LOAN AND SECURITY AGREEMENT
GMAC COMMERCIAL FINANCE LLC
(AS LENDER AND AS AGENT)
and
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME
(AS LENDERS)
with
XXXXX XXXXXX INTERNATIONAL, INC.
(AS BORROWING AGENT)
and
THE OTHER LOAN PARTIES SIGNATORY HERETO
(AS LOAN PARTIES)
March 31, 2004
LOAN AND SECURITY AGREEMENT
LOAN AND SECURITY AGREEMENT dated March 31, 2004 among XXXXX XXXXXX
INTERNATIONAL, INC., a corporation organized under the laws of the State of
Florida ("BJI"), the other entities designated from time to time as a "Borrower"
on the signature pages hereto (together with BJI, each a "Borrower" and
collectively, the "Borrowers"), the entities designated as a "Guarantor" on the
signature pages hereto (each a "Guarantor" and collectively, the "Guarantors"),
the financial institutions which are now or which hereafter become a party
hereto (each a "Lender" and collectively, the "Lenders") and GMAC COMMERCIAL
FINANCE LLC, a limited liability company organized under the laws of the State
of Delaware ("GMACCF"), as agent for Lenders (GMACCF, in such capacity, the
"Agent").
IN CONSIDERATION of the mutual covenants and undertakings herein contained,
Loan Parties, Lenders and Agent hereby agree as follows:
I. DEFINITIONS.
1.1. Accounting Terms.
As used in this Agreement, any Other Document, or any certificate, report
or other document made or delivered pursuant to this Agreement, accounting terms
not defined in Section 1.2 or elsewhere in this Agreement and accounting terms
partly defined in Section 1.2 to the extent not defined, shall have the
respective meanings given to them under GAAP; provided, however, whenever such
accounting terms are used for the purposes of determining compliance with
financial covenants in this Agreement, such accounting terms shall be defined in
accordance with GAAP as applied in preparation of the audited financial
statements of Loan Parties for the fiscal year ended December 31, 2002.
1.2. General Terms.
For purposes of this Agreement the following terms shall have the
following meanings:
"Accountants" shall have the meaning set forth in Section 9.7.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar Rate
Loan for any Interest Period a rate of interest
equal to:
(a) the offered rate for deposits in U.S. dollars in the London interbank
market for the relevant Interest Period which is published by the British
Bankers' Association and currently is reported by Bloomberg L.P. as of 11:00
a.m. (London time) on the day which is two (2) Business Days prior to the first
day of such Interest Period for a term comparable to such Interest Period;
provided, however, that if such a rate ceases to be available from that or any
other source from the British Bankers' Association, then the rate used shall be
a rate per annum equal to the offered rate for deposits in U.S. dollars in the
London interbank market for the relevant Interest Period that appears on Reuters
Screen LIBO Page (or any successor page) as of 11:00 a.m. (London time) on the
day which is two (2) Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period, provided that if more than
one rate is specified on Reuters Screen LIBO Page, then the rate used shall be a
rate per annum equal to the arithmetic mean of all such rates (rounded upwards,
if necessary, to the nearest 1/100 of 1%); provided, however, that if, for any
reason, such a rate is not published by the British Bankers' Association or
available on the Reuters Screen LIBO Page, the rate used shall be equal to a
rate per annum equal to the average rate (rounded upwards, if necessary, to the
nearest 1/100 of 1%) at which Agent determines that U.S. dollars in an amount
comparable to the amount of the applicable Loan Advances are being offered to
prime banks at approximately 11:00 a.m. (London time) on the day which is two
(2) Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period for settlement in immediately available funds
by leading banks in the London interbank market selected by Agent; divided by
(b) a number equal to 1.0 minus the aggregate (but without duplication) of
the rates (expressed as a decimal fraction) of reserve requirements in effect on
the day which is two (2) Business Days prior to the beginning of such Interest
Period (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other governmental authority having jurisdiction with
respect thereto, as now and from time to time in effect) for Eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
such Board) which are required to be maintained by a member bank of the Federal
Reserve System; such rate (if greater than zero) to be rounded upward to the
next whole multiple of one-sixteenth of one percent (.0625%).
"Adjustment Date" shall have the meaning set forth in the definition
of "Applicable Margin".
"Advances" shall mean and include the Revolving Advances, the Swingline
Loans and the Letters of Credit.
"Advance Rates" shall have the meaning set forth in Section 2.1(a).
"Affiliate" of any Person shall mean (a) any Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with such Person, or (b) any Person who is a
director, managing member, general partner or officer (i) of such Person, (ii)
of any Subsidiary of such Person or (iii) of any Person described in clause (a)
above. For purposes of this definition, control of a Person shall mean the
power, direct or indirect, (x) to vote 10% or more of the securities having
ordinary voting power for the election of directors, managing member or general
partner of such Person, or (y) to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"Agent" shall have the meaning set forth in the preamble to this Agreement
and shall include its successors and assigns.
"Agreement" shall mean this Loan and Security Agreement, as amended,
restated, modified and supplemented from time to time.
"Applicable Margin" for each type of Loan Advance shall mean, as of the
Closing Date, the applicable percentage specified below:
----------------------------------- -------------------------------------- ------------------------------------
APPLICABLE MARGIN FOR DOMESTIC RATE APPLICABLE MARGIN FOR EURODOLLAR
TYPE OF LOAN ADVANCE LOANS RATE LOANS
----------------------------------- -------------------------------------- ------------------------------------
----------------------------------- -------------------------------------- ------------------------------------
Revolving Advances 0.25% 2.25%
----------------------------------- -------------------------------------- ------------------------------------
thereafter on a fiscal quarterly basis, effective as of the first day
following receipt by Agent of Loan Parties' quarterly financial statements
required under Section 9.8 for the previous fiscal quarter (each day of such
delivery, an "Adjustment Date"), commencing with the first fiscal quarter ending
after March 31, 2005, the Applicable Margin for each type of Loan Advance shall
be adjusted, if necessary, to the applicable percent per annum set forth in the
pricing table set forth below corresponding to the Senior Secured Leverage Ratio
for the trailing twelve month period ending on the last day of the most recently
completed fiscal quarter prior to the applicable Adjustment Date (each such
period, a "Calculation Period"):
------------------------------ ------------------------------------------- ------------------------------------------
SENIOR SECURED LEVERAGE RATIO APPLICABLE MARGINS FOR DOMESTIC RATE LOANS APPLICABLE MARGINS FOR EURODOLLAR RATE
LOANS
------------------------------ ------------------------------------------- ------------------------------------------
------------------------------ ------------------------------------------- ------------------------------------------
Revolving Advances Revolving Advances
------------------------------ ------------------------------------------- ------------------------------------------
------------------------------ ------------------------------------------- ------------------------------------------
Greater than or equal to
2.50 to 1.00 0.25% 2.25%
------------------------------ ------------------------------------------- ------------------------------------------
------------------------------ ------------------------------------------- ------------------------------------------
Less than 2.50 to 1.00 0.00% 2.00%
------------------------------ ------------------------------------------- ------------------------------------------
If Loan Parties shall fail to deliver the financial statements,
certificates and/or other information required under Sections 9.7, 9.8 or 9.9 by
the dates required pursuant to such sections, each Applicable Margin shall be
conclusively presumed to equal the highest Applicable Margin specified in the
pricing table set forth above until the date of delivery of such financial
statements, certificates and/or other information.
"Authority" shall have the meaning set forth in Section 4.19(d).
"Base Rate" shall mean a variable rate of interest per annum equal to the
rate of interest from time to time published by the Board of Governors of the
Federal Reserve System in Federal Reserve statistical release H.15 (519)
entitled "Selected Interest Rates" as the Bank Prime Loan Rate, such rate to be
adjusted automatically, without notice, on the effective date of any change in
such rate. Base Rate also includes rates published in any successor publications
of the Federal Reserve System reporting the Bank Prime Loan Rate or its
equivalent. The statistical release generally sets forth a Bank Prime Loan Rate
for each Business Day. The applicable Bank Prime Loan Rate for any date not set
forth in such statistical release or equivalent document shall be the rate set
forth for the last preceding date. In the event the Board of Governors of the
Federal Reserve System ceases to publish a Bank Prime Loan Rate or equivalent,
the term "Base Rate" shall mean a variable rate of interest per annum equal to
the highest of the "prime rate," "reference rate," "base rate" or other similar
rate as determined by Agent announced from time to time by any of Bank One, X.X.
Xxxxxx Xxxxx & Co. or Citibank, N.A. (or any successor to any of the foregoing
institutions) (with the understanding that any such rate may merely be a
reference rate and may not necessarily represent the lowest or best rate
actually charged to any customer by such bank).
"Blocked Accounts" shall have the meaning set forth in Section 4.15(h).
"Bond Make-Well Debt" shall mean all Indebtedness of Loan Parties
outstanding under the Bond Make-Well Documentation.
"Bond Make-Well Documentation" shall mean such agreements, instruments and
documents as may be from time to time be entered into by and between Trivest and
Loan Parties with respect to certain advances to be made by Trivest to Loan
Parties to fund the payment of interest on the Subordinated Debt, such
agreements, instruments and documents to be in form and substance satisfactory
in good faith to Agent and the Required Lenders.
"Borrower" or "Borrowers" shall have the meaning set forth in the preamble
to this Agreement and shall extend to all permitted successors and assigns of
such Persons.
"Borrowers' Account" shall have the meaning set forth in Section 2.7.
"Borrowing Agent" shall mean BJI.
"Borrowing Base Certificate" shall mean a certificate duly executed by an
officer of Borrowing Agent appropriately completed and in substantially
the form of Exhibit A.
"BJI Corporate" shall mean Xxxxx Xxxxxx International, Inc., a
Florida corporation.
"BJI Parent" shall initially mean WLFI; provided, however, that Borrowing
Agent may appoint as a successor "BJI Parent" any domestic corporation specially
formed for the purpose of acquiring all of the capital stock of BJI so long as
(i) Borrowing Agent shall give Agent no less than thirty (30) days prior written
notice of appointment prior to the effectiveness of such appointment; (ii) such
new BJI Parent shall execute and declare to Agent a Guaranty of the Obligations
(subject, solely as to such Guaranty requirement, to such contractual
restrictions on BJI Parent as are in existence as of the date of such
appointment) and such other security agreements, documents and instruments as
shall be requested by Agent to create a perfected Lien on all of the assets of
BJI Parent, including a Lien on all of the capital stock of BJI (such Lien to be
a first priority securing interest in all assets of BJI Parent, other than the
capital stock of BJI (which shall be a second priority Lien subject only to the
Lien of the Senior Secured Documentation)); (iii) such new BJI Parent shall
agree to be bound by the terms of this Agreement and the Other Documents as a
Guarantor and a Loan Party; (iv) Agent shall receive all opinions of counsel and
evidence of corporate authority of new BJI Parent as Agent shall reasonably
request; (v) no Default or Event of Default shall be in existence prior to or
immediately after the appointment of such new BJI Parent.
"BJI Parent Pledge Agreement" shall mean the Pledge Agreement dated as of
the Closing Date by BJI Parent and certain other entities, as pledgors, in favor
of Agent, as amended, restated, modified and supplemented from time to time.
"Business Day" shall mean with respect to Eurodollar Rate Loans, any day on
which commercial banks are open for domestic and international business,
including dealings in Dollar deposit, in London, England and New York, New York
and with respect to all other matters, any day other than a day on which
commercial banks in New York are authorized or required by law to close.
"Business Segment" shall mean and refer to each of the following on
a several basis:
(a) BJI Corporate;
(b) El Xxxxx-Xxxxx Xxxxxx;
(c) El Monte-Charter;
(d) Haleyville;
(e) Liberty;
(f) Medley;
(g) Oxnard;
(h) Pompano-Xxxxxxxxxx;
(i) Pompano-Woodsmiths;
(j) Silverlake; and
(k) Sparta.
"Calculation Period" shall have the meaning set forth in the definition of
"Applicable Margin".
"Capital Expenditures" means, without duplication, all cash expenditures
(including deposits) for any fixed assets or improvements, or for replacements,
substitutions or additions thereto, that, in each case, in conformity with GAAP,
are included in "additions to property, plant and equipment" or comparable items
reflected in the consolidated statement of cash flow of Loan Parties and their
respective Subsidiaries, excluding however, expenditures made from the proceeds
of asset sales permitted hereunder.
"Capital Lease" means any lease of any property (whether real, personal or
mixed) that, in conformity with GAAP, should be accounted for as a capital
lease.
"Cash Equivalents" shall mean: (a) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within six (6) months from the date of acquisition thereof;
(b) commercial paper maturing no more than six (6) months from the date issued
and, at the time of acquisition, having a rating of at least A-1 from Standard &
Poor's Corporation or at least P-1 from Xxxxx'x Investors Service, Inc.; and (c)
certificates of deposit or bankers' acceptances maturing within six (6) months
from the date of issuance thereof issued by, or overnight reverse repurchase
agreements from, any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia having
combined capital and surplus of not less than $500,000,000 and whose debt
obligations, or those of a holding company of which it is a Subsidiary, are
rated not less than A (or the equivalent rating) by a nationally recognized
investment rating agency and not subject to setoff rights in favor of such bank.
