also a day for trading by and
between banks in the London interbank market.
Cap Amount shall mean, at any time, the sum of the reimbursement
obligations of Borrower guaranteed by each LC Guaranty at the time of
its issuance (such amount, with respect to any LC Guaranty, being
herein called the "Relevant Cap"); it being understood that:
(a) the Relevant Cap with respect to any LC Guaranty may be
reduced from time to time by the Stated Amount of a Permitted LC
covered thereby if Lenders shall have received evidence satisfactory to
the Requisite Lenders that all of the following conditions have been
satisfied: (i) such Permitted LC shall have terminated or expired in
accordance with its terms, (ii) such Permitted LC shall have been
surrendered to the Issuer thereof and cancelled, (iii) if such
Permitted LC shall have been drawn upon, the Issuer thereof shall have
been fully reimbursed for such draw, and (iv) such Issuer shall have
consented in writing to a reduction, equal to such Stated Amount in
such Relevant Cap; and
(b) the Relevant Cap with respect to any LC Guaranty may be
increased from time to time by the Stated Amount of a Permitted LC to
be covered thereby if Lenders shall have received evidence satisfactory
to the Requisite Lenders that such Permitted LC shall be issued in a
manner permitted by this Agreement concurrently with such increase;
provided, however, that in no event shall the Cap Amount exceed at any
time $1,000,000; and provided, further, that for purposes of
determining the Cap Amount, each LC Guaranty issued hereunder shall be
included unless the applicable Issuer shall have
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acknowledged in writing that Lenders shall have no further obligations
thereunder or Lenders shall have received other assurances from the
applicable Issuer that Lenders shall have no further obligations
thereunder.
Capital Expenditure Loan and Capital Expenditure Loans - see Section
2.1.5.
Capital Expenditure Loan Commitment - see Section 2.1.5.
Capital Expenditure Loan Commitment Reduction Amount - see Section
2.8(a).
Capital Expenditure Loan Commitment Reduction Date shall mean each date
indicated as such in Schedule III or, if such date is not a Business
Day, the next succeeding Business Day.
Capital Expenditure Loan Termination Date shall mean November 15, 2002.
Capital Expenditure Note - see Section 3.4.
Cash Equivalents shall mean any or all of the following: obligations
of, or guaranteed as to interest and principal by, the United States
Government maturing within 90 days after the date on which such
obligations are purchased; open market commercial paper of any
corporation (other than Borrower or any of its Affiliates) incorporated
under the laws of the United States of America or any State thereof or
the District of Columbia rated "Prime-1" or its equivalent by ▇▇▇▇▇'▇
Investors Services, Inc. or "A-1" or its equivalent by Standard &
Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.; or certificates
of deposit maturing within 90 days after the issuance thereof issued by
commercial banks organized or licensed to receive deposits under the
laws of the United States of America or of any political subdivision
thereof and either (a) having a combined capital and surplus in excess
of $500,000,000 or (b) being one of the four domestic banks having the
largest combined capital and surplus among banks having their principal
offices in Chicago, Illinois.
Cash Instruments shall mean all cash, checks, drafts and other similar
writings for the payment of money, including, without limitation, all
insurance and condemnation proceeds, Asset Sale Proceeds and Equity
Sale Proceeds.
Chattel Paper shall mean any of Borrower's "chattel paper," as defined
in the Uniform Commercial Code.
Closing Date shall mean the date the initial Loans are disbursed.
Code shall mean the Internal Revenue Code of 1986, as amended.
Collateral shall mean all property and/or rights on or in which a Lien
is granted to
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Collateral Agent (or to any other agent, trustee or other party acting
on behalf of Lenders), to secure the payment, performance or observance
of all or any of the Liabilities, including any such Lien granted
pursuant to this Agreement or any of the Collateral Documents or any
other agreements, instruments or documents provided for herein or
therein or delivered or to be delivered hereunder or thereunder or in
connection herewith or therewith.
Collateral Agent shall mean FSFP or its successor appointed pursuant to
Section 15.2, as collateral agent for the benefit of Lenders.
Collateral Assignment of Asset Purchase Agreement shall mean a
collateral assignment of Parent's and Borrower's rights under the Asset
Purchase Agreement acknowledged and consented to by Seller, in form and
substance satisfactory to the Requisite Lenders.
Collateral Documents shall mean, collectively, the Guaranty, the
Subsidiary Guaranties, the B&L Guaranty, the Security Agreement, the
Collateral Assignment of Asset Purchase Agreement, the Mortgages, the
Bank Agency Agreement, the Borrower Pledge Agreement, the Pledge
Agreement, the Financing Statements, the Insurance Assignment and any
and all other agreements, instruments or documents provided for in
Section 9 or otherwise pursuant to which a Lien is granted to
Collateral Agent (or to any agent, trustee, or other party acting on
behalf of Lenders), as security for all or any of the Liabilities, as
such documents may be amended, restated, modified or supplemented from
time to time.
Collected Balances - see Section 7.2.
Commitment shall mean, at any time with respect to a Lender, the
principal amount set forth beside such Lender's name under the heading
"Commitment" on the signature pages of this Agreement or on the
signature page of the Assignment and Acceptance pursuant to which such
Lender became a Lender hereunder in accordance with the provisions of
Section 15.1, as such Commitment may be adjusted from time to time in
accordance with the provisions of Section 15.1
Commitments shall mean, collectively, the Letter of Credit Commitment,
the Revolving Loan Commitment, the Term Loan Commitment, the Capital
Expenditure Loan Commitment and the Working Capital Commitment.
Compliance Certificate - see Section 11.1.6.
Contingent Obligation as to any Person shall mean the undrawn face
amount of any letters of credit issued for the account of such Person
and shall also mean any obligation of such Person guaranteeing or in
effect guaranteeing any Indebtedness, leases, dividends, letters of
credit or other obligations ("primary obligations") of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether
or not contingent, (a) to purchase any such primary
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20
obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or
payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the financial condition or solvency of the primary obligor,
(c) to purchase property, securities or services primarily for the
purpose of assuring the obligee under any such primary obligation of
the ability of the primary obligor to make payment of such primary
obligation or (d) otherwise to assure or hold harmless the obligee
under such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not
include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation
shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation or, where such Contingent Obligation
is specifically limited to a portion of any such primary obligation,
that portion to which it is limited or, if not stated or determinable,
the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined
by such Person in good faith.
Contractual Obligation of any Person shall mean any provision of any
security issued by such Person or of any agreement, document,
instrument or undertaking to which such Person is a party or by which
it or any of its Property is bound.
Controlled Group shall mean Borrower and any corporation, partnership,
trade or business that is, together with Borrower, a member of a
controlled group of corporations or partnerships or a controlled group
of trades or businesses under common control or treated as a single
employer, or whose employees would be treated as employed by Borrower
or any of its Subsidiaries, under Section 414 of the Code or Section
4001 of ERISA.
Current Assets shall mean, at any date, the amount which, in conformity
with GAAP, would be set forth opposite the caption "total current
assets" (or any like caption) on a consolidated balance sheet of
Borrower and its Subsidiaries at such date, less, without duplication,
cash, Cash Instruments, and Cash Equivalents.
Current Liabilities shall mean, at any date, the amount which, in
conformity with GAAP, would be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance
sheet of Borrower and its Subsidiaries at such date, less any portion
thereof attributable to the Notes (other than the Working Capital
Note), the Subordinated Note, leases which have been, or, in accordance
with GAAP, should be, recorded as capitalized leases, or any other
Indebtedness incurred hereunder.
Current Ratio shall mean, at any date, the ratio on such date of (a)
Current Assets (excluding Intangible Assets) to (b) Current
Liabilities.
Daily Settlement Date - see Section 2.3(c).
Default Interest Period - see Section 4.5(b).
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Default Rate - see Section 4.5(a).
Dollar(s) and the sign "$" shall mean lawful money of the United States
of America.
Domestic International Sales Corporation shall mean a "domestic
international sales corporation" as defined in Section 992 of the Code.
1818 shall mean The 1818 Fund II, L.P., a Delaware limited partnership.
1818 Warrants shall mean the warrants, substantially in the form of
Exhibit D to the Securities Purchase Agreement, issued by Parent to
1818 on the Closing Date.
Eligible Assignee shall mean (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $200,000,000; (b) a savings and loan
association or savings bank organized under the laws of the United
States, or any state thereof, and having a combined capital and surplus
of at least $200,000,000; (c) a commercial bank organized under the
laws of any other country that is a member of the OECD or has concluded
special lending arrangements with the International Monetary Fund
associated with its General Arrangements to Borrow, or a political
subdivision of any such country, and having a combined capital and
surplus of at least $200,000,000, so long as such bank is acting
through a branch or agency located in the United States and
demonstrates to the reasonable satisfaction of Borrower that it is not
subject to withholding tax; (d) the central bank of any country that is
a member of the OECD and which has a double tax treaty with the United
States; (e) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership, trust or other
entity) that is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and having a
combined capital and surplus of at least $200,000,000 or a fund with
total assets under its management in excess of $200,000,000; (f) any
Affiliate of FSFP, (g) any Affiliate of Union Bank, and (h) any other
Person (other than an Affiliate of Borrower) approved by the Requisite
Lenders and Borrower, such approval not to be unreasonably withheld.
Employee Benefit Plan shall mean any "employee benefit plan," as
defined under Section 3(3) of ERISA or any other plan, policy, program,
arrangement or agreement, whether or not written, with respect to
current employees, former employees, independent contractors or leased
employees, or the beneficiaries or dependents thereof, which is or has
been maintained by Borrower or a current or past member of its
Controlled Group, is adopted by Borrower or any member of its
Controlled Group in compliance with Section 4.8 of the Asset Purchase
Agreement or as to which Borrower or any member of its Controlled Group
otherwise has or could have any liability.
Employment Agreements shall mean those certain employment agreements
each dated as of the Closing Date between Borrower and (a) ▇▇▇
▇▇▇▇▇▇▇▇, (b) ▇▇▇ ▇▇▇▇▇▇▇ and (c) ▇▇▇▇▇▇ ▇▇▇▇▇.
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Equipment shall mean any "equipment," as defined in the Uniform
Commercial Code.
Equitable shall mean The Equitable Life Assurance Society of the United
States, a New York insurance company.
Equity Instruments shall mean the Securities Purchase Agreement, the
Registration Rights Agreement, the Stockholders Agreement, the Restated
Certificate of Incorporation and by-laws of Parent, the 1818 Warrants,
the S-O Warrants, the Subordinated Debt Warrants and all other warrants
to purchase Parent Equity Interests issued by Parent on the Closing
Date.
Equity Interests shall mean, collectively, the Subsidiary Equity
Interests, the Borrower Equity Interests and the Parent Equity
Interests.
Equity Sale shall mean any issuance, sale, give away, conveyance,
transfer or other disposition of any Equity Interests or any other
change in the capital structure of Borrower, any of its Subsidiaries or
Parent, including, without limitation, any capital contribution to
Borrower, any of its Subsidiaries or Parent and any private or public
offering of Equity Interests by Borrower, any of its Subsidiaries or
Parent.
Equity Sale Proceeds shall mean the aggregate cash proceeds paid to
Borrower, any of its Subsidiaries or Parent in connection with any
Equity Sale (other than any such proceeds used to consummate any
acquisition approved in writing by the Requisite Lenders of all or
substantially all of the assets or or stock of any class of, or any
partnership or joint venture interest in, any Person), after deduction
of all reasonable, and customary costs and expenses of such Equity
Sale.
ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended.
Event of Default shall mean any of the events or conditions described
in Section 13.1.
Exeter Lenders shall mean Exeter Venture Lenders, L.P., a Delaware
limited partnership.
Exeter Partners shall mean Exeter Equity Partners, L.P., a Delaware
limited partnership.
Fee Letter Agreement - see Section 5.4.
Financed Equipment shall mean any Equipment purchased with the proceeds
of any Capital Expenditure Loan.
Financing Statements shall mean such duly executed Uniform Commercial
Code financing statements as the Requisite Lenders deem necessary to
perfect and preserve Collateral Agent's Lien on the Collateral.
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Fiscal Quarter shall mean any fiscal quarter of Borrower and its
Subsidiaries for financial accounting purposes.
Fiscal Year shall mean the fiscal year of Borrower and its Subsidiaries
for financial accounting purposes, which fiscal year ends on December
31.
Force Majeure shall mean acts of God, acts of public enemies,
insurrections, riots, civil disturbances, strikes, boycotts, other
direct consequences of a labor dispute, other industrial disturbances,
fires, explosions, floods, epidemics, quarantine restrictions,
shortages of materials, equipment or transportation, freight embargoes,
power or utility failures, orders or acts, or failures to act, of civil
or military authority or other similar causes beyond the control of
Borrower.
Foreign Sales Corporation shall mean a "foreign sales corporation" as
defined in Section 922 of the Code.
FSFP - see Preamble.
Funding Date shall mean, with respect to any Loan, the date of the
funding of such Loan.
GAAP shall mean generally accepted accounting principles in the United
States of America as in effect from time to time.
General Intangible shall mean any of Borrower's "general intangibles,"
as defined in the Uniform Commercial Code.
Gross Capital Expenditures shall mean, for any period, the total of all
expenditures incurred by Borrower and its Subsidiaries in respect of
the purchase or other acquisition of fixed or capital assets during
such period other than any such expenditures made from insurance or
condemnation proceeds, without any deduction for trade-ins, salvage
values, resales or similar recoveries, including the amount which in
accordance with GAAP is or should be initially posted to the
consolidated balance sheet of Borrower and its Subsidiaries with
respect to leases entered into during such period which have been, or,
in accordance with GAAP, should be, recorded as capitalized leases or
disclosed as such in footnotes to such consolidated balance sheet.
Guaranty - see Section 9.2.2.
Hazardous Material shall mean: (a) any "hazardous substance" as now
defined pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C.A. Section
9601(14), as amended by the Superfund Amendments and Reauthorization
Act ("▇▇▇▇"), and including the judicial interpretation thereof; (b)
any "pollutant or contaminant" as defined in 42 U.S.C.A. Section
9601(33); (c) any material now defined as "hazardous waste" pursuant to
40 C.F.R. Part 261; (d) any petroleum, including
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crude oil and any fraction thereof; (e) natural gas, natural gas
liquids, liquefied natural gas, or synthetic gas usable for fuel; (f)
any "hazardous chemical" as defined pursuant to 29 C.F.R. Part 1910;
(g) any asbestos, polychlorinated biphenyl (PCB), or isomer of dioxin,
or any material or thing containing or composed of such substance or
substances; and (h) any other substance, regardless of physical form,
that is subject to any past, present or future Federal, state, local or
foreign governmental statute, requirement, rule of liability or
standard of conduct relating to the protection of human health, plant
life, animal life, natural resources, property or the reasonable
enjoyment of life or property from the presence in the environment of
any solid, liquid, gas, odor, or any form of energy, from whatever
source.
Indebtedness of a Person shall mean (a) indebtedness of such Person for
borrowed money, (b) indebtedness of such Person for the deferred
purchase price of services or property, excluding trade payables
incurred in the ordinary course of business, (c) monetary obligations
of such Person under leases which have been, or, in accordance with
GAAP, should be, recorded as capitalized leases, (d) indebtedness of
such Person arising under acceptance facilities and (e) indebtedness of
such Person consisting of unpaid reimbursement obligations in respect
of all drawings under letters of credit issued for the account of such
Person (including, without limitation, with respect to each of the
foregoing clauses (a) through (d), any such indebtedness or obligation
which is nonrecourse to the credit of such Person but is secured by
assets of such Person).
Indebtedness to be Refinanced - see Section 12.1.8.
Initial Equity Contribution shall mean the cash equity contribution
made by Parent to Borrower on or before the Closing Date in an
aggregate amount not less than $25,000,000.
Intangible Assets shall mean, with reference to Borrower and its
Subsidiaries, licenses, franchises, patents, patent applications,
trademarks, trademark applications, tradenames, copyrights, copyright
applications, computer software rights, goodwill and research and
development expense or other like intangibles shown on the consolidated
balance sheet of Borrower and its Subsidiaries.
Interest Expense shall mean, for any period, the amount which, in
conformity with GAAP, would be set forth opposite the caption "interest
expense" (or any like caption) on a consolidated income statement of
Borrower and its Subsidiaries for such period.
Interest Period shall mean with respect to any LIBOR Rate Loan, a
period of one, three or six months commencing on a Business Day
selected by Borrower pursuant to this Agreement. Each such Interest
Period shall end on (but exclude) the date which numerically
corresponds to such Business Day one, three or six months thereafter,
provided, however, that if there is no such numerically corresponding
day in such next, third or sixth succeeding month, such Interest Period
shall end on the first Business Day
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of the month next succeeding such next, third or sixth succeeding
month.
Investor shall mean, collectively, S-O LLC, 1818, SOMC and, to the
extent SOMC has the right to vote all Parent Equity Interests owned by
them, Exeter Lenders and Exeter Partners.
Issuer shall mean Union Bank or any other financial institution which
Borrower, from time to time with the prior written consent of the
Requisite Lenders, may select to issue Permitted LCs.
Key-Man Life Insurance shall mean key-man life insurance, if any,
maintained by Borrower from time to time with respect to its officers.
LC Exposure shall mean, at any time, the sum of (a) the Cap Amount at
such time, plus (b) the then aggregate amount of outstanding
Reimbursement Obligations.
LC Guaranty - see Section 2.1.3.
LC Guaranty Request - see Section 12.3.3.
LC Reimbursement Agreement - see Section 2.1.3.
LC Utilization - see Section 5.6.
Lease Obligations shall mean, at any date, the rental commitments of
Borrower and its Subsidiaries under leases for real and/or personal
property (including taxes, insurance, maintenance and similar expenses
which Borrower and its Subsidiaries are obligated to pay under the
terms of said leases) on such date, whether or not such obligations are
reflected as liabilities or commitments on a balance sheet of Borrower
or any Subsidiary in the notes thereto, excluding, however, obligations
under leases which have been, or, in accordance with GAAP, should be,
recorded as capitalized leases.
Lenders shall mean, collectively, FSFP, Union Bank and all other
financial institutions parties to this Agreement, together with their
respective successors and permitted assigns pursuant to Section 15.1,
and, individually, any of such Persons.
Lender Party - see Section 14.5(a).
Letter of Credit shall mean an irrevocable standby letter of credit
issued by an Issuer for the account of Borrower pursuant to an LC
Reimbursement Agreement.
Letter of Credit Commitment - see Section 2.1.3.
Liabilities shall mean all of the following, in each case howsoever
created, arising or
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evidenced, whether direct or indirect, joint or several, absolute or
contingent, or now or hereafter existing or arising, or due or to
become due: (a) all liabilities, obligations and Indebtedness to
Lenders, Collateral Agent and Administrative Agent of Borrower, any of
its Subsidiaries or Parent under or in connection with this Agreement,
any Note, any Letter of Credit, any LC Guaranty or any of the other
Related Documents (including, without limitation, all Reimbursement
Obligations), (b) all other liabilities, obligations and Indebtedness
of Borrower, any of its Subsidiaries or Parent to Lenders, Collateral
Agent and Administrative Agent, whether or not arising out of or in
connection with this Agreement, any Note, any LC Guaranty, any Letter
of Credit or any of the other Related Documents, and (c) all other
liabilities, obligations and Indebtedness of Borrower, any of its
Subsidiaries or Parent to Lender in connection with the Related
Transactions.
LIBOR Interest Payment Date shall mean, with respect to any LIBOR Rate
Loan (a) the first Business Day of each month and (b) the last day of
each Interest Period applicable thereto.
LIBOR Interest Rate Determination Date - see Section 4.7(b).
LIBOR Rate shall mean, for any Interest Period, an interest rate per
annum obtained by dividing (a) the rate of interest published in The
Wall Street Journal two (2) Business Days prior to the first day of
such Interest Period under the caption "Money Rates; London Interbank
Offered Rates (LIBOR)," with respect to a time period equal to such
Interest Period, by (b) a percentage equal to 100% minus the LIBOR
Reserve Percentage, if any, in effect on the applicable LIBOR Interest
Rate Determination Date; provided, however, that if such publication is
not available or such rate is not set forth therein, the LIBOR Rate
shall be determined on the basis of Telerate Page 3750, and further
provided, however, that if Telerate Page 3750 is not available or such
rate is not set forth therein, the LIBOR Rate shall be determined on
the basis of any other source reasonably acceptable to the Requisite
Lenders and Borrower.
LIBOR Rate Loans shall mean Loans which bear interest determined by
reference to the LIBOR Rate.
LIBOR Reserve Percentage shall mean, for any day, the aggregate of the
rates (expressed as a decimal), of reserve requirements current on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves) under any regulation promulgated by the Board of
Governors of the Federal Reserve System (or any other governmental
authority having jurisdiction over Lenders) as in effect from time to
time dealing with reserve requirements prescribed for eurocurrency
funding, including any reserve requirements with respect to
"eurocurrency liabilities" under Regulation D of the Board of Governors
of the Federal Reserve System.
Lien shall mean any mortgage, lien, security title, pledge,
encumbrance, charge, retained security title of a conditional vendor or
lessor, or other security interest of any kind,
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whether arising under a security agreement, mortgage, deed of trust,
leasehold deed of trust, deed to secure debt, chattel mortgage,
assignment, pledge, retention of security title, financing or similar
statement or notice or arising as a matter of law, judicial process or
otherwise.
Loan and Loans - see the last paragraph of Section 2.1.
Lockbox - see Section 6.2(a).
Management Agreement shall mean the Management Agreement dated as of
the Closing Date between Borrower and SOMC.
Management Fees shall mean all fees, expenses and other amounts payable
by Borrower under the Management Agreement, in an aggregate amount not
to exceed $250,000 in any Fiscal Year.
Master Account - see Section 6.2(a).
Material Adverse Effect shall mean (a) a material adverse effect on the
financial condition, operations, assets, liabilities, business or
prospects of Borrower, its Subsidiaries and Parent, taken as a whole on
a consolidated basis or (b) a material impairment of the ability of
Borrower, its Subsidiaries and Parent, taken as a whole on a
consolidated basis, to perform its obligations in connection with this
Agreement or any of the Related Documents to which it is a party or of
Lenders, Collateral Agent or Administrative Agent to enforce or collect
any of the Liabilities.
Material Intellectual Property Right - see Section 10.14.
Maximum Amount of the Working Capital Commitment shall mean, at any
time, $5,000,000 (as reduced pursuant to this Agreement, including
pursuant to Section 2.6).
Mortgage and Mortgages - see Section 9.1.2.
Multiemployer Plan shall mean any "multiemployer plan" within the
meaning of Section 3(37) or 4001(a)(3) of ERISA to which Borrower or a
current or past member of its Controlled Group is making or has made
contributions to or as to which Borrower or any member of its
Controlled Group otherwise has or could have any liability.
Net Cash Generated shall mean, for any period, an amount equal to (a)
Adjusted Operating Profit for such period, plus (b) to the extent
deducted in determining Net Income for such period, Management Fees
paid or accrued for such period, less (c) Gross Capital Expenditures
incurred during such period, other than any Gross Capital Expenditures
made from the proceeds of Capital Expenditure Loans.
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Net Income shall mean, for any period, an amount equal to the net
income or loss of Borrower and its Subsidiaries as it would appear on a
consolidated income statement of Borrower and its Subsidiaries for such
period prepared in accordance with GAAP.
Note and Notes shall mean the Revolving Note, the Term Note, the
Capital Expenditure Loan Note and the Working Capital Note, or any of
them.
Notice of LIBOR Activity - see Section 2.3(a).
Operating Account - see Section 6.2(b).
Parent - see Background.
Parent Equity Interests shall mean all of the capital stock and
options, warrants and other rights to acquire capital stock of Parent.
PBGC shall mean the Pension Benefit Guaranty Corporation, and any
entity succeeding to any or all of its functions under ERISA.
Pension Plan shall mean any "employee pension benefit plan," as such
term is defined in Section 3(2) of ERISA (other than a Multiemployer
Plan), which is (a) subject to title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code or Section 302
of ERISA and (b) is or has been maintained by Borrower or a current or
past member of its Controlled Group or as to which Borrower or any
member of its Controlled Group otherwise has or could have any
liability.
Permitted LC shall mean a Letter of Credit issued with the Requisite
Lenders' prior written consent; provided, however, that (a) each such
Letter of Credit shall expire pursuant to its terms on or before the
Working Capital Loan Termination Date, (b) at no time shall Total WC
Exposure exceed the Working Capital Commitment in effect at such time,
(c) Borrower's reimbursement obligations with respect to each such
Letter of Credit shall be secured by an LC Guaranty and (d) Lenders and
the respective Issuer shall have agreed in writing that the Relevant
Cap for such LC Guaranty shall be increased by an amount equal to the
Stated Amount of such Letter of Credit.
Permitted Liens shall mean any of the following Liens:
(a) Liens in favor of Collateral Agent;
(b) Liens in connection with the acquisition or lease of
fixed assets after the date hereof and attaching only
to the Property being acquired, if the Indebtedness
secured thereby does not exceed $250,000 in the
aggregate for Borrower at any one time outstanding;
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(c) Liens for current taxes or other governmental charges
or levies which are not delinquent or are being
contested in good faith and by appropriate
proceedings, and with respect to which adequate
reserves have been established, and are being
maintained, in accordance with GAAP;
(d) mechanic's, worker's, materialmen's and other like
Liens arising in the ordinary course of business in
respect of obligations which are not delinquent or
which are being contested in good faith and by
appropriate proceedings, and with respect to which
adequate reserves have been established, and are
being maintained, in accordance with GAAP;
(e) Liens arising in the ordinary course of business for
sums being contested in good faith and by appropriate
proceedings, and with respect to which adequate
reserves have been established, and are being
maintained, in accordance with GAAP, or for sums not
due, and in any case not involving any deposits or
advances for borrowed money or the deferred purchase
price of Property or services;
(f) zoning ordinances, easements, licenses,
rights-of-way, reservations, covenants, encumbrances,
conditions or restrictions on the use of Property
which are not violated in any material respect by
existing uses or improvements, do not interfere with
the use of the related Property and do not materially
adversely affect the merchantability of the title to
the related Property;
(g) Liens in respect of judgments or awards with respect
to which no Event of Default would exist pursuant to
Section 13.1.16;
(h) Liens incurred in the ordinary course of business in
connection with worker's compensation, unemployment
insurance or other forms of governmental insurance or
benefits;
(i) Liens shown on Part 1 of Schedule XII;
(j) following payment under and satisfaction by B&L of
the B&L Guaranty, Liens in the Financed Equipment in
favor of B&L; and
(k) statutory landlord's Liens.
Permitted Prior Liens shall mean any of the following Liens:
(a) the Permitted Liens described in clauses (b), (f),
(h), (i) and (j) of the definition of Permitted
Liens, subject to the limitations, if any, set forth
therein;
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(b) the Permitted Liens described in clauses (c) and (d)
of the definition of Permitted Liens that are
accorded priority by law to the Liens in favor of
Lender granted pursuant to the Collateral Documents;
and
(c) prior to December 31, 1997 and for so long as
Borrower occupies its leased premises in Yorba Linda,
California, the Liens described in clause (k) of the
definition of Permitted Liens that are accorded
priority by law to the Liens in favor of Lender
granted pursuant to the Collateral Documents.
Person shall mean any natural person, corporation, firm, general or
limited partnership, limited liability company or partnership, trust,
association, government, governmental agency or other entity, whether
acting in an individual, fiduciary or other capacity.
Pledge Agreement - see Section 9.2.1.
Prepayment Premium - see Section 2.11.
Property shall mean all types of real, personal or mixed property and
all types of tangible or intangible property.
Pro Rata Share shall mean, with respect to a Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of
such Lender's Commitment and the denominator of which is the amount of
all of the Commitments.
Reference Rate shall mean at any time the rate per annum then most
recently announced by The First National Bank of Chicago, a national
banking association, as its corporate base rate at Chicago, Illinois
(or if such rate is not being quoted, the rate which is the successor
to such rate, and if no successor is being quoted, the rate
conceptually equivalent to such rate which the domestic commercial bank
having the highest combined capital and surplus of any bank having its
principal office in Chicago, Illinois is quoting).
Reference Rate Loans shall mean Loans which bear interest determined by
reference to the Reference Rate.
Register - see Section 15.1.
Registration Rights Agreement shall mean the Registration Rights
Agreement dated November 15, 1996 among Parent, 1818, S-O LLC, SOMC,
Larkspur Capital Corporation, FSFP, Union Bank, Equitable, Exeter
Lenders and Exeter Partners.
Reimbursement Obligations - see Section 2.15.1.
Related Documents shall mean the Notes, the Subordination Agreement,
the Warrant, the
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Collateral Documents and all other agreements, documents and
instruments executed and delivered by Borrower, any of its
Subsidiaries, Parent or Investor in connection with the Loans.
Related Transactions shall mean all transactions contemplated by this
Agreement and the Related Documents, including, without limitation, the
Acquisition, the Initial Equity Contribution, the Loans, the
Subordinated Loan, the repayment of the Indebtedness to be Refinanced
and the granting by Borrower, its Subsidiaries and Parent to Collateral
Agent of Liens on the Collateral to secure the Liabilities.
Reportable Event shall have the meaning given to such term under
Section 4043 of ERISA; provided such Reportable Event would give rise
to any liability of Borrower in excess of $100,000.
Requirement of Law for any Person shall mean the corporate charter and
by-laws, partnership agreement or other organizational or governing
documents of such Person, and any law, treaty, rule, ordinance or
regulation or determination of an arbitrator or a court or other
governmental authority, in each case applicable to or binding upon such
Person or any of its Property or to which such Person or any of its
Property is subject.
Requisite Lenders shall mean Lenders having sixty-six and two thirds
percent (66.67%) or more of the total Commitments then in effect.
Revolving Loan and Revolving Loans - see Section 2.1.1.
Revolving Loan Commitment - see Section 2.1.1.
Revolving Loan Commitment Reduction Amount - see Section 2.5(a).
Revolving Loan Commitment Reduction Date shall mean each date indicated
as such in Schedule I or, if such date is not a Business Day, the next
succeeding Business Day.
Revolving Loan Termination Date - see Section 2.1.1.
Revolving Note - see Section 3.1.
Scheduled Reduction in the Capital Expenditure Loan Commitment for any
Capital Expenditure Loan Commitment Reduction Date shall mean the
amount set forth in Schedule III opposite such Capital Expenditure Loan
Commitment Reduction Date.
Scheduled Reduction in the Revolving Loan Commitment for any Revolving
Loan Commitment Reduction Date shall mean the amount set forth in
Schedule I opposite such Revolving Loan Commitment Reduction Date.
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Scheduled Reduction in the Term Loan Commitment for any Term Loan
Commitment Reduction Date shall mean the amount set forth in Schedule
II opposite such Term Loan Commitment Reduction Date.
Security Agreement - see Section 9.1.1.
Securities Purchase Agreement shall mean the Securities Purchase
Agreement dated November 15, 1996 between Parent and 1818.
Seller - see Background.
S-O LLC shall mean S-O Acquisition LLC, a New York limited liability
company managed by SOMC.
SOMC shall mean S-O Management LLC, a New York limited liability
company, whose managing members are the S-O Principals.
S-O Principals shall mean ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇.
S-O Warrants shall mean the warrants, substantially in the form of
Exhibit E to the Securities Purchase Agreement, issued by Parent to S-O
LLC on the Closing Date.
Stated Amount shall mean, with respect to any Permitted LC and as of
any date of determination, the maximum amount for which a draw or a
demand for payment may then be made thereunder, whether or not such
maximum amount is defined therein as the "Stated Amount" thereof.
Steri-Oss - see Background.
Stockholders Agreement shall mean the Stockholders Agreement dated
November 15, 1996 among Parent, 1818, SOMC, S-O LLC, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, FSFP, Union Bank, Equitable, Exeter Lenders
and Exeter Partners.
Subordinated Debt Warrants shall mean the warrants to purchase Parent
Equity Interests issued by Parent to Subordinated Lender on the Closing
Date pursuant to the Subordinated Note.
Subordinated Indebtedness shall mean all Indebtedness owed by Borrower
to Subordinated Lender pursuant to the Subordinated Loan Instruments.
Subordinated Lender shall mean, collectively, Equitable, Exeter Lenders
and Exeter Partners.
Subordinated Loan shall mean the loan in the original principal amount
of $12,500,000
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made by Subordinated Lender to Borrower pursuant to the Subordinated
Loan Instruments.
Subordinated Loan Instruments shall mean the Subordinated Note
Agreement, Subordinated Note, the Subordinated Debt Warrants and all
other documents and instruments executed by Borrower, Parent or
Subordinated Lender in connection with the Subordinated Loan.
Subordinated Note shall mean, collectively, the promissory notes issued
pursuant to the Subordinated Note Agreement in the original principal
amount of (a) $10,000,000 issued by Borrower to Equitable, (b)
$1,250,000 issued by Borrower to Exeter Lenders and (c) $1,250,000
issued by Borrower to Exeter Partners.
Subordinated Note Agreement shall mean, collectively, those certain
Subordinated Note and Warrant Purchase Agreements, each dated as of the
Closing Date among Borrower, Parent and (a) Equitable, (b) Exeter
Lenders and (c) Exeter Partners.
Subordination Agreement shall mean a subordination agreement among
Lenders, Borrower and Subordinated Lender, in form and substance
satisfactory to the Requisite Lenders, as amended, modified or
supplemented from time to time with the prior written consent of the
Requisite Lenders.
Subsidiary of a Person shall mean any corporation, general partnership,
limited partnership, limited liability company, limited liability
partnership or other entity of which such Person and/or its other
subsidiaries, individually or in the aggregate, own, directly or
indirectly, such number of outstanding shares or other equity interests
as have at the time of any determination hereunder 50% or more of the
ordinary voting power for the election of directors (or their
equivalent under the laws of the jurisdiction of organization of such
corporation, general partnership, limited partnership, limited
liability company, limited liability partnership or other entity).
Subsidiary Equity Interests shall mean all of the capital stock and
options, warrants and other rights to acquire capital stock of
Borrower's Subsidiaries.
Subsidiary Guaranties - see Section 9.1.4.
Term Loan and Term Loans - see Section 2.1.4.
Term Loan Commitment - see Section 2.1.4.
Term Loan Commitment Reduction Amount - see Section 2.7(a).
Term Loan Commitment Reduction Date shall mean each date indicated as
such in Schedule II or, if such date is not a Business Day, the next
succeeding Business Day.
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Term Note - see Section 3.3.
Term Loan Termination Date - see Section 2.1.4.