"Cash Interest Expense" means, without duplication, for any period, (x)
interest expenses deducted in the determination of net income for Loan Parties
on a Consolidated Basis for such period (excluding (a) the amortization of fees
and costs with respect to the transactions contemplated by this Agreement which
have been capitalized as transaction costs on the balance sheet of Loan Parties
on a Consolidated Basis and (b) interest paid in kind) minus (y) interest
income, but in no event less than zero.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, 42 U.S.C. 9601 et seq.
"Change of Control" shall mean any "Change of Control" as defined in the
Senior Secured Documentation and/or the Subordinated Debt Documentation, and, in
addition, shall include any and all of the following: (a) Trivest shall fail to
own at least fifty-one percent (51%) of the issued and outstanding shares of
capital stock (or other equity interests) of BJI Parent having the right to vote
for the election of directors of BJI Parent under ordinary circumstances; (b)
during any period of twelve consecutive calendar months, individuals who at the
beginning of such period constituted the board of directors of BJI Parent
(together with any new directors whose election by the stockholders of BJI
Parent was approved by a vote of at least a majority of the directors then still
in office who either were directors at the beginning of such period or whose
election or nomination for election has previously so approved) cease for any
reason other than death or disability to constitute a majority of the directors
then in office; (c) any person or group of persons (within the meaning of the
Securities Exchange Act of 1934) other than Trivest shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934) of
any of the issued and outstanding shares of capital stock (or other equity
interests) of BJI having the power to vote fifty percent (50%) or more of the
total votes entitled to be cast on any matter submitted to a vote of
shareholders; (d) BJI Parent or Trivest shall fail to own at least fifty-one
percent (51%) of the issued and outstanding shares of capital stock (or other
equity interests) of BJI having the right to vote for the election of directors
of BJI under ordinary circumstances; (e) during any period of twelve consecutive
calendar months, individuals who at the beginning of such period constituted the
board of directors of BJI (together with any new directors whose election by the
board of directors of BJI or whose nomination for election by the stockholders
of BJI was approved by a vote of at least a majority of the directors then still
in office who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason other than death or disability to constitute a majority of the directors
then in office; (f) BJI ceases to own and control, directly or indirectly, all
of the economic and voting rights associated with all of the outstanding capital
stock of any Loan Party or (g) any Loan Party ceases to own and control all of
the economic and voting rights associated with all of the outstanding capital
stock of any of its Subsidiaries.
"Charge(s)" shall mean all taxes, charges, fees, imposts, levies or other
assessments, including, without limitation, all net income, gross income, gross
receipts, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation and property taxes,
custom duties, fees, assessments, liens, claims and charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts, imposed by any taxing or other authority, domestic or
foreign (including, without limitation, the PBGC or any environmental agency or
superfund), upon the Collateral, any Loan Party or any of its Affiliates.
"Closing Date" shall mean March 31, 2004 or such other date as may be
agreed to by the parties hereto in writing.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time and the regulations promulgated thereunder.
"Collateral" shall mean and include:
(a) all Receivables;
(b) all Equipment;
(c) all General Intangibles;
(d) all Inventory;
(e) all Investment Property;
(f) all Mortgaged Property (provided, however, the Lien of the Agent under
this Agreement and the Mortgages shall not extend to (x) any lease identified in
Schedule 1.01(a) hereto, so long as the Loan Parties fail to obtain a consent
(in form and substance satisfactory to the Agent) from the landlord thereunder
to the applicable Mortgage in accordance with Section 4.21 and 4.22(ii);
provided further, however, that nothing herein shall relieve the Loan Parties
from their obligations under Section 4.21 and 4.22(ii), and (y) any lease
identified in Schedule 1.01(b) hereto);
(g) all of each Loan Party's right, title and interest in and to (i) its
respective goods and other property including, but not limited to, all
merchandise returned or rejected by Customers, relating to or securing any of
the Receivables; (ii)~all of each Loan Party's rights as a consignor, a
consignee, an unpaid vendor, mechanic, artisan, or other lien or, including
stoppage in transit, setoff, detinue, replevin, reclamation and repurchase;
(iii)~all supporting obligations and all additional amounts due to any Loan
Party from any Customer relating to the Receivables; (iv)~other property,
including warranty claims, relating to any goods securing this Agreement; (v)
all of each Loan Party's contract rights, rights of payment which have been
earned under a contract right, letter of credit rights (whether or not the
letter of credit is evidenced by a writing), instruments (including promissory
notes), documents, chattel paper (whether tangible or electronic), warehouse
receipts, deposit accounts, money and securities; (vi)~if and when obtained by
any Loan Party, all real and personal property of third parties in which such
Loan Party has been granted a lien or security interest as security for the
payment or enforcement of Receivables; and (vii)~any other goods, personal
property or real property now owned or hereafter acquired in which any Loan
Party has expressly granted a security interest or may in the future grant a
security interest to Agent hereunder, or in any amendment or supplement hereto
or thereto, or under any other agreement between Agent and any Loan Party;
(h) all of each Loan Party's ledger sheets, ledger cards, files,
correspondence, records, books of account, business papers, computers, computer
software (owned by any Loan Party or in which it has an interest), computer
programs, tapes, disks and documents relating to clauses (a), (b), (c), (d),
(e), (f) or (g) of this definition; and
(i) all proceeds and products of clauses (a), (b), (c), (d), (e), (f), (g)
or (h) of this definition in whatever form, including, but not limited to: cash,
deposit accounts (whether or not comprised solely of proceeds), certificates of
deposit, insurance proceeds (including hazard, flood and credit insurance),
negotiable instruments and other instruments for the payment of money, chattel
paper, security agreements, documents, eminent domain proceeds, condemnation
proceeds and tort claim proceeds.
"Commitment Percentage" of any Lender shall mean the percentage set forth
below such Lender's name on the signature page hereof as same may be adjusted
upon any assignment by a Lender pursuant to Section 17.3.
"Commitment Transfer Supplement" shall mean a document in the form of
Exhibit 17.3, properly completed and otherwise in form and substance
satisfactory to Agent by which the Purchasing Lender purchases and assumes a
portion of the obligation of Lenders to make Advances under this Agreement.
"Commitments" shall mean, as to any Lender, its obligation to make Advances
(including participating in Letters of Credit) in an aggregate amount not to
exceed at any one time outstanding the amount set forth below such Lender's name
on the signature page hereof under the heading "Commitment", as same may be
adjusted in accordance with this Agreement.
"Consents" shall mean all filings and all licenses, permits, consents,
approvals, authorizations, qualifications and orders of governmental authorities
and other third parties, domestic or foreign, reasonably necessary to carry on
any Loan Party's business, including, without limitation, any Consents required
under all applicable federal, state or other applicable law.
"Conformed Bills of Lading" means original clean on-board negotiable bills
of lading with respect to any shipment of Inventory which (a) are issued by the
carrier of the Inventory described in such bills of lading or by a freight
forwarder acting on behalf of such carrier; (b) consign such Inventory to Agent
(either directly or by means of endorsement); (c) are accompanied by all
commercial invoices describing such Inventory and all necessary certificates of
inspection, origin and insurance; (d) adequately describe such Inventory; (e)
contain language expressly incorporating The International Convention for the
Unification of Certain Rules
"Controlled Group" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with any Loan Party, are treated as a single
employer under Section 414 of the Code.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement to which any Loan Party or any of its Subsidiaries is a
party.
"Customer" shall mean and include the account debtor with respect to any
Receivable.
"Customs" shall mean the U.S. Customs Service and any successor thereto.
"Default" shall mean an event which, with the giving of notice or passage
of time or both, would constitute an Event
of Default.
"Default Rate" shall have the meaning set forth in Section 3.1.
"Defaulting Lender" shall have the meaning set forth in Section 2.15(a).
"Depository Accounts" shall have the meaning set forth in Section 4.15(h).
"Documentary Letters of Credit" shall mean all Letters of Credit issued in
connection with this Agreement to pay the purchase price for Inventory purchased
by a Borrower.
"Dollar" and the sign "$" shall mean lawful money of the United States
of America.
"Domestic Rate Loan" shall mean any Loan Advance that bears interest based
upon the Base Rate.
"Early Termination Date" shall have the meaning set forth in Section 13.1.
"EBITDA" means, for any period, without duplication, the total of the
following for Loan Parties on a Consolidated Basis, each calculated for such
period: (a) net income determined in accordance with GAAP; plus, to the extent
deducted in the calculation of net income, (b) the sum of (i) income and
franchise taxes accrued; (ii) interest expenses, net of interest income,
accrued; (iii) amortization and depreciation; (iv) other non-cash charges; (v)
non-cash management fees and non-cash stock based compensation (each to the
extent permitted to be paid under this Agreement); and (vi) certain
restructuring charges acceptable to the Agent, less, to the extent included in
the calculation of net income, (c) the sum of (i) the income of any Person
(other than wholly-owned Subsidiaries of BJI Parent) in which BJI Parent or a
wholly-owned Subsidiary of BJI Parent has an ownership interest except to the
extent such income is received by BJI Parent or such wholly-owned subsidiary in
a cash distribution during such period; (ii) gains or losses from sales or other
dispositions of assets (other than Inventory in the normal course of business);
and (iii) extraordinary or non-recurring gains, but not net of extraordinary or
non-recurring "cash" losses.
"Eligible Inventory" shall mean and include Inventory (excluding work in
process exceeding a cost of $5,000,000 for the Borrowers on an aggregate basis)
owned by and in the possession of a Borrower and located at premises of the
Borrower in the continental United States listed on Schedule 4.5, or at a
location of the Borrower in the continental United States or at a customs broker
in the continental United States, in each case otherwise identified to Agent by
at least fifteen (15) days' prior written notice (each, an "Additional Inventory
Location"), in the case of Inventory (x) located on leased premises of a
Borrower, for which the applicable landlord has executed a landlord waiver in
form and substance satisfactory to Agent (provided that up to $250,000 of
Inventory located at the Borrowers' showrooms in the aggregate shall not be
deemed ineligible by virtue of the failure to deliver a landlord's waiver) and
(y) located at a customs broker, for which the applicable customs broker has
executed a letter in form and substance satisfactory to Agent protecting Agent's
Lien in the Collateral with respect to each Borrower, determined in each case on
a first-in-first-out basis, which is not, in Agent's reasonable opinion,
obsolete, slow moving or unmerchantable based on such considerations as Agent
may from time to time deem appropriate including, without limitation, whether
the Inventory is subject to a perfected, first priority security interest in
favor of Agent and no other Lien (other than Permitted Encumbrances described in
clauses (a), (b) and (f) of the definition thereof) and whether the Inventory
conforms to all standards imposed by any governmental agency, division or
department thereof which has regulatory authority over such goods or the use or
sale thereof. Eligible Inventory shall also include all Inventory in-transit to
premises of a Borrower listed on Schedule 4.5 or to an Additional Inventory
Location which satisfies the criteria for Eligible Inventory (except for the
requirement that such Inventory be in the possession of Borrower and that it be
located on Borrower's premises or at a customs broker) as well as each of the
following criteria in the sole judgment of Agent: (a) title with respect to such
Inventory has passed to the Borrower, (b) such Inventory is insured against
types of loss, damage, hazards and risks, and in amounts, satisfactory to Agent
in its discretion and Agent shall be loss payee with respect to such insurance,
(c) such Inventory has been paid for by Borrower, (d) such Inventory is subject
to a Conformed Xxxx of Lading, and (e) each original of the applicable Conformed
Xxxx of Lading is in possession of Agent or a Person acting as Agent's agent for
purposes of perfecting Agent's Lien, on behalf of itself and Lenders, in such
Conformed Xxxx of Lading. Eligible Inventory shall not include licensed or
private label Inventory, unless (i) a Loan Party is the owner of such license or
private label, or (ii) a consent, in form and substance satisfactory to Agent,
has been obtained from the owner of such license or private label with respect
to Agent's security interest in such Inventory.
"Eligible Receivables" shall mean and include with respect to each
Borrower, each Receivable of such Borrower arising in the ordinary course of
such Borrower's business and which Agent, in its sole but good faith credit
judgment, shall continue to deem to be an Eligible Receivable, based on such
considerations as Agent may from time to time deem appropriate in its good faith
judgment. A Receivable shall not be deemed eligible unless such Receivable is
subject to Agent's first priority perfected security interest and no other Lien
(other than Permitted Encumbrances described in clauses (a), (b) and (f) of the
definition thereof), and is evidenced by an invoice or other documentary
evidence satisfactory to Agent. In addition, no Receivable shall be an Eligible
Receivable if:
(a) it arises out of a sale made by any Borrower to a Subsidiary or an
Affiliate of the Borrower or to a Person controlled by a Subsidiary or an
Affiliate of any Borrower;
(b) (i) its due date is sixty (60) days or less from its invoice date, and
it is unpaid more than sixty (60) days after the due date; (ii) its due date is
greater than sixty (60) days but less than one hundred and eighty (180) days
from its invoice date and it is unpaid more than thirty (30) days after the due
date; and (iii) its due date is one hundred and eighty (180) days or greater but
less than two hundred and seventy one (271) days from its invoice date, and it
is unpaid more than fifteen (15) days after the due date;
(c) twenty five percent (25%) or more of the Receivables from such Customer
are not deemed Eligible Receivables under clause (b) above;
(d) its due date is greater than two hundred and seventy (270) days from
its invoice date;
(e) twenty-five percent (25%) or more of the Receivables of the Borrowers
in the aggregate are from a single Customer, except for Wal-Mart as to which the
applicable percentage shall be 40% so long as there shall not have occurred, in
the good faith judgment of the Agent, a material adverse change in the business,
assets, financial condition or prospects of Wal-Mart (but only the Receivables
in excess of such twenty five percent (or forty percent, as applicable) limit
shall be deemed to be ineligible under this clause (e));
(f) any covenant, representation or warranty contained in this Agreement
with respect to such Receivable has been breached;
(g) the Customer shall (i) apply for, suffer, or consent to the appointment
of, or the taking of possession by, a receiver, custodian, trustee or liquidator
of itself or of all or a substantial part of its property or call a meeting of
its creditors, (ii) admit in writing its inability, or be generally unable, to
pay its debts as they become due or cease operations of its present business,
(iii) make a general assignment for the benefit of creditors, (iv) commence a
voluntary case under any state, federal or foreign bankruptcy laws (as now or
hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a
petition seeking to take advantage of any other law providing for the relief of
debtors, (vii) acquiesce to, or fail to have dismissed, any petition which is
filed against it in any involuntary case under such bankruptcy laws, or (viii)
take any action for the purpose of effecting any of the foregoing;
(h) the sale is to a Customer outside the United States of America or
Canada, unless the sale is on letter of credit, guaranty or acceptance terms, in
each case acceptable to Agent in its sole discretion;
(i) the sale to the Customer is on a xxxx-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment or any other repurchase or return
basis or is evidenced by chattel paper;
(j) Agent believes, in its good faith credit judgment, that collection of
such Receivable is insecure or that such Receivable may not be paid by reason of
the Customer's financial inability to pay;
(k) the Customer is the United States of America, any state or any
department, agency or instrumentality of any of them, unless Borrower assigns
its right to payment of such Receivable to Agent pursuant to the Assignment of
Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C.
Sub-Section 15 et seq.) or has otherwise complied with other applicable statutes
or ordinances;
(l) (i) the goods giving rise to such Receivable have not been shipped and
delivered to the Customer (or, to the extent not yet delivered, for which the
applicable Borrower cannot properly recognize "revenue" under GAAP) or the
services giving rise to such Receivable have not been performed by the
applicable Borrower and accepted by the Customer, or (ii) the applicable
Borrower has received a notice of rejection from the Customer with respect to
the goods or services giving rise to such Receivable, or (iii) the Receivable
otherwise does not represent a final sale;
(m) the Receivable is subject to any offset, deduction, defense, dispute or
counterclaim (excluding offsets, deductions or defenses for damaged goods in
favor of Wal-Mart in a maximum aggregate amount for all Borrowers of $1,000,000
per calendar year pursuant to arrangements consistent with historical practices
between Wal-Mart and the Borrowers) or is subject to a deposit (provided that
only the amount equal to the amount of such offset, deduction, defense, dispute,
counterclaim or deposit shall be ineligible by reason thereof) or the Receivable
is contingent in any respect or for any reason;
(n) the applicable Borrower has made any agreement with any Customer for
any deduction therefrom, except for discounts or allowances made in the ordinary
course of business for prompt payment, all of which discounts or allowances are
reflected in the calculation of the face value of each respective invoice
related thereto;
(o) any return, rejection or repossession of the merchandise has occurred;
(p) such Receivable is not payable to a Borrower;
(q) Receivables with respect to which the Customer is located in New
Jersey, Minnesota, or any other state denying creditors access to its courts in
the absence of a Notice of Business Activities Report or other similar filing,
unless the applicable Borrower is incorporated under the laws of such state or
has either qualified as a foreign corporation authorized to transact business in
such state or has filed (unless exempt from the requirement for filing) a Notice
of Business Activities Report or similar filing with the applicable state agency
for the then current year; or
(r) such Receivable is not otherwise satisfactory to Agent as determined in
good faith by Agent in the exercise of its reasonable credit judgment.
"El Monte-Charter" shall mean Charter Furniture Corporation, a California
corporation.
"El Xxxxx-Xxxxx Xxxxxx" shall mean Xxxxx Xxxxxx Company, a Delaware
corporation, BJ Mexico IV, Inc., a Delaware corporation and BJ Mexico, V, Inc.,
a Delaware corporation.
"Environmental Complaint" shall have the meaning set forth in Section
4.19(d).
"Environmental Laws" shall mean all federal, state and local environmental,
land use, zoning, health, chemical use, safety and sanitation laws, statutes,
ordinances and codes relating to the protection of the environment and/or
governing the use, storage, treatment, generation, transportation, processing,
handling, production or disposal of Hazardous Substances and the rules,
regulations, policies, guidelines, interpretations, decisions, orders and
directives of federal, state and local governmental agencies and authorities
with respect thereto.
"Equipment" shall mean and include as to each Loan Party all of such Loan
Party's goods (other than Inventory) whether now owned or hereafter acquired and
wherever located including, without limitation, all equipment, machinery,
apparatus, motor vehicles, fittings, furniture, furnishings, fixtures, parts,
accessories and all replacements and substitutions therefor or accessions
thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time and the rules and regulations promulgated thereunder.
"Eurodollar Rate" shall mean for any Eurodollar Rate Loan for the then
current Interest Period relating thereto the rate per annum (such Eurodollar
Rate to be adjusted to the next higher 1/100 of one percent (1%)) equal to the
Adjusted LIBO Rate.
"Eurodollar Rate Loan" shall mean a Loan Advance at any time that bears
interest based on the Adjusted LIBO Rate.
"Event of Default" shall mean the occurrence and continuance of any of the
events set forth in Article X.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Existing Loan Documentation" shall mean the Credit Agreement dated as of
May 8, 2001 by and among BJI, Canadian Imperial Bank of Commerce, as
administrative agent (the "Existing Agent"), and certain other financial
institutions, together with all agreements, instruments and documents executed
and delivered to Existing Agent in connection therewith.
"Federal Funds Rate" shall mean, for any day, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or if such rate is not so published for any
day which is a Business Day, the average of quotations for such day on such
transactions received by Agent from three Federal funds brokers of recognized
standing selected by Agent.
"Fee Letter" shall have the meaning set forth in Section 3.3.
"Fixed Charge Coverage Ratio" shall mean and include, with respect to any
fiscal period, the ratio of (a) Operating Cash Flow during such period to (b)
the sum of (i) Fixed Charges during such period and (ii) the amount of cash or
Cash Equivalent consideration paid for any Investments during such period.
"Fixed Charges" means, for any period, and each calculated for Loan Parties on a
Consolidated Basis for such period (without duplication), (a) Cash Interest
Expense; plus (b) scheduled payments of principal with respect to all
Indebtedness; plus (c) any income or franchise taxes paid in cash during such
period minus tax refunds received in cash during such period.
"Foreign Subsidiary" means a Subsidiary of a Loan Party that is not
organized under the laws of the United States of America or any State thereof,
that is not qualified to do business in the United States of America or any
State thereof and that has no assets located in the United States of America.
"Formula Amount" shall have the meaning set forth in Section 2.1(a).
"GAAP" shall mean generally accepted accounting principles in the United
States of America in effect from time to time.
"General Intangibles" shall mean and include as to each Loan Party all of
such Loan Party's general intangibles, whether now owned or hereafter acquired
including, without limitation, all payment intangibles, choses in action,
commercial tort claims, causes of action, corporate or other business records,
inventions, designs, patents, patent applications, equipment formulations,
manufacturing procedures, quality control procedures, trademarks, service marks,
trade secrets, goodwill, copyrights, design rights, registrations, licenses,
franchises, customer lists, tax refunds, tax refund claims, computer programs
and computer software, all claims under guaranties, security interests or other
security held by or granted to such Loan Party to secure payment of any of the
Receivables by a Customer, all rights of indemnification and all other
intangible property of every kind and nature (other than Receivables).
"GMACCF" shall have the meaning set forth in the preamble to this Agreement
and shall include its successors and assigns.
"Governmental Body" shall mean any nation or government, any state or other
political subdivision thereof or any entity exercising the legislative,
judicial, regulatory or administrative functions of or pertaining to a
government.
"Guarantor" or "Guarantors" shall have the meaning set forth in the
preamble to this Agreement and shall extend to all permitted successors and
assigns of such Persons.
"Guaranty" shall mean the guaranty set forth in Article XV of this
Agreement and any other guaranty of the obligations of Borrowers executed by a
Guarantor in favor of Agent for its benefit and for the ratable benefit of
Lenders.
"Haleyville" shall mean Winston Furniture Company of Alabama, Inc., an
Alabama corporation and Texacraft, Inc., a Texas corporation.
"Hazardous Discharge" shall have the meaning set forth in Section 4.19(d).
"Hazardous Substance" shall mean, without limitation, any flammable
explosives, radon, radioactive materials, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum and petroleum products,
methane, hazardous materials, Hazardous Wastes, hazardous or Toxic Substances or
related materials as defined in CERCLA, the Hazardous Materials Transportation
Act, as amended (49 U.S.C. Sections 1801, et seq.), RCRA, Articles 15 and 27 of
the New York State Environmental Conservation Law or any other applicable
Environmental Law and in the rules and regulations, adopted pursuant thereto.
"Hazardous Wastes" shall mean all waste materials subject to regulation
under CERCLA, RCRA or applicable state law, and any other applicable Federal and
state laws now in force or hereafter enacted relating to hazardous waste
disposal.
"Hedge Agreement" means an Interest Rate Agreement or a Currency Agreement
designed to hedge against fluctuations in interest rates or currency values,
respectively.
"Indebtedness" of a Person at a particular date shall mean all obligations
of such Person which in accordance with GAAP would be classified upon a balance
sheet as liabilities (except capital stock and surplus earned or otherwise) and
in any event, without limitation by reason of enumeration, shall include (a) all
indebtedness, debt and similar obligations for borrowed money of such Person
whether direct or guaranteed; (b) all liabilities under interest rate swap and
interest rate protection agreements of any kind net of liabilities owed to such
Person by the counter-parties thereon; (c) that portion of obligations with
respect to capital leases that is properly classified as a liability on a
balance sheet in conformity with GAAP; (d) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations for
borrowed money; (e) any obligation owed for all or any part of the deferred
purchase price of property or services if the purchase price is due more than
six (6) months from the date the obligation is incurred or is evidenced by a
note or similar written instrument (but specifically excluding accounts payable
and accrued expenses arising in the ordinary course of business and due less
than six (6) months from the date that the obligation is incurred); and (f) all
indebtedness secured by any Lien on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that Person.
"Individual Formula Amount" shall mean at the date of determination
thereof, with respect to each Business Segment an amount equal to: (a) up to the
Receivables Advance Rate of Eligible Receivables of such Business Segment, plus
(b) up to the Inventory Advance Rate of the value of Eligible Inventory of such
Business Segment; minus (c) the aggregate amount of Letters of Credit issued or
caused to be issued on behalf of such Business Segment and the outstanding
principal amount of Swingline Loans made to such Business Segment minus (d)
Reserves.
"Interest Rate Agreement" means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or other similar agreement or
arrangement to which any Loan Party or any of its Subsidiaries is a party.
"IRBs" shall mean the industrial revenue bonds issued by The Industrial
Development Board of the City of Haleyville, Alabama (the "IDBH") pursuant to
the Trust Indenture dated May 1, 2000 (the "Trust Indenture") between the IDBH
and First Commercial Bank, as Trustee, as amended, modified and supplemented in
accordance with Section 7.19 hereof.
"IRB Agent" shall mean First Commercial Bank, as Trustee, and its
successors and assigns.
"IRB Debt" shall mean all Indebtedness of Loan Parties outstanding under
the IRBs.
"IRB Documentation" shall mean the IRBs, the Trust Indenture and all other
agreements, instruments and documents executed in connection therewith, as
amended, modified and supplemented in accordance with Section 7.19 hereof.
"Intercreditor Agreements" shall mean (i) the Intercreditor Agreement among
Agent, Senior Secured Agent and certain Loan Parties; and (ii) the Intercreditor
Agreement among the Agent, the lender or lenders under the Bond Make Well
Documentation and certain Loan Parties, each as amended, restated, modified and
supplemented in accordance with their respective terms.