Total Fixed Charges shall mean, for any period, the sum of (a) all
scheduled or accelerated payments of cash interest or principal paid or
payable on account of Indebtedness of Borrower and its Subsidiaries,
including any and all penalties, premiums, prepayment fees or the like
thereon (including without limitation any Scheduled Reduction in the
Revolving Loan Commitment, Scheduled Reduction in the Term Loan
Commitment and Scheduled Reduction in the Capital Expenditure Loan
Commitment, whether or not such reduction gives rise to a payment of
any Loans) with respect to such period plus (b) income taxes paid or
payable with respect to such period directly by Borrower or any of its
Subsidiaries to any governmental authority, plus (c) amounts paid or
payable by Borrower under Section 11.19(i), plus (d) Management Fees
paid in cash by Borrower to the extent permitted under Section
11.21(a)(ii), plus (e) to the extent not subtracted in determining Net
Income and without double counting, all amounts paid by Borrower with
respect to such period to purchase, redeem or otherwise acquire any
Equity Interests. Nothing contained herein shall be deemed to permit
Borrower to take any action otherwise prohibited by this Agreement. For
purposes of the foregoing, "scheduled payments" shall not include
repayments of Loans (i) pursuant to clauses tenth and eleventh of
Section 7.3 or (ii) following any reductions or termination of the
Commitments pursuant to Section 2.5, 2.6, 2.7 or 2.8.
Total Funded Debt at any date shall mean the sum of (a) all
Indebtedness of Borrower and its Subsidiaries to Lenders solely for
money borrowed, (b) $12,500,000 of the Indebtedness of Borrower and its
Subsidiaries to Subordinated Lender solely for money borrowed and (c)
the Stated Amount of all Permitted LCs.
Total WC Exposure shall mean, at any time, the sum of (a) the LC
Exposure, if any, at such time and (b) the then aggregate outstanding
principal amount of all Working Capital Loans.
Unapplied Insurance or Condemnation Proceeds shall mean all casualty
insurance or condemnation proceeds with respect to the Property of
Borrower or any of its Subsidiaries which are not intended to be
applied to the repair, restoration, replacement or rebuilding of the
damaged, destroyed or condemned Property pursuant to the Collateral
Documents.
Uniform Commercial Code shall mean the Uniform Commercial Code as in
effect in the State of New York on the date of this Agreement.
Union Bank - see Preamble.
Unmatured Event of Default shall mean any event or condition which if
it continues uncured will, with the lapse of time or notice or lapse of
time and notice, constitute an
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Event of Default.
Warrant - see Section 9.4.
Welfare Plan shall mean any Employee Benefit Plan which is an "employee
welfare benefit plan," as such term is defined in Section 3(1) of
ERISA.
Working Capital Commitment - see Section 2.1.2.
Working Capital Commitment Extension Request - see Section 2.2.
Working Capital Loan and Working Capital Loans - see Section 2.1.2,
including any Reimbursement Obligations which have been converted to
Working Capital Loans.
Working Capital Loan Termination Date - see Section 2.1.2.
Working Capital Note - see Section 3.2.
SECTION 1.2 Accounting and Financial Determinations. Where the
character or amount of any asset or liability or item of income or expense is
required to be determined, or any accounting computation is required to be made,
for the purpose of this Agreement or the Related Documents, such determination
or calculation shall be made, to the extent applicable and except as otherwise
specified in this Agreement or such Related Document, on a consolidated basis so
as to include Subsidiaries of Borrower in each such calculation and in
accordance with GAAP; provided, however, that if any change in generally
accepted accounting principles from those applied in the preparation of the
financial statements referred to in Section 10.3 hereof is occasioned by the
promulgation of rules, regulations, pronouncements and opinions by or required
by the Financial Accounting Standards Board or the American Institute of
Certified Public Accountants (or successors thereto or agencies with similar
functions), the initial announcement of which change is made after the Closing
Date, results in a change in the method of calculation of financial covenants,
standards or terms found in Sections 1 or 11 hereof, the parties hereto agree to
enter into good faith negotiations in order to amend such provisions so as to
reflect such changes with the desired result that the criteria for evaluating
Borrower's financial condition shall be the same after such changes as if such
changes had not been made; and provided, further, that until such time as the
parties hereto agree upon such amendments, such financial covenants, standards
and terms shall be construed and calculated as though such change had not taken
place. When used herein, the term "financial statement" shall include the notes
and schedules thereto, if any.
SECTION 1.3 Cross References; Headings. The words "hereof," "herein"
and "hereunder" and words of a similar import when used in this Agreement or in
any of the Related Documents shall refer to this Agreement or such Related
Document as a whole and not to any particular provision of this Agreement or
such Related Document. Section, Schedule and Exhibit references contained in
this Agreement are references to Sections, Schedules and Exhibits in or
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to this Agreement unless otherwise specified. Any reference in any Section or
definition to any clause is, unless otherwise specified, to such clause of such
Section or definition. The various headings in this Agreement and the Related
Documents are inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement or such Related Document or any provision
hereof or thereof.
SECTION 2 COMMITMENTS OF LENDERS; LOAN REQUESTS; REDUCTION
OR TERMINATION OF THE COMMITMENTS; PREPAYMENTS;
MAKING OF PAYMENTS; SETOFF
SECTION 2.1 Commitments. Subject to the terms and conditions
of this Agreement, each Lender agrees, severally on its own behalf and
not jointly with any other Lender:
2.1.1. Revolving Loan Commitment. To make loans to Borrower
(herein collectively called the "Revolving Loans" and individually
called a "Revolving Loan") on a revolving basis from time to time
before November 15, 2001 (herein called the "Revolving Loan Termination
Date") in such amounts as Borrower from time to time may request up to
its Pro Rata Share of the amount set forth in Schedule I (as reduced
pursuant to this Agreement, including pursuant to Section 2.5) at such
time.
The foregoing commitment of Lenders is herein called the
"Revolving Loan Commitment."
2.1.2. Working Capital Commitment. To make loans to Borrower
(herein collectively called the "Working Capital Loans" and
individually called a "Working Capital Loan") on a revolving basis from
time to time before November 15, 1999 or such later date as may be
established pursuant to Section 2.2 (herein called the "Working Capital
Loan Termination Date") in such amounts as Borrower from time to time
may request up to its Pro Rata Share of the then existing Maximum
Amount of the Working Capital Commitment at such time, provided,
however, that (i) such Lender shall not be required to make any Working
Capital Loan following the initial Working Capital Loan unless there
shall be outstanding, at the time of such proposed Working Capital
Loan, Term Loans in the full principal amount of the Term Loan
Commitment then in effect and Revolving Loans in the full principal
amount of the Revolving Loan Commitment then in effect; (ii) such
Lender shall not be required to make any Working Capital Loan if, after
giving effect to such Working Capital Loan, the aggregate Total WC
Exposure would exceed the Maximum Amount of the Working Capital
Commitment then in effect; and (iii) the initial Working Capital Loan
shall not exceed $500,000.
The foregoing commitment of Lenders is herein called the
"Working Capital Commitment."
2.1.3. Letter of Credit Commitment. To issue to an Issuer
guaranties,
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substantially in the form set forth in Exhibit A, or any other
assurance of repayment acceptable to such Issuer which such Lender in
its sole discretion may offer (each such guaranty or other assurance
herein, together with any extension or renewals thereof, or guaranties
issued by such Lender in substitution therefor from time to time,
called an "LC Guaranty") of its Pro Rata Share of reimbursement
obligations of Borrower arising under reimbursement agreements
substantially in the form set forth in Exhibit B or such other form as
is satisfactory to the Requisite Lenders (herein collectively called
the "LC Reimbursement Agreements" and individually called an "LC
Reimbursement Agreement"), in each case executed in connection with
Permitted LCs; provided however, that such Lender shall not be required
to issue any LC Guaranty if, after giving effect to such issuance,
Total WC Exposure would exceed the Working Capital Commitment then in
effect, and provided, further, that in no event shall the aggregate
amount of reimbursement obligations of Borrower secured at any time
pursuant to LC Guaranties exceed $1,000,000. All LC Guaranties shall
expire on or before the Working Capital Loan Termination Date.
The foregoing commitment of Lenders is herein called the
"Letter of Credit Commitment."
2.1.4. Term Loan Commitment. To make term loans to Borrower
(herein collectively called the "Term Loans" and individually called a
"Term Loan") on a non- revolving basis from time to time before
November 15, 2002 (herein called the "Term Loan Termination Date") in
such amounts as Borrower from time to time may request up to its Pro
Rata Share of the amount set forth in Schedule II (as reduced pursuant
to this Agreement, including pursuant to Section 2.7) at such time.
The foregoing commitment of Lenders is herein called the "Term
Loan Commitment."
2.1.5. Capital Expenditure Loan Commitment. To make term loans
to Borrower (herein collectively called the "Capital Expenditure Loans"
and individually called a "Capital Expenditure Loan") on a
non-revolving basis from time to time before November 15, 1999 in such
amounts as Borrower from time to time may request up to its Pro Rata
Share of the amount set forth in Schedule III (as reduced pursuant to
this Agreement, including pursuant to Section 2.8) at such time, solely
for the purpose of financing Borrower's purchase of Equipment.
The foregoing commitment of Lenders is herein called the
"Capital Expenditure Loan Commitment."
The Revolving Loans, the Working Capital Loans, the Term Loans and the
Capital Expenditure Loans are herein collectively called "Loans" and
individually called a "Loan."
SECTION 2.2 Extension of Working Capital Loan Termination Date.
Borrower,
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pursuant to a Working Capital Commitment Extension Request substantially in the
form set forth in Exhibit C (a "Working Capital Commitment Extension Request"),
delivered to the Administrative Agent not more than 120, nor less than 30,
Business Days prior to the then scheduled Working Capital Loan Termination Date,
may request Lenders to extend all or part (as specified in such Working Capital
Commitment Extension Request) of the Working Capital Commitment and the Letter
of Credit Commitment for up to two additional one year periods, each expiring on
the anniversary of the then scheduled Working Capital Loan Termination Date (or,
if such date is not a Business Day, on the next succeeding Business Day). If no
Event of Default or Unmatured Event of Default has occurred and is continuing on
the then scheduled Working Capital Loan Termination Date, the Working Capital
Loan Termination Date shall be extended for an additional one year period as so
requested, but in no event beyond November 15, 2001.
SECTION 2.3 Loan Requests; Settlement Procedures.
(a) With respect to borrowings comprised of Reference Rate
Loans not exceeding an aggregate amount of $1,000,000 or less in a
single day, Borrower shall give notice to the Collateral Agent of each
such proposed borrowing by 10:00 A.M., Chicago time on the day of, or
within five (5) Business Days prior to, the proposed Funding Date of
such borrowing. With respect to borrowings comprised of Reference Rate
Loans in an aggregate amount in excess of $1,000,000 in a single day,
Borrower shall give notice to the Collateral Agent of each such
proposed borrowing by 10:00 A.M., Chicago time no later than three (3)
Business Days and no sooner than five (5) Business Days prior to, the
proposed Funding Date of such borrowing. Each of the aforementioned
notices may be oral and shall be confirmed in writing on or before the
fifteenth Business Day of the first calendar month following the
Funding Date of each such borrowing by delivery of a Borrowing
Certificate to each Lender. With respect to borrowings comprised of
LIBOR Rate Loans, Borrower shall deliver to each Lender written notice
of each such proposed borrowing substantially in the form set forth on
Exhibit D (each a "Notice of LIBOR Activity") by 10:00 A.M., Chicago
time at least three (3) Business Days prior to, but in any event no
more than five (5) Business Days prior to, the proposed Funding Date.
Each oral or written notice, as the case may be, given pursuant to this
Section 2.3(a) shall be irrevocable. Loans made on any Funding Date (x)
in the case of Reference Rate Loans, shall be in an aggregate minimum
amount of $105,000 and integral multiples of $5,000 in excess thereof
and (y) in the case of LIBOR Rate Loans, shall be in an aggregate
minimum amount of $1,000,000 and integral multiplies of $100,000 in
excess thereof. Subject to receipt by Collateral Agent of the documents
required under Section 12 with respect to such borrowing and the
satisfaction of all other conditions precedent to such borrowing set
forth in this Agreement, on the requested Funding Date the Collateral
Agent shall pay over such funds by wire transfer to the Master Account
(except that, with respect to the initial Loans, disbursement shall be
according to instructions to be agreed upon by Lenders and Borrower on
or prior to the Closing Date).
(b) No Lender Party shall incur any liability to Borrower in
acting upon any
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oral notice referred to above which such Lender Party believes in good
faith to have been given by a duly authorized officer or other person
authorized to borrow on behalf of Borrower or for otherwise acting in
good faith under this Section 2.3 and, upon funding of any Loans by
Collateral Agent or any Lender in accordance with this Agreement
pursuant to any such oral notice, Borrower shall have effected a Loan
hereunder.
(c) On or prior to 10:00 a.m. (Chicago time) on each Business
Day on which it is asked to make an advance with respect to Loans,
Collateral Agent shall advise each Lender by telephone or facsimile
transmission of the requested Funding Date, the amount of such advance
and the amount of such Lender's Pro Rata Share thereof. Each Lender
shall pay to Collateral Agent the amount of such Lender's Pro Rata
Share of such advance prior to 11:00 a.m. (Chicago time) on the
proposed Funding Date. Provided that each Lender has made all payments
required to be made by it hereunder, on or prior to 11:00 a.m. (Chicago
time) on the next Business Day after receipt by Collateral Agent of any
payments of principal with respect to the Loans and interest, fees and
other amounts with respect to the Liabilities (the "Daily Settlement
Date"), Collateral Agent shall pay to each Lender the amount of such
Lender's Pro Rata Share of such payments. If any payment from any
Lender to Collateral Agent or from Collateral Agent to any Lender is
not, in fact, made by the party from whom payment is due, the other
party shall be entitled to recover such corresponding amount on demand
(which demand shall be promptly made) together with interest thereon at
the Federal Funds Rate, for each day from the Funding Date or Daily
Settlement Date on which such amount was due until such amount is paid.
SECTION 2.4 Certain Waivers. Borrower waives presentment, demand for
payment, notice of dishonor and protest, notice of the creation of any of the
Liabilities and all other notices whatsoever to Borrower with respect to the
Liabilities except notices required under Section 13.1. The obligations of
Borrower under this Agreement and the Related Documents shall not be affected by
(a) the failure of any Lender Party, any of its successors or assigns or any
holder of the Notes or any of the Liabilities to assert any claim or demand or
to exercise or enforce any right, power or remedy against Borrower, any of its
Subsidiaries, Parent, Investor, the Collateral or otherwise, (b) any extension
or renewal for any period (whether or not longer than the original period) or
exchange of any of the Liabilities or the release or compromise of any
obligation of any nature of any Person with respect thereto, (c) the surrender,
release or exchange of all or any part of any property (including without
limitation the Collateral) securing payment, performance and observance of any
of the Liabilities or the compromise or extension or renewal for any period
(whether or not longer than the original period) of any obligations of any
nature of any Person with respect to any such property, and (d) any other act,
matter or thing (other than payment and satisfaction) which would or might, in
the absence of this provision, operate to release, discharge or otherwise
prejudicially affect the obligations of Borrower.
SECTION 2.5 Reduction or Termination of the Revolving Loan Commitment.
(a) On each Revolving Loan Commitment Reduction Date, the
Revolving Loan
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Commitment in effect on such date shall be reduced by an amount equal
to the sum of (i) the Revolving Loan Commitment Reduction Amount plus
(ii) for each Revolving Loan Commitment Reduction Date occurring on
January 1 of any year (commencing with January 1, 1998) on which there
is $1,000 or zero in aggregate outstanding principal amount of all
Working Capital Loans, an amount equal to the amount by which (x) the
Revolving Loan Commitment as adjusted pursuant to the foregoing clause
(i) exceeds (y) the daily average of the outstanding principal amount
of the Revolving Loans for a period of 30 days preceding such Revolving
Loan Commitment Reduction Date, plus the amount of any payments
received by Borrower from Metalor during such 30 day period, rounded up
to the nearest integral multiple of $50,000; provided, however, that
prior to the termination of the Revolving Loan Commitment, the
Revolving Loan Commitment shall at no time be less than $1,000. For
purposes of the foregoing, "Revolving Loan Commitment Reduction Amount"
shall mean the amount indicated with respect to the relevant Revolving
Loan Commitment Reduction Date in Schedule I under the caption
"Scheduled Reduction in Revolving Loan Commitment." Borrower shall not,
in anticipation of any Revolving Loan Commitment Reduction Date, take
any actions primarily intended to increase the amount specified in
clause (y) above for such date. These actions could include, for
example and not by way of limitation, prepayment or accelerated payment
of Borrower's trade payables, other obligations or discretionary
expenditures or making short term investments (whether with Revolving
Loan proceeds or other available cash). Additionally, effective as of
the date the amounts described in clauses (A), (B) and (C) below are
required to be applied to the repayment of the Loans, the Revolving
Loan Commitment shall be automatically and permanently reduced by the
amount of all (A) Unapplied Insurance or Condemnation Proceeds, (B)
Asset Sale Proceeds and (C) Equity Sale Proceeds.
(b) In addition to the mandatory reductions of the Revolving
Loan Commitment under clause (a) above, Borrower may voluntarily from
time to time on at least five Business Days' prior written irrevocable
notice to Lender permanently reduce the amount of the Revolving Loan
Commitment or terminate the Revolving Loan Commitment prior to the
Revolving Loan Termination Date; provided, however, that no such notice
may be given unless, prior to or contemporaneously with the effective
date of such reduction or termination, the Working Capital Commitment
and the Letter of Credit Commitment shall have been terminated pursuant
to Section 2.6 or otherwise and the Capital Expenditure Loan Commitment
shall have been terminated pursuant to Section 2.8 or otherwise and
provided, further, that prior to the termination of the Revolving Loan
Commitment, the Revolving Loan Commitment shall at no time be less than
$1,000. Each such voluntary reduction of the Revolving Loan Commitment
shall be in an aggregate amount of at least $100,000 and an integral
multiple of $50,000. Borrower may terminate the Revolving Loan
Commitment only upon payment in full of the Revolving Note and all
amounts, if any, due pursuant to Section 2.11.
(c) The amount of each reduction of the Revolving Loan
Commitment pursuant to clauses (a) and (b) above (other than reductions
pursuant to clause (a) (i) above) shall
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be subtracted (as an additional reduction of the Revolving Loan
Commitment) from the "Amount of Revolving Loan Commitment" set forth in
Schedule I opposite each remaining period in the inverse order of such
remaining periods beginning with the last such period and ending with
the period which includes the date of such reduction; and, upon
Borrower's request, the Collateral Agent shall deliver to Borrower a
copy of Schedule I setting forth such revisions, which revised Schedule
I shall become a part of this Agreement amending any and all previous
versions of Schedule I, provided, however, that the failure of the
Collateral Agent to provide such Schedule I shall not give rise to or
result in any liability of any Lender Party.
SECTION 2.6 Reduction or Termination of the Working Capital Commitment
and Letter of Credit Commitment.
(a) On the Working Capital Commitment Termination Date, the
Working Capital Commitment and the Letter of Credit Commitment in
effect on such date shall be reduced to zero. Additionally, effective
as of the date the amounts described in clauses (i), (ii) or (iii)
below are required to be applied to the repayment of the Loans, the
Working Capital Commitment shall be automatically and permanently
reduced by the amount of all (i) Unapplied Insurance or Condemnation
Proceeds less the amount of any reduction in the Revolving Loan
Commitment pursuant to Section 2.5(a)(A) and the amount of any
reduction in the Capital Expenditure Loan Commitment pursuant to
Section 2.8(a)(i), (ii) Asset Sale Proceeds less the amount of any
reduction in the Revolving Loan Commitment pursuant to Section
2.5(a)(B) and the amount of any reduction in the Capital Expenditure
Loan Commitment pursuant to Section 2.8(a)(ii), and (iii) Equity Sale
Proceeds less the amount of any reduction in the Revolving Loan
Commitment pursuant to Section 2.5(a)(C) and the amount of any
reduction in the Capital Expenditure Loan Commitment pursuant to
Section 2.8(a)(iii).
(b) In addition to the mandatory reduction of the Working
Capital Commitment under clause (a) above, Borrower may voluntarily
from time to time on at least five Business Days' prior written
irrevocable notice to Lender permanently reduce or terminate the amount
of the Working Capital Commitment, any such reduction to be in an
aggregate amount of at least $100,000 and an integral multiple of
$50,000; provided, however, that no such notice may be given unless,
prior to or contemporaneously with the effective date of such reduction
or termination, the Capital Expenditure Loan Commitment shall have been
terminated pursuant to Section 2.8 or otherwise and provided, further,
that prior to the termination of the Working Capital Commitment, the
Working Capital Commitment shall at no time be less than the greater of
(i) LC Exposure at such time and (ii) $1,000. Borrower may terminate
the Working Capital Commitment and the Letter of Credit Commitment only
upon payment in full of the Working Capital Note and all amounts, if
any, due pursuant to Section 2.11 and full and final release and return
by the Issuer of all LC Guaranties to Lenders.
(c) The amount of each reduction of the Working Capital
Commitment
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pursuant to clauses (a) and (b) above shall be subtracted (as an
additional permanent reduction of the Working Capital Commitment) from
the Maximum Amount of the Working Capital Commitment then in effect and
the reduced Maximum Amount of the Working Capital Commitment shall
constitute the Maximum Amount of the Working Capital Commitment.
SECTION 2.7 Reduction or Termination of the Term Loan Commitment.
(a) On each Term Loan Commitment Reduction Date, the Term Loan
Commitment in effect on such date shall be reduced by an amount equal
to the Term Loan Commitment Reduction Amount. For purposes of the
foregoing, "Term Loan Commitment Reduction Amount" shall mean the
amount indicated with respect to the relevant Term Loan Commitment
Reduction Date in Schedule II under the caption "Scheduled Reduction in
Term Loan Commitment." Additionally, effective as of the date the
amounts described in clauses (i), (ii) and (iii) below are required to
be applied to the repayment of the Loans, the Term Loan Commitment
shall be automatically and permanently reduced by the amount of all (i)
Unapplied Insurance or Condemnation Proceeds less the amount of any
reduction in the Revolving Loan Commitment pursuant to Section
2.5(a)(A), the Working Capital Commitment pursuant to Section 2.6(a)(i)
and the Capital Expenditure Loan Commitment pursuant to Section
2.8(a)(i), (ii) Asset Sale Proceeds less the amount of any reduction in
the Revolving Loan Commitment pursuant to Section 2.5(a)(B), the
Working Capital Commitment pursuant to Section 2.6(a)(ii) and the
Capital Expenditure Loan Commitment pursuant to Section 2.8(a)(ii) and
(iii) Equity Sale Proceeds less the amount of any reduction in the
Revolving Loan Commitment pursuant to Section 2.5(a)(C), the Working
Capital Commitment pursuant to Section 2.6(a)(iii) and the Capital
Expenditure Loan Commitment pursuant to Section 2.8(a)(iii).
(b) In addition to the mandatory reductions of the Term Loan
Commitment under clause (a) above, Borrower may voluntarily from time
to time on at least five Business Days' prior written irrevocable
notice to Lender permanently reduce the amount of or terminate the Term
Loan Commitment prior to the Term Loan Termination Date; provided,
however, that no such notice may be given unless, prior to or
contemporaneously with the effective date of such reduction or
termination, the Revolving Loan Commitment, Working Capital Commitment,
the Letter of Credit Commitment and the Capital Expenditure Loan
Commitment shall have been terminated pursuant to Section 2.5, 2.6, 2.8
or otherwise. Each such voluntary reduction of the Term Loan Commitment
shall be in an aggregate amount of at least $100,000 and an integral
multiple of $50,000. Borrower may terminate the Term Loan Commitment
only upon payment in full of the Term Note and all amounts, if any, due
pursuant to Section 2.11.
(c) The amount of each reduction of the Term Loan Commitment
pursuant to clauses (a) and (b) above (other than Term Loan Commitment
Reduction Amounts) shall be subtracted (as an additional reduction of
the Term Loan Commitment) from the "Amount of Term Loan Commitment" set
forth in Schedule II opposite each remaining
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period in the inverse order of such remaining periods beginning with
the last such period and ending with the period which includes the date
of such reduction; and, upon Borrower's request, the Collateral Agent
shall deliver to Borrower a copy of Schedule II setting forth such
revisions, which revised Schedule II shall become a part of this
Agreement amending any and all previous versions of Schedule II;
provided, however, that the failure of the Collateral Agent to provide
such Schedule II shall not give rise to or result in any liability of
any Lender Party.
SECTION 2.8 Reduction or Termination of the Capital Expenditure Loan
Commitment.
(a) On each Capital Expenditure Loan Commitment Reduction
Date, the Capital Expenditure Loan Commitment in effect on such date
shall be reduced by the Capital Expenditure Loan Commitment Reduction
Amount. For purposes of the foregoing, "Capital Expenditure Loan
Commitment Reduction Amount" shall mean the amount indicated in
Schedule III under the caption "Scheduled Reduction in the Capital
Expenditure Loan Commitment." Additionally, effective as of the date
the amounts described in clauses (i), (ii) or (iii) below are required
to be applied to the repayment of the Loans, the Capital Expenditure
Loan Commitment shall be automatically and permanently reduced by the
amount of all (i) Unapplied Insurance or Condemnation Proceeds less the
amount of any reduction in the Revolving Loan Commitment pursuant to
Section 2.5(a)(A), (ii) Asset Sale Proceeds less the amount of any
reduction in the Revolving Loan Commitment pursuant to Section
2.5(a)(B), and (iii) Equity Sale Proceeds less the amount of any
reduction in the Revolving Loan Commitment pursuant to Section
2.5(a)(C).
(b) In addition to the mandatory reduction of the Capital
Expenditure Loan Commitment under clause (a) above, Borrower may
voluntarily from time to time on at least five Business Days' prior
written irrevocable notice to Lender permanently reduce the amount of
or terminate the Capital Expenditure Loan Commitment, any such
reduction to be in an aggregate amount of at least $100,000 and an
integral multiple of $50,000; provided, however, that no such notice
may be given unless, prior to or contemporaneously with the effective
date of such reduction or termination, the Revolving Loan Commitment
shall have been terminated pursuant to Section 2.7 or otherwise.
Borrower may terminate the Capital Expenditure Loan Commitment only
upon payment in full of the Capital Expenditure Loan Note and all
amounts, if any, due pursuant to Section 2.11.
(c) The amount of each reduction of the Capital Expenditure
Loan Commitment pursuant to clauses (a) and (b) above (other than
Capital Expenditure Loan Commitment Reduction Amounts) shall be
subtracted (as an additional reduction of the Capital Expenditure Loan
Commitment) from the "Amount of Capital Expenditure Loan Commitment"
set forth in Schedule III opposite each remaining period in the inverse
order of such remaining periods beginning with the last such period and
ending with the period
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which includes the date of such reduction; and, upon Borrower's
request, the Collateral Agent shall deliver to Borrower a copy of
Schedule III setting forth such revisions, which revised Schedule III
shall become a part of this Agreement amending any and all previous
versions of Schedule III; provided, however, that the failure of the
Collateral Agent to provide such Schedule III shall not give rise to or
result in any liability of any Lender Party.
SECTION 2.9 Mandatory Prepayments.
(a) Concurrently with each reduction (including any
termination) of the Revolving Loan Commitment (whether pursuant to
Section 2.5 or otherwise), Borrower shall make a mandatory prepayment
of the amount, if any, by which the unpaid principal amount of the
Revolving Loans (after giving effect to any repayments thereof pursuant
to Section 7.3), exceeds the then reduced amount of the Revolving Loan
Commitment (and each such payment shall be accompanied by accrued
interest on such principal amount and any Prepayment Premium required
under Section 2.11).
(b) Concurrently with each reduction (including any
termination) of the Working Capital Commitment (whether pursuant to
Section 2.6 or otherwise), Borrower shall make a mandatory prepayment
of the amount, if any, by which (i) Total WC Exposure (after giving
effect to any repayments of the Working Capital Loans pursuant to
Section 7.3) exceeds (ii) the then reduced amount of the Working
Capital Commitment (and each such payment shall be accompanied by
accrued interest on such principal amount and any Prepayment Premium
required under Section 2.11).
(c) Concurrently with each reduction (including any
termination) of the Term Loan Commitment (whether pursuant to Section
2.7 or otherwise), Borrower shall make a mandatory prepayment of the
amount, if any, by which the unpaid principal amount of the Term Loans
exceeds the then reduced amount of the Term Loan Commitment (and each
such payment shall be accompanied by accrued interest on such principal
amount and any Prepayment Premium required under Section 2.11).
(d) Concurrently with each reduction (including any
termination) of the Capital Expenditure Loan Commitment (whether
pursuant to Section 2.8 or otherwise), Borrower shall make a mandatory
prepayment of the amount, if any, by which the unpaid principal amount
of the Capital Expenditure Loans (after giving effect to any repayments
thereof pursuant to Section 7.3), exceeds the then reduced amount of
the Capital Expenditure Loan Commitment (and each such payment shall be
accompanied by accrued interest on such principal amount and any
Prepayment Premium required under Section 2.11).
(e) If at any time Total WC Exposure shall exceed the Working
Capital Commitment then in effect, Borrower shall make a mandatory
prepayment of the Working Capital Loans (and each such prepayment shall
be accompanied by accrued interest on such principal amount and/or
cause a reduction in the Cap Amount then in effect (by the
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delivery of cash collateral to the applicable Issuer or otherwise) in
the aggregate amount of such excess; provided, however, that any such
reduction in the Cap Amount shall not be deemed effective for the
purposes hereof until the applicable Issuer shall have delivered to
Lenders a written acknowledgment thereof.
(f) If at any time the making of a deemed Loan pursuant to the
first sentence of Section 7.5(b) results in Loans or Reimbursement
Obligations exceeding the related Commitment, then Borrower immediately
shall make a mandatory prepayment thereof (and each such payment shall
be accompanied by accrued interest on such principal amount).
(g) Upon receipt by Borrower, any of its Subsidiaries or
Parent of any Unapplied Insurance or Condemnation Proceeds, Asset Sale
Proceeds or Equity Sale Proceeds, Borrower shall make a mandatory
prepayment of the Loans in the amount thereof, each such prepayment to
be applied in the order set forth in Section 7.3 (and each such payment
shall be accompanied by accrued interest on such principal amount and
any payment required under Section 2.11).
SECTION 2.10 Voluntary Prepayments. Borrower voluntarily from time to
time may prepay the Loans in whole or in part, provided that:
(a) any prepayment of the Term Loan may be made only if at the
time of such prepayment and after application of other payments being
made at the same time the aggregate outstanding principal amount of all
Revolving Loans and all Working Capital Loans is $1,000 or zero and no
Reimbursement Obligations are outstanding;
(b) any prepayment of Revolving Loans may be made only if at
the time of such prepayment and after application of other payments
being made at the same time the aggregate outstanding principal amount
of all Working Capital Loans is $1,000 or zero and no Reimbursement
Obligations are outstanding;
(c) any prepayment of Working Capital Loans may be made only
if at the time of such prepayment and after application of other
payments being made at the same time no Reimbursement Obligations are
outstanding;
(d) except for prepayments pursuant to Section 7.3, Borrower
shall give Collateral Agent not less than five (5) Business Days' prior
notice of any prepayment, specifying the Loans to be prepaid, and the
date and amount of such prepayment;
(e) prior to the termination of the Working Capital
Commitment, Borrower shall be entitled to prepay only so much of the
Working Capital Loans as shall leave at all times outstanding a minimum
principal amount of $1,000 in Working Capital Loans;
(f) prior to the termination of the Revolving Loan Commitment,
Borrower
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shall be entitled to prepay only so much of the Revolving Loans as
shall leave at all times outstanding a minimum principal amount of
$1,000 in Revolving Loans;
(g) except for prepayments pursuant to Section 7.3, each
partial prepayment of a Loan shall be in a principal amount of at least
$100,000 and an integral multiple of $50,000; and
(h) each such prepayment shall be accompanied by accrued
interest on the principal amount prepaid and any Prepayment Premium
required under Section 2.11.
SECTION 2.11 Prepayment Premium. Each voluntary reduction of the
Commitments pursuant to Sections 2.5(b), 2.6(b), 2.7(b) and 2.8(b) and each
prepayment of all or any portion of the outstanding principal balance of the
Loans made from any source of funds other than funds derived in the ordinary
course of Borrower's business operations, including funds from any refinancing
of the Liabilities, from Asset Sale Proceeds, from Equity Sale Proceeds (other
than any Equity Sale Proceeds payable in respect of an initial public offering
of any Parent Equity Interests or any additional cash capital contribution to
Borrower by B&L or Investor) or from Unapplied Insurance or Condemnation
Proceeds, shall be accompanied in each case by a prepayment premium ("Prepayment
Premium") in an amount equal to:
(a) if such reduction or prepayment is made at any time during
the period from and including the Closing Date to but excluding the
first anniversary of the Closing Date, one and one-half of one percent
(1.50%) of such reduction or prepayment;
(b) if such reduction or prepayment is made at any time during
the period from and after the first anniversary of the Closing Date to
but excluding the second anniversary of the Closing Date, one percent
(1.00%) of such reduction or prepayment; and
(c) if such reduction or prepayment is made at any time during
the period from and after the second anniversary of the Closing Date to
but excluding the third anniversary of the Closing Date, one-half of
one percent (0.50%) of such reduction or prepayment.
SECTION 2.12 Making of Payments. All payments of principal of, or
interest on, the Notes and of all fees and other Liabilities shall be made by
Borrower to Collateral Agent in immediately available Dollars. All such payments
shall be made to Collateral Agent's Account No. ▇▇▇▇▇▇▇ at LaSalle National
Bank, ABA #▇▇▇▇▇▇▇▇▇ (or such other account as Collateral Agent may specify from
time to time), not later than 12:30 P.M., Chicago time, on the date due; and
funds received after that hour shall be deemed to have been received by
Collateral Agent on the next following Business Day. Anything in this Agreement
to the contrary notwithstanding, under no circumstances shall receipt by Agent
Bank of funds of Borrower (prior to transfer of such funds to Collateral Agent
in accordance with the Bank Agency Agreement) constitute repayment of Loans or
entitle Borrower to interest thereon.
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SECTION 2.13 Due Date Extension. If any payment of principal or
interest with respect to any of the Loans or Reimbursement Obligations falls due
on a Saturday, Sunday or other day which is not a Business Day, then such due
date shall be extended to the next following Business Day, and additional
interest shall accrue and be payable for the period of such extension.
SECTION 2.14 Setoff. Collateral Agent, Administrative Agent, Agent Bank
(all as agents of Lenders), each Lender shall have all rights of set-off
provided by applicable law, and in addition thereto, if at any time any payment
or amount owing by Borrower under or in connection with this Agreement or the
Related Documents is then due, Collateral Agent, Administrative Agent, Agent
Bank (all as agents for Lenders), each Lender may apply to the payment of such
payment or other amount any and all balances, credits, deposits, accounts or
moneys of Borrower then or thereafter with such Person.
SECTION 2.15 Certain Matters Relating to LC Guaranties.