"Interest Period" shall mean the period provided for any Eurodollar Rate
Loan pursuant to Section 2.2(b).
"Inventory" shall mean and include as to each Loan Party all of such Loan
Party's now owned or hereafter acquired goods, merchandise and other personal
property, wherever located, to be furnished under any contract of service or
held for sale or lease, all raw materials, work in process, finished goods and
materials and supplies of any kind, nature or description which are or might be
used or consumed in such Loan Party's business or used in selling or furnishing
such goods, merchandise and other personal property, all other inventory of such
Loan Party, and all documents of title or other documents representing them.
"Inventory Advance Rate" shall have the meaning set forth in Section
2.1(a)(y)(ii).
"Investment" means (i) any direct or indirect purchase or other acquisition
by any Loan Party or any of its Subsidiaries of, or of a beneficial interest in,
any securities of any other Person (including any Subsidiary of a Loan Party),
(ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of a Loan Party from any Person other
than a Loan Party or any of its Subsidiaries, of any equity Securities of such
Subsidiary, (iii) any direct or indirect loan, advance or capital contribution
by a Loan Party or any of its Subsidiaries to any other Person (other than a
wholly-owned Subsidiaries of a Loan Party), including all indebtedness and
accounts receivable from that other Person that are not current assets or did
not arise from sales to that other Person in the ordinary course of business, or
(iv) Interest Rate Agreements or Currency Agreements not constituting Hedge
Agreements. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"Investment Property" shall mean and include as to each Loan Party, all
such Loan Party's now owned or hereafter acquired investment property, including
without limitation all securities (whether certificated or uncertificated),
securities entitlements, securities accounts, commodities contracts, commodities
accounts, stocks, mutual fund shares, money market shares and U.S. Government
securities.
"Issuer" shall mean any Person who issues a Letter of Credit and/or accepts
a draft pursuant to the terms thereof (it being agreed that so long as GMACCF
shall be Agent or a Lender, then the Issuer shall be GMACCF or General Motors
Acceptance Corporation; provided, however, that in the event that GMACCF is
neither the Agent nor a Lender, the "Issuer" with respect to all subsequently
issued Letters of Credit shall be a Lender selected by the Borrowers to the
extent such Lender agrees to be the Issuer).
"Lender" and "Lenders" shall have the meaning ascribed to such term in the
preamble to this Agreement and shall include each Person which becomes a
transferee, successor or assign of any Lender.
"Lender Default" shall have the meaning set forth in Section 2.15(a).
"Letter of Credit Application" shall have the meaning set forth in Section
2.9.
"Letter of Credit Fees" shall have the meaning set forth in Section 3.2.
"Letter of Credit Obligations" shall mean the sum of (x) the aggregate
undrawn amount of Letters of Credit plus the aggregate amount of any draws or
other amounts paid or disbursed under Letters of Credit which have not been
reimbursed (whether through the making of a Revolving Advance, a Swingline Loan
or otherwise) by any Borrower.
"Letters of Credit" shall have the meaning set forth in Section 2.8.
"Liberty" shall mean Lodging By Liberty, Inc., a North Carolina
corporation.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest, lien (whether statutory or otherwise), Charge
upon the Collateral, claim or encumbrance, or preference, priority or other
security agreement or preferential arrangement held or asserted in respect of
any asset of any kind or nature whatsoever, whether or not filed, recorded, or
otherwise perfected under applicable law, including, without limitation, any
conditional sale or other title retention agreement, any lease having
substantially the same economic effect as any of the foregoing, and the filing
of, any financing statement under the UCC or comparable law of any jurisdiction.
"Loan Advances" shall mean and include the Revolving Advances and the
Swingline Loans.
"Loan Parties on a Consolidated Basis" shall mean the consolidation in
accordance with GAAP of the accounts or other items of Loan Parties and their
respective Subsidiaries.
"Loan Party" shall mean, individually, each Borrower, each Guarantor and
BJI Parent and "Loan Parties" shall mean, collectively, the Borrowers, the
Guarantors and BJI Parent.
"Loan Year" means, collectively, the period of twelve (12) consecutive
months commencing on the Closing Date and ending on the day prior to the first
anniversary of the Closing Date, together with each subsequent period of twelve
consecutive months commencing on the anniversary of the Closing Date and ending
on the day prior to the next anniversary of the Closing Date.
"Management Agreement" means the Management Agreement dated as of
August~27, 1999 by and between BJI (as successor to WinsLoew Furniture, Inc.)
and Trivest II, Inc. which assigned its rights and obligations thereunder to
Trivest Partners, L.P. pursuant to an assignment and assumption agreement among
BJI, Trivest II, Inc. and Trivest Partners, as amended pursuant to an amendment
dated as of May 8, 2001, between BJI and Trivest Partners, L.P., and pursuant to
that amendment dated as of March 19, 2003, between BJI and Trivest Partners,
L.P., and an amendment of even date herewith, as the same may be amended,
supplemented or modified from time to time.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
condition (financial or otherwise), operations, assets, business, management,
affairs, property, results of operations, or prospects of the Loan Parties taken
as a whole, (b) any Borrower's ability to pay the Obligations or the Loan
Parties' ability as a whole to pay the Obligations, each in accordance with the
terms thereof, (c) the value of a material portion of the Collateral, or Agent's
Liens on the Collateral or the priority of any such Lien or (d) the practical
realization of the benefits of Agent's and each Lender's rights and remedies
under this Agreement and the Other Documents.
"Maximum Revolving Advance Amount" shall mean $90,000,000 (inclusive of
outstanding Swingline Loans).
"Maximum Swingline Loan Amount" shall mean $10,000,000.
"Medley" shall mean Pompeii Furniture Co., Inc., a Florida corporation and
Tropic Craft, Inc., a Florida corporation.
"Monthly Advances" shall have the meaning set forth in Section 3.1.
"Mortgage" shall mean an agreement, including, but not limited to, a
mortgage, deed of trust or any other document, creating and evidencing a Lien on
Mortgaged Property, which shall be reasonably satisfactory in form and substance
to the Agent, in each case, with such schedules and including such provisions as
shall be necessary to conform such document to applicable local or foreign law
or as shall be customary under applicable local or foreign law.
"Mortgaged Property" shall mean (a)~each Real Property identified on
Schedule 1.01(a)~hereto and (b) each Real Property, if any, which shall be
subject to a Mortgage delivered after the Closing Date pursuant to Section 4.21
and/or 4.22.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Sections 3(37) and 4001(a)(3) of ERISA.
"Net Orderly Liquidation Value" shall mean 65% (until such percentage is
changed pursuant to the most recent inventory appraisal requested by Agent) of
book value calculated in accordance with GAAP.
"Net Income" shall mean, for any period, the aggregate income (or loss) of
the Loan Parties on a Consolidated Basis for such period, all computed and
calculated in accordance with GAAP.
"Non-Defaulting Lenders" shall have the meaning set forth in Section
2.15(b).
"Note" or "Notes" shall mean, individually or collectively, the Revolving
Credit Note, and the Swingline Note.
"Obligations" shall mean and include any and all of each Loan Party's
Indebtedness and/or liabilities arising under this Agreement or any Other
Document, to Agent, Lenders, any Issuer or any corporation that directly or
indirectly controls or is controlled by or is under common control with Agent,
any Lender or any Issuer of every kind, nature and description, direct or
indirect, secured or unsecured, joint, several, joint and several, absolute or
contingent, due or to become due, now existing or hereafter arising, contractual
or tortious, liquidated or unliquidated, whether evidenced by any agreement or
instrument (including all interest accruing after the commencement of any
bankruptcy or similar proceeding whether or not enforceable in such proceeding)
and all obligations of any Loan Party to Agent, Lenders or any Issuer to perform
acts or refrain from taking any action under this Agreement or any Other
Document.
"Operating Cash Flow" means, for Loan Parties on a Consolidated Basis for
any period, (a) EBITDA; less (b) Capital Expenditures net of amounts financed by
third parties.
"Original Term" shall have the meaning set forth in Section 13.1.
"Other Documents" shall mean the Notes, the Hedge Agreement, any Guaranty
and any and all other agreements, instruments and written contractual
obligations, including, without limitation, guaranties, security agreements,
pledges, powers of attorney, consents, and all other writings heretofore, now or
hereafter executed by any Loan Party and/or delivered to Agent, any Lender or
any Issuer in respect of the transactions contemplated by this Agreement.
"Other Taxes" means any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies which arise from any
payment made hereunder or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any Other Documents.
"Oxnard" shall mean Casual Living Worldwide, Inc., a California
corporation.
"Parent" of any Person shall mean a corporation or other entity owning,
directly or indirectly, at least 50% of the shares of stock or other ownership
interests having ordinary voting power to elect a majority of the directors of
the Person, or other Persons performing similar functions for any such Person.
The term "Parent" shall include, without limitation, BJI and BJI Parent.
"Participant" shall mean each Person who shall be granted the right by any
Lender to participate in any of the Advances and who shall have entered into a
participation agreement in form and substance satisfactory to such Lender.
"Payment Office" shall mean initially 0000 Xxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxx 00000; thereafter, such other office of Agent, if any,
which it may designate by notice to Borrowing Agent and to each Lender to be the
Payment Office.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Permitted Encumbrances" shall mean (a) Liens in favor of Agent for the
benefit of Agent, Lenders and/or any Issuer, which, in each case, secure
Obligations, and Liens under the Senior Secured Documentation securing the
Senior Secured Debt (which Liens shall be subordinate to the Liens of Agent in
all Collateral other than the "Pledged Stock Collateral" as defined in the
applicable Intercreditor Agreement) and the Bond Make-Well Documentation
securing the Bond Make-Well Debt (which Liens shall be subordinate to the Liens
of Agent in all Collateral pursuant to the terms of the applicable Intercreditor
Agreement), and Liens securing any Permitted Refinancing of such Indebtedness to
the extent that the Collateral subject to such Liens do not extend beyond the
Collateral for the refinanced Indebtedness; (b) Liens for taxes, assessments or
other governmental charges (excluding any Lien imposed pursuant to any of the
provisions of ERISA) not delinquent or being contested in good faith and by
appropriate proceedings and with respect to which proper reserves have been
taken by Loan Parties; provided, that, the Lien shall have no effect on the
priority of the Liens in favor of Agent or the value of the assets in which
Agent has such a Lien and a stay of enforcement of any such Lien shall be in
effect; (c) Liens disclosed in the financial statements referred to in Section
5.5 the existence of which Agent has consented to in writing; (d) deposits or
pledges to secure obligations under worker's compensation, social security or
similar laws, or under unemployment insurance; (e) deposits or pledges to secure
bids, tenders, contracts (other than contracts for the payment of money),
leases, statutory obligations, surety and appeal bonds and other obligations of
like nature arising in the ordinary course of any Loan Party's business; (f)
judgment Liens that have been stayed or bonded and mechanics', workers',
materialmen's or other like Liens arising in the ordinary course of any Loan
Party's business with respect to which obligations are not due or which are
being contested in good faith by the applicable Loan Party; provided that the
Lien shall have no effect on the priority of the Liens in favor of Agent or the
value of the assets in which Agent has such a Lien; (g) Liens placed upon
Equipment hereafter acquired to secure a portion of the purchase price thereof
and Liens created under Capital Leases, provided that (x) any such Lien shall
not encumber any property of the Loan Parties other than the subject Equipment
and (y) the aggregate amount of Indebtedness secured by such Liens incurred as a
result of such purchases and/or Capital Leases during any fiscal year shall not
exceed the amount provided for in Section 7.6; (h) Liens arising with respect to
zoning restrictions, easements, licenses, reservations, covenants,
rights-of-way, utility easements, building restrictions and other similar
charges or encumbrances on the use of Real Property which do not interfere with
the ordinary conduct of the business of the Loan Parties or with the exercise of
remedies by Agent and (i) Liens disclosed on Schedule 7.2 (but not any
amendments thereto that add collateral).
"Permitted Refinancing" of an Indebtedness shall mean a refinancing of such
Indebtedness pursuant to terms reasonably acceptable to Agent and the Required
Lenders; provided, however, without limitation of the foregoing (i) the
principal amount of such refinancing Indebtedness shall not exceed the principal
amount of the refinanced Indebtedness at the time of such refinancing (plus
accrued and unpaid interest and reasonable transaction costs); (ii) the interest
rate and other material economic terms of such refinancing Indebtedness shall
each be (x) at least as advantageous to the Loan Parties as those of the
refinanced Indebtedness (if such refinancing is occurring prior to the scheduled
final maturity of the refinanced Indebtedness) or (y) arms-length and fair
market in all respects (if such refinancing is occurring on the scheduled final
maturity of the refinanced Indebtedness); and (iii) the final maturity date of
the refinancing Indebtedness is the same as or later than the final maturity
date of the refinanced Indebtedness and the refinancing Indebtedness has a
Weighted Average Life to Maturity equal to or greater than the refinanced
Indebtedness.
"Person" shall mean any individual, sole proprietorship, partnership,
corporation, business trust, joint stock company, trust, unincorporated
organization, association, limited liability company, institution, public
benefit corporation, joint venture, entity or government (whether Federal,
state, county, city, municipal or otherwise, including any instrumentality,
division, agency, body or department thereof).
"Plan" shall mean any employee benefit plan within the meaning of Section
3(3) of ERISA, maintained for employees of Loan Parties or any member of the
Controlled Group or any such Plan to which any Loan Party or any member of the
Controlled Group is required to contribute on behalf of any of its employees.
"Pompano Loewenstein" shall mean Loewenstein, Inc., a Florida corporation.
"Pompano Woodsmiths" shall mean The Woodsmiths Company, a Florida
corporation.
"Pro Forma Balance Sheet" shall have the meaning setforth in Section 5.5(a).
"Pro Forma Financial Statements" shall have the meaning set forth
in Section 5.5(b).
"Purchase Money Indebtedness" shall mean Indebtedness incurred by a Loan
Party constituting (x) the purchase price for Equipment and/or (y) obligations
under Capital Leases, to the extent (i) secured by a Permitted Encumbrance
described in clause (g) of the definition thereof and (ii) that the aggregate
amount of such Indebtedness and/or Capital Leases during any fiscal year shall
not exceed the amount provided for in Section 7.7(ii).
"Purchase and Security Agreement" shall have the meaning set forth in the
definition of Senior Secured Documentation.
"Purchasing Lender" shall have the meaning set forth in Section 17.3(c).
"Questionnaire" shall mean the Documentation Information Questionnaire and
the responses thereto provided by Loan Parties and delivered to Agent.
"RCRA" shall mean the Resource Conservation and Recovery Act, 42 U.S.C.
6901 et seq., as same may be amended from time to time.
"Real Property" shall mean all of each Loan Party's right, title and
interest in and to the owned and leased premises identified on Schedule 4.19 and
all owned or leased premises acquired after the Closing Date.
"Receivables" shall mean and include, as to each Loan Party, all of such
Loan Party's accounts (including, without limitation, all health-care insurance
receivables), contract rights, instruments (including promissory notes and other
instruments evidencing Indebtedness owed to Loan Parties by their Affiliates),
documents, chattel paper (whether tangible or electronic), general intangibles
relating to accounts, drafts and acceptances, and all other forms of obligations
owing to such Loan Party arising out of or in connection with the sale, lease or
other disposition of Inventory or the rendition of services, all guarantees and
other security therefor, whether secured or unsecured, now existing or hereafter
created, and whether or not specifically sold or assigned to Agent hereunder.
"Receivables Advance Rate" shall have the meaning set forth in Section
2.1(a)(y)(i).
"Release" shall have the meaning set forth in Section 5.7(c).
"Reportable Event" shall mean a reportable event described in Section
4043(b) of ERISA or the regulations promulgated thereunder.
"Required Lenders" shall mean Lenders holding at least fifty one percent
(51%) of the Advances and, if no Advances are outstanding, shall mean Lenders
holding at least fifty one percent (51%) of the Commitment Percentages;
provided, however, that at all times when there shall be two or fewer Lenders
hereunder, "Required Lenders" shall mean Lenders holding one hundred percent
(100%) of the Advances and, if no Advances are outstanding, shall mean Lenders
holding one hundred percent (100%) of the Commitment Percentages.
"Reserves" shall mean, as determined by Agent in its reasonable credit
judgment or Required Lenders in their reasonable credit judgment, such amounts
as Agent or Required Lenders may from time to time establish and revise (a) to
the extent that Agent in the exercise of its reasonable credit judgment
following receipt of a Collateral audit determines that the dilution with
respect to Receivables taken as a whole for any period is not acceptable to
Agent or Required Lenders in their reasonable credit judgment or has increased
in any material respect or may be reasonably anticipated to increase in any
material respect above historical levels; (b) to reflect events, conditions,
contingencies or risks which could reasonably be likely to have a Material
Adverse Effect; (c) to reflect the belief of Agent or Required Lenders that any
Borrowing Base Certificate or financial information furnished by or on behalf of
the Borrowers to Agent is or may have been materially incomplete, inaccurate or
misleading in any material respect; (d) to reflect material liabilities to the
PBGC and/or material environmental remediation costs and material liabilities of
the Loan Parties that have been determined by a Governmental Authority or by
order of a court of competent jurisdiction to be due and payable; (e) to reflect
rental expenses, service charges and other charges with respect to any Real
Property for which a landlord waiver, mortgagee waiver or other collateral
access agreement reasonably satisfactory to Agent has not been received by
Agent; (f) to ensure the payment of Indebtedness or trade payables, material
expenses and other liabilities if Borrower is not paying such Indebtedness or
trade payables currently (which, for purposes of trade payables, shall be within
ninety (90) days of their due date), or not paying such material expenses or
other liabilities (other than Indebtedness or trade payables) as and when
payable in the ordinary course of business; or (g) to reflect risks or
contingencies which may affect Eligible Receivables or Eligible Inventory.
Notwithstanding anything to the contrary in the preceding sentence, no Reserve
shall be established in duplication of any eligibility criteria set forth in the
definition of Eligible Receivables or Eligible Inventory.
"Revolving Advances" shall mean Advances made other than Swingline Loans
and Letters of Credit.
"Revolving Credit Note" shall mean, collectively, the promissory notes
referred to in Section 2.1(a).
"Revolving Interest Rate" shall mean an interest rate per annum equal to
(a) the sum of the Base Rate plus the Applicable Margin per annum with respect
to Domestic Rate Loans that are Revolving Advances or Swingline Loans or, as
applicable (b) the sum of the Eurodollar Rate plus the Applicable Margin per
annum with respect to Eurodollar Rate Loans that are Revolving Advances.
"Senior Secured Agent" shall mean The Bank of New York, and its successors
and assigns.
"Senior Debt" shall mean all Indebtedness of any Loan Party under the
Senior Secured Documentation and/or the IRBs.
"Senior Secured Debt" shall mean all Indebtedness of any Loan Party under
the Senior Secured Documentation.
"Senior Secured Documentation" shall mean the Purchase and Security
Agreement dated as of March 31, 2004 (the "Purchase and Security Agreement")
among BJI, certain guarantors named therein, the purchasers named therein and
the Senior Secured Agent, and all other agreements, instruments and documents
executed and delivered in connection therewith, as amended, restated, modified
and supplemented from time to time in accordance with Section 7.19 hereof.
"Senior Secured Leverage Ratio" shall mean for Loan Parties on a
Consolidated Basis and for any period, the ratio of (x) the sum of (i) the
outstanding balance of Advances hereunder as at the end of such period; and (ii)
the outstanding balance of Senior Debt, each as at the end of such period to (y)
EBITDA for such period.
"Settlement Date" shall mean the Closing Date and thereafter every Business
Day designated by Agent as a "Settlement Date" by notice from Agent to each
Lender, but not less frequently than monthly.
"Silverlake" shall mean Wabash Valley Manufacturing, Inc., a Indiana
corporation.
"Sparta" shall mean Southern Wood Products, Inc., a Tennessee corporation.
"Standby Letters of Credit" shall mean all Letters of Credit issued in
connection with this Agreement as a credit enhancement for certain Indebtedness
(other than Indebtedness for borrowed money) of Borrowers.
"Subordinated Debt" shall mean all Indebtedness of any Loan Party under or
in connection with the Subordinated Debt Documentation.
"Subordinated Debt Documentation" shall mean the Subordinated Indenture,
12-3/4% Senior Subordinated Notes due 2007 issued by BJI and all indentures,
agreements and instruments issued in connection therewith, as amended, restated,
modified and supplemented from time to time in accordance with Section 7.19
hereof.
"Subordinated Indenture" shall mean the Indenture dated as of August 24,
1999 with respect to the 12-3/4% Senior Subordinated Notes due 2007 issued by
BJI (f/k/a Winsloew Escrow Corp.) to American Stock Transfer & Trust Company, as
trustee, as amended, restated, modified and supplemented from time to time in
accordance with Section 7.19 hereof.
"Subsidiary" of a Person shall mean a corporation or other entity whose
shares of stock or other ownership interests having ordinary voting power (other
than stock or other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the directors of such
corporation, or other Persons performing similar functions for such entity, are
owned, directly or indirectly, by such Person.
"Swingline Lender" means GMACCF, or if GMACCF shall resign as Swingline
Lender, another Lender selected by Agent and reasonably acceptable to Borrowers.
"Swingline Loan" means each Advance made by Swingline Lender pursuant to
Section 2.1(c). "Swingline Note" shall mean the promissory note referred to in
Section 2.1(c).
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, such taxes (including
income taxes or franchise taxes) as are imposed on or measured by the Agent's or
each Lender's net income in any jurisdiction (whether federal, state or local
and including any political subdivision thereof) under the laws of which such
Lender or the Agent, as the case may be, is organized or maintains a lending
office.
"Term" shall mean the period commencing on the Closing Date and ending on
the Termination Date.
"Termination Date" shall have the meaning set forth in Section 13.1.
"Termination Event" shall mean (i) a Reportable Event with respect to any
Plan or Multiemployer Plan; (ii) the withdrawal of any Loan Party or any member
of the Controlled Group from a Plan or Multiemployer Plan during a plan year in
which such entity was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA; (iii) the providing of notice of intent to terminate a Plan in a
distress termination described in Section 4041(c) of ERISA; (iv) the institution
by the PBGC of proceedings to terminate a Plan or Multiemployer Plan; (v) any
event or condition (a) which would reasonably result under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan
or Multiemployer Plan, or (b) that would reasonably result in termination of a
Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial or
complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of
any Loan Party or any member of the Controlled Group from a Multiemployer Plan.
"Toxic Substance" shall mean and include any material present on the Real
Property which has been shown to have significant adverse effect on human health
or which is subject to regulation under the Toxic Substances Control Act (TSCA),
15 U.S.C. 2601 et seq., applicable state law, or any other applicable Federal
or state laws now in force or hereafter enacted relating to toxic substances.
"Toxic Substance" includes but is not limited to asbestos, polychlorinated
biphenyls (PCBs) and lead-based paints.
"Transactions" shall have the meaning set forth in Section 5.5.
"Transaction Documents" shall have the meaning set forth in Section 8.1(c).
"Transferee" shall have the meaning set forth in Section 17.3.
"Trivest" shall mean Trivest Partners, L.P., Trivest Fund II, Ltd., Trivest
Fund III, L.P., Trivest Furniture Partners, Ltd. and/or Trivest Furniture
Partners II, Ltd.
"UCC" shall mean the Uniform Commercial Code as in effect in the State of
New York from time to time.
"Undrawn Availability" at a particular date shall mean an amount equal to
(a) the lesser of (i) the Formula Amount or (ii) the Maximum Revolving Advance
Amount, minus (b) the sum of (i) the outstanding amount of Advances plus (ii)
all amounts due and owing to Borrowers' trade creditors which are outstanding
beyond normal trade terms for more than ninety (90) days beyond their due date
and not the subject of a good faith dispute (without duplication of any Reserves
then in effect with respect thereto), plus (iii) accrued interest under this
Agreement and fees and expenses for which Borrowers are liable under this
Agreement but which have not been paid or charged to Borrowers' Account.
"Week" shall mean the time period commencing with the opening of business
on a Monday and ending on the end of business the following Sunday.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the aggregate
outstanding principal amount of such Indebtedness on such date into (b) the sum
of the total of the products obtained by multiplying (i) the amount of each
scheduled installment, sinking fund, serial maturity or other required payment
of principal including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"WLFI" shall mean WLFI Holdings, Inc., a corporation organized under the
laws of the State of Florida.
1.3. UCC Terms.
All terms used herein and defined in the UCC shall have the meaning given
therein unless otherwise defined herein.
1.4. Certain Matters of Construction.
The terms "herein", "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular section,
paragraph or subdivision. Each reference to a Section, an Exhibit or a Schedule
shall be deemed to refer to a Section, an Exhibit or a Schedule, as applicable,
of this Agreement unless otherwise specified. Any pronoun used shall be deemed
to cover all genders. Wherever appropriate in the context, terms used herein in
the singular also include the plural and vice versa. All references to statutes
(including the UCC) and related regulations shall include any amendments of same
and any successor statutes and regulations. Unless otherwise provided, all
references to any instruments or agreements to which Agent is a party,
including, without limitation, references to any of the Other Documents, shall
include any and all modifications or amendments thereto and any and all
extensions or renewals thereof. For purposes of Sections 3.1, 3.6, 3.7, 3.8,
3.9, Articles IV, V, VIII, XI, XII, XIII, XIV, XV, XVI and XVII, the term
"Lender" shall include each Lender and Swingline Lender.