2.15.1. Reimbursement Obligation. Notwithstanding any
provision herein to the contrary, immediately upon any Issuer's
presentation of any demand for payment under an LC Guaranty, Borrower
shall be obligated to reimburse each Lender for such Lender's Pro Rata
Share of such demand, on the date on which such Lender honors its Pro
Rata Share of such demand, in immediately available funds equal to the
amount of such honored demand (such obligations being referred to
herein as "Reimbursement Obligations"). Each Lender shall use its best
efforts to give notice to Borrower of the amount of such honored demand
by such Lender, provided, however, that the failure to give such notice
shall not relieve Borrower of its Reimbursement Obligation nor give
rise to or result in any liability of any Lender. If all or any part of
such demand is not paid by Borrower within two Business Days after
notice from Collateral Agent, such unpaid amount shall bear interest
for each day during the period from the day of such demand until it
shall be paid in full at a rate equal to the Default Rate applicable to
Working Capital Loans which are Reference Rate Loans. Pursuant to a
written notice within five (5) Business Days prior to, or
contemporaneously with, Borrower's incurrence of a Reimbursement
Obligation, Borrower may request that such Reimbursement Obligation be
converted into a Working Capital Loan. Such Reimbursement Obligation
shall be so converted if, and only if, each of the following conditions
shall have been satisfied within three (3) Business Days after the date
the Reimbursement Obligation is incurred: (a) no Event of Default or
Unmatured Event of Default shall have occurred and be continuing, (b)
after giving effect to such conversion, Total WC Exposure shall not
exceed the Working Capital Commitment then in effect, (c) all other
conditions precedent to the making of a Working Capital Loan shall be
satisfied, other than any requirement that the amount of such Loan
shall be in a minimum amount of $105,000 or an integral multiple of
$5,000, and (d) an appropriate officer of Borrower shall have delivered
a certificate confirming satisfaction of each of the conditions
specified in clauses (a), (b) and (c) above. Such conversion shall be
effective on the date on which all of the conditions specified in the
preceding sentence are satisfied, and thereafter each reference in this
Agreement or any other Related Document to a Loan or Loans shall be
deemed to include
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reference to such Reimbursement Obligations as so converted.
2.15.2. Reimbursement Obligations Absolute. The obligation of
Borrower to reimburse a Lender for demands made under the LC Guaranties
shall be unconditional and irrevocable and shall be enforced strictly
in accordance with the terms of this Agreement under all circumstances,
including, without limitation, the following:
(a) lack of validity or enforceability of the applicable LC
Guaranty or Permitted LC;
(b) the existence of any claim, set-off, defense (other than
payment and performance) or other right which Borrower may have at any
time against an Issuer, any other Lender Party or any other Person,
whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any
underlying transaction between Borrower and the beneficiary under a
Permitted LC);
(c) any draft, demand, certificate or any other document
presented under an LC Guaranty or Permitted LC proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(d) payment by any Lender under any LC Guaranty against a
demand which does not comply with the terms of the LC Guaranty,
provided that such payment does not constitute gross negligence or
willful misconduct of such Lender;
(e) any adverse change in the condition (financial or
otherwise) of Borrower;
(f) any breach of this Agreement by Borrower or any other
Lender Party;
(g) any other circumstances or happening whatsoever, which is
similar to any of the foregoing; or
(h) the fact that an Event of Default or an Unmatured Event of
Default shall have occurred and be continuing.
2.15.3. Indemnification. In addition to amounts payable as
elsewhere provided herein and to the provisions of Section 14.5 hereof,
Borrower hereby agrees to indemnify, exonerate and hold each Lender
Party free and harmless from and against any and all claims, demands,
actions, causes of action, suits, losses, costs (including attorneys'
fees and disbursements), charges, liabilities and damages, and expenses
in connection therewith (irrespective of whether such Person is a party
to the action for which indemnification hereunder is sought) which such
Lender Party incurs or is subject to as a consequence, directly or
indirectly, of (i) the issuance of any LC Guaranty, other than as a
result of the gross negligence or willful misconduct of such Person as
determined by a court of competent jurisdiction, or (ii) the failure of
any Lender to honor a demand
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under an LC Guaranty as a result of any act or omission relating to an
LC Guaranty, whether rightful or wrongful, of any present or future de
jure or de facto government or governmental authority (herein all such
acts or omissions being called "Governmental Acts"). All obligations
under this Section 2.15.3 shall survive any termination of this
Agreement.
As among Borrower and Lender Parties, Borrower assumes all
risks of the acts and omissions of, or misuse of an LC Guaranty by, the
applicable Issuer or any beneficiary of a Permitted LC. Without
limiting the foregoing, no Lender Party shall be responsible for: (i)
the form, validity, sufficiency, accuracy, genuineness or legal effect
of any document submitted by any Person in connection with the
application for and issuance of an LC Guaranty or Permitted LC, even if
such document is proven to be in any respect invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or
assign an LC Guaranty or Permitted LC or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) the failure of the
beneficiary of a Permitted LC to comply fully with conditions required
in order to draw thereupon, or the failure of an Issuer to comply fully
with conditions required in order to demand under an LC Guaranty; (iv)
errors, omissions, interruptions or delays in transmission or delivery
of any messages, by mail, cable, telegraph, facsimile, telex or
otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under a Permitted LC or a demand under an LC Guaranty or of the
proceeds of either thereof; (vii) the misapplication by an Issuer of
the proceeds of any demand under an LC Guaranty; and (viii) any
consequences arising from causes beyond the control of such Lender
Party, including, without limitation, any Governmental Acts, in each
case, other than a result of the gross negligence or willful misconduct
of such Lender Party. None of the above shall affect, impair or prevent
the vesting of any of any Lender Party's rights or powers hereunder.
Without limiting the foregoing, any action taken or omitted by
any Lender Party under or in connection with an LC Guaranty shall not
put such Lender Party under any resulting liability to Borrower.
SECTION 3 NOTES; RECORDKEEPING.
SECTION 3.1 Revolving Note. The Revolving Loans shall be evidenced by
promissory notes (herein, as from time to time supplemented, extended or
replaced, collectively called the "Revolving Note") substantially in the form
set forth in Exhibit E, with appropriate insertions, dated the date hereof,
payable to the order of each Lender in the maximum principal amount of such
Lender's Pro Rata Share of the Revolving Loan Commitment.
SECTION 3.2 Working Capital Note. The Working Capital Loans shall be
evidenced by promissory notes (herein, as from time to time supplemented,
extended or replaced,
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collectively called the "Working Capital Note") substantially in the form set
forth in Exhibit F, with appropriate insertions, dated the date hereof, payable
to the order of each Lender in the maximum principal amount of such Lender's Pro
Rata Share of the Working Capital Commitment.
SECTION 3.3 Term Note. The Term Loan shall be evidenced by promissory
notes (herein, as from time to time supplemented, extended or replaced,
collectively called the "Term Note") substantially in the form set forth in
Exhibit G, with appropriate insertions, dated the date hereof, payable to the
order of each Lender in the maximum principal amount of such Lender's Pro Rata
Share of the Term Loan Commitment.
SECTION 3.4 Capital Expenditure Loan Note. The Capital Expenditure Loan
shall be evidenced by promissory notes (herein, as from time to time
supplemented, extended or replaced, collectively called the "Capital Expenditure
Loan Note") substantially in the form set forth in Exhibit H, with appropriate
insertions, dated the date hereof, payable to the order of each Lender in the
maximum principal amount of such Lender's Pro Rata Share of the Capital
Expenditure Loan Commitment.
SECTION 3.5 Recordkeeping. Collateral Agent shall record in its records
the date and amount of each Loan made hereunder, each repayment thereof, and the
other information provided for herein. The aggregate unpaid principal amount so
recorded shall be rebuttable presumptive evidence of the principal amount owing
and unpaid on the applicable Note. The failure so to record any such information
or any error in so recording any such information shall not, however, limit or
otherwise affect the actual obligations of Borrower hereunder or under the Notes
to repay the principal amount of all Loans together with all interest accruing
thereon.
SECTION 4 INTEREST.
SECTION 4.1 Interest Rates on Revolving Loans. Subject to Section 4.5,
Borrower hereby promises to pay interest on the outstanding principal amount of
each Revolving Loan for the period commencing on the date of such Loan until
such Loan is paid in full at a rate per annum determined by reference to the
Reference Rate or the LIBOR Rate. The applicable basis for determining the rate
of interest shall be selected by Borrower at the time a borrowing is requested
pursuant to Section 2.3(a) or at the time a Notice of LIBOR Activity is given
pursuant to Section 4.5, as the case may be. If a Revolving Loan is outstanding
with respect to which notice has not been given to Collateral Agent in
accordance with the terms of this Agreement specifying the basis for determining
the rate of interest, then such Revolving Loan shall be a Reference Rate Loan.
Subject to Section 4.5, all Revolving Loans shall bear interest as follows:
(a) if a Reference Rate Loan, then at the sum of the Reference
Rate in effect from time to time, plus one and one-half of one percent
(1.50%) per annum; or
(b) if a LIBOR Rate Loan, then at the sum of the LIBOR Rate
for the
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applicable Interest Period, plus three percent (3.00%) per annum.
SECTION 4.2 Interest Rates on Working Capital Loans. Subject to Section
4.5, Borrower hereby promises to pay interest on the outstanding principal
amount of each Working Capital Loan for the period commencing on the date of
such Working Capital Loan until such Working Capital Loan is paid in full at a
rate per annum determined by reference to the Reference Rate or the LIBOR Rate.
The applicable basis for determining the rate of interest shall be selected by
Borrower at the time a borrowing is requested pursuant to Section 2.3(a) or at
the time a Notice of LIBOR Activity is given by Borrower pursuant to Section
4.5, as the case may be. If a Working Capital Loan is outstanding with respect
to which notice has not been given to Collateral Agent in accordance with the
terms of this Agreement specifying the basis for determining the rate of
interest, then such Working Capital Loan shall be a Reference Rate Loan. Subject
to Section 4.5, all Working Capital Loans shall bear interest as follows:
(a) if a Reference Rate Loan, then at the sum of the Reference
Rate in effect from time to time, plus one and one-half of one percent
(1.50%) per annum; or
(b) if a LIBOR Rate Loan, then at the sum of the LIBOR Rate
for the applicable Interest Period, plus two and three-quarters of one
percent (2.75%) per annum.
SECTION 4.3 Interest Rates on Term Loans. Subject to Section 4.5,
Borrower hereby promises to pay interest on the outstanding principal amount of
each Term Loan for the period commencing on the Closing Date until such Term
Loan is paid in full at a rate per annum determined by reference to the
Reference Rate or the LIBOR Rate. The applicable basis for determining the rate
of interest shall be selected by Borrower at the time a borrowing is requested
pursuant to Section 2.3(a) or at the time a Notice of LIBOR Activity is given
pursuant to Section 4.5, as the case may be. If a Term Loan is outstanding with
respect to which notice has not been given to Collateral Agent in accordance
with the terms of this Agreement specifying the basis for determining the rate
of interest, then such Term Loan shall be a Reference Rate Loan. Subject to
Section 4.5, all Term Loans shall bear interest as follows:
(a) if a Reference Rate Loan, then at the sum of the Reference
Rate in effect from time to time, plus two percent (2.00%) per annum;
or
(b) if a LIBOR Rate Loan, then at the sum of the LIBOR Rate
for the applicable Interest Period, plus three and three-quarters of
one percent (3.75%) per annum.
SECTION 4.4 Interest Rates on Capital Expenditure Loans. Subject to
Section 4.5, Borrower hereby promises to pay interest on the outstanding
principal amount of each Capital Expenditure Loan for the period commencing on
the date of such Capital Expenditure Loan until such Capital Expenditure Loan is
paid in full at a rate per annum determined by reference to the Reference Rate
or the LIBOR Rate. The applicable basis for determining the rate of interest
shall be selected by Borrower at the time a borrowing is requested pursuant to
Section 2.3(a) or at the
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time a Notice of LIBOR Activity is given by Borrower pursuant to Section 4.5, as
the case may be. If a Capital Expenditure Loan is outstanding with respect to
which notice has not been given to Collateral Agent in accordance with the terms
of this Agreement specifying the basis for determining the rate of interest,
then such Capital Expenditure Loan shall be a Reference Rate Loan. Subject to
Section 4.5, all Capital Expenditure Loans shall bear interest as follows:
(a) if a Reference Rate Loan, then at the sum of the Reference
Rate in effect from time to time, plus one and one-half of one percent
(1.50%) per annum; or
(b) if a LIBOR Rate Loan, then at the sum of the LIBOR Rate
for the applicable Interest Period, plus three percent (3.00%) per
annum.
SECTION 4.5 Default Interest.
(a) Notwithstanding the respective rates of interest specified
in Sections 4.1, 4.2, 4.3 and 4.4, during any Default Interest Period
the unpaid principal amount of all Loans shall bear interest at the
applicable rate per annum set forth in Section 4.1, 4.2, 4.3 and 4.4,
respectively, plus two percent (2.00%) per annum (each rate described
in this clause (a) being herein called the "Default Rate").
(b) For purposes of this Section 4.5, the term "Default
Interest Period" shall mean a period of time commencing on the date on
which the Requisite Lenders notify Borrower that an Event of Default
has occurred and ending on the date on which such Event of Default is
cured or waived.
SECTION 4.6 Conversion or Continuation.
(a) Subject to the provisions of Section 4.6, Borrower shall
have the option (i) to convert at any time all or any part of its
outstanding Loans equal to $1,000,000 and integral multiples of
$100,000 in excess of that amount from a Reference Rate Loan to a LIBOR
Rate Loan; (ii) to convert all or any part of its outstanding Loans in
integral multiples of $100,000 from a LIBOR Rate Loan to a Reference
Rate Loan on the expiration date of any Interest Period applicable
thereto; or (iii) upon the expiration of the Interest Period with
respect to any LIBOR Rate Loan, to continue all or any portion of such
Loan equal to $1,000,000 and integral multiples of $100,000 in excess
of that amount as a LIBOR Rate Loan, and the succeeding Interest
Period(s) of such continued Loan shall commence on the expiration date
of the Interest Period applicable thereto; provided, however, that,
notwithstanding the foregoing, no outstanding Loan may be continued as,
or be converted into, a LIBOR Rate Loan when any Event of Default or
Unmatured Event of Default has occurred and is continuing without the
consent of the Requisite Lenders.
(b) In the event Borrower shall elect to convert or continue a
Loan under Section 4.6(a), Borrower shall deliver to Collateral Agent a
Notice of LIBOR Activity by
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10:00 A.M., Chicago time three (3) Business Days prior to, but in any
event not more than five (5) Business Days prior to, the proposed
conversion/continuation date. Upon conversion or continuation by
Lenders in accordance with this Agreement pursuant to any Notice of
LIBOR Activity, Borrower shall have effected the
conversion/continuation of Loans hereunder.
(c) The officers and employees of Borrower authorized to
request a Loan on behalf of Borrower shall also be authorized to
request a conversion/continuation on behalf of Borrower. No Lender
Party shall incur any liability to Borrower in acting upon any oral
notice referred to above which such Lender Party believes in good faith
to have been given by a duly authorized officer or other person
authorized to act on behalf of Borrower or such other obligor or for
otherwise acting in good faith under this Section 4.6.
(d) Any Notice of LIBOR Activity for conversion to, or
continuation of, a Loan (including any such oral notice) shall be
irrevocable and Borrower shall be bound to convert or continue in
accordance therewith.
SECTION 4.7 Special Provisions Governing LIBOR Rate Loans .
Notwithstanding anything to the contrary contained in this Agreement, the
following provisions shall govern with respect to LIBOR Rate Loans as to the
matters covered:
(a) Determination of Interest Period. By giving notice as set
forth in Sections 2.3 or 4.6(b), Borrower shall have the option,
subject to the other provisions of this Section 4.7, to specify whether
the Interest Period applicable to any requested LIBOR Rate Loan shall
be a one-month, three-month or six-month period. The determination of
Interest Periods shall be further subject to the following provisions:
(i) In the case of immediately successive Interest
Periods, each successive Interest Period shall commence on the
day on which the immediately preceding Interest Period
expires.
(ii) If any Interest Period would otherwise expire on
a day which is not a Business Day, the Interest Period shall
be extended to expire on the next succeeding Business Day.
(iii) Borrower may not select an Interest Period for
any Revolving Loan which terminates later than November 15,
2001, for any Term Loan which terminates later than November
15, 2002, for any Working Capital Loan which terminates later
than the Working Capital Loan Termination Date then in effect
or for any Capital Expenditure Loan which terminates later
than November 15, 2002.
(iv) Borrower may not select an Interest Period with
respect to any portion of principal of a Loan which extends
beyond a date on which Borrower
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could reasonably be expected to be required to make a
mandatory payment or prepayment of that portion of principal
(including, without limitation, as a result of any mandatory
reduction in the Revolving Loan Commitment, the Working
Capital Commitment, the Term Loan Commitment or the Capital
Expenditure Loan Commitment, respectively, pursuant to the
terms of this Agreement).
(v) Any Interest Period which begins on a day for
which there is no numerically corresponding day in the
calendar month during which such Interest Period is to end
shall (subject to clause (ii) above) end on the first Business
Day following the last day of such calendar month.
(vi) There shall be no more than four (4) LIBOR Rate
Loans outstanding at any one time.
(b) Determination of Interest Rate. As soon as practicable on
the second Business Day immediately preceding the first day of any
Interest Period applicable to any LIBOR Rate Loans (the "LIBOR Interest
Rate Determination Date"), Collateral Agent shall determine (which
determination shall, absent manifest error, be presumptively correct)
the interest rate which shall apply to such Loans for such Interest
Period and shall promptly give notice thereof (in writing or by
telephone confirmed in writing) to Borrower.
(c) Substituted Rate of Borrowing. In the event that on any
LIBOR Interest Rate Determination Date any Lender shall have determined
(which determination shall be presumptively correct and binding upon
all parties) that, by reason of any changes arising after the date of
this Agreement affecting the London interbank market, adequate and fair
means do not exist for ascertaining the LIBOR Rate on a basis
consistent with the essential intent of the parties hereto, then, and
in any such event, the right of Borrower to select a LIBOR Rate Loan
for such Loan or any subsequent Loan shall be suspended until such
Lender shall notify Borrower that the circumstances causing such
suspension no longer exist, and such requested Loan shall be a
Reference Rate Loan.
(d) Illegality. Notwithstanding anything to the contrary
contained in this Agreement, in the event that on any date any Lender
shall have reasonably determined (which determination shall be final
and conclusive and binding upon all parties) that the making or
continuation of its LIBOR Rate Loans has become unlawful by compliance
by such Lender in good faith with any applicable law, treaty,
governmental rule, regulation or order (whether or not having the force
of law and whether or not failure to comply therewith would be
unlawful), then such Lender shall promptly give notice to Borrower of
such determination. Subject to the prior withdrawal of a Notice of
LIBOR Activity or prepayment of the LIBOR Rate Loans as contemplated by
the following Section 4.7(e), the obligation of such Lender to make or
maintain LIBOR Rate Loans during any such period shall be terminated at
the earlier of the termination of the
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Interest Period then in effect or when required by law, and Borrower
shall no later than the termination of the Interest Period in effect at
the time any such determination pursuant to this Section 4.7(d) is made
or, earlier, when required by law, repay the LIBOR Rate Loans, together
with all interest accrued thereon. Each Lender shall use reasonable
efforts to avoid the possibility that the making or continuation of its
LIBOR Rate Loans shall become unlawful.
(e) Options of Borrower. In lieu of prepaying LIBOR Rate Loans
as required by Section 4.7(d) above, Borrower may exercise either of
the following options:
(i) Upon written notice to Collateral Agent, Borrower
may terminate the obligations of the affected Lender to make
or maintain Loans as, and to convert Loans into, LIBOR Rate
Loans and in such event, Borrower shall, at the end of the
then current Interest Period (or at such earlier time as
prepayment is otherwise required), convert all of the LIBOR
Rate Loans of such Lender into Reference Rate Loans in the
manner contemplated by Section 4.6 but without satisfying the
advance notice requirements therein; or
(ii) Borrower may, by giving notice (by telephone
confirmed immediately by telecopy) to Collateral Agent require
such Lender to make the LIBOR Rate Loan then being requested
as a Reference Rate Loan or to continue to maintain its
outstanding Reference Rate Loan then the subject of a Notice
of LIBOR Activity as a Reference Rate Loan or to convert its
LIBOR Rate Loans then outstanding that are so affected into
Reference Rate Loans at the end of the then current Interest
Period (or at such earlier time as prepayment is otherwise
required) in the manner contemplated by Section 4.6 but
without satisfying the advance notice requirements therein.
(f) Compensation. In addition to (but without duplication of)
such amounts as are required to be paid by the Borrower pursuant to
this Agreement, including, without limitation, Sections 4.1, 4.2, 4.3,
4.4, 8.1 and 8.2, Borrower shall compensate each Lender, upon written
request by such Lender (which request shall set forth in reasonable
detail the basis for requesting such amounts), for all losses, costs,
expenses and liabilities, including, without limitation, any loss, cost
or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund or maintain
such Lender's LIBOR Rate Loans to Borrower which such Lender may
sustain (i) if for any reason a borrowing of any LIBOR Rate Loan does
not occur on a date specified therefor in a Notice of LIBOR Activity,
including an oral request for borrowing or conversion/continuation, or
if a successive Interest Period does not commence after notice therefor
is given pursuant to Section 4.6(b), (ii) if any voluntary or mandatory
prepayment of any LIBOR Rate Loan occurs for any reason on a date which
is not the last day of an Interest Period, (iii) as a consequence of
any required conversion of a LIBOR Rate Loan to a Reference Rate Loan
as a result of any of the events indicated in Section 4.6(d), or (iv)
as a consequence of any other default by Borrower to repay any LIBOR
Rate Loan when required by the terms of this Agreement.
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(g) Manner of Funding of LIBOR Rate Loans. Each Lender shall
be entitled to fund and maintain its funding of all or any part of any
LIBOR Rate Loan requested by Borrower hereunder in any manner it sees
fit, it being understood and agreed, however, that for the purposes of
this Agreement, all determinations hereunder shall be made as if such
Lender had actually funded and maintained each LIBOR Rate Loan during
each Interest Period for such Loan through the purchase of deposits in
the London interbank market having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the LIBOR Rate
for such Interest Period.
(h) LIBOR Rate Loans After Default. Unless the Requisite
Lenders shall otherwise agree in writing, after the occurrence and
during the continuance of an Unmatured Event of Default or an Event of
Default, Borrower may not elect to have a Loan be made or continued as,
or converted to, a LIBOR Rate Loan after the expiration of any Interest
Period then in effect for that Loan.
SECTION 4.8 Interest Payment Dates. Accrued interest on each Reference
Rate Loan shall be payable in arrears on the first Business Day of each month,
and at maturity, commencing with the first of such dates to occur after the date
of the initial Loans. Accrued Interest on each LIBOR Rate Loan shall be payable
in arrears on each LIBOR Interest Payment Date applicable to such Loan and, in
any event, at maturity. After maturity (whether by acceleration or otherwise),
accrued interest on all Loans shall be due and payable on demand. Accrued
interest on Reimbursement Obligations shall be due and payable upon demand.
SECTION 4.9 Setting of Rates. Interest rates hereunder shall be
calculated from time to time by Collateral Agent and each such calculation of an
interest rate shall be conclusive and binding on Borrower in the absence of
demonstrable error.
SECTION 4.10 Computation of Interest. Interest on each Loan and
Reimbursement Obligation shall be computed for the actual number of days elapsed
on the basis of a year consisting of 360 days. In computing interest on any
Loan, the date of the making of the Loan or the first day of an Interest Period,
as the case may be, shall be included and the date of payment of the Loan or the
expiration date of an Interest Period, as the case may be, shall be excluded;
provided, however, that if a Loan is repaid on the same day on which it is made,
one day's interest shall in any event be paid on that Loan. The interest rate
applicable to each Reference Rate Loan and Reimbursement Obligation shall change
simultaneously with each change in the Reference Rate.
SECTION 5 FEES.
SECTION 5.1 Revolving Loan Non-Use Fee. Borrower shall pay to Lenders,
on a monthly basis, a non-use fee for the period from and including the date
hereof to but excluding the Revolving Loan Termination Date (or such earlier
date on which the Revolving Loan Commitment shall be terminated pursuant to
Section 2.5 or 13.2 hereof) of one-half of one percent (0.50%) per annum on the
excess of (i) the daily average of the then applicable
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Revolving Loan Commitment for the month then ending over (ii) the daily average
of the aggregate principal amount of outstanding Revolving Loans for the month
then ending. Such nonuse fee shall be payable in arrears on the first day of
each month (commencing on December 1, 1996) and on the Revolving Loan
Termination Date (or such earlier date on which the Revolving Loan Commitment
shall terminate) for any period then ending for which such fee shall not have
been theretofore paid.
SECTION 5.2 Working Capital Loan Non-Use Fee. Borrower shall pay to
Lenders, on a monthly basis, a non-use fee for the period from and including the
date hereof to but excluding the Working Capital Loan Termination Date (or such
earlier date on which the Working Capital Loan Commitment shall be terminated
pursuant to Section 2.6 or 13.2 hereof) of one-half of one percent (0.50%) per
annum on the excess of (i) the daily average of the then applicable Working
Capital Commitment for the month then ending over (ii) for the month then ending
(x) the daily average of the aggregate principal amount of outstanding Working
Capital Loans for the month then ending plus (y) the daily average of the
aggregate principal amount of the outstanding Reimbursement Obligations for the
month then ending plus (z) (without double counting) the daily average of the LC
Utilization (which shall be rebuttably presumed to equal at any time the excess
of the Cap Amount at such time over the then aggregate outstanding principal
amount of the Reimbursement Obligations) for the month then ending, unless
Lenders have actually received certification from the applicable Issuer to the
contrary. Such non-use fee shall be payable in arrears on the first day of each
month (commencing on December 1, 1996) and on the Working Capital Loan
Termination Date (or such earlier date on which the Working Capital Loan
Commitment shall terminate) for any period then ending for which such fee shall
not have been theretofore paid.
SECTION 5.3 Capital Expenditure Loan Non-Use Fee. Borrower shall pay to
Lenders, on a monthly basis, a non-use fee for the period from and including the
date hereof to but excluding the Capital Expenditure Loan Termination Date (or
such earlier date on which the Capital Expenditure Loan Commitment shall be
terminated pursuant to Section 2.8 or 13.2 hereof) of one-half of one percent
(0.50%) per annum on the excess of (i) the daily average of the then applicable
Capital Expenditure Loan Commitment for the month then ending over (ii) the
daily average of the aggregate principal amount of outstanding Capital
Expenditure Loans for the month then ending. Such nonuse fee shall be payable in
arrears on the first day of each month (commencing on December 1, 1996) and on
the Capital Expenditure Loan Termination Date (or such earlier date on which the
Capital Expenditure Loan Commitment shall terminate) for any period then ending
for which such fee shall not have been theretofore paid.
SECTION 5.4 Closing Fee. On the date of the initial Loan, Borrower
shall pay to FSFP and Union Bank the commitment and closing fees set forth in
that certain Fee Letter Agreement of even date herewith among Borrower, FSFP and
Union Bank (the "Fee Letter Agreement").
SECTION 5.5 Computation of Fees. All fees shall be computed for the
actual number of days elapsed on the basis of a year consisting of 360 days.
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SECTION 5.6 Letter of Credit Fees. Borrower shall pay to Lenders a fee
for the period from and including the first date on which any Permitted LC is
outstanding to but excluding the Working Capital Loan Termination Date (or such
earlier date on which all of the LC Guaranties shall no longer be of any force
or effect and the originals thereof are returned by the appropriate Issuer to
Lenders and the applicable Issuer shall have acknowledged in writing that
Lenders shall have no further obligations thereunder) of two and three-quarters
of one percent (2.75%) per annum on the daily average of the aggregate Stated
Amounts of outstanding Permitted LCs (the "LC Utilization"). Such fees shall be
payable in arrears on the first day of each month (commencing on December 1,
1996) and on the date on which all of the LC Guaranties shall no longer be of
any force or effect. The LC Utilization shall be rebuttably presumed to equal at
any time the excess of the Cap Amount at such time over the then aggregate
outstanding principal amount of Reimbursement Obligations, unless Lenders have
actually received certification from the applicable Issuer to the contrary. All
LC Reimbursement Agreements shall require the applicable Issuer to provide
certification of the daily LC Utilization, but in the event such Issuer fails to
comply with such requirement, the preceding sentence shall apply.
SECTION 6 ACCOUNT AGREEMENTS; ACCOUNTS; LIST OF ACCOUNTS AND ACCOUNT
STATEMENTS.
SECTION 6.1 Account Agreements. Prior to the date of the initial Loan,
Borrower, its Subsidiaries, Agent Bank and such other Persons as are designated
by Collateral Agent shall enter into a Bank Agency Agreement (herein, as the
same may be amended, restated, modified or supplemented from time to time,
called the "Bank Agency Agreement"). Pursuant to the Collateral Documents,
including the Bank Agency Agreement, Borrower and its Subsidiaries shall grant
to Collateral Agent a continuing first priority lien upon, and security interest
in, the Master Account and the Operating Account, each described below
(collectively, the "Accounts"), all funds, items, instruments, investments,
securities and other things of value at any time paid, deposited, credited to or
held in the Lockbox or the Accounts (whether for collection, provisionally or
otherwise), and all other Property of Borrower and its Subsidiaries from time to
time in the possession or under the control of, or in transit to any Lender
Party or any agent, bailee or custodian therefor, and all proceeds of all of the
foregoing. The Bank Agency Agreement shall specify that throughout the term of
this Agreement, Agent Bank, to the extent any such Person is a party to the Bank
Agency Agreement, (i) shall be pledgee-in- possession (for the benefit of
Collateral Agent) of the Accounts described therein, all Cash Instruments of
Borrower and its Subsidiaries held by Agent Bank, and all such funds, items,
instruments, investments, securities, other things of value, Property and
proceeds, (ii) shall take such action as shall be specified in written notice
from Collateral Agent to enable Collateral Agent or Lenders to exercise their
rights with respect to such lien and security interest, (iii) shall be entitled
to exercise all and any rights which any Lender Party may have under this
Agreement and the Related Documents or applicable law with respect to the
Accounts described therein and such other Property and (iv) shall provide
Collateral Agent with copies of all statements relating to the Accounts provided
by Agent Bank to Borrower. Notwithstanding any provision of this Section 6.1,
Collateral Agent shall have no obligation to reconcile or verify, at any time or
for
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any purpose, any balance in any Account or any other account maintained by Agent
Bank as agent for Collateral Agent.
SECTION 6.2 Accounts.
(a) Master Account and Lockbox. Collateral Agent shall
maintain at Agent Bank the account identified as the "Master Account"
in the Bank Agency Agreement (herein called the "Master Account") and
Borrower shall maintain a lockbox with the Agent Bank (herein called
the "Lockbox"). The Master Account and the Lockbox shall be under the
sole dominion and control of Collateral Agent, and Borrower shall not
have any right of withdrawal therefrom.
(b) Operating Account. Borrower and its Subsidiaries shall
maintain the controlled disbursement operating accounts at Agent Bank
described in the Bank Agency Agreement (such accounts being herein
collectively called the "Operating Account").
(c) Other Accounts. Borrower shall not, and shall not permit
any of its Subsidiaries to, maintain any operating account (other than
the Operating Account), and agrees that it will not, and will not
permit any of its Subsidiaries to, maintain any bank investment or
other account of any kind whatsoever with any other brokerage house or
financial institution; provided, however, that so long as no Event of
Default shall have occurred and be continuing, Borrower may maintain
the ▇▇▇▇▇ cash and payroll accounts listed on Schedule IV hereto at the
financial institutions indicated thereon, provided that the aggregate
amount of funds on deposit in each such ▇▇▇▇▇ cash account shall not
exceed $5,000 and each such payroll account shall not at any time
exceed the sum of all accrued payroll and payroll taxes then payable by
Borrower on account of payroll obligations payable from such account;
and provided, further, that (i) Borrower shall have irrevocably
instructed the relevant financial institution, at the request of the
Requisite Lenders, to provide Collateral Agent with information
concerning such accounts, (ii) such financial institution shall
acknowledge such instructions in writing for the benefit of Collateral
Agent, and (iii) at any time when an Event of Default has occurred and
is continuing Borrower shall, at the request of the Requisite Lenders,
promptly cause each such financial institution to provide Collateral
Agent with daily reports of the balance in each such account.
SECTION 6.3 List of Accounts and Account Statements. All Accounts of
Borrower and its Subsidiaries and all payroll and ▇▇▇▇▇ cash accounts of
Borrower are described on Schedule IV. In the event Borrower or any of its
Subsidiaries opens any new accounts or closes any account in accordance with the
terms of this Agreement, Borrower shall deliver to Collateral Agent a revised
version of Schedule IV showing any changes thereto within three (3) Business
Days of any such change. Borrower shall instruct all banks listed on Schedule IV
to provide Collateral Agent with copies of all statements issued by such banks
with respect to the accounts described on Schedule IV.
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SECTION 7 PROCEEDS OF COLLATERAL; APPLICATION OF FUNDS; DEEMED LOANS.
SECTION 7.1 Proceeds of Collateral; Notices to Account Debtors;
Lockbox. Borrower shall, and shall cause each of its Subsidiaries to, direct all
Account Debtors to pay all Accounts Receivable and other proceeds of Collateral
directly to the Lockbox for application to the Master Account. In addition,
Borrower shall take all such actions necessary or appropriate to ensure that at
all times on and after the date hereof all proceeds of Collateral (including,
without limitation, all Cash Instruments) are sent directly to the Lockbox. If,
notwithstanding the actions provided for in the preceding sentences of this
Section 7.1, Borrower or any of its Subsidiaries shall receive, or any financial
institution shall receive for the account of Borrower or any of its
Subsidiaries, any Cash Instruments, Borrower shall, or shall cause such
financial institution to, transmit in the form received, before the close of
business on the next succeeding Business Day, all such Cash Instruments
(properly endorsed, where required, so that all items delivered may be collected
by Agent Bank) to Agent Bank for deposit in the Master Account. Borrower shall
not, nor shall Borrower permit or cause any such financial institution to,
commingle any Cash Instrument so received except in the Master Account, and
Borrower shall hold separate and apart from all other Property, all such Cash
Instruments in express trust for the benefit of Collateral Agent until delivery
thereof is made to Agent Bank. Pursuant to, and subject to the terms and
conditions of, the Bank Agency Agreement, items deposited in the Lockbox shall
be credited to the Master Account.
SECTION 7.2 Application of Funds Available for Operating Expenses. At
the opening of business on each Business Day, Agent Bank shall calculate the
amount of collected funds on deposit in the Master Account (herein, with respect
to the Master Account for any day, called the "Collected Balances" for such
day). Promptly upon such calculation (and in any event prior to 12:00 noon
Chicago time on such day), if no Event of Default shall have occurred and be
continuing and to the extent of Collected Balances available to do so, Agent
Bank shall transfer from the Master Account to the Operating Account such
amounts as shall permit all checks drawn on such Operating Account presented for
payment at Agent Bank as of the preceding Business Day and, provided Borrower
has given Collateral Agent notice of the amount of such wire transfers by 12:00
noon Chicago time no later than 1 Business Day and no sooner than 5 Business
Days prior to the date of such wire transfers, all wire transfers authorized on
such date for payments permitted hereunder, to be honored and leaving a zero
balance in the Operating Account after payment and transfer of such items from
the Operating Account.
SECTION 7.3 Application of Funds Available for Loan Repayments.
Promptly after any disbursements pursuant to Section 7.2 are made, Agent Bank
promptly shall transfer to Collateral Agent in integral multiples of $5,000 the
remaining Collected Balances in excess of $450,000 but leaving a balance of at
least $300,000 but not more than $305,000 in the Master Account. Any amounts
received by Collateral Agent pursuant to this Section 7.3 shall be applied to
the outstanding obligations of Borrower in the following order of priority:
first, to accrued and unpaid interest on the Reimbursement Obligations; second,
to accrued and unpaid interest then
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due and payable on the Working Capital Loans; third, to accrued and unpaid
interest then due and payable on the Capital Expenditure Loans; fourth, to
accrued and unpaid interest then due and payable on the Revolving Loans; fifth,
to accrued and unpaid interest then due and payable on the Term Loans, sixth to
the unpaid principal amount of the Reimbursement Obligations; seventh, to the
unpaid principal amount of the Working Capital Loans then due and payable;
eighth, to the unpaid principal amount of the Revolving Loans then due and
payable; ninth, to any fees hereunder then due and payable, in such order as the
Requisite Lenders may elect; tenth, to the unpaid principal amount of the
Working Capital Loans not otherwise due and payable at such time (provided,
however, that prior to the termination of the Working Capital Commitment, the
unpaid principal amount of the Working Capital Loans shall never be less than
$1,000); eleventh, to the unpaid principal amount of the Revolving Loans not
otherwise due and payable at such time (provided, however, that prior to the
termination of the Revolving Loan Commitment, the unpaid principal amount of the
Revolving Loans shall never be less than $1,000); twelfth, to the payment of any
other Liabilities then due and payable to Lender; and thirteenth, any remainder
shall be retained in the Master Account and applied (a) first to the unpaid
principal amount of the Capital Expenditure Loans as and when due and payable
and last to the unpaid principal amount of the Term Loans as and when due and
payable. Notwithstanding the foregoing provisions of this Section 7.3 to the
contrary, any amounts received by Collateral Agent representing Asset Sale
Proceeds in respect of any Financed Equipment or insurance proceeds in respect
of any Financed Equipment shall be applied first to the unpaid principal amount
of the Capital Expenditure Loans, whether or not then due and payable.
SECTION 7.4 Application Upon an Event of Default. If an Event of
Default shall have occurred and be continuing, and notwithstanding the foregoing
Section 7.3, at the request of Collateral Agent, Agent Bank from time to time
shall transfer all Collected Balances in the Master Account to Collateral Agent
for application to the Liabilities in such order as the Requisite Lenders, in
their sole discretion, shall elect. Agent Bank and Collateral Agent each shall
be entitled to rely on a written statement of the Requisite Lenders to the
effect that an Event of Default has occurred and is continuing.
SECTION 7.5 Deemed Loans.
(a) Notwithstanding any provision contained herein to the
contrary, if at any time or from time to time the balance in the Master
Account is less than $10,000, Borrower shall, if the Requisite Lenders
so elect, be deemed to have given the notice required by Section 2.3
(and to have made all of the representations set forth in a Borrowing
Certificate) of a proposed borrowing equal to the lesser of (i) the
amount (which shall be $5,000 or an integral multiple thereof)
necessary to increase such balance to at least $300,000, but not more
than $305,000 and (ii) the remaining availability under the
Commitments, and, in the event of such election, each Lender shall lend
to Borrower its Pro Rata Share of such amount, the proceeds of which
shall be deposited by such Lender in the Master Account. Such Loan
shall be a Revolving Loan bearing interest at the rate described in
Section 4.1(a) to the extent of unused availability of the Revolving
Loan Commitment and, if the availability under the Revolving Loan
Commitment is not
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sufficient to make such Loan in its full principal amount, it shall be,
to the extent of such insufficiency, a Working Capital Loan bearing
interest at the rate described in Section 4.2(a) to the extent of
availability of the Working Capital Commitment and, if the availability
under the Working Capital Commitment is not sufficient to make such
Loan in its full principal amount, it shall be, to the extent of such
insufficiency, a Capital Expenditure Loan bearing interest at the rate
described in Section 4.4(a) to the extent of availability of the
Capital Expenditure Loan Commitment.
(b) Notwithstanding any provision contained herein to the
contrary, and in addition to, and not in limitation of, any of the
other rights or remedies of Lender Parties set forth herein, including,
without limitation, pursuant to Section 7.4, at the sole option of the
Requisite Lenders, in order to facilitate timely payment hereunder of
all Liabilities in respect of (i) payments of principal and interest
due on any Loans or Reimbursement Obligations, (ii) payments of cash,
fees and expenses due and payable by Borrower to any Lender Party or
under any of the Related Documents and (iii) payments by any Lender
Party of any amount due and payable under the Bank Agency Agreement or
any other agreement entered into by Collateral Agent and Agent Bank in
connection with this Agreement (including, without limitation, any
amount resulting from the return, dishonor or other non-payment of
items deposited with Agent Bank by or on behalf of Borrower), then,
whether or not there is availability under any Commitment, Borrower
shall be deemed automatically to have made a request for, and upon such
payment Lenders shall be deemed to have made, a Revolving Loan, a
Working Capital Loan or a Capital Expenditure Loan (or any combination
thereof, as determined by the Requisite Lenders in their sole and
absolute discretion) in the full amount of such payment. Collateral
Agent shall use its best efforts to give reasonable prior notice to
Borrower of the making of such Loan; provided, however, that the
failure to give such notice shall not affect the obligations of
Borrower with respect to such Loan nor give rise to or result in any
liability of any Lender Party. Borrower acknowledges that such Loan may
cause Borrower to have exceeded a Commitment, in which event Borrower
shall be obligated to immediately make a prepayment pursuant to Section
2.9(e).
SECTION 8 INCREASED COSTS AND OTHER SPECIAL PROVISIONS.
SECTION 8.1 Increased Costs. If, after the date hereof, the adoption of
any applicable law, rule or regulation generally applicable to a financial
institution in the business of making and holding commercial loans, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority or agency charged with the interpretation or
administration thereof, or compliance by any Lender Party with any request or
directive (whether or not having the force of law) of any such authority or
agency, shall subject any Lender Party to any tax, duty or other charge or
capital adequacy requirement with respect to, or shall otherwise increase the
effective cost of, the Loans, the Reimbursement
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Obligations, the LC Guaranties or any Lender's obligation to make, issue or
maintain the Loans, the Reimbursement Obligations or the LC Guaranties, or shall
change the basis of taxation of payments to any Lender Party of the principal of
or interest on the Loans, the Reimbursement Obligations or any other amounts due
under this Agreement in respect of the Loans, the Reimbursement Obligations or
the LC Guaranties, or any Lender's obligation to make, issue or maintain the
Loans, the Reimbursement Obligations or the LC Guaranties (except for changes in
the rate of tax on the overall net income of such Lender Party), or shall impose
on any Lender Party any other condition affecting the Loans, the Reimbursement
Obligations or the LC Guaranties or any Lender's obligation to make the Loans or
the Reimbursement Obligations or maintain the LC Guaranties, and the result of
any of the foregoing is to increase the cost to any Lender of making, issuing or
maintaining the Loans, or to reduce the amount of any rate of return or any sum
received or receivable by such Lender under this Agreement or under the Notes
with respect thereto, then upon written notice of such occurrence to Borrower by
such Lender (which notice shall contain a statement setting forth a description
of such occurrence), Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such increased cost or such reduction
from the date of receipt of such notice (but not before). In such event,
Borrower shall have 90 days after the date of such notice to replace the Lender
giving such notice with a Lender not subject to the increased costs, and any
such replacement shall not give rise to any Prepayment Premium owing to the
replaced Lender.
SECTION 8.2 Funding Losses. Borrower agrees that if Collateral Agent
receives a notice (whether written or oral) of borrowing or repayment pursuant
to this Agreement and Borrower fails to borrow or repay strictly in accordance
therewith, then, upon demand by any Lender (which demand shall be accompanied by
a statement setting forth the basis for the calculations of the amount being
claimed) Borrower will indemnify such Lender against any net loss or expense
which such Lender may sustain or incur (including, without limitation, any net
loss or expense incurred by reason of the liquidation or reemployment of funds
acquired by such Lender to fund or maintain Loans), as reasonably determined by
such Lender, as a result of any failure of Borrower to borrow or repay any Loan
on a date specified therefor in a notice (whether written or oral) of borrowing
or repayment pursuant to this Agreement. For this purpose, all notices to
Collateral Agent pursuant to this Agreement shall be deemed to be irrevocable.
SECTION 8.3 Conclusiveness of Statements; Survival of Provisions. In
making the determinations contemplated by this Section 8, each Lender Party may
make such reasonable estimates, assumptions, allocations and the like such
Lender Party in good faith determines to be appropriate; and, subject to the
foregoing clause, determinations and statements of each Lender Party pursuant to
this Section 8 shall be conclusive absent demonstrable error. The provisions of
this Section 8 shall survive termination of this Agreement.
SECTION 8.4 Discretion of Lenders as to Manner of Funding .
Notwithstanding any provision of this Agreement to the contrary, each Lender
shall be entitled to fund and maintain its funding of all or any part of the
Loans in any manner it sees fit.
SECTION 9 COLLATERAL SECURITY
SECTION 9.1 Borrower. Concurrently with or prior to the making of the
initial Loan, Borrower shall execute and deliver, and shall cause each of its
Subsidiaries to execute and
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deliver, to Collateral Agent the following:
9.1.1. Personal Property. A security agreement in form and
substance satisfactory to the Requisite Lenders (herein, as the same
may be amended, restated, modified or supplemented from time to time
with the prior written consent of the Requisite Lenders, called the
"Security Agreement"), and the Collateral Assignment of Asset Purchase
Agreement.
9.1.2. Real Estate. Fee and leasehold mortgages, deeds of
trust, deeds to secure debt, assignments of leases and rents, security
agreements and fixture filings, covering all real estate owned or
leased by Borrower and its Subsidiaries, and in form and substance
satisfactory to the Requisite Lenders (herein, as the same may be
amended, restated, modified or supplemented from time to time with the
prior written consent of the Requisite Lenders, collectively called the
"Mortgages" and individually called a "Mortgage").
9.1.3. Subsidiary Guaranties. In the case of each Subsidiary
of Borrower, a guaranty in form and substance satisfactory to the
Requisite Lenders (herein, as the same may be amended, restated,
modified or supplemented from time to time with the prior written
consent of the Requisite Lenders, collectively called the "Subsidiary
Guaranties" and individually called a "Subsidiary Guaranty"), covering
the payment and performance of all of the Liabilities.
9.1.4. Subsidiary Pledge Agreement. In the case of Borrower, a
pledge agreement in form and substance satisfactory to the Requisite
Lenders (herein, as the same may be amended, restated, modified or
supplemented from time to time with the prior written consent of the
Requisite Lenders, called the "Borrower Pledge Agreement"), covering
all of the Subsidiary Equity Interests (or, in the case of 3304906
Canada Inc., covering not less than 66% of the Subsidiary Equity
Interests of such Subsidiary).
Notwithstanding the foregoing (a) Borrower shall execute and deliver to
Collateral Agent the Borrower Pledge Agreement within 60 days after the Closing
Date, (b) 3304906 Canada Inc. shall not be required to execute and deliver a
Security Agreement or Subsidiary Guaranty and (c) Borrower shall only be
required to execute and deliver a Mortgage with respect to its leased premises
in Yorba Linda, California upon the extension or renewal of Borrower's lease of
such premises.
SECTION 9.2 Parent. Concurrently with or prior to the making of the
initial Loan, Borrower shall cause Parent to execute and deliver to Collateral
Agent, the following:
9.2.1. Pledge Agreement. A pledge agreement in form and
substance satisfactory to the Requisite Lenders (herein, as the same
may be amended, restated, modified or supplemented from time to time
with the prior written consent of the Requisite Lenders, called the
"Pledge Agreement"), covering all of the Borrower Equity Interests.
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9.2.2. Guaranty. A guaranty in form and substance satisfactory
to the Requisite Lenders (herein, as the same may be amended, restated,
modified or supplemented from time to time with the prior written
consent of the Requisite Lenders, called the "Guaranty"), covering the
payment and performance of all of the Liabilities.
SECTION 9.3 B&L. Concurrently with or prior to the making of the
initial Loan, Borrower shall cause B&L to execute and deliver to Collateral
Agent a guaranty in form and substance satisfactory to the Requisite Lenders
(herein, as the same may be amended, restated, modified or supplemented from
time to time with the prior written consent of the Requisite Lenders, called the
"B&L Guaranty"), covering the payment and performance of the Capital Expenditure
Loan.
SECTION 9.4 Warrant. Concurrently with or prior to the making of the
initial Loan, Borrower shall execute and deliver to each of Union Bank and FSFP
warrants to purchase common stock of Borrower in form and substance satisfactory
to each such Person (herein, as the same may be amended, restated, modified or
supplemented from time to time with the prior written consent of such Person,
collectively called the "Warrant").
SECTION 9.5 Change of Location or Name. So long as any of the
Liabilities shall remain outstanding or any Lender shall continue to have any
Commitment, Borrower shall not change, and shall not permit any of its
Subsidiaries to change (a) the location of its principal place of business or
chief executive office or its records concerning its business and financial
affairs, or (b) its name or the name under or by which it conducts its business,
in each case without first giving Collateral Agent and Lenders at least 30 days'
advance written notice thereof and having taken any and all action required or
desirable to maintain and preserve the first perfected Lien in favor of
Collateral Agent on all property thereof free and clear of any Lien whatsoever
except for Permitted Liens; provided, however, that notwithstanding the
foregoing, Borrower shall not change, and shall not permit any of its
Subsidiaries to change, its principal place of business or chief executive
office or the location of its records concerning its business and financial
affairs to any place outside the contiguous continental United States of
America.
SECTION 9.5 Deliveries; Further Assurances. Borrower agrees that it
will, and will cause each of its Subsidiaries to, at its sole expense, (a)
without any request by Collateral Agent or Lenders, immediately deliver or cause
to be delivered to Collateral Agent, in due form for transfer (i.e., endorsed in
blank or accompanied by duly executed undated blank stock or bond powers), all
securities, chattel paper, instruments and documents, if any, at any time
representing all or any of the Collateral, (b) upon request of the Requisite
Lenders furnish or cause to be furnished to Collateral Agent such surveys,
mortgagee title commitments or policies, appraisals, opinions of counsel and
other documents as the Requisite Lenders reasonably may specify, (c) upon
request of the Requisite Lenders, cause the Lien granted to Collateral Agent
hereunder and under the Collateral Documents to be at all times duly noted on
any certificate of title issuable with respect to any of the Collateral and
forthwith deliver or cause to be delivered to Collateral Agent each such
certificate of title, and (d) execute and deliver, or cause to be executed and
delivered, to Collateral Agent in due form for filing or recording (and pay the
cost of filing or
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recording the same in all public offices deemed necessary or advisable by the
Requisite Lenders) such assignments (including, without limitation, assignments
of life insurance), security agreements, mortgages, deeds of trust, pledge
agreements, consents, waivers, financing statements, stock or bond powers, and
other instruments and documents, and do such other acts and things, all as may
from time to time be necessary or desirable to establish and maintain to the
satisfaction of the Requisite Lenders a valid perfected Lien in all Property of
Borrower and its Subsidiaries now or hereafter existing or acquired (free of all
other Liens whatsoever other than Permitted Liens) to secure payment and
performance of the Liabilities.
SECTION 9.6 Subsequently Acquired Property. As further security for the
payment, performance and observance of the Liabilities, so long as any of the
Liabilities shall remain outstanding or any Lender shall continue to have any
Commitment, Borrower shall, and shall cause each of its Subsidiaries to:
(a) acquire and maintain its respective properties in a manner
which will enable Borrower and its Subsidiaries to allow such property
to become subject to the Liens of the Collateral Documents;
(b) obtain and maintain the consent or approval of any Person
whose consent or approval is required to the granting of a Lien on any
such property to Collateral Agent, including a consent to each Mortgage
covering real estate leased by Borrower or any of its Subsidiaries in
form and substance satisfactory to the Requisite Lenders from the
landlord of such real estate and any mortgagee having a Lien on such
real estate (except that no such consent shall be required prior to
December 31, 1997 with respect to Borrower's leased premises in Yorba
Linda, California);
(c) execute and deliver from time to time within ten (10) days
after the purchase, acquisition or renewal by Borrower or any of its
Subsidiaries of any real property or leasehold interest in real
property or of property subject to a titling statute or of any other
personal property, asset or other right with a fair market value in
excess of $50,000, additional Mortgages and such amendments and
supplements to the Collateral Documents in form and substance
satisfactory to the Requisite Lenders, and in such number of
counterparts as the Requisite Lenders may require, by which such Person
shall pledge, mortgage and grant a perfected Lien on such property,
asset or right to Collateral Agent;
(d) execute and deliver to Collateral Agent, in form and
substance satisfactory to the Requisite Lenders and in such number of
counterparts as the Requisite Lenders may require, (i) an assignment of
such Person's rights under any contract to construct any property with
a fair market value in excess of $50,000 promptly upon entering into
such contract, and (ii) such other agreements and instruments
(including, without limitation, acknowledgements by other contract
parties) as may be necessary to ▇▇▇▇▇ ▇ ▇▇▇▇ on such Person's rights
and interests under such contract and each such property, whether under
construction or otherwise, to Collateral Agent; and
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(e) execute and deliver to Collateral Agent, in form and
substance satisfactory to the Requisite Lenders and in such number of
counterparts as the Requisite Lenders may require, assignments of such
Person's rights under each lease to which such Person is a party as
landlord or sublandlord, promptly upon entering into such lease, to
Collateral Agent.
SECTION 9.7 Asset Sales and Equity Sales. The parties hereto intend
that all Property of Borrower and each of its Subsidiaries shall be subjected to
Liens in favor of Collateral Agent to secure the Liabilities. Accordingly,
Borrower shall not consummate, or permit any of its Subsidiaries to consummate,
any Asset Sales or Equity Sales not permitted under Section 11.22 without the
prior written consent of the Requisite Lenders, which consent may be given or
withheld in the sole and absolute discretion of the Requisite Lenders, and may
be based, without limitation, on any Lender Party's evaluation of the adequacy
of the consideration proposed to be received by Borrower or any of its
Subsidiaries in connection with any such disposition and the effect of such
disposition on Borrower's and such Subsidiary's net worth, and on Net Income,
Net Cash Generated, interest coverage ratios or other financial criteria.
Without limiting the generality of the foregoing, and without limiting the right
of the Requisite Lenders to require any other application of proceeds or
modification of this Agreement and the Related Documents, or any greater payment
of Loans, Reimbursement Obligations or reduction of Commitments, it is the
present anticipation of the parties that all Asset Sale Proceeds and Equity Sale
Proceeds will be applied as a mandatory prepayment of the Loans pursuant to
Section 2.9 and that the Commitments shall be automatically and permanently
reduced in the amount of such prepayments to the extent provided in Section 2.5,
Section 2.6, Section 2.7 and Section 2.8.
SECTION 10 REPRESENTATIONS AND WARRANTIES.
To induce Collateral Agent, Administrative Agent and Lenders to enter
into this Agreement and to induce Lenders to make Loans and other financial
accommodations hereunder, Borrower represents and warrants to Collateral Agent,
Administrative Agent and Lenders that:
SECTION 10.1 Due Organization, Authorization. Borrower and each of its
Subsidiaries is a corporation duly existing and in good standing under the laws
of the jurisdiction of its incorporation and is duly qualified and in good
standing in each jurisdiction where, because of the nature of its activities or
properties, such qualification is required or the failure so to qualify could
have a Material Adverse Effect (which jurisdictions shall include, without
limitation, those jurisdictions listed in Part 1 of Schedule IX). The execution,
delivery and performance by Borrower, each of its Subsidiaries and Parent of
this Agreement and the Related Documents to which they respectively are parties,
and the consummation of the Related Transactions, are within their respective
corporate powers, have been duly authorized by all necessary corporate action
(including, without limitation, shareholder approval), have received all
necessary governmental and other consents and approvals (if any shall be
required), and do not and will not contravene or conflict with, or create a Lien
or right of termination or acceleration under, any Requirement of Law or
Contractual Obligation binding upon any of it. This Agreement and each of the
Related Documents to which Borrower, any of its Subsidiaries
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or Parent is a party are (or when executed and delivered will be) the legal,
valid, and binding obligations of such Person enforceable against it in
accordance with their respective terms, except as limited by general principles
of equity and applicable bankruptcy, reorganization, insolvency or similar laws
affecting the enforcement of creditors' rights.
SECTION 10.2 Certain Agreements. Borrower has furnished or caused to be
furnished to Lenders true, correct and complete copies of each of the Related
Documents, the Acquisition Instruments, the Subordinated Loan Instruments, the
Equity Instruments, the Management Agreement and the Employment Agreements
(including all schedules and written disclosures in connection therewith). All
representations and warranties of Borrower set forth in this Agreement and the
Related Documents and all representations and warranties of Borrower and to
Borrower's best knowledge after due inquiry, all representations and warranties
of the other parties thereto, set forth in the Acquisition Instruments, the
Subordinated Loan Instruments, the Equity Instruments, the Management Agreement
and the Employment Agreements are true and correct in all material respects
without any waiver or modification thereof and no default of any party exists
thereunder.
SECTION 10.3 Financial Information; Financial Condition. All balance
sheets, all statements of net assets, all statements of operations, of
shareholders' equity and of changes in financial position, and other financial
data (other than projections) which have been or shall hereafter be furnished to
any Lender Party for the purposes of or in connection with this Agreement, the
Related Documents or the Related Transactions (including the financial
information referred to below, except for the projections referred to in clause
(d) below) have been and will be prepared in accordance with GAAP consistently
applied throughout the periods involved and do and will present fairly the
financial condition of the entities involved as of the dates thereof and the
results of their operations for the periods covered thereby except that (i) in
the case of the Audited Financials (as defined below), the foregoing
representation is made (A) subject to adjustments and inconsistencies which may
arise in connection with the preparation of consolidated financial statements of
Seller and (B) except as otherwise stated in the reports that accompanied the
Audited Financials, (ii) the Unaudited Financials (as defined below) have been
prepared in accordance with Seller's usual historical practice for the
preparation of monthly financial statements and the foregoing representation is
subject to adjustments and inconsistencies arising therefrom and (iii) the
foregoing representation with respect to such financial data of Seller is made
by Borrower to its best knowledge after due inquiry. All projections (including,
without limitation, the projections described in clause (d) below) which have
been or shall be furnished to any Lender Party for purposes of or in connection
with this Agreement, the Related Documents or the Related Transactions have
represented and will represent at the time made management's best estimates of
future performance, based upon historical financial information and reasonable
assumptions of management. Such financial data include, without limitation, the
following financial statements and reports which have been furnished to Lenders
prior to the date hereof:
(a) the audited consolidated balance sheet of Seller as of
December 31, 1995 and the statement of net assets of Steri-Oss as of
December 31, 1995 and the eight month
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period ended August 24, 1996 and the related combined statements of
income and cash flows of Steri-Oss for the periods ending on such dates
(the "Audited Financials");
(b) the unaudited statement of net assets of Steri-Oss and
related combined statements of income and cash flows of Steri-Oss
certified by the chief financial officer of B&L, for the month ending
September 27, 1996 and for the month of October, 1996 (the "Unaudited
Financials");
(c) pro forma consolidated balance sheet of Borrower and its
Subsidiaries as of October 25, 1996 after giving effect to all Related
Transactions;
(d) consolidated cash flow projections for Borrower and its
Subsidiaries for the Fiscal Years 1997 through 2002, based on the
historical financial statements and records of Steri-Oss, after giving
effect to all Related Transactions; and
(e) projected consolidated balance sheets, and statements of
earnings, shareholders' equity and changes in financial position for
Borrower and its Subsidiaries for each month in Fiscal Year 1997 and
each quarter in Fiscal Year 1998, based on the historical financial
statements and records of Steri-Oss, after giving effect to all Related
Transactions.
As of the Closing Date there has been no material adverse change since August
24, 1996 in the financial condition, operations, assets, business or prospects
of Steri-Oss or B&L, other than as a result of the Related Transactions, from
that reflected in the financial information referred to in clauses (a) through
(c). No notices or other communications have been given or received with respect
to the matters described in Section 4.23 of the Asset Purchase Agreement, except
such as have been delivered to Lenders by Borrower prior to the Closing Date.
On the Closing Date and after giving effect to the Related
Transactions, (i) the assets of Borrower and each of its Subsidiaries, including
Intangible Assets, at a fair valuation, will exceed its liabilities, including
contingent liabilities, (ii) the capital of Borrower and each of its
Subsidiaries will not be unreasonably small to conduct its business and (iii)
neither Borrower nor any of its Subsidiaries has incurred debts, nor does it
intend to incur debts, beyond its ability to pay such debts as they mature. For
purposes of this Section 10.3, "debt" means any liability on a claim, "claim"
means a (x) right to payment, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured; or (y) right to an equitable
remedy for breach of performance if such breach gives rise to a payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or unsecured and
"contingent liabilities" shall be computed as the amount of such liabilities
which, in light of all the facts and circumstances existing on the date hereof,
represents the maximum amount that reasonably can be expected to become absolute
and matured liabilities determined in good faith.
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SECTION 10.4 Litigation and Contingent Obligations. As of the date of
the initial Loan, except as set forth (including estimates of the dollar amounts
involved) in Schedule V hereto and except for claims as to which the insurer has
admitted coverage in writing and which are fully covered by insurance, no
claims, litigation (including, without limitation, derivative actions and
litigation with respect to any Employee Benefit Plan), arbitration, governmental
investigation or proceeding or inquiry is pending or, to the best of Borrower's
knowledge after due inquiry, threatened against Borrower, any of its
Subsidiaries, Parent or Seller which could, if adversely determined, have a
Material Adverse Effect. As of the date of the initial Loan, other than any
liability incident to such claims, litigation or proceedings, neither Borrower
nor any of its Subsidiaries has any material Contingent Obligations not provided
for or referred to in the financial statements delivered under Section 10.3(a)
or (b) or in Schedule XII hereto.
SECTION 10.5 Liens. At all times on and after the making of the initial
Loan, none of the assets of Borrower or any of its Subsidiaries will be subject
to any Lien, except for Permitted Liens which (except for Permitted Prior Liens)
are junior to the Lien of the Collateral Documents. Except as described in Part
1 of Schedule XII and except for Permitted Prior Liens, Collateral Agent will
obtain, as security for the Liabilities, (a) a legally valid and binding first
Lien on all real property and interests in real property described in the
Mortgages, and (b) a first perfected Lien on all other property described in the
Collateral Documents as being pledged, assigned or granted thereby. The legal
descriptions attached to the Mortgages, together with the descriptions of other
property described in the Collateral Documents, correctly describe all property
used in the business or operations of Borrower and its Subsidiaries in a manner
sufficient to create an enforceable Lien on or security interest in such
property.
SECTION 10.6 Absence of Default. Neither Borrower nor any of its
Subsidiaries is in material default under any contract or contracts (a) to which
it is a party or by which it is bound, and (b)(i) pursuant to which Borrower
and/or such Subsidiary provides goods or services to a customer which
contributed more than $250,000 of gross revenue during the prior Fiscal Year of
Borrower or which is reasonably expected to contribute more than $250,000 of
gross revenue during the current Fiscal Year of Borrower, or (ii) pursuant to
which Borrower and/or such Subsidiary incurs Lease Obligations in excess of
$100,000 during any Fiscal Year, or (iii) which cannot be replaced without
material expense, delay or interruption of business (including, without
limitation, any Material Intellectual Property Right).
SECTION 10.7 Employee Benefit Plans.
(a) Neither Borrower nor any member of its Controlled Group
have incurred any liability with respect to any Pension Plan or
Multiemployer Plan other than to pay premiums to the PBGC and make
contributions to any such Pension Plan (provided that any such
contributions and premiums which have been due have been paid).
(b) With respect to each Pension Plan, full and timely payment
has been made of all amounts required under Code Section 412, Section
302 of ERISA and under the terms of each such plan; no event or
condition has occurred which has or could result in
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the imposition of a lien or an accumulated funding deficiency (whether
or not waived) under Code Section 412 or Section 302 of ERISA; Borrower
and each member of its Controlled Group have fulfilled their
obligations, if any, under the minimum funding standards of ERISA and
the Code; and no security has been posted or is required to be posted
under Section 401(a)(29) of the Code or Section 307 of ERISA.
(c) No steps have been taken to terminate any Pension Plan or
to withdraw from any Multiemployer Plan.
(d) No Reportable Event has occurred with respect to any
Pension Plan.
(e) Neither Borrower nor any member of its Controlled Group
has any material contingent liability with respect to any
post-retirement benefits under a Welfare Plan (other than liability for
health care continuation coverage in compliance with the requirements
of Part 6 of Subtitle B of Title I of ERISA or Section 4980B of the
Code).
(f) Each Employee Benefit Plan (i) complies in form with any
requirements of ERISA and has been operated and administered in a
manner so as not to result in any liability to Borrower or any member
of its Controlled Group for failure to comply with ERISA, (ii) if
intended to qualify under the Code, is in form and has been
administered in a manner so as not to result in any liability to
Borrower or any member of its Controlled Group for failure to comply
with the applicable provisions thereof, and (iii) has no other
conditions existing or events or transactions which have occurred with
respect to such plan which could result in the incurrence by Borrower
or any member of the Controlled Group of any liability, except, in the
case of each of the foregoing clauses (i), (ii) and (iii) as may (x) be
funded or adequately reserved on the balance sheet of Borrower or one
of its Controlled Group members, (y) not result in the incurrence of
any liability by Borrower or any member of its Controlled Group (net of
any reduction in liability arising out of the same condition, event or
transaction) in excess of $100,000 (in the aggregate) or (z) arise in
connection with the adoption of any Employee Benefit Plan by Borrower
or any member of its Controlled Group in compliance with Section 4.8 of
the Asset Purchase Agreement.
(g) Borrower is not an Employee Benefit Plan, Borrower's
assets do not constitute assets of an Employee Benefit Plan and the
execution, performance and delivery of this Agreement or the execution
of any Related Transactions will not involve any prohibited
transaction, as defined in Section 406 of ERISA or Section 4975 of the
Code, for which an exemption is unavailable.
SECTION 10.8 Investment Company Act; Public Utility Holding Company
Act. Neither Borrower nor any of its Subsidiaries is an "investment company" or
a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company," within the meaning of the Public Utility
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Holding Company Act of 1935, as amended.
SECTION 10.9 Regulations G, U and X. Neither Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation G, U or X of the Board of
Governors of the Federal Reserve System). Neither Borrower nor any of its
Affiliates or any Person acting on its behalf has taken or will take action to
cause the execution, delivery or performance of this Agreement or the Notes, the
making or existence of the Loans or the use of proceeds of the Loans to violate
Regulation G, U or X of the Board of Governors of the Federal Reserve System.
SECTION 10.10 Proceeds. The proceeds of the initial Revolving Loans,
Working Capital Loans, Term Loans, Subordinated Loans and Initial Equity
Contribution will be used for (a) the payment in full of the obligations of
Borrower pursuant to the Acquisition, (b) the payment of the costs, expenses,
fees and taxes incurred by Borrower in connection therewith, including, without
limitation, costs, expenses, fees and taxes incurred pursuant to Section 14.4,
(c) the payment in full of the Indebtedness to be Refinanced and (d) working
capital purposes. The proceeds of subsequent Loans will be used for working
capital purposes, to pay for capital improvements, and for other purposes
permitted hereunder; provided, however, that the proceeds of Capital Expenditure
Loans shall be used solely to finance capital expenditures by Borrower.
SECTION 10.11 Acquisition Instruments. At the time of the making of the
initial Loan: (a) the Acquisition will have been consummated in accordance with
the Acquisition Instruments; (b) all material consents and approvals of, and
filings and registrations with, and all other actions in respect of, all
governmental agencies, authorities or instrumentalities required in order to
make or consummate the Acquisition will have been obtained, given, filed or
taken and shall be in full force and effect, and all required waiting periods
will have elapsed; and (c) all actions pursuant to the Acquisition Instruments
or in furtherance of the Acquisition, will have been taken in material
compliance with all Requirements of Law. The warranties and representations of
Parent contained in the Guaranty and the Pledge Agreement and of Borrower's
Subsidiaries contained in the Security Agreement, the Subsidiary Guaranties and
the Mortgages are and will be true and correct in all material respects. All
representations and warranties set forth in Articles 2 and 3 of the Asset
Purchase Agreement are true and correct in all material respects as if made as
of the Closing Date.
SECTION 10.12 Insurance. Schedule VI hereto sets forth a true and
correct summary of all insurance carried by Borrower and its Subsidiaries.
Borrower and its Subsidiaries are adequately insured for its benefit under
policies issued by insurers of recognized responsibility. No notice of any
pending or threatened cancellation or premium increase has been received by
Borrower or any of its Subsidiaries with respect to any of such insurance
policies. Borrower and its Subsidiaries are in compliance with all conditions
contained in such insurance policies.
SECTION 10.13 Material Disruptions. As of the date of the initial Loan,
neither the business nor the properties of Borrower or any of its Subsidiaries
is affected, or anticipated to
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be affected, by any existing event of Force Majeure or other existing casualty
which could reasonably be expected to have a Material Adverse Effect.
SECTION 10.14 Patents, Trademarks Borrower and its Subsidiaries own and
possess, or are licensed under valid and enforceable license agreements to use,
all such patents, patent rights, trademarks, trademark rights, trade names,
trade name rights, service marks, service ▇▇▇▇ rights, trade secrets, mask works
and copyrights as are necessary for the conduct of their respective businesses
as now conducted or presently proposed to be conducted without any infringement
upon rights of others which could have a Material Adverse Effect, and, except as
set forth in Part 1 of Schedule VII, there is no individual patent, patent
right, trademark, trademark right, trade name, trade name right, service ▇▇▇▇,
service ▇▇▇▇ right, trade secret, mask work or copyright the loss of which could
have a Material Adverse Effect (any such item, whether or not set forth on
Schedule VII, being herein called a "Material Intellectual Property Right").