II. ADVANCES, PAYMENTS.
2.1. Revolving Advances and Swingline Loans.
(a) Revolving Advances. Subject to the terms and conditions set forth in
this Agreement (including, without limitation, Sections 2.1(b) and 2.1(c)), each
Lender, severally and not jointly, will make Revolving Advances to Borrowers in
aggregate amounts outstanding at any time equal to such Lender's Commitment
Percentage of the lesser of (x) an amount equal to (i) the Maximum Revolving
Advance Amount minus (ii) the aggregate amount of outstanding Letter of Credit
Obligations minus (iii) the outstanding principal amount of the Swingline Loans
and (y) an amount equal to the sum of:
(i) up to 85%, subject to the provisions of Section 2.1(c) (the
"Receivables Advance Rate"), of Eligible Receivables, plus
(ii) up to the least of (A) 60%, subject to the provisions of Section
2.1(c), of the lesser of (I) the aggregate cost, calculated on a
first-in-first-out basis, of Eligible Inventory at such time and (II) the
aggregate fair market value of Eligible Inventory at such time and (B) 85%,
subject to the provisions of Section 2.1(c), of the appraised Net Orderly
Liquidation Value of Inventory at such time as determined by appraisers
acceptable to Agent (provided, however, that during the period from February 1
to and including April 30 of each year (which ninety (90) day period may be
changed upon request of the Borrowing Agent and approval by the Required
Lenders), the Advance Rate percentage in clause (A) above shall be up to 65% and
the Advance Rate percentage in clause (B) above shall be up to 90%) (clauses (A)
and (B), collectively, the "Inventory Advance Rate" and, together with the
Receivables Advance Rate, the "Advance Rates"); minus
(iii) the aggregate amount of outstanding Letter of Credit Obligations and
the outstanding principal amount of Swingline Loans, minus
(iv) Reserves.
The amount derived from the sum of (x) Sections 2.1(a)(y)(i) and (ii) minus
(y) Section 2.1(a)(y)(iv) at any time and from time to time shall be referred to
as the "Formula Amount". The Revolving Advances shall be evidenced by one or
more secured promissory notes (each, a "Revolving Credit Note") substantially in
the form attached hereto as Exhibit 2.1(a).
(b) Individual Revolving Advances. Subject to Section 2.1(a), each Lender,
severally and not jointly, will make Revolving Advances to each Business Segment
in aggregate amounts outstanding at any time not greater than such Lender's
Commitment Percentage of such Business Segment's Individual Formula Amount.
(c) Swingline Loans. (i) Agent may convert any request by Borrowing Agent
for a Revolving Advance into a request for a Swingline Loan. The Swingline Loans
shall be Domestic Rate Loans and shall not exceed in the aggregate at any time
outstanding the Maximum Swingline Loan Amount. In the event that on any Business
Day Swingline Lender desires that all or any portion of the outstanding
Swingline Loans should be reduced in whole or in part, Swingline Lender shall
promptly notify Agent to that effect and indicate the portion of the Swingline
Loans to be reduced. Swingline Lender hereby agrees that it shall notify Agent
to reduce the outstanding Swingline Loans to $0 at least once every month. Agent
agrees to promptly transmit to Lenders the information contained in each notice
received by Agent from Swingline Lender and shall concurrently notify Lenders of
each Lender's Commitment Percentage of the obligation to make a Revolving
Advance to repay the Swingline Loan (or portion thereof).
(ii) Each of the Lenders hereby unconditionally and irrevocably agrees to
fund to Agent for the benefit of Swingline Lender, in lawful money of the United
States and in same day funds, not later than 1:00 p.m. (New York time) on the
Settlement Date, such Lender's Commitment Percentage of a Revolving Advance
(which Revolving Advance shall be a Domestic Rate Loan and shall be deemed to be
requested by Borrowing Agent) in the principal amount of such portion of the
Swingline Loans which is required to be paid to Swingline Lender under this
Section 2.1(c) (regardless of whether the conditions precedent thereto set forth
in Article VIII are then satisfied, whether or not Borrowing Agent has provided
a notice of borrowing under Section 2.2 and whether or not any Default or Event
of Default exists or all or any of the Advances have been accelerated, but
subject to the other provisions of this Section 2.1(c)). The proceeds of any
such Revolving Advance shall be immediately paid over to Agent for the benefit
of Swingline Lender for application to the Swingline Loan.
(iii) In the event that an Event of Default shall occur and either (i) such
Event of Default is of the type described in Section 10.7 or (ii) no further
Revolving Advances are being made under this Agreement, so long as any such
Event of Default is continuing, then, each of the Lenders (other than Swingline
Lender) shall be deemed to have irrevocably, unconditionally and immediately
purchased from Swingline Lender such Lender's Commitment Percentage of the
Swingline Loan outstanding as of the date of the occurrence of such Event of
Default. Each Lender shall affect such purchase by making available an amount
equal to its participation on the date of such purchase in Dollars in
immediately available funds to Agent for the benefit of Swingline Lender. In the
event any Lender fails to make available to Swingline Lender when due the amount
of such Lender's participation in the Swingline Loan, Swingline Lender shall be
entitled to recover such amount on demand from such Lender together with
interest at the Federal Funds Rate. Each such purchase by a Lender shall be made
without recourse to Swingline Lender, without representation or warranty of any
kind, and shall be affected and evidenced pursuant to documents reasonably
acceptable to Swingline Lender. The Swingline Loans shall be evidenced by one or
more promissory notes substantially in the form of Exhibit 2.1(c). The
obligations of the Lenders under this Section 2.1(c) shall be absolute,
irrevocable and unconditional, shall be made under all circumstances and shall
not be affected, reduced or impaired for any reason whatsoever.
2.2. Procedure for Borrowing.
(a) Borrowing Agent on behalf of any Borrower may notify Agent prior to
11:00 a.m. (New York time) on a Business Day of the Borrower's request to incur,
on that day, a Revolving Advance hereunder. Any amount required to be paid as
interest hereunder, or as fees or other charges under this Agreement or any
other agreement with Agent, Lenders and/or any Issuer, or with respect to any
other Obligation, which shall become due, shall be deemed a request for a
Revolving Advance as of the date such payment is due, in the amount required to
pay in full such interest, fee, charge or Obligation under this Agreement or any
other agreement with Agent, Lenders and/or any Issuer and such request shall be
irrevocable.
(b) Notwithstanding the provisions of (a) above, in the event any Borrower
desires to obtain a Eurodollar Rate Loan, Borrowing Agent shall give Agent at
least three (3) Business Days' prior written notice, specifying (i) the date of
the proposed borrowing (which shall be a Business Day), (ii) the type of Loan
Advance and the amount on the date of such Loan Advance to be borrowed, which
amount shall be in a minimum amount of $100,000 and in integral multiples of
$100,000 in excess thereof, and (iii) the duration of the first Interest Period
therefor. Interest Periods for Eurodollar Rate Loans shall be for one, two,
three, six or (if available from Agent) nine or twelve months; provided,
however, that until Agent has advised Borrowing Agent that the syndication of
the financing arrangements under this Agreement has been completed, Borrowing
Agent may not request any Interest Period duration other than one month . No
Eurodollar Rate Loan shall be made available to any Borrower during the
continuance of a Default or an Event of Default.
(c) Each Interest Period of a Eurodollar Rate Loan shall commence on the
date such Eurodollar Rate Loan is made and shall end on such date as Borrowing
Agent may elect as set forth in (b)(iii) above provided that the exact length of
each Interest Period shall be determined in accordance with the practice of the
interbank market for offshore Dollar deposits and no Interest Period shall end
after the Termination Date.
(d) Borrowing Agent shall elect the initial Interest Period applicable to a
Eurodollar Rate Loan by its notice of borrowing given to Agent pursuant to
Section 2.2(b) or by its notice of conversion given to Agent pursuant to Section
2.2(e), as the case may be. Borrowing Agent shall elect the duration of each
succeeding Interest Period by giving irrevocable written notice to Agent of such
duration not less than three (3) Business Days prior to the last day of the then
current Interest Period applicable to such Eurodollar Rate Loan. If Agent does
not receive timely notice of the Interest Period elected by Borrowing Agent,
Borrowers shall be deemed to have elected to convert to a Domestic Rate Loan
subject to Section 2.2(e).
(e) Provided that no Event of Default shall have occurred and be
continuing, any Borrower may, (i) on the last Business Day of the then current
Interest Period applicable to any outstanding Eurodollar Rate Loan, continue
such loan as a Eurodollar Rate Loan or convert any such loan into a loan of
another type in the same aggregate principal amount provided that any
continuation or conversion of a Eurodollar Rate Loan shall be made only on the
last Business Day of the then current Interest Period applicable to such
Eurodollar Rate Loan; or (ii) on any Business Day with respect to Domestic Rate
Loans, convert any such loan into a loan of another type in the same aggregate
principal amount. If a Borrower desires to continue or convert a loan, Borrowing
Agent shall give Agent not less than three (3) Business Days' prior written
notice to continue a Eurodollar Rate Loan or convert from a Domestic Rate Loan
to a Eurodollar Rate Loan or one (1) Business Day's prior written notice to
convert from a Eurodollar Rate Loan to a Domestic Rate Loan, specifying the date
of such continuation or conversion, the loans to be continued or converted and
(other than with respect to conversions from a Eurodollar Rate Loan to a
Domestic Rate Loan) the duration of the first (or next, as appropriate) Interest
Period therefor. After giving effect to each such continuation and/or
conversion, there shall not be outstanding more than seven (7) Eurodollar Rate
Loans, in the aggregate.
(f) At its option and upon three (3) Business Days' prior written notice,
any Borrower may prepay the Eurodollar Rate Loans in whole at any time or in
part from time to time, without premium or penalty, but with accrued interest on
the principal being prepaid to the date of such repayment. Such Borrower shall
specify the date of prepayment of Loan Advances which are Eurodollar Rate Loans
and the amount of such prepayment. In the event that any prepayment of a
Eurodollar Rate Loan is required or permitted on a date other than the last
Business Day of the then current Interest Period with respect thereto, each
Borrower and each other Loan Party shall indemnify Agent and Lenders therefor in
accordance with Section 2.2(g).
(g) Each Loan Party shall indemnify Agent and Lenders and hold Agent and
Lenders harmless from and against any and all losses or expenses that Agent and
Lenders may sustain or incur as a consequence of any prepayment, continuation
of, conversion of or any default by the Borrower in the payment of the principal
of or interest on any Eurodollar Rate Loan or failure by the Borrower to
complete a borrowing of, a prepayment of, a continuation of or conversion of or
to a Eurodollar Rate Loan after notice thereof has been given, including, but
not limited to, any interest payable by Agent or Lenders to lenders of funds
obtained by it in order to make or maintain its Eurodollar Rate Loans hereunder.
A certificate as to any additional amounts payable pursuant to the foregoing
sentence submitted by Agent or any Lender to Borrowing Agent shall be conclusive
absent manifest error.
(h) Notwithstanding any other provision hereof, if any applicable law,
treaty, regulation or directive, or any change therein or in the interpretation
or application thereof, shall make it unlawful for any Lender (for purposes of
this Section 2.2(h), the term "Lender" shall include any Lender and the office
or branch where any Lender or any corporation or bank controlling such Lender
makes or maintains any Eurodollar Rate Loans) to make or maintain its Eurodollar
Rate Loans, the obligation of Lenders to make Eurodollar Rate Loans hereunder,
as the case may be, shall forthwith be cancelled and Borrowers shall, if any
affected Eurodollar Rate Loans are then outstanding, promptly upon request from
Agent, either pay all such affected Eurodollar Rate Loans or convert such
affected Eurodollar Rate Loans into loans of another type. If any such payment
or conversion of any Eurodollar Rate Loan is made on a day that is not the last
day of the Interest Period applicable to such Eurodollar Rate Loan, Borrowers
shall pay Agent, upon Agent's request, such amount or amounts as may be
necessary to compensate Lenders for any loss or expense sustained or incurred by
Lenders in respect of such Eurodollar Rate Loan as a result of such payment or
conversion, including (but not limited to) any interest or other amounts payable
by Lenders to lenders of funds obtained by Lenders in order to make or maintain
such Eurodollar Rate Loan. A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by Lenders to Borrowing Agent shall
be conclusive absent manifest error.
2.3. Disbursement of Loan Advance Proceeds.
All Loan Advances shall be disbursed from whichever office or other place
Agent may designate from time to time and, together with any and all other
Obligations of Borrowers to Agent or Lenders, shall be charged to Borrowers'
Account on Agent's books. During the Term, Borrowers may use the Revolving
Advances by borrowing, prepaying and reborrowing, all in accordance with the
terms and conditions hereof. The proceeds of each Loan Advance requested by
Borrowers or deemed to have been requested by Borrowers under Section 2.2(a)
shall, with respect to requested Loan Advances to the extent Lenders make such
Loan Advances, be made available to the applicable Borrower on the day so
requested by way of credit to such Borrower's operating account at such bank as
Borrowing Agent may designate following notification to Agent, in immediately
available federal funds or other immediately available funds or, with respect to
Loan Advances deemed to have been requested by any Borrower, be disbursed to
Agent to be applied to the outstanding Obligations giving rise to such deemed
request.