Parts 1 and 2 of Schedule VII together contain a complete list of all patents,
trademarks, copyrights, service marks, mask works and license agreements
relating to patent rights, trademark rights, trade name rights, service ▇▇▇▇
rights, trade secrets, mask works and copyrights owned or licensed by Borrower
or any of its Subsidiaries.
SECTION 10.15 Ownership of Properties; Property Schedule. On the date
of the initial Loan and after giving effect to all Related Transactions,
Borrower and its Subsidiaries will have good and marketable title to all of
their respective material properties and assets, real and personal, of any
nature whatsoever. Schedule VIII contains descriptions of all real and personal
property (a) in which Borrower or any of its Subsidiaries has an interest as of
the date hereof, (b) with respect to which the Collateral Documents will not
create a valid and perfected first lien and security interest and (c) which
cannot be replaced without material expense, delay or interruption of business.
SECTION 10.16 Business Locations; Trade Names. Schedule IX contains (a)
a list of each of the locations where Borrower or any of its Subsidiaries
maintains an office, a place of business or any records, (b) a list of each name
under or by which Borrower, any of its Subsidiaries, or to Borrower's best
knowledge after due inquiry, Steri-Oss or any of its predecessors, conducts its
business or has conducted business at any time during the five year period prior
to the Closing Date and (c) a complete and accurate address and legal
description of each parcel of real estate owned or leased by Borrower.
SECTION 10.17 Accuracy of Information. No statement by Borrower
contained in any document delivered to any Lender Party by Borrower in
connection with this Agreement or any transaction contemplated hereby contains
(or will contain) an untrue statement of a material fact or omits (or will omit)
to state a material fact necessary to make the statements made, in light of the
circumstances in which made, not materially false or misleading.
SECTION 10.18 Subsidiaries. Borrower has no Subsidiaries other than
3304906 Canada, Inc., and Parent has no Subsidiaries other than Borrower and
Borrower's Subsidiaries.
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SECTION 10.19 Hazardous Materials. Except as disclosed in Schedule X
hereto, (a) neither Borrower nor, to the best knowledge of Borrower after due
inquiry, any other Person has ever caused or permitted any Hazardous Material to
be released, treated, stored or disposed of in a manner which could form the
basis for any claim, demand, proceeding or action by any Person, past, present
or future on, under or at any real property legally or beneficially owned (or
any interest or estate in real property which is owned) or operated by Borrower
or any of its Subsidiaries (including, without limitation, any property owned by
a land trust the beneficial interest in which is owned in whole or in part by
Borrower or any of its Subsidiaries), (b) no such real property has ever been
used (by Borrower or, to the best knowledge of Borrower after due inquiry, any
other Person) as (i) a disposal site for any Hazardous Material in violation of
any Requirement of Law or (ii) a storage site for any Hazardous Material in
violation of any Requirement of Law, and (c) neither Borrower nor, to the best
knowledge of Borrower after due inquiry, any other Person has ever caused or
permitted any Hazardous Material to be transported, released, treated, stored or
disposed of at any location other than those identified in Schedule X in a
manner which could reasonably be expected to form the basis for any claim,
demand, proceeding or action by any Person.
SECTION 10.20 Agent's Fees. No agent, broker, investment banker,
Person, or firm acting on behalf of Borrower or any of its Affiliates, or under
the authority of any such Person, is or will be entitled to any broker's or
finder's fee or any other commission or similar fee, directly or indirectly,
from any of the parties hereto in connection with any of the transactions
contemplated herein, except for Larkspur Capital Corporation whose fees and
expenses (not to exceed $2,500,000) will be paid by Borrower on the date the
initial Loans are made and other Persons whose fees and expenses will be paid by
Borrower on the date the initial Loans are made.
SECTION 10.21 Taxes. Borrower and each of its Subsidiaries has filed
all tax returns that are required to be filed by it or on behalf of any Employee
Benefit Plan (other than tax returns for which the time for filing has not yet
expired), and has paid or provided adequate reserves for the payment of all
taxes, including, without limitation, all payroll taxes and federal and state
withholding taxes, and all assessments payable by it that have become due, other
than those that are not yet delinquent or that are being contested in good faith
by appropriate proceedings and with respect to which adequate reserves have been
established, and are being maintained, in accordance with GAAP. As of the
Closing Date there is no ongoing audit or other governmental investigation of
the tax liability of Borrower, any of its Subsidiaries or any Employee Benefit
Plan and there is no unresolved claim by a taxing authority concerning the tax
liability of Borrower or any of its Subsidiaries (or by any governmental
authority with respect to any Employee Benefit Plan), for any period for which
returns have been filed or were due. As used in this Section 10.21, the term
"taxes" includes all taxes of any nature whatsoever and however denominated,
including, without limitation, excise, import, governmental fees, duties and all
other charges, as well as additions to tax, penalties and interest thereon,
imposed by any government or instrumentality, whether federal, state, local,
foreign or other.
SECTION 10.22 Securities Laws. Neither Borrower nor any Affiliate of
Borrower,
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nor anyone acting on behalf of any such Person, has directly or indirectly
offered any interest in the Notes, any of the other Liabilities or the LC
Guaranties for sale to, or solicited any offer to acquire any such interest
from, or has sold any such interest to any Person that would subject the
issuance or sale of the Notes, any of the other Liabilities or the LC Guaranties
to registration under the Securities Act of 1933, as amended.
SECTION 10.23 Governmental Authorizations. Borrower and each of its
Subsidiaries has all licenses, franchises, permits and other governmental
authorizations necessary for all businesses presently carried on by it
(including owning and leasing the real and personal property owned and leased by
it), except where failure to obtain such licenses, franchises, permits and other
governmental authorizations could not reasonably be expected to (a) subject
Borrower, any of its Subsidiaries or any of their respective officers to
criminal liability or (b) have a Material Adverse Effect.
SECTION 10.24 Compliance with Laws. Neither Borrower nor any of its
Subsidiaries (a) is in violation of any law, ordinance, rule, regulation, order,
policy, guideline or other requirement of any governmental authority, which
violation could reasonably be expected to subject Borrower, any of its
Subsidiaries or any of their respective officers, to criminal liability or have
a Material Adverse Effect, and Borrower has not received any written notice
alleging any such violation, (b) has failed to file in a timely manner all
reports, documents and other materials required to be filed by it with any
governmental bureau, agency or instrumentality (and the information contained in
each of such filings is true, correct and complete in all respects), except
where failure to make such filing could not reasonably be expected to have a
Material Adverse Effect and (c) has failed to retain all records and documents
required to be retained by it pursuant to any law, ordinance, rule, regulation,
order, policy, guideline or other requirement of any governmental authority,
except where failure to retain such records could not reasonably be expected to
subject Borrower, any of its Subsidiaries or any of their respective officers to
criminal liability or have a Material Adverse Effect.
SECTION 10.25 Employees and Labor. There is no unfair labor practice
complaint against Borrower or any of its Subsidiaries pending before the
National Labor Relations Board or any state or local agency nor is there a labor
strike or other labor dispute, pending or threatened, affecting any of the
foregoing which if adversely resolved could have a Material Adverse Effect;
there is no existing representation question respecting the employees of
Borrower or any of its Subsidiaries nor are there organizational attempts
affecting any of the employees of any of the foregoing which could have a
Material Adverse Effect; there is no grievance pending or threatened against
Borrower or any of its Subsidiaries; and no labor disputes or work stoppages
involving Borrower or any of its Subsidiaries are pending or threatened which
could have a Material Adverse Effect. No customer or supplier of Borrower or any
of its Subsidiaries is involved in, or threatened with or affected by, any labor
dispute, arbitration, lawsuit or administrative proceeding which could have a
Material Adverse Effect.
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SECTION 11 COVENANTS.
Until the expiration or termination of the Commitments and thereafter
until the Notes and all other Liabilities are paid in full, Borrower agrees that
it will, and will cause each of its Subsidiaries to:
SECTION 11.1 Reports, Certificates and other Information. Furnish or
cause to be furnished to each Lender:
11.1.1. Initial Balance Sheet. As soon as practicable, and in
any event no later than December 15, 1996, a consolidated balance sheet
as of the Closing Date (and after giving effect to all Related
Transactions) of Borrower and its Subsidiaries certified by the chief
financial officer of Borrower and, except as may be consented to by
Lenders, without significant variation from the balance sheet referred
to in Section 10.3(c).
11.1.2. Audit Report. As soon as available, but in any event
within 90 days after the end of each Fiscal Year: (i) copies of the
consolidated and consolidating balance sheets of Borrower and its
Subsidiaries as at the end of such Fiscal Year and the related
statements of earnings, shareholders' equity and cash flows for such
Fiscal Year, in each case setting forth in comparative form the figures
for the previous year and Borrower's business plan for such Fiscal
Year, prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein, certified,
without a going concern or like qualification or qualification arising
out of the scope of the audit, by Price Waterhouse LLP (or such other
independent certified public accountants of recognized standing as
shall be selected by Borrower with the approval of the Requisite
Lenders); (ii) a certificate from the accountants identified in clause
(i) of this Section 11.1.2 containing a computation of, and showing
compliance with, each of the financial ratios and restrictions
contained in Section 11, and to the effect that, in making the
examination necessary for the signing of the annual audit report of
Borrower and its Subsidiaries by such accountants, whether or not they
have become aware of any non-compliance by Parent, Borrower or any of
Borrower's Subsidiaries, or any Event of Default or Unmatured Event of
Default, under this Agreement or the Related Documents; (iii) if
possible through the exercise of Borrower's reasonable best efforts, a
letter addressed to Borrower and its Subsidiaries from the accountants
identified in clause (i) of this Section 11.1.2 stating that such
accountants have been informed that a primary intent of Borrower and
its Subsidiaries was for the professional services such accountants
provided to Borrower and its Subsidiaries in preparing their audit
report and the certificate referred to in clause (ii) above to benefit
or influence Lenders, and identifying Lenders as parties that Borrower
and its Subsidiaries have indicated intend to rely on such professional
services provided to Borrower and its Subsidiaries by such accountants;
(iv) a copy of each management representation letter given by
management of Borrower to such accountants; and (v) product line
information for Borrower and its Subsidiaries for such fiscal period.
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11.1.3. Quarterly Reports. As soon as available, but in any
event within 45 days after the end of each Fiscal Quarter of Borrower:
(i) copies of the unaudited consolidated and consolidating balance
sheets of Borrower and its Subsidiaries as at the end of such Fiscal
Quarter and the related unaudited statements of earnings, shareholders'
equity and cash flows for such Fiscal Quarter and the portion of the
Fiscal Year through such Fiscal Quarter, in each case setting forth in
comparative form the figures for the corresponding periods of the
previous Fiscal Year and Borrower's business plan for such Fiscal
Quarter, prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and
certified by the chief financial officer of Borrower as presenting
fairly the financial condition and results of operations of Borrower
and its Subsidiaries (subject to normal year-end audit adjustments);
and (ii) product line information for Borrower and its Subsidiaries for
such fiscal period in a form reasonably satisfactory to the Requisite
Lenders for such products or classes of products as the Requisite
Lenders shall require.
11.1.4. Monthly Reports. As soon as available, but in any
event within 30 days after the end of each month, copies of the
unaudited consolidated and consolidating balance sheets of Borrower and
its Subsidiaries as at the end of such month and the related unaudited
statements of earnings and cash flows for such month and the portion of
the Fiscal Year through such month, in each case setting forth in
comparative form the figures for the corresponding periods of the
previous Fiscal Year and Borrower's business plan for the portion of
the Fiscal Year through such month, prepared in reasonable detail and
in accordance with GAAP applied consistently throughout the periods
reflected therein and certified by the chief financial officer of
Borrower as presenting fairly the financial condition and results of
operations of Borrower and its Subsidiaries (subject to normal year-end
audit adjustments).
11.1.5. Business Plan. As soon as available, but in any event:
(i) within 30 days after the beginning of each Fiscal Year, a copy of
the plan and forecast (including a projected closing balance sheet and
projected income statements and funds flow statements) of Borrower and
its Subsidiaries for such Fiscal Year; and (ii) within 30 days after
the end of the second Fiscal Quarter of Borrower in each Fiscal Year,
an update of each plan and forecast delivered with respect to the
Fiscal Year in which such Fiscal Quarter occurs, reflecting changes in
such plan resulting from actual and then anticipated results and
forecasts.
11.1.6. Compliance Certificates; Management Reports.
Contemporaneously with the furnishing of a copy of each annual audit
report and of each set of statements provided for in Sections 11.1.2,
11.1.3 and 11.1.4, (i) a duly completed certificate in substantially
the form of Exhibit I (each a "Compliance Certificate"), signed by the
chief financial officer of Borrower, containing, among other things, a
computation of, and showing compliance with, each of the applicable
financial ratios and restrictions contained in this Section 11 and to
the effect that as of such date no Event of Default or Unmatured Event
of Default has occurred and is continuing, or, if one has occurred, the
steps being
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taken with respect thereto and (ii) a report of an executive officer of
Borrower satisfactory to the Requisite Lenders describing the financial
performance of Borrower during the period covered by the statements
provided for in Sections 11.1.2, 11.1.3 and 11.1.4 and setting forth
any significant events occurring during such period affecting Borrower.
11.1.7. Auditors' Materials. Promptly upon receipt thereof,
copies of all detailed financial and management reports regarding
Borrower submitted to Borrower by independent public accountants in
connection with each annual or interim audit report made by such
accountants of the books of Borrower or any of its Subsidiaries.
11.1.8. Reports to SEC and to Shareholders. Promptly upon the
filing or making thereof, copies of each filing and report made by
Borrower, Parent or any of their Subsidiaries with or to any securities
exchange or the Securities and Exchange Commission and of each written
communication from Borrower or Parent to its shareholders generally.
11.1.9. Notice of Default, Litigation, Intellectual Property
and ERISA Matters. Forthwith upon learning of the occurrence of any of
the following, written notice thereof, describing the same and the
steps being taken by Borrower with respect thereto: (i) any expectation
of uncollectability of, material delay in collection of, or other
impairment of any Account Receivable in excess of $100,000, (ii) the
occurrence of an Event of Default or an Unmatured Event of Default,
(iii) the institution of, or any adverse determination or materially
adverse development in, any litigation, arbitration proceeding or
governmental proceeding which could have a Material Adverse Effect,
(iv) the occurrence of a Reportable Event with respect to a Pension
Plan, (v) the institution of any steps to terminate any Pension Plan,
(vi) the institution of any steps to completely or partially withdraw
from any Multiemployer Plan, (vii) the failure of Borrower or any
member of its Controlled Group to make a required contribution to a
Pension Plan if such failure is sufficient to give rise to a lien under
Section 412 of the Code or Section 302 of ERISA, (viii) the adoption of
any amendment which would require Borrower or any member of its
Controlled Group to provide security to the Plan under Section
401(a)(29) of the Code or Section 307 of ERISA, (ix) the incurrence of
any increase in the contingent liability of Borrower or any member of
its Controlled Group or any other conditions, events or transactions
with respect to any present (or future) Employee Benefit Plan which (a)
is not reserved on the balance sheet of Borrower or one of its
Controlled Group members, (b) could result in the incurrence by
Borrower or any member of its Controlled Group of any liability (net of
any reduction in liability arising out of the same condition, event or
transaction) in excess of $100,000 (in the aggregate) and (c) is not in
connection with the adoption by Borrower or any member of its
Controlled Group of any Employee Benefit Plan in compliance with
Section 4.8 of the Asset Purchase Agreement, (x) the commencement of
any dispute which might lead to the modification, transfer, revocation,
suspension or termination of any Related Document, (xi) any expectation
of the termination (without renewal), loss, suspension or other
impairment of Borrower's rights under any Material Intellectual
Property Right or (xii) any event or events which
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could have a Material Adverse Effect.
11.1.10. Insurance Reports. (i) Within 90 days after the end
of each Fiscal Year, a certificate signed by its chief financial
officer that summarizes the insurance policies, including, without
limitation, any Key-Man Life Insurance, carried by Borrower and its
Subsidiaries (such certificate to be in form and substance satisfactory
to the Requisite Lenders), and (ii) written notification 30 days prior
to any cancellation or material change of any such insurance by
Borrower and within 5 days after receipt of any notice (whether formal
or informal) of cancellation, reduction in coverage, shortening of
policy period or material adverse change by any of its insurers.
11.1.11. Withdrawal Liability. With respect to each
Multiemployer Plan, (i) no less frequently than annually, a written
estimate (which shall be based on information received from each such
plan, it being expressly understood that Borrower shall take all
reasonable steps to obtain such information) of the withdrawal
liability that would be incurred by Borrower or any member of its
Controlled Group in the event that all companies in the Controlled
Group were to completely withdraw from that plan, and (ii) written
notice thereof, as soon as it has reason to believe (on the basis of
the most recent information available to it) that the sum of (a) the
withdrawal liability that would be incurred by the Controlled Group if
all companies in the Controlled Group completely withdrew from all
multiemployer plans as to which any company in the Controlled Group has
an obligation to contribute, and (b) the aggregate amount of the
outstanding withdrawal liability (without unaccrued interest) incurred
by the Controlled Group to multiemployer plans, would exceed $100,000.
11.1.12. Information Concerning Parent and its Subsidiaries.
(i) Forthwith upon learning thereof, written notice of the occurrence
with respect to Parent or any Subsidiary of Parent of any of the events
the occurrence of which in relation to Borrower would constitute an
Event of Default or an Unmatured Event of Default under Section 13.1.5;
(ii) prompt written notice of execution of any binding agreement by
Parent or any of its Subsidiaries to merge or consolidate into or with,
or purchase or otherwise acquire all or substantially all of the assets
or stock of any class of, or any partnership or joint venture interest
in, any other Person, or for the sale, transfer, lease or conveyance by
Parent or any of its Subsidiaries of all or any substantial part of its
Property or sale or assignment without recourse of any of its
receivables; and (iii) forthwith upon the receipt by Borrower thereof,
any request by Person to transfer or to record any pledge of any
Borrower Equity Interests or Subsidiary Equity Interests.
11.1.13. List of Officers and Directors. (i) Not more than 10
Business Days after each anniversary date of the initial Loan, a
complete list of the officers and directors of Borrower, and (ii)
within 15 Business Days of any change in the information provided
pursuant to the foregoing clause (i), written notice of such change.
11.1.14. Tax Returns and Receipts. Upon request by the
Requisite Lenders,
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within: (i) 30 days after the filing thereof, copies of all tax returns
filed by Borrower, any of its Subsidiaries or Parent with any Federal
or state taxing authority; and (ii) 30 days after receipt thereof by
Borrower, evidence of payment of property taxes.
11.1.15. Other Information. From time to time, such other
information concerning Borrower as any Lender reasonably may request.
SECTION 11.2 Corporate Existence; Foreign Qualification. Do and cause
to be done at all times all things necessary to (a) maintain and preserve the
corporate existence of Borrower, each of its Subsidiaries and Parent, (b) be,
and ensure that Parent and each Subsidiary of Borrower is, duly qualified to do
business and in good standing as a foreign corporation in each jurisdiction
where the nature of its business makes such qualification necessary, except any
such jurisdiction where the failure to so qualify could have a Material Adverse
Effect (which jurisdictions shall include, without limitation, those
jurisdictions listed in Part I of Schedule IX) and (c) comply, and cause its
Subsidiaries and Parent to comply, with all Contractual Obligations and
Requirements of Law binding upon such entity, except to the extent that the
failure to comply therewith could not have a Material Adverse Effect.
SECTION 11.3 Books, Records and Inspections. (a) Maintain, and cause
each of its Subsidiaries to maintain, complete and accurate books and records;
(b) permit, and cause each of its Subsidiaries to permit, access at reasonable
times by any Lender to its books and records; (c) permit, and cause each of its
Subsidiaries to permit, any Lender to inspect at reasonable times its properties
and operations; and (d) permit, and cause each of its Subsidiaries to permit,
any Lender to discuss its business, operations and financial condition with its
officers.
SECTION 11.4 Insurance. (a) Maintain, and cause each of its
Subsidiaries to maintain, such insurance as may be required by law, by the
Collateral Documents or otherwise by the Requisite Lenders, all to such extent
and against such hazards and liabilities, as is customarily maintained by
prudent companies similarly situated, (b) maintain, and cause each of its
Subsidiaries to maintain, a sufficient amount of insurance so that none of
Borrower, any of its Subsidiaries, Collateral Agent or any Lender will be
considered a co-insurer or co- insurers, (c) with respect to each liability
insurance policy, (A) cause such policy to provide, pursuant to endorsements in
form and substance satisfactory to the Requisite Lenders, that Collateral Agent
is named as an additional insured and that the insurer will give Collateral
Agent 30 days' prior written notice of the termination of such policy and (B)
notify Collateral Agent within 5 days after obtaining any new policy, or
increasing coverage under any existing policy, describing in detail in such
notice any such new policy or increase, (d) with respect to each physical damage
or casualty policy and each life insurance policy, (A) cause such policy to
provide, pursuant to endorsements in form and substance satisfactory to the
Requisite Lenders, that Collateral Agent is named as a loss payee as to personal
property and a mortgagee as to real property and that the insurer will give
Collateral Agent 30 days' prior written notice of the termination or material
modification of such policy, (B) use its reasonable best efforts to cause such
policy to provide, pursuant to endorsements in form and substance satisfactory
to the Requisite Lenders, that the insurance shall not be invalidated as against
Collateral Agent or any Lender by any action or
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inaction of any Person other than Collateral Agent or such Lender, regardless of
any breach or violation of any warranty, declaration or condition contained in
such policy, (C) as against Collateral Agent and Lenders, use its reasonable
best efforts to cause the insurers to waive any rights of subrogation to the
extent that the named insured has waived such rights (and Borrower hereby
irrevocably and unconditionally waives any right of subrogation against
Collateral Agent and Lenders, except for claims arising out of the gross
negligence or willful misconduct of Collateral Agent or Lenders), and (D) notify
Collateral Agent within 5 days of obtaining any new policy or increasing
coverage under any existing policy, describing in detail in such notice any such
new policy or increase and (e) with respect to any Key-Man Life Insurance
obtained by Borrower, (A) cause such policy to be assigned to Collateral Agent
for collateral security and to provide that the insurer will give Collateral
Agent 30 days' prior written notice of the termination or modification of such
policy, (B) cause the insurer to acknowledge and consent to such assignment and
(C) notify Collateral Agent within 5 days after obtaining any new policy,
describing in detail in such notice any such new policy.
SECTION 11.5 Taxes and Liabilities. Pay, and cause each of its
Subsidiaries to pay, when due all material taxes, assessments and other material
liabilities except as contested in good faith and by appropriate proceedings
with respect to which adequate reserves have been established, and are being
maintained, in accordance with GAAP if and so long as forfeiture of any part of
the Collateral will not result from the failure to pay any such taxes,
assessments or other material liabilities during the period of any such contest.
SECTION 11.6 Environmental Liabilities. Comply, and cause each of its
Subsidiaries to comply, with all Requirements of Law regarding Hazardous
Material, the failure to comply with which could reasonably be expected to have
a Material Adverse Effect; and, without limiting the foregoing, not, and not
permit any other Person to, except in accordance with all Requirements of Law
(except where the failure to comply with such Requirements of Law could not
reasonably be expected to have a Material Adverse Effect), dispose of any
Hazardous Material into, onto or from, any real property owned or operated by it
or any of its Subsidiaries, nor allow any lien imposed pursuant to any law,
regulation or order relating to Hazardous Materials or the disposal thereof to
be imposed or to remain on such real property.
SECTION 11.7 Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply, with all Requirements of Law related to its business if
the failure so to comply could have a Material Adverse Effect.
SECTION 11.8 Maintenance of Permits. Maintain, and cause each of its
Subsidiaries to maintain, all permits, licenses and consents as are required for
the conduct of its business by any state, federal or local government agency or
instrumentality (including, without limitation, any such license, consent or
permit relating to Hazardous Materials or the disposal thereof) if the failure
to maintain such licenses, permits and consents could have a Material Adverse
Effect.
SECTION 11.9 Collateral Documents. Cause the Collateral Documents, as
security
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for the payment, performance and observance of all of the Liabilities, to be and
remain valid, perfected Liens on and security interests in all assets of
Borrower and its Subsidiaries now or hereafter existing or acquired (free of all
other Liens whatsoever other than Permitted Liens).
SECTION 11.10 Employee Benefit Plans. (i) Maintain, and cause each
member of the Controlled Group to maintain, each Pension Plan as to which it may
have any liability, in compliance in all material respects with all applicable
Requirements of Law or as required pursuant to a collective bargaining
agreement, or if intended to qualify under Section 401(a) or 501(a) of the
Internal Revenue Code, in form and administered in a manner so as not to result
in any material liability to Borrower for failure to comply with the applicable
provisions thereof, and (ii) not institute any actions which could give rise to
any of the following, unless the liability to Borrower arising from the same
(net of any reduction in liability arising out of the same condition, event or
transaction) will not exceed $100,000 or is adequately reserved on the balance
sheet of Borrower or one of its Controlled Group members: (a) a Reportable Event
with respect to a Pension Plan, (b) the complete or partial withdrawal from any
Multiemployer Plan, (c) an amendment, modification or termination of a Pension
Plan or the entering into of any new Employee Benefit Plan other than in
connection with the adoption of any Employee Benefit Plan by Borrower or any
member of its Controlled Group in compliance with Section 4.8 of the Asset
Purchase Agreement (whether or not resulting in the posting of a security under
Section 401(a)(29) of the Internal Revenue Code or Section 302 of ERISA), (d) an
obligation to file a notice of intent to terminate a Pension Plan under ERISA,
(e) a lien under Section 412 of the Internal Revenue Code or Section 302 of
ERISA, (f) the institution of proceedings to terminate a Pension Plan by the
Pension Benefit Guaranty Corporation, or (g) other than in the ordinary course
or in connection with the adoption by Borrower or any member of its Controlled
Group of any Employee Benefit Plan in compliance with Section 4.8 of the Asset
Purchase Agreement, the incurrence of any increase in the contingent liability
of Borrower or any other conditions, events or transactions with respect to any
present (or future) Employee Benefit Plan.
SECTION 11.11 Indebtedness. Not incur or permit to exist, or permit any
of its Subsidiaries to incur or permit to exist, any Indebtedness or accounts
payable except (a) the Loans and the other Liabilities, (b) the Subordinated
Indebtedness, (c) deferred taxes, (d) current accounts payable arising in the
ordinary course of business, (e) non-current accounts payable which it is
contesting in good faith and by appropriate proceedings diligently conducted,
and with respect to which adequate reserves have been established, and are being
maintained, in accordance with and as required by GAAP, (f) Indebtedness shown
on Part 1 of Schedule XII, (g) Indebtedness in respect of the deferred payment
of insurance premiums, provided that the aggregate amount of such premiums which
may be deferred in any Fiscal Year shall not exceed $100,000, (h) other
Indebtedness hereafter incurred in connection with Permitted Liens, (i)
Indebtedness in respect of unpaid Reimbursement Obligations in respect of
drawings under Permitted LCs, provided that no such unpaid Reimbursement
Obligations shall be outstanding for more than one Business Day and (j) other
Indebtedness not in excess of $50,000 outstanding at any time.
SECTION 11.12 Liens. Not create or permit to exist, or permit any of
its
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Subsidiaries to create or permit to exist, any Lien with respect to any assets
now or hereafter existing or acquired, except Permitted Liens.
SECTION 11.13 Current Ratio. Not permit the Current Ratio as of the
last day of any month during any period set forth below to be less than the
amount set forth below opposite such period:
Period Amount
------ ------
December 1, 1996 through December 31, 1997 1.50
January 1, 1998 through June 30, 1998 1.75
July 1, 1998 through December 31, 2000 2.00
January 1, 2001 through December 31, 2001 2.25
January 1, 2002 through December 31, 2002 3.00
SECTION 11.14 Adjusted Operating Profit. Not permit Adjusted Operating
Profit for the twelve month period ending on the last day of any month during
any period set forth below (or in the case of months ending on or before October
31, 1997, for the period from the Closing Date to the last day of such month
treated as a single accounting period) to be less than the amount set forth
below opposite such period:
Period Amount
------ ----------
Closing Date through December 31, 1996 $600,000
Closing Date through January 31, 1997 $800,000
Closing Date through February 28, 1997 $1,150,000
Closing Date through March 31, 1997 $2,000,000
Closing Date through April 30, 1997 $2,375,000
Closing Date through May 31, 1997 $2,795,000
Closing Date through June 30, 1997 $3,700,000
Closing Date through July 31, 1997 $4,300,000
Closing Date through August 31, 1997 $4,500,000
Closing Date through September 30, 1997 $5,350,000
Closing Date through October 31, 1997 $6,250,000
November 1, 1997 through November 30, 1997 $6,875,000
December 1, 1997 through December 31, 1997 $7,175,000
January 1, 1998 through March 31, 1998 $7,290,000
April 1, 1998 through June 30, 1998 $7,790,000
July 1, 1998 through September 30, 1998 $8,326,000
October 1, 1998 through December 31, 1998 $8,843,000
January 1, 1999 through March 31, 1999 $9,300,000
April 1, 1999 through June 30, 1999 $9,800,000
July 1, 1999 through September 30, 1999 $10,300,000
October 1, 1999 through December 31, 1999 $11,100,000
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January 1, 2000 through March 31, 2000 $11,750,000
April 1, 2000 through June 30, 2000 $12,250,000
July 1, 2000 through September 30, 2000 $12,750,000
October 1, 2000 through December 31, 2000 $13,650,000
January 1, 2001 through March 31, 2001 $14,480,000
April 1, 2001 through June 30, 2001 $15,080,000
July 1, 2001 through September 30, 2001 $15,880,000
October 1, 2001 through December 31, 2001 $16,880,000
January 1, 2002 through March 31, 2002 $17,950,000
April 1, 2002 through June 30, 2002 $18,450,000
July 1, 2002 through September 30, 2002 $19,250,000
October 1, 2002 through December 31, 2002 $20,050,000
SECTION 11.15 Net Cash Ratio. Not permit the ratio of Net Cash
Generated to Total Fixed Charges for the twelve month period ending on the last
day of any month during any period set forth below (or in the case of months
ending on or before October 31, 1997, for the period from the Closing Date to
the last day of the applicable period set forth below treated as a single
accounting period) to be less than the amount set forth below opposite such
period:
Period Amount
------ ------
Closing Date through December 31, 1996 1.00
Closing Date through January 31, 1997 1.00
Closing Date through February 28, 1997 1.00
Closing Date through March 31, 1997 1.00
Closing Date through April 30, 1997 0.90
Closing Date through May 31, 1997 0.95
Closing Date through June 30, 1997 0.95
Closing Date through July 31, 1997 0.95
Closing Date through August 31, 1997 0.95
Closing Date through September 30, 1997 1.00
Closing Date through October 31, 1997 1.00
November 1, 1997 through December 31, 1997 1.05
January 1, 1998 through March 31, 1998 1.00
April 1, 1998 through June 30, 1998 1.04
July 1, 1998 through September 30, 1998 1.10
October 1, 1998 through December 31, 1998 1.14
January 1, 1999 through December 31, 1999 1.15
January 1, 2000 through December 31, 2000 1.18
January 1, 2001 through December 31, 2001 1.32
January 1, 2002 through December 31, 2002 1.17
SECTION 11.16 Leverage Ratio. Not permit the ratio of Total Funded Debt
on the last day of any month during any period set forth below to Adjusted
Operating Profit for the
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twelve month period ending on such last day (or in the case of months ending on
or before October 31, 1997, for the period from the Closing Date to the last day
of the applicable period set forth below treated as a single accounting period)
to exceed the amount set forth below opposite such period:
Period Amount
------ ------
Closing Date through December 31, 1996 64.00
Closing Date through January 31, 1997 48.00
Closing Date through February 28, 1997 35.00
Closing Date through March 31, 1997 21.00
Closing Date through April 30, 1997 16.00
Closing Date through May 31, 1997 14.00
Closing Date through June 30, 1997 11.00
Closing Date through July 31, 1997 9.00
Closing Date through August 31, 1997 8.50
Closing Date through September 30, 1997 7.50
Closing Date through October 31, 1997 6.50
November 1, 1997 through November 30, 1997 5.25
December 1, 1997 through December 31, 1997 5.00
January 1, 1998 through March 31, 1998 4.88
April 1, 1998 through June 30, 1998 4.73
July 1, 1998 through September 30, 1998 4.18
October 1, 1998 through December 31, 1998 3.95
January 1, 1999 through March 31, 1999 3.44
April 1, 1999 through June 30, 1999 3.25
July 1, 1999 through September 30, 1999 3.00
October 1, 1999 through December 31, 1999 2.75
January 1, 2000 through March 31, 2000 2.21
April 1, 2000 through June 30, 2000 2.00
July 1, 2000 through September 30, 2000 1.75
October 1, 2000 through December 31, 2000 1.50
January 1, 2001 through March 31, 2001 1.26
April 1, 2001 through December 31, 2001 1.00
January 1, 2002 through December 31, 2002 0.86
SECTION 11.17 Gross Capital Expenditures. Not, and not permit any of
its Subsidiaries to, directly or indirectly (by way of the acquisition of the
securities of a Person or otherwise), make Gross Capital Expenditures, except
that Borrower may, so long as no Event of Default shall exist or would result
therefrom, make Gross Capital Expenditures in the ordinary course of business in
an aggregate amount in any one Fiscal Year set forth below not to exceed the
amount set forth below opposite such Fiscal Year:
Fiscal Year Amount
----------- ------
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1996 $250,000
1997 $1,250,000
1998 $1,650,000
1999 $1,400,000
2000 $1,400,000
2001 $1,400,000
2002 $1,400,000
SECTION 11.18 Leases. Not, and not permit any of its Subsidiaries to,
incur or permit to exist any Lease Obligations (other than pursuant to leases
which are cancelable at the option of Borrower or such Subsidiary without
penalty and on no more than 90 days' notice) if the aggregate amount of all
Lease Obligations for any Fiscal Year would exceed $300,000.
SECTION 11.19 Restricted Payments to Equity Holders. Not, and not
permit any of its Subsidiaries to, purchase, redeem or otherwise acquire any
Equity Interests, declare or pay any dividends on or make any distributions in
respect of any Equity Interests, or make any other payment of any nature
whatsoever to the holders of any Equity Interests (in their capacity as such)
other than dividends to Borrower from its Subsidiaries, provided, however, that
Borrower and its Subsidiaries may:
(i) make payments to Parent from time to time for the
payment of Borrower's and its Subsidiaries' portion of the aggregate
federal income tax liabilities (including estimated tax liabilities) of
the affiliated group filing consolidated returns of which Parent is
common parent and Borrower is a member for any taxable year, provided
that such payments shall not exceed with respect to any year the lesser
of (i) the federal income tax liabilities of Borrower and its
Subsidiaries for such year determined as if Borrower and its
Subsidiaries were not members of such affiliated group filing
consolidated returns but rather as if Borrower and its Subsidiaries
filed their respective returns on a separate company basis for such
year and all prior years and (ii) the aggregate federal income tax
liabilities (including estimated tax liabilities) of the affiliated
group filing consolidated returns of which Parent is the common parent
and Borrower is a member;
(ii) if no Event of Default or Unmatured Event of Default
shall exist or result therefrom, make payments to Parent to enable
Parent to repurchase or redeem common stock of Parent from employees of
Borrower, provided that aggregate amount of such payments shall not
exceed $100,000;
(iii) if no Event of Default or Unmatured Event of Default
shall exist or result therefrom, make payments to Parent for reasonable
out-of-pocket administrative expenses of Parent, provided that the
aggregate amount of such payments shall not exceed $20,000 in any
Fiscal Year;
(iv) purchase shares of capital stock of Parent or the
Warrant, each to the extent permitted or required by the Warrant; and
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(v) make payments permitted pursuant to Section 11.21 hereof;
so long as (a) all payments by Borrower to Parent made pursuant to this Section
11.19 are applied by Parent for the purposes specified within 5 Business Days
after Parent's receipt thereof and (b) Borrower delivers to Collateral Agent a
certificate of the chief financial officer of Borrower describing each payment
made under this Section 11.19 not less than 5 Business Days prior to making such
payment, which certificate shall set forth the form and amount of such payment
and otherwise be in such form and substance and containing such specificity and
detail as shall be reasonably satisfactory to the Requisite Lenders.
SECTION 11.20 Restricted Payments of Indebtedness. Not, and not permit
any of its Subsidiaries to, (a) make any voluntary or optional prepayment of any
Indebtedness other than the Loans or (b) make any cash payment on account of the
Subordinated Indebtedness, provided, however, that Borrower may make payments of
accrued and unpaid interest on the Subordinated Indebtedness to the extent
permitted by the Subordination Agreement.
SECTION 11.21 Transactions with Affiliates. Not, and not permit any of
its Subsidiaries to, enter into, cause, suffer or permit to exist:
(a) any arrangement or contract with any of its Affiliates
requiring any payments to be made by Borrower or any of its
Subsidiaries with respect to services whether or not such services
shall be received by Borrower or such Subsidiary, except that Borrower
may (i) enter into the Management Agreement, (ii) so long as no Event
of Default or Unmatured Event of Default shall have occurred and be
continuing, make payments of Management Fees to SOMC pursuant to the
Management Agreement, (iii) enter into the Acquistion Instruments, the
Equity Instruments, the Subordinated Loan Instruments and the
Employment Agreements and may perform all of its obligations thereunder
to the extent such performance would not result in any Event of Default
or Unmatured Event of Default under this Agreement, (iv) enter into a
tax sharing agreement with Parent and its Subsidiaries and (v) pay
directors' fees in an aggregate amount not in excess of $70,000 in any
Fiscal Year; or
(b) any other transaction, arrangement or contract (including,
without limitation, any employment contract or agreement as to payment
of a director's fees) with any of its Affiliates on terms which are
less favorable than those otherwise reasonably attainable on an
arm's-length basis from a Person which is not one of its Affiliates.
SECTION 11.22 Mergers, Acquisitions, Consolidations, Sales. Not, and
not permit any of its Subsidiaries to, (a) be a party to any merger or
consolidation, or purchase or otherwise acquire all or substantially all of the
assets or stock of any class of, or any partnership or joint venture interest
in, any other Person, (b) sell or assign with or without recourse any Account
Receivable or (c) enter into any agreement providing for or consummate any Asset
Sales or Equity Sales, other than any Equity Sales the terms of which (i) do not
require any mandatory redemption or repurchase of any Equity Interests prior to
the date the Liabilities are paid and
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performed in full and the Commitments are terminated, (ii) do not require any
cash dividends or other payments by the issuer on any Equity Interests sold
pursuant to such Equity Sales prior to the date the Liabilities are paid and
performed in full and the Commitments are terminated and (iii) are fully
disclosed to Lenders within a reasonable period of time prior to the
consummation of such Equity Sale.
SECTION 11.23 Guaranties, Loans, Advances or Investments. Not, and not
permit any of its Subsidiaries to, become or be a guarantor or surety of, or
otherwise incur any Contingent Obligation or become or be responsible in any
manner (whether by agreement to purchase any obligations, stock, assets, goods
or services, or to supply or advance any funds, assets, goods or services, or
otherwise) with respect to, any undertaking of any other Person, or make or
permit to exist any loans or advances to, or investments in, any other Person,
except for (a) the endorsement, in the ordinary course of collection, of
instruments payable to it or to its order, (b) investment in Cash Equivalents,
(c) Contingent Obligations under the LC Reimbursement Agreements and (d)
Borrower's investments in 3304906 Canada Inc and a Foreign Sales Corporation or
Domestic International Sales Corporation permitted under Section 11.25.
SECTION 11.24 Business Activities. Not, and not permit any of its
Subsidiaries to, engage in any type of business except the businesses described
in Schedule XI and the activities incidental and related thereto.
SECTION 11.25 Subsidiaries. Not, and not permit any of its Subsidiaries
to, create or permit to exist any Subsidiary other than (a) 3304906 Canada Inc.
and (b) so long as no Event of Default would result as a result of the creation
thereof and Collateral Agent receives 30 days prior notice from Borrower of its
creation, a single Foreign Sales Corporation and a single Domestic International
Sales Corporation, provided that the annual net income of each such Foreign
Sales Corporation and Domestic International Sales Corporation does not exceed
$25,000.
SECTION 11.26 Fiscal Year. Not change its Fiscal Year from a Fiscal
Year ending on the last day of December.
SECTION 11.27 Unconditional Purchase Obligations. Not, and not permit
any of its Subsidiaries to, enter into or be a party to any contract for the
purchase of materials, supplies or other property or services, if such contract
requires that payment be made by it regardless of whether delivery is ever made
of such materials, supplies or other property or services.
SECTION 11.28 Regulations G, U and X. Not, and not permit any of its
Subsidiaries to, use or permit any proceeds of the Loans or Reimbursement
Obligations to be used, either directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of "purchasing or carrying margin stock"
within the meaning of Regulations G, U and X of the Board of Governors of the
Federal Reserve System, as amended from time to time.
SECTION 11.29 Other Agreements. Not, and not permit any of its
Subsidiaries to,
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enter into or permit to exist any agreement containing any provision which would
be violated or breached by the performance of its obligations hereunder or under
any Related Document.
SECTION 11.30 No Amendment of Certain Documents. Not, and not permit
any of its Subsidiaries to, enter into or permit to exist any amendment or
modification of its articles of incorporation or by-laws (which articles or
by-laws shall provide for an observatory seat on the board of directors of
Borrower and each of its Subsidiaries for a representative of Lenders), the
Subordinated Loan Instruments (except to the extent permitted by the
Subordination Agreement), the Acquisition Instruments, the Equity Instruments
(except in connection with any Equity Sales permitted under Section 11.22 or as
contemplated by Section 8.16 and 10.3 of the Securities Purchase Agreement), the
Management Agreement, the Employment Agreements or the Warrant.
SECTION 11.31 Steri-Oss Name Change. Provide to the Collateral Agent,
within 15 Business Days after the Closing Date, a certificate of the (i)
California Secretary of State indicating that Steri-Oss has changed its name to
a name dissimilar to "Steri-Oss, Inc." and (ii) Delaware Secretary of State
indicating that Borrower has changed its name to "Steri-Oss, Inc."
SECTION 12 CONDITIONS.
The obligation of Lenders to make Loans and issue LC Guaranties
hereunder is subject to the following conditions precedent or concurrent:
SECTION 12.1 Initial Loan. The obligation of each Lender to make its
initial Loan shall be subject to the prior or concurrent satisfaction (in form
and substance satisfactory to such Lender) of each of the conditions precedent
set forth below.
12.1.1. Acquisition. Lenders shall have received evidence that
concurrently with the disbursement of the initial Loans hereunder (i)
the Acquisition has been consummated in accordance with the terms of
the Acquisition Instruments, all Requirements of Law and as
contemplated by this Agreement, (ii) Borrower has acquired good and
marketable title to all Property necessary for the operation of its
business, free and clear of all Liens other than Permitted Liens, (iii)
the Acquisition Instruments are in full force and effect, (iv) none of
the parties to the Acquisition Instruments shall have failed to perform
any material obligation or covenant required by any Acquisition
Instrument to be performed or complied with by it on or before the
Closing Date
12.1.2. No Default. No Event of Default, or Unmatured Event of
Default, shall have occurred and be continuing or will result from the
making of such Loan.
12.1.3. Warranties and Representations. All warranties and
representations of Borrower, its Subsidiaries, Parent and Investor
contained in this Agreement and the Related Documents, the Subordinated
Loan Instruments, the Acquisition Instruments, the Equity Instruments,
the Management Agreement and the Employment Agreements shall be true
and correct in all material respects as of the date of such Loan, with
the same
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effect as though made on the date of such Loan.
12.1.4. Lender Approval of Certain Documents. The terms and
provisions of the Acquisition Instruments, the Subordinated Loan
Instruments, the Equity Instruments, the Management Agreement and the
Employment Agreements shall have been approved by Lenders.
12.1.5. Litigation. In the sole and absolute discretion of
Lenders, (i) no litigation (including, without limitation, derivative
actions), arbitration, governmental investigation or proceeding or
inquiry shall, on the date of the initial Loan, be pending, or to the
best knowledge of Borrower after due inquiry, threatened which seeks to
enjoin or otherwise prevent the consummation of, or to recover any
damages or to obtain relief as a result of, the Related Transactions,
or would be materially adverse to, or be detrimental to the interests
of, any of the parties to this Agreement or the Related Documents or
any of the Related Transactions, and (ii) no material adverse
development shall have occurred in any litigation (including, without
limitation, derivative actions), arbitration, government investigation
or proceeding or inquiry disclosed in Schedule V.
12.1.6. Fees. The fees referred to in Section 5 which are due
and payable on or prior to the date of the initial Loan shall have been
paid.
12.1.7. Establishment of Accounts. The Accounts shall have
been established pursuant to Section 6.2 and the financial institutions
at which the Accounts have been established shall have furnished
Collateral Agent with the acknowledgment referred to in Section 6.3.
12.1.8. Indebtedness to be Refinanced. The obligations of
Borrower under the Acquisition Instruments and all other Indebtedness
identified on Part 2 of Schedule XII (herein called "Indebtedness to be
Refinanced"), together with all interest accrued thereon and all
prepayment premiums and other amounts payable in connection therewith,
shall have been refinanced in full from the proceeds of the Loans, the
Subordinated Loans and the Initial Equity Contribution and Collateral
Agent shall have received (i) the certificate of the President or a
Vice President of Borrower, dated the date of the initial Revolving
Loan to such effect and to the further effect that an aggregate amount
of no more than $0.00 was required to make such payments, (ii) a letter
from each of the holders of the Indebtedness to be Refinanced setting
forth in each case (x) the amount of principal and accrued interest
thereon due such holder as of the date of such letter, (y) the per diem
interest rate on unpaid principal thereunder as of such date, and (z)
payment instructions relative to the payment of such Indebtedness to be
Refinanced, and enclosing in escrow any and all Uniform Commercial Code
termination statements, mortgage releases and releases of security
interests in patents, trademarks and copyrights, in form and substance
satisfactory to the Requisite Lenders, sufficient to terminate all
Liens securing any of the Indebtedness to be Refinanced.
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12.1.9. Documents. Each Lender shall have received all of the
following, each duly executed and dated the date of the initial Loan
(or such earlier date as shall be satisfactory to such Lender), in form
and substance satisfactory to such Lender:
(a) Certain Related Documents. The Notes, the
Subordination Agreement, the Bank Agency Agreement, the
Security Agreement, the Guaranty, the B&L Guaranty, the Pledge
Agreement, the Borrower Pledge Agreement, the Subsidiary
Guaranties, the Mortgages, the other Collateral Documents, the
Financing Statements, the Warrant and certificates
representing all of the capital stock of Borrower and its
Subsidiaries, together with appropriate duly executed stock
powers.
(b) Leases and Landlord Consents. Copies of all
leases of real property to which Borrower is subject,
certified by Borrower as true and correct.
(c) Resolutions. Certified copies of resolutions of
the shareholders and Board of Directors of (i) Borrower and
Seller authorizing or ratifying the execution, delivery and
performance of the Acquisition Instruments and (ii) Borrower,
each of its Subsidiaries and Parent authorizing or ratifying
the execution, delivery and performance of this Agreement, the
Related Documents, the Subordinated Loan Instruments, the
Equity Instruments, the Management Agreement and the
Employment Agreements, to the extent such Persons are parties
thereto.
(d) Incumbency and Signatures. A certificate of the
Secretary or an Assistant Secretary of Borrower, each of its
Subsidiaries and Parent, certifying the names of the
individual or individuals authorized to sign this Agreement
and the Related Documents to which such entity is a party,
together with a sample of the true signature of each such
individual.
(e) Articles and By-Laws. Certified copies of the
articles of incorporation and by-laws of Borrower, each of its
Subsidiaries and Parent (which articles or by-laws shall
provide for an observatory seat on the board of directors of
Borrower for Lender).
(f) List of Directors and Officers. A complete list
of the officers and directors of Borrower as at the date of
the initial Revolving Loan.
(g) Good Standing Certificates. Certificates of good
standing for Borrower, each of its Subsidiaries and Parent in
each jurisdiction in which the business of such entity
requires it to be qualified.
(h) Financial Statements. Each of the financial
statements listed in Section 10.3.
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(i) Evidence of Financial Condition. A certificate of
an executive officer of Borrower, relying on such financial
information as may be satisfactory to Lender, to the effect
that, as of the date of the initial Loan and after giving
effect to the Related Transactions: (i) Borrower's assets, at
fair valuation, determined on a going concern basis, will
exceed the total liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities) of
Borrower, (ii) Borrower will have an aggregate cash equity
capitalization of at least $25,000,000, (iii) Borrower will
have sufficient cash flow to enable it to pay its debts as
they mature, and (iv) Borrower will not have an unreasonably
small capital with which to engage in its anticipated
businesses.
(j) Opinions of Counsel. The opinion of (a) ▇▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇, counsel for Borrower, addressed to Lender, in
form and substance satisfactory to Lender, (b) such local
counsel in form and substance satisfactory to Lender as Lender
may request and (c) Seller's counsel regarding the
Acquisition, in form and substance satisfactory to Lender.
(k) Consents. Certified copies of all documents
evidencing any necessary corporate action, consents and
governmental approvals (if any) with respect to this
Agreement, the Related Documents, any other document provided
for hereunder and the Related Transactions.
(l) Insurance. Evidence that Borrower and its
Subsidiaries are maintaining insurance of the type required by
this Agreement and the Collateral Documents (including without
limitation casualty, liability and worker's compensation
insurance), together with certificates of insurance naming
Collateral Agent as an additional insured and/or loss payee
and specifying, among other things, such matters as shall be
required by Section 11.4. Such evidence shall include, without
limitation, a certificate, in form and substance satisfactory
to the Requisite Lenders and signed by the chief financial
officer of Borrower, summarizing the insurance policies
carried by Borrower and its Subsidiaries.
(m) Licenses and Permits. Copies, certified by an
appropriate officer of Borrower, of all licenses, permits and
other authorizations from Federal, state, local or foreign
governmental or similar authorities necessary for the
operation of Borrower's business.
(n) Subordinated Loan Instruments. Copies, certified
by an appropriate officer of Borrower, of the Subordinated
Loan Instruments.
(o) Acquisition Instruments. Copies, certified by an
appropriate officer of Borrower, of the Acquisition
Instruments.
(p) Equity Instruments. Copies, certified by an
appropriate officer of
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Parent, of the Equity Instruments.
(q) Employment Agreements. A copy, certified by an
appropriate officer of Borrower, of the Employment Agreements.
(r) Management Agreement. A copy, certified by an
appropriate officer of Borrower, of the Management Agreement.
(s) Confirmatory Certificate. A duly completed
certificate confirming satisfaction of the conditions set
forth in Sections 12.1.1 through 12.1.3 and 12.1.7 through
12.1.11, signed by the President or a Vice President of
Borrower.
(t) Other. Such other documents as any Lender
reasonably may request.
12.1.10. Subordinated Loan Instruments. The Subordinated Loan
Instruments shall have been duly executed by the parties thereto, and
the Subordinated Loan shall have been made thereunder.
12.1.11. Initial Equity Contribution. Borrower shall have
received in cash the Initial Equity Contribution.
SECTION 12.2 Initial Revolving Loan and Working Capital Loan; Maximum
Loan Balance at Closing. The obligation of Lenders to make the initial Loan
shall be subject to the prior or concurrent satisfaction (in form and substance
satisfactory to Lenders) of the conditions precedent set forth below:
12.2.1. Order of Funding. A Term Loan in the full amount of
the Term Loan Commitment shall be made prior to the initial Revolving
Loan. A Revolving Loan in the full amount of the Revolving Loan
Commitment shall be made prior to the initial Working Capital Loan.
12.2.2. Maximum Loan Balance at Closing. The initial Loans
shall not exceed $25,500,000 in the aggregate.
SECTION 12.3 All Loans; LC Guaranties. The obligation of Lenders to
make each Loan subsequent to the initial Loans or to issue an LC Guaranty is
subject to the following further conditions precedent that:
12.3.1. No Default; Reaffirmation of Warranties and
Representations. (a) No Event of Default or Unmatured Event of Default
shall have occurred and be continuing or will result from the making of
such Loan or issuing such LC Guaranty, (b) the warranties and
representations contained in this Agreement and the Related Documents
shall be true and correct in all material respects as of the date of
such requested Loan
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or provision of such LC Guaranty, with the same effect as though made
on the date of such Loan or provision of such LC Guaranty, except to
the extent such warranties and representations expressly relate to an
earlier date and except as disclosed in the schedules attached to the
most recent Borrowing Certificate or LC Guaranty Request, and (c) there
shall have been no material adverse change or notice of prospective
material adverse change with respect to insurance maintained by
Borrower.
12.3.2. Litigation; Adverse Changes. (a) No claims, litigation
(including, without limitation, derivative actions), arbitration,
governmental proceeding, investigation or inquiry not disclosed in
writing by Borrower to Lenders prior to the date of the of the request
for such Loan or issuance of an LC Guaranty, shall be pending or known
to be threatened against Borrower, (b) no material development not so
disclosed shall have occurred in any claim, litigation (including,
without limitation, derivative actions), arbitration, governmental
proceeding, investigation or inquiry so disclosed, (c) except as
disclosed in the schedules attached to the most recent Borrowing
Certificate or LC Guaranty Request the schedules attached to this
Agreement shall be complete and correct and (d) no event, condition or
development shall have occurred or developed at any time (whether
before or after the making of the last previous Loan), which (in the
case of each of the foregoing clauses (a) through (d)) in the opinion
of the Requisite Lenders could reasonably be expected to have a
Material Adverse Effect.
12.3.3. Borrowing Certificate and Other Confirmations .
Collateral Agent shall have received: (a) not later than the fifteenth
Business Day of each month, a certificate, substantially in the form of
Exhibit J (the "Borrowing Certificate") dated the last Business Day of
the month in which such Loan was requested, signed by the President or
a Vice President or other appropriate officer of Borrower, (b) not less
than three days prior to the making of an LC Guaranty, a certificate
substantially in the form of Exhibit K (the "LC Guaranty Request")
relating to all Permitted LCs to be covered by an LC Guaranty since the
most recent prior LC Guaranty Request, signed by the President of a
Vice President of Borrower and (c) such other documents as any Lender
reasonably may request in support of such requested Loan or LC
Guaranty.
12.3.4. Minimum Loan Balance. In the case of any (a) Revolving
Loan (other than the initial Revolving Loan), there shall be
outstanding Revolving Loans in a minimum principal amount of $1,000 and
(b) Working Capital Loans (other than the initial Working Capital
Loan), there shall be outstanding Working Capital Loans in a minimum
principal amount of $1,000.
SECTION 13 EVENTS OF DEFAULT AND THEIR EFFECT.
SECTION 13.1 Events of Default. Each of the following shall constitute
an Event of Default under this Agreement:
13.1.1. Non-Payment of Loans or Reimbursement Obligations.
Default in
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the payment when due, whether by acceleration or otherwise, of any
principal of or interest or premium on any Loan or Reimbursement
Obligation.
13.1.2. Non-Payment of Fees or Other Amounts. Default, and
continuance thereof for 5 Business Days, in the payment when due,
whether by acceleration or otherwise, of any amount payable to any
Agent or any Lender hereunder or under the Related Documents (other
than any amount described in Section 13.1.1).
13.1.3. Non-Payment of Other Indebtedness. (i) Default in the
payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any other Indebtedness of, or guaranteed
by, Borrower or any of its Subsidiaries aggregating $100,000 or more or
(ii) default in the performance or observance of any obligation or
condition with respect to any such other Indebtedness of, or guaranteed
by, Borrower or any of its Subsidiaries, if, in the case of either
clause (i) or (ii) above, the effect of such default is to accelerate
the maturity of (or there is matured and unpaid) such other
Indebtedness aggregating $100,000 or more, or to cause such other
Indebtedness aggregating $100,000 or more to become due and payable, or
to permit the holder or holders of such other Indebtedness of $100,000
or more, or any trustee or agent for such holders, to cause such other
Indebtedness to become due and payable prior to its expressed maturity.
13.1.4. Intentionally Omitted.
13.1.5. Bankruptcy, Insolvency, etc. (a) Borrower, any of its
Subsidiaries or Parent becomes insolvent or generally fails to pay, or
admits in writing its inability to pay, debts as they become due; or
(b) Borrower, any of its Subsidiaries or Parent applies for, consents
to, or acquiesces in the appointment of, a trustee, receiver or other
custodian or similar for such Person or for any of such Person's
Property, or makes a general assignment for the benefit of creditors;
or (c) in the absence of such application, consent or acquiescence, a
trustee, receiver or other custodian or similar Person is appointed for
Borrower, any of its Subsidiaries or Parent or for a substantial part
of the Property of any such Person, unless (i) such Person institutes
appropriate proceedings to contest or discharge such appointment within
10 days and thereafter continuously and diligently prosecutes such
proceedings and (ii) such appointment is in fact discharged within 60
days of such appointment; or (d) any bankruptcy, reorganization, debt
arrangement, or other case or proceeding under any bankruptcy or
insolvency law, or any dissolution or liquidation proceeding is
commenced in respect of Borrower, any of its Subsidiaries or Parent
unless (i) such case or proceeding is not commenced such Person, (ii)
such case or proceeding is not consented to or acquiesced in by such
Person, (iii) such Person institutes appropriate proceedings to dismiss
such case or proceeding within 10 days and thereafter continuously and
diligently prosecutes such proceedings and (iv) such case or proceeding
is in fact dismissed within 60 days after the commencement thereof; or
(e) Borrower, any of its Subsidiaries or Parent takes any action to
authorize, or in furtherance of, any of the foregoing.
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13.1.6. Non-compliance with Certain Provisions. Failure of
Borrower to comply with the provisions of each of Sections 6.1, 6.2,
7.1, 9.4, 9.5, 11.2 through 11.6, 11.11 through 11.22, 11.26, 11.27 and
11.30.
13.1.7. Non-compliance With Other Provisions of this Agreement
or the Related Documents. Failure by Borrower, any of its Subsidiaries,
Parent or B&L to comply with or to perform any provision of this
Agreement or the Related Documents (and not constituting an Event of
Default under any of the other provisions of this Section 13) and
continuance of such failure for 30 days after notice thereof from the
Requisite Lenders to such Person.
13.1.8. Indebtedness to be Refinanced. Failure to pay in full
the Indebtedness to be Refinanced concurrently with the making of the
initial Loan.
13.1.9. Warranties and Representations. Any written warranty,
representation or statement made by or on behalf of Borrower, any of
its Subsidiaries or Parent herein or in any of the Related Documents or
otherwise in connection herewith or therewith is inaccurate or
incorrect or is breached or false or misleading in any material respect
as of the date such warranty or representation is made.
13.1.10. Employee Benefit Plans. Except to the extent that any
of the following is expressly permitted hereunder or does not give rise
to the incurrence by Borrower or any member of its Controlled Group of
any liability (net of any reduction in liability arising out of the
same condition, event or transaction) in excess of $100,000 (in the
aggregate), or except to the extent any of the following is adequately
reserved on the balance sheet of the applicable Borrower or one of its
Controlled Group members, the institution of any steps by Borrower or
any other Person, including the PBGC, (a) to amend, modify or terminate
a Pension Plan or to enter into any new Pension Plan other than any
Employee Benefit Plan adopted by Borrower or any member of its
Controlled Group in compliance with Section 4.8 of the Asset Purchase
Agreement, (b) to cause a complete or partial withdrawal from any
Multiemployer Plan, or (c) other than in the ordinary course or in
connection with the adoption of any Employee Benefit Plan by Borrower
or any member of its Controlled Group in compliance with Section 4.8 of
the Asset Purchase Agreement, to directly or indirectly cause to exist
any other conditions, events or transaction which could give rise to
liability to Borrower or any member of its Controlled Group with
respect to any Employee Benefit Plan.
13.1.11. Related Documents. At any time after the initial
Loan, Borrower, any of its Subsidiaries, Parent or B&L takes any action
to repudiate this Agreement or any of the Related Documents or to
contest the validity, binding nature or enforceability of any thereof.
13.1.12. Collateral. Any portion of the Collateral shall be
seized or taken by governmental or similar authority, the loss of which
could have a Material Adverse
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Effect; or Borrower shall fail to take any action requested by the
Requisite Lenders or otherwise required hereunder to maintain the
liens, security interest and priority of the Collateral Documents as
against any Person; or the title and rights of Borrower, any of its
Subsidiaries or Parent to any portion or portions of the Collateral
shall have become the subject matter of litigation which might, in the
reasonable opinion of the Requisite Lenders, upon final determination
result in impairment or loss of the security provided by the Collateral
Documents which could reasonably be expected to have a Material Adverse
Effect.
13.1.13. Change in Ownership. If at any time (a) Borrower
shall cease to own and control, beneficially and of record, all of the
Subsidiary Equity Interests, (b) Parent shall cease to own and control,
beneficially and of record, all of the Borrower Equity Interests or (c)
any Person other than Investor shall gain direct voting control over
Parent, including the right to elect a majority of the board of
directors of Parent.
13.1.14. Subordinated Loan Instruments. If any Event of
Default (as defined in the Subordinated Note Agreement) shall occur and
be continuing.
13.1.15. Litigation. If the sum of all judgments, awards or
decrees, or orders of attachment, garnishment or any other writ,
entered against Borrower, any of its Subsidiaries or Parent exceeds
$100,000 at any one time outstanding, excluding judgments, awards,
decrees, orders or writs (i) for which there is full insurance and with
respect to which the insurer has assumed responsibility in writing,
(ii) for which there is full indemnification (upon terms and by
creditworthy indemnitors which are satisfactory to the Requisite
Lenders) or (iii) which have been in force for less than the applicable
period for filing an appeal so long as execution is not levied
thereunder (or in respect of which Borrower shall at the time in good
faith be prosecuting an appeal or proceeding for review and in respect
of which a stay of execution or appropriate appeal bond shall have been
obtained pending such appeal or review).
SECTION 13.2 Effect of Event of Default. If any Event of Default
described in Section 13.1.5 shall occur, the Commitments, (if not theretofore
terminated) shall immediately terminate and the Notes and all other Liabilities
(including, without limitation, all of Borrower's contingent reimbursement
obligations with respect to LC Guaranties) shall become immediately due and
payable, all without notice of any kind; and, if any other Event of Default
shall occur and be continuing, the Requisite Lenders may declare the Commitments
(if not theretofore terminated) to be terminated and the Notes and all other
Liabilities (including, without limitation, all of Borrower's contingent
reimbursement obligations with respect to LC Guaranties) to be due and payable,
whereupon the such Commitments (if not theretofore terminated) shall immediately
terminate and the Notes and all other Liabilities (including, without
limitation, all of Borrower's contingent reimbursement obligations with respect
to LC Guaranties) shall become immediately due and payable, all without further
notice of any kind. Collateral Agent shall promptly advise Borrower of any such
declaration but failure to do so shall not impair the effect of such
declaration. Notwithstanding the foregoing, the effect as an Event of Default of
any event
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described in Section 13 may be waived by the Requisite Lenders in writing.
SECTION 14 GENERAL.
SECTION 14.1 Waiver; Amendments. No delay on the part of any Lender
Party in the exercise of any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise by any of them of any right,
power or remedy preclude other or further exercise thereof, or the exercise of
any other right, power or remedy. No amendment, modification or waiver of, or
consent with respect to, any provision of this Agreement or a Note or any
Related Document shall in any event be effective unless the same shall be in
writing and signed and delivered by the Requisite Lenders, and then any such
amendment, modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 14.2 Confirmations. Borrower and Lenders (or any holder of a
Note) agree from time to time, upon written request received by it from the
other, to confirm to the other in writing the aggregate unpaid principal amount
of the Loans then outstanding under such Note and of Reimbursement Obligations.
SECTION 14.3 Notices. Except with respect to Section 2.4: (a) notices
forwarded by mail shall be deemed to have been given five days after the date
sent if sent by registered or certified mail, postage paid, and:
(i) if to Borrower, addressed to Borrower at its address shown
below its signature hereto; or
(ii) if to Collateral Agent, Administrative Agent or any
Lender, addressed to such Person at the address shown below its
signature hereto; or
in the case of either party, at such other address as such party may, by written
notice received by the other parties to this Agreement, have designated as its
address for notices; (b) notices given by facsimile transmission shall be deemed
to have been given when sent if sent to the telecopy number included in the of
such party address as aforesaid and (c) notices given by overnight courier shall
be deemed to have been given one Business Day after the date sent if addressed
to the party to whom sent, at its address as aforesaid. Notices of borrowing
pursuant to Section 2.4 shall be effective upon receipt by Collateral Agent and
shall be in writing (or by telephone to be confirmed in writing by Borrower).
Collateral Agent, Administrative Agent and each Lender shall be entitled to rely
upon all telephone notices and Borrower shall indemnify and hold each Lender
Party harmless from any loss, cost or expense ensuing from any such reliance,
which indemnification shall survive any termination of this Agreement.
SECTION 14.4 Costs, Expenses and Taxes. Borrower agrees to pay on
demand all out-of-pocket costs and expenses of Collateral Agent, Administrative
Agent and each Lender (including the reasonable fees and out-of-pocket expenses
of counsel for Collateral Agent and of
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local counsel, if any, who may be retained by said counsel and all reasonable
costs of appraisals, surveys, environmental reviews and the like required to be
made or completed) in connection with the preparation, execution and delivery of
this Agreement, the Related Documents and all other instruments or documents
provided for herein or delivered or to be delivered hereunder or in connection
herewith. Borrower further agrees to pay all reasonable costs and expenses
(including attorneys' fees and legal expenses) incurred by Collateral Agent and
Administrative Agent in connection with the administration (including, without
limitation, expenses incurred for due diligence trips, inspection and
monitoring), enforcement, waiver or amendment of any of the Related Documents
and any such other instruments or documents. In addition, Borrower agrees to
pay, and to save Collateral Agent, Administrative Agent and each Lender harmless
from all liability for, any document, stamp, filing, recording, mortgage or
other taxes which may be payable in connection with the borrowings hereunder or
the execution, delivery, recording or filing of this Agreement, any of the
Related Documents or of any other instruments or documents provided for herein
or delivered or to be delivered hereunder or in connection herewith (other than
any income or withholding taxes). All obligations provided for in this Section
14.4 shall survive any termination of this Agreement.
SECTION 14.5 Indemnification.
(a) In consideration of the execution and delivery of this
Agreement by Collateral Agent, Administrative Agent, each Lender and
such Lender's extension of its Commitments, Borrower hereby agrees to
indemnify, exonerate and hold Collateral Agent, Administrative Agent,
Agent Bank, each Lender and each of their respective officers,
directors, employees and agents (herein collectively called "Lender
Parties" and individually called a "Lender Party") free and harmless
from and against any and all claims, demands, actions, causes of
action, suits, losses, costs (including, without limitation, all
documentary, recording, filing, mortgage or other stamp taxes or
duties), charges, liabilities and damages, and expenses in connection
therewith (irrespective of whether such Lender Party is a party to the
action for which indemnification hereunder is sought), and including,
without limitation, reasonable attorneys' fees and disbursements
(called in this clause (a) the "Indemnified Liabilities"), incurred by
Lender Parties or any of them as a result of, or arising out of, or
relating to (i) any transaction financed or to be financed in whole or
in part, directly or indirectly, with the proceeds of any Loan or
Reimbursement Obligation or involving any Loan or Reimbursement
Obligation, or (ii) the execution, delivery, performance or enforcement
of this Agreement, the Related Documents and any instrument, document
or agreement executed pursuant hereto by any of Lender Parties, and, to
the extent that the foregoing undertaking may be unenforceable for any
reason, Borrower agrees to make the maximum contribution to the payment
and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law; provided, however, that Borrower
shall not be required to indemnify any Lender Party for any Indemnified
Liability arising out of Lender's or such Lender Party's gross
negligence or willful misconduct.
(b) Without limiting the generality of the indemnity set out
in the preceding
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clause (a), Borrower hereby further agrees to indemnify, exonerate and
hold all Lender Parties free and harmless from and against any and all
claims, demands, actions, causes of action, suits, losses, costs,
charges, liabilities and damages, and expenses in connection therewith,
including, without limitation, reasonable attorneys' fees and
disbursements (called in this clause (b) the "Indemnified
Liabilities"), of any and every kind whatsoever paid, incurred or
suffered by, or asserted against, any Lender Party for, with respect
to, or as a direct or indirect result of, (i) the presence on or under,
or the escape, seepage, leakage, spillage, discharge, emission or
release from, any real property legally or beneficially owned (or any
estate or interest which is owned) or operated by Borrower or any of
its Subsidiaries (including, without limitation, any property owned by
a land trust the beneficial interest in which is owned, in whole or in
part, by Borrower or any of its Subsidiaries) of any Hazardous Material
(including, without limitation, any claims, demands, actions, causes of
action, suits, losses, costs, charges, liabilities and damages,
asserted or arising under the Comprehensive Environmental Response,
Compensation and Liability Act, any so-called "Superfund" or
"Superlien" law, or any other Federal, state or local statute, law,
ordinance, code, rule, regulation, order or decree regulating, relating
to or imposing liability or standards of conduct concerning, any
Hazardous Material), and (ii) any of the conditions disclosed in any of
the documents listed on Schedule X regardless, in the case of either of
clause (i) or clause (ii), of whether caused by, or within the control
of, Borrower or any of its Subsidiaries; provided, however, that
Borrower shall not be required to indemnify any Lender Party for any
Indemnified Liability arising out of Lender's or such Lender Party's
gross negligence or willful misconduct.