2.4. Maximum Revolving Advances.
The aggregate balance of Revolving Advances outstanding plus the aggregate
amount of Letter of Credit Obligations plus the aggregate Swingline Loans
outstanding at any time shall not exceed the lesser of (a) Maximum Revolving
Advance Amount and (b) the Formula Amount. Without limiting the foregoing, the
aggregate balance of Revolving Advances outstanding plus the aggregate amount of
Letter of Credit Obligations plus the aggregate Swingline Loans outstanding at
any time shall not exceed the lesser of (A) (x) the amount of "Permitted
Indebtedness" calculated under paragraph (1) of Section 4.09(b) of the
Subordinated Indenture, minus (y) the outstanding amount of indebtedness,
obligations and liabilities owed under the Senior Secured Documentation and (B)
the amount of "Permitted Indebtedness" calculated under paragraph (1) of Section
6.10(b) of the Purchase and Security Agreement, and each request for a Revolving
Advance or Letter of Credit shall constitute a representation and warranty by
Loan Parties of its compliance with the foregoing. The foregoing sentence shall
constitute a limit and restriction enforceable against the Loan Parties, but in
no event shall the foregoing be enforced against Agent and/or any Lender by any
Person in a manner that is adverse to Agent and/or the Lenders.
2.5. Repayment of Loan Advances.
(a) The Revolving Advances shall be due and payable in full on the
Termination Date subject to earlier prepayment as herein provided.
(b) Each Borrower recognizes that the amounts evidenced by checks, notes,
drafts or any other items of payment relating to and/or proceeds of Collateral
may not be collectible by Agent on the date received. In consideration of
Agent's agreement to conditionally credit Borrowers' Account as of the Business
Day on which Agent receives those items of payment, each Borrower agrees that,
in computing the charges under this Agreement, all items of payment shall be
deemed applied by Agent on account of the Obligations on the Business Day of
confirmation to Agent by the Blocked Account bank or Depository Account bank, as
provided for in Section 4.15(h), that such items of payment have been collected
in good funds and finally credited to Agent's account. Agent is not, however,
required to credit Borrowers' Account for the amount of any item of payment
which is unsatisfactory to Agent in the exercise of its good faith judgment and
Agent may charge Borrowers' Account for the amount of any item of payment which
is returned to Agent unpaid.
(c) All payments of principal, interest and other amounts payable
hereunder, or under any of the related agreements shall be made to Agent at the
Payment Office not later than 1:00 p.m. (New York time) on the due date therefor
in lawful money of the United States of America in federal funds or other funds
immediately available to Agent. Agent shall have the right to effectuate payment
on any and all Obligations due and owing hereunder by charging Borrowers'
Account or by making Revolving Advances as provided in Section 2.2.
(d) Borrowers shall pay principal, interest, and all other amounts payable
hereunder, or under any related agreement, without any deduction whatsoever,
including, but not limited to, any deduction for any setoff or counterclaim.
2.6. Repayment of Excess Advances.
The aggregate balance of Loan Advances outstanding at any time in excess of
the maximum amount of Loan Advances permitted hereunder shall be immediately due
and payable without the necessity of any demand, at the Payment Office, whether
or not a Default or Event of Default has occurred.
2.7. Statement of Account.
Agent shall maintain, in accordance with its customary procedures, a loan
account (the "Borrowers' Account") in the name of Borrowers in which shall be
recorded the date and amount of each Advance made by Lenders and the date and
amount of each payment in respect thereof; provided, however, the failure by
Agent to record the date and amount of any Advance shall not adversely affect
Agent or any Lender. Each month, Agent shall send to Borrowing Agent a statement
showing the accounting for the Advances made, payments made or credited in
respect thereof, and other transactions between Lenders and Borrowers, during
such month. The monthly statements shall be deemed correct and binding upon
Borrowers in the absence of manifest error and shall constitute an account
stated between Lenders and Borrower unless Agent receives a written statement of
Borrowers' specific exceptions thereto within thirty (30) days after such
statement is received by Borrowing Agent. The records of Agent with respect to
the loan account shall be conclusive evidence absent manifest error of the
amounts of Advances and other charges thereto and of payments applicable
thereto.
2.8. Letters of Credit.
Subject to the terms and conditions hereof, Agent shall issue or cause the
issuance of Documentary Letters of Credit and Standby Letters of Credit
(collectively, "Letters of Credit") by the Issuer on behalf of any Borrower;
provided, however, that Agent will not be required to issue or cause to be
issued any Letters of Credit to the extent that the face amount of such Letters
of Credit would then cause the sum of (i) the outstanding Revolving Advances and
Swingline Loans plus (ii) outstanding Letters of Credit to exceed the lesser of
(x) the Maximum Revolving Advance Amount or (y) the Formula Amount; provided,
further, however, that Agent will not be required to issue or cause to be issued
any Letters of Credit to with respect to any Business Segment to the extent that
the face amount of such Letters of Credit issued for such Business Segment would
then cause the sum of (i) the outstanding Revolving Advances and Swingline Loans
to such Business Segment plus (ii) the outstanding Letters of Credit issued or
caused to be issued on behalf of such Business Segment to exceed such Business
Segment's Individual Formula Amount (for the purposes of the foregoing, without
giving effect to the deductions in clause (c) of the definition of Individual
Formula Amount). The maximum amount of outstanding Letters of Credit shall not
exceed $15,000,000 in the aggregate at any time. All disbursements or payments
related to Letters of Credit shall be deemed to be Revolving Advances and shall
bear interest at the Revolving Interest Rate for Domestic Rate Loans; Letters of
Credit that have not been drawn upon shall not bear interest.
2.9. Issuance of Letters of Credit.
(a) Borrowing Agent, on behalf of Borrowers, may request Agent to issue or
cause the issuance of a Letter of Credit by delivering to Agent at the Payment
Office, Issuer's standard form of letter of credit application (collectively,
the "Letter of Credit Application") and any draft if applicable, completed to
the satisfaction of Agent; and, such other certificates, documents and other
papers and information as Agent or Issuer may reasonably request. Borrowing
Agent, on behalf of Borrowers, also has the right to give instructions and make
agreements with respect to any application, any applicable letter of credit and
security agreement, any applicable letter of credit reimbursement agreement
and/or any other applicable agreement, any letter of credit and the disposition
of documents, disposition of any unutilized funds, and to arrange the issuance
of any amendment, extension or renewal of any Letter of Credit.
(b) Each Letter of Credit shall, among other things, (i) provide for the
payment of sight drafts or acceptances of issuance drafts when presented for
honor thereunder in accordance with the terms thereof and when accompanied by
the documents described therein and (ii) (a) with respect to Documentary Letters
of Credit, have an expiry date not later than one hundred and eighty (180) days
after such Documentary Letter of Credit's date of issuance or (b) with respect
to Standby Letters of Credit, have an expiry date not later than twelve (12)
months after such Standby Letter of Credit's date of issuance, and (with respect
to clauses (ii) (a) and (ii) (b) above) in no event having an expiration date
later than the Termination Date unless Loan Parties provide at least sixty (60)
days before the Termination Date cash collateral equal to not less than one
hundred five percent (105%) of the face amount thereof to be held by Agent
pursuant to a cash collateral agreement in form and substance satisfactory to
Agent. Each Documentary Letter of Credit shall be subject to the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500, and any amendments or revision thereof adhered to
by the Issuer and, to the extent not inconsistent therewith, the laws of the
State of New York. All Standby Letters of Credit shall be subject to the laws or
rules designated in such Standby Letter of Credit, or if no laws or rules are
designated, the International Standby Practices (ISP98 - International Chamber
of Commerce Publication Number 590) (the "ISP98 Rules") and, as to matters not
governed by the ISP98 Rules, the laws of the State of New York.
(c) Agent shall use its reasonable efforts to notify Lenders of the request
by Borrowing Agent for a Letter of Credit hereunder.
2.10. Requirements For Issuance of Letters of Credit.
(a) In connection with the issuance of any Letter of Credit, Borrowers
shall indemnify, save and hold Agent, each Lender and each Issuer harmless from
any loss, cost, expense or liability, including, without limitation, payments
made by Agent, any Lender or any Issuer and expenses and reasonable attorneys'
fees incurred by Agent, any Lender or any Issuer arising out of, or in
connection with, any Letter of Credit to be issued or created for any Borrower.
Borrowers shall be bound by Agent's or Issuer's regulations and good faith
interpretations of any Letter of Credit issued or created for Borrowers'
Account, although this interpretation may be different from its own; and,
neither Agent, nor any Lender, nor any Issuer nor any of their correspondents
shall be liable for any error, negligence, or mistake, whether of omission or
commission, in following Borrowing Agent's or any Borrower's instructions or
those contained in any Letter of Credit or of any modifications, amendments or
supplements thereto or in issuing or paying any Letter of Credit except for
Agent's, any Lender's, any Issuer's or such correspondents' willful misconduct.
(b) Borrowing Agent shall authorize and direct any Issuer of a Letter of
Credit to name the applicable Borrower as the "Applicant" or "Account Party"
therein, to deliver to Agent all related payment/acceptance advices, to deliver
to Agent all instruments, documents, and other writings and property received by
the Issuer pursuant to the Letter of Credit and to accept and rely upon Agent's
instructions and agreements with respect to all matters arising in connection
with the Letter of Credit or the application therefor.
(c) In connection with all Letters of Credit issued or caused to be issued
by Agent under this Agreement, each Borrower hereby appoints Agent, or its
designee, as its attorney, with full power and authority if an Event of Default
or Default shall have occurred and be continuing (i) to sign and/or endorse such
Borrower's name upon any warehouse or other receipts, letter of credit
applications and acceptances; (ii) to sign such Borrower's name on bills of
lading; (iii) to clear Inventory through Customs in the name of such Borrower or
Agent or Agent's designee, and to sign and deliver to Customs officials powers
of attorney in the name of such Borrower for such purpose; and (iv) to complete
in such Borrower's name or Agent's, or in the name of Agent's designee, any
order, sale or transaction, obtain the necessary documents in connection
therewith, and collect the proceeds thereof. Neither Agent nor its attorneys
will be liable for any acts or omissions nor for any error of judgment or
mistakes of fact or law, except for Agent's or its attorney's gross negligence
or willful misconduct. This power, being coupled with an interest, is
irrevocable as long as any Letters of Credit remain outstanding.
(d) Each Lender shall to the extent of the percentage amount equal to the
product of such Lender's Commitment Percentage times the aggregate amount of all
unreimbursed reimbursement obligations arising from disbursements made or
obligations incurred with respect to the Letters of Credit be deemed to have
irrevocably purchased an undivided participation in (i) each such unreimbursed
reimbursement obligation, (ii) Agent's credit support enhancement provided to
the Issuer of any Letter of Credit and (iii) each Revolving Advance made as a
consequence of the issuance of a Letter of Credit and all disbursements
thereunder, in each case in an amount equal to such Lender's applicable
Commitment Percentage times the outstanding amount of the Letters of Credit and
disbursements thereunder. In the event that at the time a disbursement is made
the unpaid balance of Revolving Advances exceeds or would exceed, with the
making of such disbursement, the amount permitted under Section 2.1(a), and such
disbursement is not reimbursed by Borrowers within two (2) Business Days, Agent
shall promptly notify each Lender and upon Agent's demand each Lender shall pay
to Agent such Lender's proportionate share of such unreimbursed disbursement
together with such Lender's proportionate share of Agent's unreimbursed costs
and expenses relating to such unreimbursed disbursement. Upon receipt by Agent
of a repayment from any Borrower of any amount disbursed by Agent for which
Agent had already been reimbursed by Lenders, Agent shall deliver to each Lender
that Lender's pro rata share of such repayment. Each Lender's participation
commitment shall continue until the last to occur of any of the following
events: (A) Agent ceases to be obligated to issue or cause to be issued Letters
of Credit hereunder; (B) no Letters of Credit issued hereunder remain
outstanding and uncancelled or (C) all Persons (other than the applicable
Borrower) have been fully reimbursed for all payments made under or relating to
Letters of Credit.
2.11. Additional Payments.
Any sums expended by Agent or any Lender due to any Loan Party's failure to
perform or comply with its obligations under this Agreement or any Other
Document including, without limitation, any Loan Party's obligations under
Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1, may be charged to Borrowers'
Account as a Revolving Advance and added to the Obligations.
2.12. Manner of Borrowing and Payment.
(a) Each borrowing of Revolving Advances shall be advanced according to the
applicable Commitment Percentages of Lenders.