(c) Without limiting the generality of the indemnities set out
in the preceding clauses (a) and (b), Borrower hereby further agrees to
indemnify, exonerate and hold all Lender Parties free and harmless from
and against any claims, demands, actions, causes of action, suits,
losses, costs, charges, liabilities and damages, and expenses in
connection therewith, including, without limitation, reasonable
attorneys' fees and disbursements (called in this clause (c) the
"Indemnified Liabilities") under Federal or state securities laws or
otherwise (i) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any
registration statement, prospectus or offering memorandum or in any
preliminary prospectus or preliminary offering memorandum or any
amendment or supplement to any thereof or in any other writing prepared
in connection with the offer, sale or resale of any Borrower Equity
Interests, Subsidiary Equity Interests or Parent Equity Interests
(including, without limitation, any offer, sale or resale pursuant to
Collateral Agent's enforcement of its rights under the Pledge Agreement
and the Borrower Pledge Agreement), or (ii) arising out of or based
upon any omission or alleged omission to state therein a material fact
required to be stated or necessary to make the statements therein not
misleading; provided, however, that Borrower shall not be required to
indemnify any Lender Party for any Indemnified Liability arising out of
Lender's or such Lender Party's gross negligence or willful misconduct.
If and to the extent that the foregoing undertakings in this paragraph
may be unenforceable for any reason, Borrower agrees to make the
maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible
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under applicable law. In connection with a public sale or other
distribution pursuant to Collateral Agent's enforcement of its rights
under the Pledge Agreement, Borrower shall indemnify any underwriters,
their respective successors and assigns, their respective officers and
directors and each Person who controls any such underwriter (within the
meaning of the Securities Act of 1933, as amended) to the same extent
as provided above with respect to the indemnification of Lender
Parties.
(d) Without limiting the generality of the indemnities set out
in the preceding clauses (a), (b) and (c), Borrower hereby further
agrees to indemnify, exonerate and hold all Lender Parties free and
harmless from and against any claims, demands, actions, causes of
action, suits, losses, costs, charges, liabilities and damages, and
expenses in connection therewith, including, without limitation,
reasonable attorneys' fees and disbursements (called in this clause (d)
the "Indemnified Liabilities") arising directly or indirectly from or
out of the following:
(i) any injury to person or damage to property, known
or unknown, reported or unreported, which results from the use
of the products of Borrower or any of its Subsidiaries; or
(ii) any obligation or liability arising out of or
with respect to the business or operations of Borrower or any
of its Subsidiaries;
whether any of such matters arise before or after the foreclosure of or
other taking of title to all or any portion of the Collateral by
Collateral Agent, provided, however, that Borrower shall not be
required to indemnify any Lender Party for any Indemnified Liability
arising out of Lender's or such Lender Party's gross negligence or
willful misconduct.
(e) All obligations provided for in this Section 14.5 shall
survive any termination of this Agreement and shall not be reduced or
impaired by any investigation made by or on behalf of any Lender Party.
SECTION 14.6 SUBMISSION TO JURISDICTION. COLLATERAL AGENT,
ADMINISTRATIVE AGENT AND LENDERS MAY ENFORCE ANY CLAIM ARISING OUT OF THIS
AGREEMENT OR THE RELATED DOCUMENTS IN ANY STATE OR FEDERAL COURT HAVING SUBJECT
MATTER JURISDICTION AND LOCATED IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK,
STATE OF NEW YORK. FOR THE PURPOSE OF ANY ACTION OR PROCEEDING INSTITUTED WITH
RESPECT TO ANY SUCH CLAIM, BORROWER, ON BEHALF OF ITSELF AND ITS SUBSIDIARIES,
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS. BORROWER, ON
BEHALF OF ITSELF AND ITS SUBSIDIARIES, HEREBY IRREVOCABLY DESIGNATES CT
CORPORATION, WITH OFFICES ON THE DATE HEREOF AT ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇▇▇, TO RECEIVE FOR AND ON BEHALF OF BORROWER AND ITS SUBSIDIARIES
SERVICE OF PROCESS IN NEW YORK. BORROWER, ON
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BEHALF OF ITSELF AND ITS SUBSIDIARIES, FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF SAID COURTS BY MAILING A COPY THEREOF, BY REGISTERED
MAIL, POSTAGE PREPAID, TO BORROWER AND AGREES THAT SUCH SERVICE, TO THE FULLEST
EXTENT PERMITTED BY LAW, (i) SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE
OF PROCESS UPON IT IN ANY SUCH SUIT, ACTION OR PROCEEDING AND (ii) SHALL BE
TAKEN AND HELD TO BE VALID PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO IT.
NOTHING HEREIN CONTAINED SHALL AFFECT THE RIGHT OF COLLATERAL AGENT,
ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR PRECLUDE ANY SUCH PERSON FROM BRINGING AN ACTION OR
PROCEEDING IN RESPECT HEREOF IN ANY OTHER COUNTRY, STATE OR PLACE HAVING
JURISDICTION OVER SUCH ACTION. BORROWER HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT LOCATED IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, STATE
OF NEW YORK AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 14.7 Governing Law. THIS AGREEMENT AND THE NOTES SHALL BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES. Whenever possible each provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of Borrower and rights of Collateral Agent,
Administrative Agent, each Lender and any other holder of a Note or Liability
expressed herein or in the Related Documents shall be in addition to and not in
limitation of those provided by applicable law or in any other written
instrument or agreement relating to any of the Liabilities.
SECTION 14.8 Entry Into Agreement. Borrower represents, warrants and
acknowledges that (i) the its relationship with Lenders is solely that of a
borrower and lender, and (ii) Borrower is in sole control of its business and
has entered into this Agreement as its own free act and voluntary deed, based
upon its independent judgment as to its best interests.
SECTION 14.9 Legal Opinions. Borrower expressly consents to the
rendering by its counsel and of each other counsel specified in Section 12.1.9
of the opinions to be rendered pursuant thereto, and thereafter to be rendered
from time to time in connection with this Agreement or any Related Document, and
acknowledges that such opinions, when so rendered, shall be deemed to be
rendered at the request and upon the instruction of Borrower, which has, and
will have (prior to the rendering of each opinion), consulted with and been
advised by such
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counsel as to the consequences of such consent, request and instructions.
SECTION 14.10 JURY TRIAL. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT OR ANY RELATED DOCUMENT TO WHICH IT IS A PARTY, OR
UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN
THE FUTURE BE DELIVERED IN CONNECTION THEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED DOCUMENT, AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.
SECTION 14.11 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of Borrower, Collateral Agent, Administrative
Agent, each Lender and their respective successors and assigns; provided,
however, that Borrower shall not have the right to assign its rights or delegate
its duties under this Agreement and the right of each Lender to assign its
rights or delegate its duties under this Agreement is subject to Section 15.
This Agreement and the Related Documents contain the entire agreement of the
parties hereto with respect to the matters covered hereby.
SECTION 14.12 Confidentiality. Borrower agrees that FSFP may disclose
information relating to Borrower to the Master Lenders, the Master Agents and
the Surety Provider, which have agreed to use procedures substantially
comparable to those used by them in respect of non-public information as
supplied to them by or on behalf of FSFP to the extent that such information is
not and does not become publicly available and which FSFP indicates at the time
is to be treated confidentially; provided, however, that each of the Master
Lenders, the Master Agents and the Surety Provider, as the case may be, is
hereby authorized to deliver a copy of each or any financial statement of
Borrower or any other information relating to the Loans, or the Collateral,
which may be furnished to it hereunder or otherwise to (a) its legal counsel,
auditors and other professional advisors, (b) governmental or regulatory
authorities having jurisdiction over it, (c) independent financial rating
agencies (including, without limitation, the Rating Agencies), (d) any person
providing general liquidity or credit enhancement to the Master Lenders or the
Surety Provider, and (e) subject to obtaining a confidentiality agreement
containing the foregoing confidentiality restrictions, any Person to whom a
Master Lender or Surety Provider proposes to assign all or any part of its
interest or grant a participation in its interest, provided that the Surety
Provider shall have the right to give participations in its rights under the
Insurance and Indemnity Agreement and to enter into contracts of reinsurance
with respect to the Surety Policy without obtaining a confidentiality agreement
from such participant or reinsurers as the case may be; however, the Surety
Provider will advise such participant or reinsurers as the case may be of the
confidentiality provisions of the Master Credit Agreement. As used herein:
"Master Agents" shall mean Citicorp North America, Inc. ("CNAI"), Bank of New
York and any successor thereto or assignee thereof; "Master Lender" shall mean
any person becoming a "Lender" party to that certain Second Amended and Restated
Credit Agreement dated as of May 24, 1996 (as amended from time to time, the
"Master Credit Agreement") among First
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Source Financial, Inc., FSFP, Master Agents, such Lenders, Surety Provider, et
al; "Surety Provider" shall mean AMBAC Indemnity Corporation, in its capacity as
surety provider under the Master Credit Agreement, and any successor thereto;
"Surety Policy" shall mean the financial guaranty policy dated as of May 24,
1996 issued by the Surety Provider in favor of CNAI on behalf of the Master
Lenders; "Rating Agencies" shall mean Standard and Poor's Ratings Group, a
division of ▇▇▇▇▇▇-▇▇▇▇, Inc., and ▇▇▇▇▇'▇ Investors Services, Inc.; and
"Insurance and Indemnity Agreement" means the insurance agreement among FSFP,
Surety Provider and the other parties thereto.
Except as set forth above in this Section 14.12, each Lender and each
Agent will utilize reasonable good faith efforts to maintain as confidential any
information obtained from Borrower (to the extent each Lender and each Agent are
advised by Borrower that such information is confidential and other than
information which (i) at the time of disclosure or thereafter is generally
available to and known by the public (other than as a result of a disclosure
directly or indirectly by any Lender Party), (ii) is available to any Lender
Party on a non-confidential basis from a source other than Borrower, provided
that such source was not known by such Lender Party to be bound by a
confidentiality agreement with Borrower, (iii) is required to be disclosed
pursuant to any Requirement of Law or in connection with any litigation arising
out of or related to this Agreement or (iv) has been independently developed by
any Lender Party), provided that any Lender Party may disclose any such
information to any Eligible Assignee provided such Eligible Assignee agrees to
the terms of this paragraph or otherwise with the consent of Borrower.
SECTION 15 ASSIGNMENT AND PARTICIPATION; AGENTS
SECTION 15.1 Assignments and Participations in Loans and Notes.
Each Lender may assign its rights and delegate its obligations under
this Agreement to any Eligible Assignee which is not a competitor or an
Affiliate of any competitor of Borrower; provided that (i) such Lender shall
first obtain the written consent of the Requisite Lenders, (ii) the aggregate
amount of the outstanding Commitment and Loans of the assigning Lender being
assigned pursuant to such assignment (determined as of the date of the
Assignment and Acceptance entered into with respect to such assignment by the
assigning Lender and the assignee, and accepted by Administrative Agent, in form
and substance satisfactory to Administrative Agent, the assigning Lender and the
assignee (the "Assignment and Acceptance")) shall in no event be less than
$5,000,000 of the assigning Lender's rights and obligations under this Agreement
and (iii) the parties to each such assignment shall execute and deliver to
Administrative Agent, for its acceptance and recording in the Register (as
hereinafter defined), an Assignment and Acceptance. In the case of an assignment
authorized under this Section 15.1, the assignee shall have, to the extent of
such assignment, the same rights, benefits and obligations as it would if it
were a Lender hereunder and the assigning Lender shall be relieved of its
obligations hereunder with respect to its Commitment to the extent of such
assignment. Borrower hereby acknowledges and agrees that any assignment will
give rise to a direct obligation of Borrower to the assignee and that the
assignee shall be considered to be a "Lender."
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Administrative Agent shall maintain at its address set forth on the
signature page hereto a copy of each Assignment and Acceptance delivered to and
accepted by it and books and records, including computer records, in which it
shall record the names and addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall constitute rebuttably presumptive
evidence, absent manifest error, of the accuracy of the information contained
therein, and Parent, Borrower, Borrower's Subsidiaries, Collateral Agent,
Administrative Agent and the Lenders may treat each Person the name of which is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by Collateral Agent,
any Lender or Borrower at any reasonable time and from time to time upon
reasonable prior notice.
Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with the Notes subject to such
assignment, Administrative Agent shall, if such Assignment and Acceptance has
been completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, and (iii) give prompt notice
thereof to Borrower. Within five (5) Business Days after Borrower's receipt of
such notice, Borrower, at its own expense, will execute and deliver to
Administrative Agent in exchange for the surrendered Notes, new Notes, to the
order of such assignee in amounts corresponding to the interest in the assigning
Lender's rights and obligations under this Agreement acquired by such assignee
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained an interest in such rights and obligations hereunder, new Notes to the
order of the assigning Lender in amounts corresponding to such interest retained
by it hereunder. Such Notes shall be in an aggregate principal amount equal to
the aggregate principal amount of such surrendered Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the forms of Exhibits E, F, G, and H, as applicable. Upon delivery
of such new Notes, the surrendered Notes shall be cancelled by Administrative
Agent and returned to Borrower.
Each Lender may sell participations in all or any part of any Loans
made by it to any Eligible Assignee which is not a competitor or an Affiliate of
any competitor of Borrower; provided that (i) immediately after giving effect to
any participation, the aggregate amount of the outstanding Commitment and Loans
still held by the Lender granting the participation for its own account shall in
no event be less than $5,000,000 and (ii) all amounts payable by Borrower
hereunder shall be determined as if that Lender had not sold such participation
and the holder of any such participation shall not be entitled to require such
Lender to take or omit to take any action hereunder except action directly
affecting (a) any reduction in the principal amount, interest rate or fees
payable with respect to any Loan in which such holder participates; (b) any
extension of the final scheduled maturity date of the principal amount of the
Loans in which such holder participates; and (c) any release of any Collateral
(other than in accordance with the terms of this Agreement or the Related
Documents).
Except as otherwise provided in this subsection 15.1 no Lender shall, as
between Borrower and that Lender, be relieved of any of its obligations
hereunder as a result of any sale,
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assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Liabilities owed to such Lender. Each
Lender may furnish any information concerning Borrower and its Subsidiaries in
the possession of that Lender from time to time to assignees and participants
(including prospective assignees and participants).
SECTION 15.2 Appointment of Agents.
FSFP is hereby appointed Collateral Agent hereunder to act on behalf of all
Lenders as collateral agent under this Agreement and the Related Documents.
Union Bank is hereby appointed Administrative Agent hereunder to act on behalf
of all Lenders as administrative agent under this Agreement and the Related
Documents. The provisions of this subsection 15.2 are solely for the benefit of
Agents and Lenders and no Person shall have any rights as a third party
beneficiary of any of the provisions hereof. In performing their respective
functions and duties under this Agreement and the Related Documents, each Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or trust
with or for Borrower or any of its Subsidiaries. The agency hereby created shall
in no way impair or affect any of the rights and powers of, or impose any duties
or obligations upon, either Agent in its individual capacity as a Lender
hereunder. Each Agent shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not performing the
duties and functions delegated to it hereunder. Either Agent may resign at any
time by giving thirty (30) days prior written notice thereof to each Lender and
Borrower. Upon any such resignation, the Requisite Lenders shall have the right,
upon five days notice to Borrower, to appoint a successor Agent who is a Lender
or an Eligible Assignee. Upon acceptance of appointment, the successor Agent
shall succeed to and become vested with all rights, powers, privileges and
duties of the retiring Agent under this Agreement and the Related Documents, and
the retiring Agent shall be discharged from its duties and obligations under
this Agreement and the Related Documents.
If either Agent shall request instructions from the Requisite Lenders
with respect to any act or action (including failure to act) in connection with
this Agreement or any Related Document, then such Agent shall be entitled to
refrain from such act or taking such action unless and until such Agent shall
have received instructions from Requisite Lenders; and such Agent shall not
incur liability to any Person by reason of so refraining. Each Agent shall be
fully justified in failing or refusing to take any action hereunder or under any
Related Document (a) if such action would, in the opinion of such Agent be
contrary to law or the terms of this Agreement or any Related Document or (b) if
such Agent shall not first be indemnified to its satisfaction by Lenders against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against either Agent as a
result of such Agent acting or refraining from acting hereunder or under any
Related Document in accordance with the instructions of the Requisite Lenders.
SECTION 15.3 Investigation. Each Lender shall make its own independent
investigation of the financial condition and affairs of the Parent and its
Subsidiaries (including
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Borrower) in connection with the making and the continuance of the Loans
hereunder, and shall make its own appraisal of the creditworthiness of the
Parent and its Subsidiaries (including Borrower), and neither 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 date of this Agreement or at any time or
times thereafter, or to determine or verify the existence, eligibility or value
of any of the Collateral, or the correctness of any notice of borrowing. In
addition, neither Agent nor its counsel shall be responsible to the Lenders for
the enforceability or validity of this Agreement or any of the Related Documents
or for the existence, creation, attachment, perfection or priority of any
Security Interest in the Collateral. Neither Agent shall be responsible to any
Lender for any recitals, statements, representations or warranties contained in
this Agreement or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any of the
Related Documents or any of the transactions contemplated hereby or thereby, or
for the financial condition of the Parent or any of its Subsidiaries (including
Borrower). Each Agent shall be entitled to rely upon any written notices,
statements, certificates, orders or other documents or any telephone message
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 Related Documents and its duties hereunder or
thereunder, upon advice of counsel selected by it.
SECTION 15.4 Indemnification. To the extent that either Agent is not
reimbursed and indemnified by Parent, Borrower or any of its Subsidiaries, the
Lenders will reimburse and indemnify each Agent for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, advances or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of this Agreement or any of the Related Documents or
any action taken or omitted by Agent under this Agreement or the Related
Documents, in proportion to each Lender's Pro Rata Share, including, without
limitation, Agent Advances made pursuant to Section 15.6. The obligations of the
Lenders under this Section 15.4 shall survive the payment in full of the Loans
and the termination of this Agreement.
SECTION 15.5 Set Off and Sharing of Payments. In addition to any rights
now or hereafter granted under applicable law and not by way of limitation of
any such rights, upon the acceleration of the Liabilities, each Lender and each
holder of any Note is hereby authorized by Borrower at any time or from time to
time, without notice to Borrower or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and to apply any and all
balances held by it at any of its offices for the account of Borrower or any of
its Subsidiaries (regardless of whether such balances are then due to Borrower
or its Subsidiaries) and any other property at any time held or owing by that
Lender or that holder to or for the credit or for the account of Borrower
against and on account of any of the Liabilities which are not paid when due;
provided that no Lender shall exercise any such right without giving prior
written notice to Collateral Agent. Any Lender or holder of any Note having a
right to set off shall, to the extent the amount of any such set off exceeds its
Pro Rata Share of the Liabilities, purchase for cash (and the other Lenders or
holders shall sell) participations in each such other Lender's or holder's
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Pro Rata Share of the Liabilities as would be necessary to cause such Lender to
share such excess with each other Lender or holder in accordance with their
respective Pro Rata Shares. Borrower agrees, to the fullest extent permitted by
law, that (a) any Lender or holder may exercise its right to set off with
respect to amounts in excess of its Pro Rata Share of the Liabilities and may
sell participations in such excess to other Lenders and holders and (b) any
Lender or holder so purchasing a participation in the Loans made or other
Liabilities held by other Lenders or holders may exercise all rights of set-off,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender or holder were a direct holder of Loans and other
Liabilities in the amount of such participation.
SECTION 15.6 Disbursement of Funds. Collateral Agent may, on behalf of
Lenders, make such disbursements and advances ("Agent Advances") pursuant to
this Agreement and the Related Documents which the Requisite Lenders, in their
sole discretion, deem necessary or desirable to preserve or protect the
Collateral, or any portion thereof, in order to enhance the likelihood of, or
maximize the amount of, repayment by Borrower, or any guarantor or other Person,
of the Loans and other Liabilities or to pay any other amount chargeable to
Borrower pursuant to the terms of this Agreement, including, without limitation,
costs, fees and expenses as described in Section 14.4. Agent Advances shall be
repayable on demand and be secured by the Collateral. Agent Advances shall
constitute Revolving Loans and shall otherwise constitute Liabilities to pay
principal hereunder and shall bear interest at the rate applicable to the
Revolving Loans. Collateral Agent shall notify each Lender in writing of each
such Agent Advance, which notice shall include a description of the purpose of
such Agent Advance. Without limitation of any of its obligations under this
Agreement, each Lender agrees that it shall make available to Collateral Agent,
upon Collateral Agent's demand, in immediately available funds, an amount equal
to such Lender's Pro Rata Share of each such Agent Advance. If such funds are
not made available to Collateral Agent by such Lender within one (1) Business
Day after Collateral Agent's demand therefor, Collateral Agent will be entitled
to recover any such amount from such Lender together with interest thereon at
the Federal Funds Rate for each day during the period commencing on the date of
such demand and ending on the date such amount is received. Each Lender shall
reimburse Collateral Agent on demand for all Loans disbursed on its behalf by
Collateral Agent, or if Collateral Agent so requests, each Lender will remit to
Collateral Agent its Pro Rata Share of any Loan before Collateral Agent
disburses same to Borrower. If any Lender fails to pay the amount of its Pro
Rata Share forthwith upon Collateral Agent's demand, Collateral Agent shall
promptly notify Borrower, and Borrower shall immediately repay such amount to
Collateral Agent. Nothing in this Section 15.6 shall be deemed to require
Collateral Agent to advance funds on behalf of any Lender or to relieve any
Lender from its obligation to fulfill its Commitments hereunder or to prejudice
any rights that Borrower may have against any Lender as a result of any default
by such Lender hereunder.
[remainder of this page intentionally left blank]
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Delivered at Chicago, Illinois, as of the day and year first above written.
S-O OPERATING CORP., a Delaware corporation
By: ____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FIRST SOURCE FINANCIAL LLP, in its capacity as
Collateral Agent for Lenders
By: First Source Financial, Inc.,
its Agent/Manager
By: ______________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Contract Administration
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
96
▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, N.A., in its capacity
as Administrative Agent for Lenders
By: ____________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
By: ____________________________________
▇▇▇▇ ▇. Spring
Assistant Vice President
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Contract Administration
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: $16,500,000.00 FIRST SOURCE FINANCIAL LLP, in its individual
capacity as a Lender
By: First Source Financial, Inc.,
its Agent/Manager
By: ______________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Contract Administration
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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Commitment: $16,500,000.00 UNION BANK OF CALIFORNIA, N.A., in its
individual capacity as a Lender
By: ____________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
By: ____________________________________
▇▇▇▇ ▇. Spring
Assistant Vice President
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Contract Administration
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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SCHEDULE I
Revolving Loan Commitment Reduction Dates and Amounts (Section 2.1.1)
Amount of Revolving
Loan Commitment(1) Period
---------------- ------
$17,500,000 Closing Date through April 1, 1997
$16,750,000 April 2, 1997 through July 1, 1997
$16,000,000 July 2, 1997 through October 1, 1997
$15,250,000 October 2, 1997 through January 1, 1998
$14,500,000 January 2, 1998 through April 1, 1998
$13,625,000 April 2, 1998 through July 1, 1998
$12,750,000 July 2, 1998 through October 1, 1998
$11,875,000 October 2, 1998 through January 1, 1999
$11,000,000 January 2, 1999 through April 1, 1999
$10,100,000 April 2, 1999 through July 1, 1999
$9,200,000 July 2, 1999 through October 1, 1999
$8,300,000 October 2, 1999 through January 1, 2000
$7,400,000 January 2, 2000 through April 1, 2000
$6,400,000 April 2, 2000 through July 1, 2000
$5,400,000 July 2, 2000 through October 1, 2000
$4,400,000 October 2, 2000 through January 1, 2001
$3,400,000 January 2, 2001 through April 1, 2001
$2,550,000 April 2, 2001 through July 1, 2001
$1,700,000 July 2, 2001 through October 1, 2001
$850,000 October 2, 2001 through November 15, 2001
$0 November 15, 2001 and thereafter
Scheduled Reduction in Revolving Loan Commitment
Revolving Loan Commitment Reduction Date
------------------------- --------------
$750,000 April 1, 1997
$750,000 July 1, 1997
$750,000 October 1, 1997
$750,000 January 1, 1998
$875,000 April 1, 1998
$875,000 July 1, 1998
$875,000 October 1, 1998
$875,000 January 1, 1999
$900,000 April 1, 1999
--------
(1) Less all reductions, and subject to any termination, under Sections 2.5
and 13.2.
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$900,000 July 1, 1999
$900,000 October 1, 1999
$900,000 January 1, 2000
$1,000,000 April 1, 2000
$1,000,000 July 1, 2000
$1,000,000 October 1, 2000
$1,000,000 January 1, 2001
$850,000 April 1, 2001
$850,000 July 1, 2001
$850,000 October 1, 2001
$850,000 November 15, 2001
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SCHEDULE II
Term Loan Commitment Reduction Dates and Amounts (Section 2.1.4)
Amount of Term
Loan Commitment(2) Period
---------------- ------
$7,500,000 Closing Date through April 1, 1997
$7,481,250 April 2, 1997 through July 1, 1997
$7,462,500 July 2, 1997 through October 1, 1997
$7,443,750 October 2, 1997 through January 1, 1998
$7,425,000 January 2, 1998 through April 1, 1998
$7,406,250 April 2, 1998 through July 1, 1998
$7,387,500 July 2, 1998 through October 1, 1998
$7,368,750 October 2, 1998 through January 1, 1999
$7,350,000 January 2, 1999 through April 1, 1999
$7,331,250 April 2, 1999 through July 1, 1999
$7,312,500 July 2, 1999 through October 1, 1999
$7,293,750 October 2, 1999 through January 1, 2000
$7,275,000 January 2, 2000 through April 1, 2000
$7,256,250 April 2, 2000 through July 1, 2000
$7,237,500 July 2, 2000 through October 1, 2000
$7,218,750 October 2, 2000 through January 1, 2001
$7,200,000 January 2, 2000 through April 1, 2001
$6,650,000 April 2, 2001 through July 1, 2001
$6,100,000 July 2, 2001 through October 1, 2001
$5,550,000 October 2, 2001 through January 1, 2002
$5,000,000 January 2, 2001 through April 1, 2002
$3,300,000 April 2, 2002 through July 1, 2002
$1,600,000 July 2, 2002 through October 1, 2002
$800,000 October 2, 2002 through November 15, 2002
$0 November 15, 2002 and thereafter
Scheduled Reduction in Term Loan Commitment
Term Loan Commitment Reduction Date
-------------------- --------------
$18,750 April 1, 1997
$18,750 July 1, 1997
$18,750 October 1, 1997
$18,750 January 1, 1998
--------
(2) Less all reductions, and subject to any termination, under Sections 2.7
and 13.2.
115
$18,750 April 1, 1998
$18,750 July 1, 1998
$18,750 October 1, 1998
$18,750 January 1, 1999
$18,750 April 1, 1999
$18,750 July 1, 1999
$18,750 October 1, 1999
$18,750 January 1, 2000
$18,750 April 1, 2000
$18,750 July 1, 2000
$18,750 October 1, 2000
$18,750 January 1, 2001
$550,000 April 1, 2001
$550,000 July 1, 2001
$550,000 October 1, 2001
$550,000 January 1, 2002
$1,700,000 April 1, 2002
$1,700,000 July 1, 2002
$800,000 October 1, 2002
$800,000 November 15, 2002
116
SCHEDULE III
Capital Expenditure Loan Commitment Reduction Dates and Amounts (Section 2.1.5)
Amount of Capital
Expenditure Loan Commitment(3) Period
---------------------------- ------
$3,000,000 Closing Date through July 1, 2002
$1,500,000 July 2, 2002 through November 15, 2002
$0 November 15, 2002 and thereafter
Scheduled Reduction in the Capital Capital Expenditure Loan
Expenditure Loan Commitment Commitment Reduction Date
--------------------------- -------------------------
$1,500,000(4) July 1, 2002
$1,500,000 November 15, 2002
--------
(3) Less all reductions, and subject to any termination, under Sections 2.8
and 13.2.
(4) Or, if less, 50% of the unpaid principal amount of the Capital
Expenditure Loans.
117
SCHEDULE IV
LOCATIONS OF BANK ACCOUNTS (Section 6.2 and 6.3)
118
SCHEDULE V
LITIGATION (Section 10.4)
119
SCHEDULE VI
INSURANCE (Section 10.12)
120
SCHEDULE VII
INTELLECTUAL PROPERTY RIGHTS
(Section 10.14)
Part 1. Intellectual Property the Loss of Which Would have a Material Adverse
Effect.
Part 2. Other Intellectual Property.
121
SCHEDULE VIII
CERTAIN PROPERTY OF BORROWER
(Section 10.15)
122
SCHEDULE IX
BUSINESS LOCATIONS; TRADE NAMES;
REAL ESTATE (Section 10.16)
123
SCHEDULE X
HAZARDOUS MATERIALS (Section 10.19)
124
SCHEDULE XI
BUSINESS ACTIVITIES (Section 11.24)
125
SCHEDULE XII
INDEBTEDNESS (INCLUDING INDEBTEDNESS
TO BE REFINANCED); LIENS
(Section 10.5 and 11.11); CONTINGENT OBLIGATIONS (Section 10.4)
Nature and
Description Name of
of Lien (if any) Lender/Lienholder Amount Maturity
---------------- ----------------- ------ --------
Part 1. Indebtedness Not to be Refinanced.
Part 2. Indebtedness to be Refinanced.
126
EXHIBIT A
(Section 2.1.3)
LC GUARANTY
THIS GUARANTY, dated as of ______________, 19__, is from FIRST SOURCE
FINANCIAL LLP, an Illinois registered limited liability partnership
("Guarantor"), to [APPLICABLE ISSUER], a _________________ ("Bank").
R E C I T A L S:
WHEREAS, _________________________________. ("Obligor"), and Bank have
entered into that certain LC Reimbursement Agreement, dated _________, 19__ (the
"Letter of Credit Agreement"); and
WHEREAS, pursuant to the Letter of Credit Agreement, Bank is issuing
the Letters of Credit described in Schedule I hereto, as such schedule may be
amended with the prior written consent of Guarantor from time to time to provide
for additional Letters of Credit, in the stated amounts (such amount with
respect to any such Letter of Credit being herein called its "Stated Amount"),
and for the benefit of such persons, as are specified in such Schedule I (the
foregoing Letters of Credit being herein referred to as the "Credits"); and
WHEREAS, it is a condition precedent to the issuance of the Credits
that Guarantor provide this Guaranty to Bank; and
WHEREAS, Guarantor, for good and sufficient consideration, the receipt
of which is hereby acknowledged, is willing to execute and deliver this
Guaranty;
NOW, THEREFORE, Guarantor hereby agrees for the benefit of Bank as
follows:
1. Guaranty. For value received, and to induce Bank to issue the
Credits, Guarantor hereby unconditionally and irrevocably guarantees, as primary
obligor and as surety, whether at stated maturity, by acceleration or otherwise,
the full and punctual payment when due of all reimbursement and other
obligations of Obligor to Bank arising from or related to the Credits
(collectively, the "Obligations"), and agrees to pay any reasonable expenses
(including reasonable counsel fees and expenses) incurred by Bank in enforcing
any right under this Guaranty. The right of recovery against Guarantor under
this Guaranty is, however, limited to the Cap Amount (as hereinafter defined)
plus accrued interest on such amount and plus all expenses of enforcing this
Guaranty. The Cap Amount as of ______________, 199__ (the "Closing Date") shall
be $___________ (the "Cap Amount"); provided, however, that the then current Cap
Amount shall be automatically reduced by the Stated Amount of each Credit when
(i) such Credit terminates or expires, (ii) such Credit has been surrendered by
the beneficiary thereof to Bank, and (iii) subject to Section 2(a), if such
Credit has been drawn upon, Bank has been reimbursed in full for its
disbursement thereunder, and provided further that interest
accruing more than thirty (30)
127
days after the date of Bank's honoring of any demand under a Credit shall not be
reimbursed if Bank fails to give the written notice required in Section 2(a)
hereof within thirty (30) days after Bank's honoring of the related demand.
2. Guaranty Absolute.
(a) This is a guarantee of payment and not merely of
collection. Guarantor hereby covenants and agrees that in case Obligor
shall fail duly and punctually to pay the Obligations on the date on
which such payment is due, Guarantor will, within five (5) days of the
actual receipt of written notice from Bank to such effect, and of the
amount which Obligor has failed to pay, pay such amount, subject to the
penultimate sentence of Section 1 hereof. The liability of Guarantor
under this Guaranty shall be absolute and unconditional and shall not
be discharged except by valid, final and irrevocable payment as herein
provided, irrespective of: (i) any law, regulation, or order, or
interpretation thereof, now or hereinafter in effect in any
jurisdiction affecting or purporting to affect any of the terms or
rights of Bank with respect to the Obligations or with respect to this
Guaranty; (ii) any lack of validity or enforceability of the Letter of
Credit Agreement; (iii) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Obligations;
or (iv) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, Obligor in respect of any of
the Obligations of Guarantor in respect of any obligations under this
Guaranty. This Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time such payment of any of
the Obligations is rescinded or must otherwise be returned by Bank upon
the insolvency, bankruptcy or reorganization of Obligor or otherwise,
all as though such payment had not been made.
(b) Except for any liability under the last sentence of
subparagraph 2(a), the Guaranty shall continue in effect with respect
to the Credit until 4:59 p.m., Chicago time, on the date following
seven (7) days after the then current expiry date of such Credit;
provided, however, that this Guaranty shall continue in effect until no
Obligations are owing under the Credits and the Letter of Credit
Agreement.
3. Waiver. Guarantor hereby unconditionally waives, except as expressly
provided in this Guaranty, in the Letter of Credit Agreement or in any Credit:
(a) promptness, diligence, notice of acceptance and any other notice with
respect to any of the Obligations and this Guaranty; (b) presentment for
payment, notice of nonpayment, demand, protest, notice of protest and notice of
dishonor or default to any party including Guarantor, and any requirement that
Bank protect, secure, perfect or insure any security interest or lien of any
property subject thereto or exhaust any right or take any action against Obligor
or any other person or entity or any collateral; (c) all other notices to which
Guarantor may be entitled but which may legally be waived; and (d) to the
maximum extent provided by law, all rights under any state or federal statute
dealing with or affecting the rights of creditors.
4. No Waivers; Remedies. No failure or delay on the part of Bank in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or
128
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof, or the exercise of any other right, power or
privilege. Failure by Bank to insist upon strict performance hereof shall not
constitute a relinquishment of its right to demand strict performance at another
time. Receipt by Bank of any payment by any person of the Obligations, with
knowledge of a default with respect to any of the Obligations or of a breach of
this Guaranty, or both, shall not be construed as a waiver of the default or
breach. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
5. Representations and Warranties. Guarantor hereby represents and
warrants as follows:
(a) Guarantor is duly organized and validly existing and has
the power and authority to execute and deliver, and to perform its
obligations under, this Guaranty.
(b) The execution and delivery of this Guaranty by Guarantor
and the performance of its obligations hereunder have been and remain
duly authorized by all necessary action and do not contravene any
provision of its membership agreement or any law, regulation or
contractual restriction binding on or affecting it or its property.
(c) All consents, authorizations and approvals required for
the execution and delivery by Guarantor of this Guaranty and the
performance of its obligations hereunder have been obtained and remain
in full force and effect, all conditions thereof have been duly
complied with, and no other action by, and no notice to or filing with,
any governmental authority or regulatory body is required for that
execution, delivery or performance.
(d) This Guaranty is Guarantor's legal, valid and binding
obligation, enforceable against Guarantor in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and subject to general principles of
equity.
(e) The ultimate determination of all proceedings pending or,
to the best of its knowledge, threatened against Guarantor at law or in
equity or before any governmental instrumentality or in any arbitration
will not, in the aggregate, materially impair its ability to perform
its obligations under this Guaranty, and no such proceeding purports or
is likely to affect the legality, validity or enforceability of this
Guaranty.
(f) No proceeding has been instituted in a court seeking a
decree or order (i) for relief in respect of Guarantor in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now in effect, or (ii) for the appointment of a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or other
similar official) of Guarantor, or for any substantial part of
Guarantor's property, in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now in effect, or (3) for
the winding up or liquidation of the affairs of Guarantor.
(g) Guarantor has not (i) commenced a voluntary case under any
applicable
129
bankruptcy, insolvency or other similar law now in effect, or (ii)
consented to the entry of an order for relief in an involuntary case
under any such law, or (iii) consented to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or other similar official) of Guarantor or for any
substantial part of the property of Guarantor, or (iv) made a general
assignment for the benefit of creditors, or (v) failed generally to pay
its debts as they become due, or (vi) taken any corporate action in
furtherance of any of the foregoing.
6. Continuing Guaranty, Transfer; Assignment. This Guaranty is a
continuing guaranty and shall (i) be binding upon Guarantor, its successors and
assigns, and (ii) inure to the benefit of and be enforceable by Bank and its
successors, transferees and assigns. Without limiting the generality of the
foregoing, Bank may assign or otherwise transfer any evidence of any of the
Obligations to any other person or entity, and such person or entity shall
thereupon become vested with all the rights in respect thereof granted to Bank
herein or otherwise, provided, however, that each transferee or assignee shall
be bound by all waivers, notices and actions granted, given, taken and made
prior to the time of the assignment or transfer to it. The duties and
obligations of Guarantor may not be delegated or transferred by Guarantor
without the written consent of Bank.
7. Validity; Amendments. If any provision hereof shall for any reason
be held invalid or unenforceable, no other provision shall be affected thereby,
and this Guaranty shall be construed as if the invalid or unenforceable
provision had never been a part of it; provided, however, that in no event shall
the liability of Guarantor be greater than as set forth in the penultimate
sentence of Section 1 hereof. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by Guarantor therefrom shall in any event
be effective unless the same shall be in writing and signed by Bank, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given. None of the terms or provisions of the
Letter of Credit Agreement may be waived, altered, modified or amended without
the prior written consent of Guarantor and this Guaranty shall be void as to any
such waiver, alteration, modification or amendment purported to be made without
such consent.
8. Notices. All notices and other communications provided for hereunder
shall be in writing (including telegraphic communication) and, if to Guarantor,
mailed by first class, certified mail, or telecopied, or delivered to it, in
each case addressed to it at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Contract Administration, with a copy to General
Counsel (telecopy number ___________________); and if to Bank, mailed by first
class, certified mail, or telecopied, or delivered to it, in each case addressed
to it at _________________________, Attention: ________________ (telecopy number
___________________), or as to each party at such other address as shall be
designated by such party in a written notice to the other party. All such
notices and other communications shall be effective three (3) days after being
deposited in the mails (except that a mailed notice pursuant to the second
sentence of Section 2(a) hereof shall only be effective upon actual receipt
thereof by Guarantor) or when telecopied (having received the answer back), or
when delivered by hand respectively, addressed as aforesaid.
9. Governing Law. This Guaranty shall be governed by, and construed in
accordance
130
with, the laws of the State of Illinois, without regard to conflicts of law
principles.
WITNESS the due execution hereof intending to be legally bound.
FIRST SOURCE FINANCIAL LLP
By: First Source Financial, Inc., its
Agent/Manager
By: ______________________________
Name: ______________________________
Title: ______________________________
ACCEPTED:
[BANK]
By: ______________________________
Name: ______________________________
Title: ______________________________
131
SCHEDULE I
TO LC GUARANTY DATED AS OF _____________
LETTERS OF CREDIT
Number Date Stated Amount Beneficiary
------ ---- ------------- -----------
132
EXHIBIT B
(Section 2.1.3)
LC REIMBURSEMENT AGREEMENT
As of _________________, 19___
[BANK]
------------------------
------------------------
------------------------
Attention: _____________
Ladies and Gentlemen:
By its acceptance below, and subject to the terms of this Agreement,
____________________ (the "Letter of Credit Issuer") has agreed to issue, at the
request and for the account of __________________________________ ("Account
Party"), an irrevocable letter of credit substantially in the form of Exhibit I
hereto (as from time to time hereafter amended, the "Letter of Credit"), dated
on or about _____________, 19___, and with an expiry date of ________________,
19___ (as from time to time hereafter extended, the ("Expiry Date") in favor of
(NAME OF BENEFICIARY) (the "Beneficiary") in a maximum face amount equal to
$----------------.
The Account Party and the Letter of Credit Issuer hereby agree as follows with
respect to the Letter of Credit:
1. Reimbursement Obligation. The Account Party hereby irrevocably and
unconditionally agrees with the Letter of Credit Issuer that in the event the
Letter of Credit Issuer shall make any payment to the Beneficiary under the
Letter of Credit, each payment shall constitute, without necessity of further
act or evidence whatsoever, an obligation (arising on the date payment is made
to the Beneficiary by the Letter of Credit Issuer) to reimburse the Letter of
Credit Issuer upon demand (the "Reimbursement Obligation") in the principal
amount equal to the amount of such payment. The Reimbursement Obligation will
bear interest at the rate per annum equal to the Reference Rate (as hereinafter
defined) plus 1.5% per annum from the date of payment to the Beneficiary under
the Letter of Credit, payable upon demand. To the extent that any monies are
received by the Letter of Credit Issuer in respect of the Reimbursement
Obligation and other amounts owed to the Letter of Credit Issuer pursuant to or
in connection with this Agreement, such monies shall be applied in such order of
application (whether to the principal amount of any Reimbursement Obligation or
interest, or both, or otherwise) as the Letter of Credit Issuer may from time to
time in its sole discretion elect. As used herein, the term "Reference Rate"
means, at any time, the rate then most recently announced by the Letter
133
of Credit Issuer at _______________ as its reference rate.
2. Letter of Credit Fee. The Account Party agrees to pay or cause to be
paid to the Letter of Credit Issuer a reasonable fee as agreed upon by such
parties, to be payable at such time or times as such parties agree. If any
payment of the fee is not made when due, then such fee shall bear interest until
paid at a rate per annum equal to 1/2 of 1% per annum, payable upon demand.
3. Indemnifications. The obligation of the Account Party hereof to pay
such amounts shall be absolute, unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances
whatsoever, including, without limitation, the following circumstances:
(a) the existence of any claim, set-off, defense or other
right which the Beneficiary, the Account Party, the Guarantor, the
Letter of Credit Issuer or other person or entity may have at any time
against the Beneficiary, the Account Party, the Guarantor, the Letter
of Credit Issuer or any other person or entity for any reason
whatsoever, whether in connection with this Agreement, the Letter of
Credit, the Guaranty (as hereinafter defined) or any agreement or
document referred to in any thereof or in connection with any unrelated
transaction;
(b) any certificate presented under the Letter of Credit
proving to be forged, fraudulent or invalid; or
(c) any other circumstance or happening whatsoever not
constituting gross negligence or willful misconduct of the Letter of
Credit Issuer, whether or not similar to any of the foregoing.
In addition, neither the Letter of Credit Issuer nor any of its directors,
officers, employees or agents shall have any liability or responsibility of any
kind to the Beneficiary, the Account Party, the Guarantor or any other person or
entity under or in connection with the Letter of Credit, in connection with any
acts or omissions of any of the foregoing persons or entities or in connection
with any payment or failure to make payment thereunder by the Letter of Credit
Issuer under any circumstances whatsoever, except that the Letter of Credit
Issuer shall be liable for the amount of any damages suffered by the Account
Party or the Guarantor which are caused by the Letter of Credit Issuer's willful
misconduct or negligence in performing its obligations under this Agreement or
the Letter of Credit (including in determining whether documents presented or
delivered under the Letter of Credit appear to comply with the terms of the
Letter of Credit). In furtherance and not in limitation of the foregoing, the
Letter of Credit Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation.
4. Increased Costs/Taxes. If as a result of any law, regulation, treaty
or directive, or any change therein, or in the interpretation or application
thereof or the Letter of Credit Issuer's compliance with any request or
directive (whether or not having the force of law) from any court
134
or governmental authority, agency or instrumentality, any reserve, premium,
special deposit, special assessment or similar requirements against (a) the
Letter of Credit Issuer's assets, (b) deposits with the Letter of Credit Issuer
or for its account, or (c) credit extended by the Letter of Credit Issuer, are
imposed, modified or deemed applicable and the Letter of Credit Issuer
determines that, by reason thereof, the cost to it of issuing or maintaining the
Letter of Credit is increased, the Account Party agrees to pay to the Letter of
Credit Issuer upon demand (which demand shall be accompanied by a statement
setting forth the basis for the calculation thereof) such additional amount or
amounts as will compensate it for such additional cost. Determinations by the
Letter of Credit Issuer, for the purposes of this Section 5, of the additional
amounts required to compensate it in respect of the foregoing shall be
conclusive absent manifest error. The Account Party further agrees to pay any
applicable levies or other taxes imposed in connection with the Letter of Credit
other than net income taxes payable by the Letter of Credit Issuer.
5. Guaranty. It is a condition precedent to the issuance of the Letter
of Credit that First Source Financial LLP, an Illinois registered limited
liability partnership (the "Guarantor"), execute and deliver to the Letter of
Credit Issuer a Guaranty substantially in the form of Exhibit II hereto (as from
time to time thereafter amended, the "Guaranty").
6. Miscellaneous.
(a) All notices, demands and other communications hereunder
shall be in writing, make reference to the Letter of Credit by number
thereof and, in the case of each party hereto, mailed or delivered to
it addressed:
(i) in the case of the Account Party, at its address set
forth below, with a copy to:
c/o First Source Financial, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Contract Administration
(ii) in the case of the Letter of Credit Issuer, at its
address set forth above; and
(iii) in the case of either party, at such other address as
shall be designated by such party in a written notice
to the other party hereto and complying as to
delivery with the terms of this subsection 6(a).
All notices, demands and other communications provided for hereunder
shall be effective five days after deposited in the first class mails,
postage prepaid, registered or certified mail, or the day delivered by
hand or sent by telecopy, addressed as aforesaid.
3
135
(b) All payments to the Letter of Credit Issuer shall be made
in immediately available funds. Funds received after 12:30 p.m.,
Chicago time, shall be deemed to have been received by the Letter of
Credit Issuer on the next Business Day. As used herein "Business Day"
shall mean a day on which the Letter of Credit Issuer (at its above
address, or if appropriate, its substitute principal office in
_________, ___________) is open for the purpose of conducting a
commercial banking business.
(c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
No provision of this Agreement shall be deemed to require the payment,
or permit the collection, of interest in excess of that permitted by
applicable law.
(d) This Agreement (except as to the obligations of the
Account Party to the Letter of Credit Issuer under Sections 1, 3 and 4
hereof and as to liability for sums then due and owing and claims under
Section 2 hereof, which shall survive) and the Letter of Credit may be
canceled by the Account Party upon delivery of the Letter of Credit for
cancellation to the Letter of Credit Issuer.
(e) This Agreement (except as to obligations of the Account
Party to the Letter of Credit Issuer under Sections 1, 3 and 4 hereof
and as to liability for sums then due and owing and claims under
Section 2 hereof, which shall survive) and the Letter of Credit shall
terminate immediately and be of no further force or effect upon the
Letter of Credit Issuer's close of business at its principal office in
___________, ___________ on the Expiry Date or, if such day shall not
be a Business Day, at the closing of business on the first Business Day
next succeeding said date. Should the Letter of Credit terminate under
the foregoing sentence, then the Account Party shall use reasonable
best efforts to return or cause to be returned to the Letter of Credit
Issuer the Letter of Credit.
(f) This Agreement shall be deemed to be a contract made under
the internal laws of the State of New York, and shall, as to matters
not governed by the Uniform Customs (as hereinafter defined), be
construed in accordance with the laws of said State, without regard to
principles of conflict of law. This Agreement is subject to the Uniform
Customs and Practice for Documentary Credits, International Chamber of
Commerce, Publication No. 500 (the "Uniform Customs"). None of the
terms or provisions of this Agreement or of the Letter of Credit may be
waived, altered, modified, or amended except by an instrument in
writing duly signed for and on behalf of the parties hereto and the
Guarantor and, in the case of the Letter of Credit, the Beneficiary.
(g) This Agreement shall be binding upon, and inure to the
benefit of, the Account Party, the Guarantor and the Letter of Credit
Issuer and their respective successors and assigns.
4
136
If the foregoing terms of this letter are in accordance with your understanding
of our agreement, please sign and deliver to us one or more counterparts of this
letter, whereupon this letter shall constitute a binding agreement between the
Letter of Credit Issuer and the Account Party as of the date first above
written.
Very truly yours,
----------------------------------
By:________________________________
Name Printed:______________________
Its:_______________________________
5
137
Address:
----------------------------------
----------------------------------
----------------------------------
Accepted and Agreed to:
[BANK]
By:________________________________
Name Printed:______________________
Its:_______________________________
6
138
EXHIBIT C
(Section 2.2)
WORKING CAPITAL COMMITMENT EXTENSION REQUEST
First Source Financial LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This Working Capital Commitment Extension Request is furnished pursuant
to the Secured Credit Agreement, dated as of November 15, 1996 (as from time to
time amended, modified or supplemented, the "Secured Credit Agreement"), among
____________________ _____________, a _____________ corporation, First Source
Financial LLP, an Illinois registered limited liability partnership, and Union
Bank of California, N.A., a national banking association. Capitalized terms used
but not elsewhere defined herein shall have the respective meanings ascribed to
such terms in the Secured Credit Agreement.
In accordance with Section 2.2 of the Secured Credit Agreement, the
undersigned hereby requests an extension of the Working Capital Loan Termination
Date for $___________ of the Working Capital Commitment to the earlier of
__________, 19___ or the Revolving Loan Termination Date (or, in either case, if
such date is not a Business Day, to the next preceding Business Day).
Very truly yours,
By:_________________________
Name Printed:_______________
Its:________________________
139
EXHIBIT D
(Section 2.3(a))
NOTICE OF LIBOR ACTIVITY
TO: First Source Financial, Inc., as Servicer
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: Loan Administration
RE: LIBOR Activity
We refer to that certain Secured Credit Agreement, dated as of
November 15, 1996 (as amended, restated, supplemented or
otherwise modified from time to time, the "Secured Credit
Agreement") among S-O Operating Corp., as Borrower, First
Source Financial LLP and Union Bank of California, N.A.
Capitalized terms used but not otherwise defined herein are
used herein as defined in the Secured Credit Agreement.
Pursuant to __________ and/or ____________ of the Secured
Credit Agreement, Borrower hereby requests Lenders to convert
and or continue the Loan(s) indicated below (collectively, the
"Requested LIBOR Activity"):
Please circle relevant transactions/activities
and complete requested information
LIBOR CREATE (Conversion from Reference Rate):
Effective Date:
Term [months] (circle one) 1 3 6
Amount: [minimum $1,000,000 in increments of $200,000]
--------------
Affected Piece:(circle one) Working Capital Revolver Term Capital Expenditure
LIBOR MATURING: (circle one)
CONVERSION TO REFERENCE RATE CONTINUATION TO NEW LIBOR RATE
Original Date:________________
140
Original Amount:_________________
Affected Piece: (circle one) Working Capital Revolver Term
Effective Date:__________________
Interest Period: (circle one) 1 3 6
Amount: [minimum $1,000,000 in increments of $200,000]
------------
Affected Piece:(circle one) Working Capital Revolver Term Capital Expenditure
Comments:_______________________________________________________________________
________________________________________________________________________________
_______________________.
To induce Lenders to effect the Requested LIBOR Activity, Borrower
hereby represents and warrants to Lenders that:
(a) No Event of Default or Unmatured Event of Default has occurred
and is continuing, or has resulted or will result from such
Requested LIBOR Activity.
(b) The warranties and representations contained in Section 10 of
the Secured Credit Agreement and in the Related Documents are
true and correct in all material respects as of the date
hereof, with the same effect as though made on the date
hereof, except to the extent such representations and
warranties expressly relate to a specific date and except as
disclosed in the schedules attached to the most recent
Borrowing Certificate or LC Guaranty Request.
(c) There has been no material adverse change or notice of
prospective material adverse change with respect to insurance
maintained by Borrower or any of its Subsidiaries.
(d) Except as disclosed in the schedules attached hereto (i) no
claims, litigation (including, without limitation, derivative
actions), arbitration, governmental proceedings, investigation
or inquiry not disclosed in writing by Borrower to Lender
prior to the date of the last previous Loan, provision of an
LC Guaranty or Requested LIBOR Activity, whichever shall have
more recently occurred, is pending or known to be threatened
against Borrower or any Subsidiary of Borrower, (ii) no
material development not so disclosed has occurred in any
claim, litigation (including, without limitation, derivative
actions), arbitration, governmental proceeding, investigation
or inquiry so disclosed, (iii) the schedules attached to the
Secured Credit Agreement are complete and correct and (iv) no
event, condition or development shall have occurred or
developed at any time
2
141
(whether before or after the making of the last previous Loan,
provision of an LC Guaranty or Requested LIBOR Activity,
whichever shall have more recently occurred), which, (in the
case of each of the foregoing clauses (i) through (iv)) has
caused or could reasonably be expected to cause a Material
Adverse Effect.
(e) All conditions to the making of such Requested LIBOR Activity
as set forth in the Secured Credit Agreement and the Related
Documents have been satisfied.
Dated this ____ day of ____________, ____.
By:_________________________________
Print Name:_________________________
Its:________________________________
3
142
SCHEDULE I
FOR FSFI USE ONLY
Rate set for ________________ month LIBOR
Please be advised that the rate set for the LIBOR effective _________________
(date) for ___________________________________________________________ (tranche)
has been set as follows:
LIBOR Rate: _______________
*Spread _______________
All in Rate: _______________
Effective: _______________
Maturity Date: _______________
Total Principal: _______________
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143
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE TRANSFERABLE
WITHOUT COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH LAWS UNLESS AN
EXEMPTION OR EXCLUSION FROM REGISTRATION IS AVAILABLE.
EXHIBIT E
(Section 3.1)
REVOLVING NOTE
$_______________ Due __________, ____
__________, 199__
FOR VALUE RECEIVED, on or before _____________________, the undersigned
hereby promises to pay to the order of First Source Financial LLP, an Illinois
registered limited liability partnership ("Lender") at the principal office of
LaSalle National Bank, N.A. in Chicago, Illinois the principal amount of
____________________________ AND NO/100 DOLLARS ($____________) or, if less, the
aggregate unpaid principal amount of all Revolving Loans made by Lender pursuant
to the Secured Credit Agreement hereinafter referred to (as shown in the records
of Lender or, at Lender's option, on the schedule attached hereto and any
continuation thereof).
The undersigned further promises to pay interest on the unpaid
principal amount of each Revolving Loan from the date of such Revolving Loan
until such Revolving Loan is paid in full, payable at such rate(s) and at such
time(s), as provided in the Secured Credit Agreement hereinafter referred to.
This Note evidences indebtedness incurred under, and is entitled to the
benefits of, that certain Secured Credit Agreement dated as of the date hereof
(and, if amended, all amendments thereto) between the undersigned and Lender
(herein called the "Secured Credit Agreement"), to which Secured Credit
Agreement reference is hereby made for a statement of the terms and provisions
under which this Note may be paid prior to its due date or its due date
accelerated. Reference is hereby made to the Secured Credit Agreement for
provisions relating to reductions in the principal amount of this Note. Terms
used but not otherwise defined herein are used herein as defined in the Secured
Credit Agreement hereinabove referred to.
This Note is secured pursuant to the Secured Credit Agreement and the
Related Documents referred to therein, and reference is made thereto for a
statement of terms and provisions.
In addition to and not in limitation of the foregoing and the
provisions of the Secured
144
Credit Agreement hereinabove referred to, the undersigned further agrees,
subject only to any limitation imposed by applicable law, to pay all expenses,
including reasonable attorneys' fees and legal expenses, incurred by the holder
of this Note in endeavoring to collect any amounts payable hereunder which are
not paid when due, whether by acceleration or otherwise.
THIS NOTE IS MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
----------------------------------
By:_________________________________
Name Printed:____________________
Its:_____________________________
____________________________________
____________________________________
Attention:__________________________
____________________________________
Telecopy:___________________________
Telephone:__________________________
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145
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE TRANSFERABLE
WITHOUT COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH LAWS UNLESS AN
EXEMPTION OR EXCLUSION FROM REGISTRATION IS AVAILABLE.
EXHIBIT F
(Section 3.2)
WORKING CAPITAL NOTE
$________________ _______________, 199__
FOR VALUE RECEIVED, on or before _________________ (unless extended
pursuant to a Working Capital Commitment Extension Request under Section 2.2 of
the Secured Credit Agreement hereinafter referred to, in which event this Note
shall mature on or before the Working Capital Loan Termination Date, the
undersigned hereby promises to pay to the order of First Source Financial LLP,
an Illinois registered limited liability partnership ("Lender") at the principal
office of LaSalle National Bank, N.A. in Chicago, Illinois the principal amount
of _______________________ AND NO/100 DOLLARS ($_____________) or, if less, the
aggregate unpaid principal amount of all Working Capital Loans made by Lender
pursuant to the Secured Credit Agreement hereinafter referred to (as shown in
the records of Lender or, at Lender's option, on the schedule attached hereto
and any continuation thereof).
The undersigned promises to pay interest on the unpaid principal amount
of each Working Capital Loan from the date of such Working Capital Loan until
such Working Capital Loan is paid in full, payable at such rate(s) and at such
time(s), as provided in the Secured Credit Agreement hereinafter referred to.
This Note evidences indebtedness incurred under, and is entitled to the
benefits of, that certain Secured Credit Agreement dated as of the date hereof
(and, if amended, all amendments thereto) between the undersigned and Lender
(herein called the "Secured Credit Agreement"), to which Secured Credit
Agreement reference is hereby made for a statement of the terms and provisions
under which this Note may be paid prior to its due date or its due date
accelerated. Reference is hereby made to the Secured Credit Agreement for
provisions relating to reductions in the principal amount of this Note. Terms
used but not otherwise defined herein are used herein as defined in the Secured
Credit Agreement hereinabove referred to.
This Note is secured pursuant to the Secured Credit Agreement and the
Related Documents referred to therein, and reference is made thereto for a
statement of terms and provisions.
146
In addition to and not in limitation of the foregoing and the
provisions of the Secured Credit Agreement hereinabove referred to, the
undersigned further agrees, subject only to any limitation imposed by applicable
law, to pay all expenses, including reasonable attorneys' fees and legal
expenses, incurred by the holder of this Note in endeavoring to collect any
amounts payable hereunder which are not paid when due, whether by acceleration
or otherwise.
THIS NOTE IS MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
----------------------------------
By:_________________________________
Name Printed:__________________
Its:___________________________
____________________________________
____________________________________
Attention:__________________________
____________________________________
Telecopy:___________________________
Telephone:__________________________
2
147
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE TRANSFERABLE
WITHOUT COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH LAWS UNLESS AN
EXEMPTION OR EXCLUSION FROM REGISTRATION IS AVAILABLE.
EXHIBIT G
(Section 3.3)
TERM NOTE
$________________ Due _______________
___________, 199__
FOR VALUE RECEIVED, on or before ___________________ the undersigned
hereby promises to pay to the order of First Source Financial LLP, an Illinois
registered limited liability partnership ("Lender") at the principal office of
LaSalle National Bank, N.A. in Chicago, Illinois the principal amount of
______________________________ AND NO/100 DOLLARS ($_______________) or, if
less, the aggregate unpaid principal amount of all Term Loans made by Lender
pursuant to the Secured Credit Agreement hereinafter referred to (as shown in
the records of Lender or, at Lender's option, on the schedule attached hereto
and any continuation thereof).
The undersigned further promises to pay interest on the unpaid
principal amount of each Term Loans from the date of hereof until such Term Loan
is paid in full, payable at such rate(s) and at such time(s), as provided in the
Secured Credit Agreement hereinafter referred to.
This Note evidences indebtedness incurred under, and is entitled to the
benefits of, that certain Secured Credit Agreement dated as of the date hereof
(and, if amended, all amendments thereto) between the undersigned and Lender
(herein called the "Secured Credit Agreement"), to which Secured Credit
Agreement reference is hereby made for a statement of the terms and provisions
under which this Note may be paid prior to its due date or its due date
accelerated. Reference is hereby made to the Secured Credit Agreement for
provisions relating to reductions in the principal amount of this Note. Terms
used but not otherwise defined herein are used herein as defined in the Secured
Credit Agreement hereinabove referred to.
This Note is secured pursuant to the Secured Credit Agreement and the
Related Documents referred to therein, and reference is made thereto for a
statement of terms and provisions.
In addition to and not in limitation of the foregoing and the
provisions of the Secured
148
Credit Agreement hereinabove referred to, the undersigned further agrees,
subject only to any limitation imposed by applicable law, to pay all expenses,
including reasonable attorneys' fees and legal expenses, incurred by the holder
of this Note in endeavoring to collect any amounts payable hereunder which are
not paid when due, whether by acceleration or otherwise.
THIS NOTE IS MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
----------------------------------
By:_________________________________
Name Printed:__________________
Its:___________________________
____________________________________
____________________________________
Attention:__________________________
____________________________________
Telecopy:___________________________
Telephone:__________________________
2
149
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE TRANSFERABLE
WITHOUT COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH LAWS UNLESS AN
EXEMPTION OR EXCLUSION FROM REGISTRATION IS AVAILABLE.
EXHIBIT H
(Section 3.4)
CAPITAL EXPENDITURE LOAN NOTE
$_______________ Due __________, ____
__________, 199__
FOR VALUE RECEIVED, on or before _____________________, the undersigned
hereby promises to pay to the order of First Source Financial LLP, an Illinois
registered limited liability partnership ("Lender") at the principal office of
LaSalle National Bank, N.A. in Chicago, Illinois the principal amount of
____________________________ AND NO/100 DOLLARS ($____________) or, if less, the
aggregate unpaid principal amount of all Capital Expenditure Loans made by
Lender pursuant to the Secured Credit Agreement hereinafter referred to (as
shown in the records of Lender or, at Lender's option, on the schedule attached
hereto and any continuation thereof).
The undersigned further promises to pay interest on the unpaid
principal amount of each Capital Expenditure Loan from the date of such Capital
Expenditure Loan until such Capital Expenditure Loan is paid in full, payable at
such rate(s) and at such time(s), as provided in the Secured Credit Agreement
hereinafter referred to.
This Note evidences indebtedness incurred under, and is entitled to the
benefits of, that certain Secured Credit Agreement dated as of the date hereof
(and, if amended, all amendments thereto) between the undersigned and Lender
(herein called the "Secured Credit Agreement"), to which Secured Credit
Agreement reference is hereby made for a statement of the terms and provisions
under which this Note may be paid prior to its due date or its due date
accelerated. Reference is hereby made to the Secured Credit Agreement for
provisions relating to reductions in the principal amount of this Note. Terms
used but not otherwise defined herein are used herein as defined in the Secured
Credit Agreement hereinabove referred to.
This Note is secured pursuant to the Secured Credit Agreement and the
Related Documents referred to therein, and reference is made thereto for a
statement of terms and provisions.
In addition to and not in limitation of the foregoing and the
provisions of the Secured
150
Credit Agreement hereinabove referred to, the undersigned further agrees,
subject only to any limitation imposed by applicable law, to pay all expenses,
including reasonable attorneys' fees and legal expenses, incurred by the holder
of this Note in endeavoring to collect any amounts payable hereunder which are
not paid when due, whether by acceleration or otherwise.
THIS NOTE IS MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
----------------------------------
By:_________________________________
Name Printed:__________________
Its:___________________________
____________________________________
____________________________________
Attention:__________________________
____________________________________
Telecopy:___________________________
Telephone:__________________________
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151
EXHIBIT J
(Section 12.3.3)
BORROWING CERTIFICATE
To: First Source Financial LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Contract Administration
We refer to the Secured Credit Agreement dated as of November 15, 1996
(herein as heretofore amended or modified called the "Secured Credit Agreement")
among _________ ________________________, a Delaware corporation ("Borrower"),
First Source Financial LLP, an Illinois registered limited liability
partnership, and Union Bank of California, N.A., a national banking association.
Capitalized terms used but not elsewhere defined herein are used
herein as defined in the Secured Credit Agreement.
Pursuant to Section 12.3.3 of the Secured Credit Agreement, the
undersigned hereby confirms its request that on each day listed on the Detail
Loan Statement attached hereto for the period __________, 199_ to ____________,
199_, Borrower requested Lenders to make Loan(s) ("Requested Loan(s)") to
Borrower in the aggregate principal amount set forth opposite such day on the
Detail Loan Statement.
To induce Lenders to make the Requested Loan(s) Borrower hereby
represents and warrants to Lenders that:
(a) No Event of Default or Unmatured Event of Default has occurred
and is continuing, or has resulted or will result from the
making of any Requested Loan.
(b) The warranties and representations contained in Section 10 of
the Secured Credit Agreement (excluding, in the case of Loans
subsequent to the initial Loan, the first sentence of Section
10.4) and in the Related Documents are true and correct in all
material respects as of the date hereof, with the same effect
as though made on the date hereof, except to the extent such
representations and warranties expressly relate to an earlier
date and except as disclosed in the schedules attached hereto.
(c) There has been no material adverse change or notice of
prospective material adverse change with respect to any
insurance maintained by Borrower or any of its Subsidiaries.
(d) Except as disclosed in schedules attached hereto (i) no
claims, litigation (including, without limitation, derivative
actions), arbitration, governmental proceeding, investigation
or inquiry not disclosed in writing by Borrower to Lender
prior to
152
the date of the last previous Loan, provision of an LC
Guaranty or Requested LIBOR Activity, whichever shall have
more recently occurred, is pending or known to be threatened
against Borrower or any Subsidiary of Borrower, (ii) no
material development not so disclosed has occurred in any such
claim, litigation (including, without limitation, derivative
actions), arbitration, governmental proceeding, investigation
or inquiry so disclosed, (iii) the schedules attached to the
Secured Credit Agreement are complete and correct and (iv) no
event, condition or development shall have occurred or
developed at any time (whether before or after the making of
the last previous Loan, provision of an LC Guaranty or
Requested LIBOR Activity, whichever shall have more recently
occurred) which in the case of each of the foregoing clauses
(i) through (iv) has or could reasonably be expected to have a
Material Adverse Effect.
(e) All conditions to the making of the Requested Loan(s) have
been satisfied.
Dated this ________ day of ______________________, 199_.
----------------------------------
By:_________________________________
Name Printed:__________________
Its:___________________________
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153
DETAIL LOAN STATEMENT
154
EXHIBIT K
(Section 12.3.3)
LC GUARANTY REQUEST
First Source Financial LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We refer to the Secured Credit Agreement dated as of November 15, 1996
(as from time to time amended, modified or supplemented, the "Secured Credit
Agreement"), between __________________________________, a Delaware corporation,
First Source Financial LLP, an Illinois registered limited liability
partnership, and Union Bank of California, N.A., a national banking association.
Capitalized terms used but not elsewhere defined herein shall have the
respective meanings ascribed to such terms in the Secured Credit Agreement.
Pursuant to Section 12.3.3 of the Secured Credit Agreement, Borrower
hereby requests that on ___________, 19___ Lenders execute an LC Guaranty
pursuant to the terms of the Secured Credit Agreement (the "Requested LC
Guaranty") in connection with the LC Reimbursement Agreement attached hereto as
Exhibit A with [APPLICABLE ISSUER].
To induce Lenders to issue the Requested LC Guaranty or to consent to
the issuance of the Permitted LC, Borrower hereby represents and warrants to
Lenders that:
(a) No Event of Default or Unmatured Event of Default has occurred
and is continuing, or will result from the issuance of the
Requested LC Guaranty or Permitted LC.
(b) The warranties and representations contained in Section 10 of
the Secured Credit Agreement and in the Related Documents are
true and correct in all material respects as of the date
hereof, with the same effect as though made on the date
hereof, except to the extent such representations and
warranties expressly relate to an earlier date and except as
disclosed in the schedules attached hereto.
(c) There has been no material adverse change and no notice of
prospective material adverse change has been received with
respect to insurance maintained by any Borrower.
(d) Except as disclosed in the schedules attached hereto (i) no
claims, litigation (including, without limitation, derivative
actions), arbitration, governmental proceeding, investigation
or inquiry not disclosed in writing by Borrower to
155
Lender prior to the date of the last previous Loan, provision
of an LC Guaranty or Requested LIBOR Activity, whichever shall
have more recently occurred, is pending or known to be
threatened against any Borrower or any Subsidiary of Borrower,
(ii) no material development not so disclosed has occurred in
any claim, litigation (including, without limitation,
derivative actions), arbitration, governmental proceeding,
investigation or inquiry so disclosed, (iii) the schedules
attached to the Secured Credit Agreement are complete and
correct and (iv) no event, condition or development has
occurred or developed at any time (whether before or after the
making of the last previous Loan, provision of an LC Guaranty
or Requested LIBOR Activity, whichever shall have more
recently occurred), which, (in the case of each of the
foregoing clauses (i) through (iv)) has caused or could
reasonably be expected to cause a Material Adverse Effect.
(e) All conditions to the issuance of the Requested LC Guaranty as
set forth in the Secured Credit Agreement and the Related
Documents have been satisfied.
Dated this ____ day of _____________, 19__
IN WITNESS WHEREOF, Borrower has caused this LC Guaranty Request to be
executed and delivered by a duly authorized officer of Borrower as of , 199 .
----------------------------------
By:_________________________________
Name Printed:__________________
Its:___________________________
2