(b) Each payment (including each prepayment) by Borrowers on account of the
principal of the Revolving Advances shall be applied to the Revolving Advances
pro rata according to the applicable Commitment Percentages of Lenders. Except
as expressly provided herein, all payments (including prepayments) to be made by
Borrowers on account of principal, interest and fees shall be made without set
off or counterclaim and shall be made to Agent on behalf of the Lenders to the
Payment Office, in each case on or prior to 1:00 p.m. (New York time), in
Dollars and in immediately available funds.
(c) (i) Notwithstanding anything to the contrary contained in Sections
2.12(a) and 2.12(b), commencing with the first Business Day following the
Closing Date, each borrowing of Revolving Advances shall be advanced by Agent
and each payment by any Borrower on account of Revolving Advances shall be
applied first to those Revolving Advances advanced by Agent. On or before 1:00
p.m. (New York time) on each Settlement Date commencing with the first
Settlement Date following the Closing Date, Agent and Lenders shall make certain
payments as follows: (I) if the aggregate amount of new Revolving Advances made
by Agent during the preceding Week (if any) exceeds the aggregate amount of
repayments applied to outstanding Revolving Advances during such preceding Week,
then each Lender shall provide Agent with funds in an amount equal to its
applicable Commitment Percentage of the difference between (w) such Revolving
Advances and (x) such repayments and (II) if the aggregate amount of repayments
applied to outstanding Revolving Advances during such Week exceeds the aggregate
amount of new Revolving Advances made during such Week, then Agent shall provide
each Lender with funds in an amount equal to its applicable Commitment
Percentage of the difference between (y) such repayments and (z) such Revolving
Advances.
(ii) Each Lender shall be entitled to earn interest at the applicable
Revolving Interest Rate on outstanding Loan Advances which it has funded.
(iii) Promptly following each Settlement Date, Agent shall submit to each
Lender a certificate with respect to payments received and Revolving Advances
made during the Week immediately preceding such Settlement Date. Such
certificate of Agent shall be conclusive in the absence of manifest error.
(d) If any Lender or Participant (a "benefited Lender") shall at any time
receive any payment of all or part of its Advances, or interest thereon, or
receive any Collateral in respect thereof (whether voluntarily or involuntarily
or by set-off) in a greater proportion than any such payment to and Collateral
received by any other Lender, if any, in respect of such other Lender's
Advances, or interest thereon, and such greater proportionate payment or receipt
of Collateral is not expressly permitted hereunder, such benefited Lender shall
purchase for cash from the other Lenders a participation in such portion of each
such other Lender's Advances, or shall provide such other Lender with the
benefits of any such Collateral, or the proceeds thereof, as shall be necessary
to cause such benefited Lender to share the excess payment or benefits of such
Collateral or proceeds ratably with each of Lenders; provided, however, that if
all or any portion of such excess payment or benefits is thereafter recovered
from such benefited Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest. Each Lender so purchasing a portion of another Lender's Advances may
exercise all rights of payment (including, without limitation, rights of
set-off) with respect to such portion as fully as if such Lender were the direct
holder of such portion.
(e) Unless Agent shall have been notified by telephone, confirmed in
writing, by any Lender that such Lender will not make the amount which would
constitute its applicable Commitment Percentage of the Revolving Advances
available to Agent, Agent may (but shall not be obligated to) assume that such
Lender shall make such amount available to Agent on the next Settlement Date
and, in reliance upon such assumption, make available to Borrowers a
corresponding amount. Agent will promptly notify Borrowers of its receipt of any
such notice from a Lender. If such amount is made available to Agent on a date
after such next Settlement Date, such Lender shall pay to Agent on demand an
amount equal to the product of (i) the daily average Federal Funds Rate
(computed on the basis of a year of 360 days) during such period as quoted by
Agent, times (ii) such amount, times (iii) the number of days from and including
such Settlement Date to the date on which such amount becomes immediately
available to Agent. A certificate of Agent submitted to any Lender with respect
to any amounts owing under this paragraph (e) shall be conclusive, in the
absence of manifest error. If such amount is not in fact made available to Agent
by such Lender within three (3) Business Days after such Settlement Date, Agent
shall be entitled to recover such an amount, with interest thereon at the rate
per annum then applicable to such Revolving Advances hereunder, on demand from
Borrowers; provided, however, that Agent's right to such recovery shall not
prejudice or otherwise adversely affect Borrowers' rights (if any) against such
Lender.
2.13. Mandatory Prepayments
(a) (i) When any Loan Party sells or otherwise disposes of any Collateral,
other than Inventory in the ordinary course of business (which shall be governed
by the provisions of Section 4.15(h)) or consummates an issuance of equity, Loan
Parties shall repay the Advances in an amount equal to the net proceeds of such
sale or issuance (i.e., gross proceeds less the direct costs of such sales,
dispositions or issuances), such repayments to be made promptly but in no event
more than one (1) Business Day following receipt of such net proceeds, and until
the date of payment, such proceeds shall be held in trust for Agent. The
foregoing shall not be deemed to be implied consent to any such sale or issuance
otherwise prohibited by the terms and conditions hereof. Such repayments shall
be applied (y) first, to the Revolving Advances in such order as Agent may
determine, subject to Borrowers' ability to reborrow Revolving Advances in
accordance with the terms hereof and (z) second, as cash collateral in an amount
of one hundred percent (100%) of outstanding Letters of Credit Obligations
pursuant to arrangements satisfactory to Agent.
(ii) Notwithstanding the foregoing, unless and until an Event of Default
has occurred and is continuing, Loan Parties may sell or otherwise dispose of
Collateral (other than Inventory in the ordinary course of business) not to
exceed (x) $500,000 in the aggregate in any fiscal year plus (y) $250,000 in the
aggregate in any fiscal year with respect to obsolete, worn-out or unnecessary
Equipment in the ordinary course of business, and retain such net proceeds
solely to acquire replacement Collateral without making a mandatory prepayment
hereunder so long as (a) the failure to apply such net proceeds to the
Obligations shall not result in an obligation on the part of the applicable Loan
Party to apply such net proceeds to the Senior Secured Debt, Subordinated Debt
or any other Indebtedness; (b) the fair market value of the acquired Collateral
is equal to or greater than the fair market value of the Collateral which was
sold, (c) the acquired Collateral is purchased by the applicable Loan Party
within forty-five (45) days of the sale of the Collateral, (d) the acquired
Collateral shall be subject to Agent's first priority security interest created
hereunder and (e) until such time as the proceeds are used to acquire such
replacement Collateral, at the Agent's option, either (i) such proceeds shall be
held by Agent as cash collateral for the Obligations pursuant to terms
acceptable to Agent in its sole discretion or (ii) such proceeds shall be
applied as a repayment of Revolving Advances and a reserve against loan
availability under Section 2.1(a) in the amount of such repayment shall be
established. Such cash collateral or loan availability reserve, as the case may
be, shall be released by Agent only in connection with the making of a Revolving
Advance to be used by the Borrowers solely for the purposes of funding the
acquisition of replacement Collateral pursuant to the terms of this Section
2.13; provided, however, that nothing contained herein shall waive or modify any
conditions to the making of Revolving Advances or any other provisions of this
Agreement. If a Loan Party fails to meet the conditions set forth above, the
Loan Parties hereby authorize Agent and Lenders to apply the proceeds held by
Agent as a prepayment of the Advances in the manner set forth above.
(b) Subject to the provisions of Section 4.11, the Agent shall apply the
proceeds of any insurance settlements from casualty losses which are received by
the Agent to the outstanding Advances in such order as Agent may determine,
subject to Borrower's ability to reborrow Revolving Advances in accordance with
the terms hereof.
2.14. Use of Proceeds.
Borrowers shall apply the proceeds of (i) Revolving Advances made on the
Closing Date (x) to repay existing indebtedness owed under the Existing Loan
Documentation; (y) to pay all existing Indebtedness owed to Trivest (including
accrued interest thereon), swap breakage fees, financial advisor fees and
accrued and unpaid management fees owing to Trivest and (z) to pay fees and
expenses relating to this transaction and (ii) Revolving Advances made on and
after the Closing Date to provide for its working capital needs.
2.15. Defaulting Lender.
(a) Notwithstanding anything to the contrary contained herein, in the event
any Lender (x) has refused (which refusal constitutes a breach by such Lender of
its obligations under this Agreement) to make available its portion of any Loan
Advance or (y) notifies either Agent or Borrowing Agent that it does not intend
to make available its portion of any Loan Advance (if the actual refusal would
constitute a breach by such Lender of its obligations under this Agreement)
(each, a "Lender Default"), all rights and obligations hereunder of such Lender
(a "Defaulting Lender") as to which a Lender Default is in effect and of the
other parties hereto shall be modified to the extent of the express provisions
of this Section 2.15 while such Lender Default remains in effect.
(b) Loan Advances shall be incurred pro rata from Lenders (the
"Non-Defaulting Lenders") which are not Defaulting Lenders based on their
respective Commitment Percentages, and no Commitment Percentage of any Lender or
any pro rata share of any Loan Advances required to be advanced by any Lender
shall be increased as a result of such Lender Default. Amounts received in
respect of principal of any type of Loan Advances shall be applied to reduce the
applicable Loan Advances of each Lender pro rata based on the aggregate of the
outstanding Loan Advances of that type of all Lenders at the time of such
application; provided, that, such amount shall not be applied to any Loan
Advances of a Defaulting Lender at any time when, and to the extent that, the
aggregate amount of Loan Advances of any Non-Defaulting Lender exceeds such
Non-Defaulting Lender's Commitment Percentage of all Loan Advances then
outstanding.
(c) A Defaulting Lender shall not be entitled to give instructions to Agent
or to approve, disapprove, consent to or vote on any matters relating to this
Agreement and the Other Documents. All amendments, waivers and other
modifications of this Agreement and the Other Documents may be made without
regard to a Defaulting Lender and, for purposes of the definition of "Required
Lenders", a Defaulting Lender shall be deemed not to be a Lender and not to have
either Advances outstanding or a Commitment Percentage.
(d) Other than as expressly set forth in this Section 2.15, the rights and
obligations of a Defaulting Lender (including the obligation to indemnify Agent)
and the other parties hereto shall remain unchanged. Nothing in this Section
2.15 shall be deemed to release any Defaulting Lender from its obligations under
this Agreement and the Other Documents, shall alter such obligations, shall
operate as a waiver of any default by such Defaulting Lender hereunder, or shall
prejudice any rights which any Borrower, Agent or any Lender may have against
any Defaulting Lender as a result of any default by such Defaulting Lender
hereunder.
(e) In the event a Defaulting Lender retroactively cures to the
satisfaction of Agent the breach which caused a Lender to become a Defaulting
Lender, such Defaulting Lender shall no longer be a Defaulting Lender and shall
be treated as a Lender under this Agreement.
III. INTEREST AND FEES.
3.1. Interest.
Interest on Loan Advances shall be payable to Agent for the benefit of
Lenders in arrears on the first day of each month with respect to Domestic Rate
Loans and, with respect to Eurodollar Rate Loans, at the end of each Interest
Period or, for Eurodollar Rate Loans with an Interest Period in excess of three
months, at the earlier of (a) each three months on the anniversary date of the
commencement of such Eurodollar Rate Loan or (b) the end of the Interest Period.
Interest charges shall be computed on the actual principal amount of Loan
Advances outstanding during the month (the "Monthly Advances") at a rate per
annum equal to the applicable Revolving Interest Rate. Whenever, subsequent to
the date of this Agreement, the Base Rate is increased or decreased, the
Revolving Interest Rate for Domestic Rate Loans shall be similarly changed
without notice or demand of any kind by an amount equal to the amount of such
change in the Base Rate during the time such change or changes remain in effect.
Upon and after the occurrence of an Event of Default, and during the
continuation thereof, at the option of Agent, (i) the Obligations other than
Eurodollar Rate Loans shall bear interest at the Revolving Interest Rate for
Domestic Loans plus two percent (2.0%) per annum or (ii) Eurodollar Rate Loans
shall bear interest at the Revolving Interest Rate for Eurodollar Rate Loans
plus two percent (2.0%) per annum (as applicable, the "Default Rate").
3.2. Letter of Credit Fees; Cash Collateral.
(a) Borrowers shall pay (x) to Agent, for the benefit of Lenders, fees for
each Letter of Credit for the period from and excluding the date of issuance of
same to and including the date of expiration or termination, equal to the
average daily face amount of each outstanding Letter of Credit multiplied by (i)
a per annum rate equal to the Eurodollar Rate Loan Applicable Margin at the time
of issuance with respect to Standby Letters of Credit and (ii) a per annum rate
equal to the Eurodollar Rate Loan Applicable Margin at the time of issuance
minus one half of one percent (0.50%) with respect to Documentary Letters of
Credit, such fees to be calculated on the basis of a 360-day year for the actual
number of days elapsed and to be payable monthly in arrears on the first day of
each month and on the last day of the Term and (y) to Agent for the benefit of
the Issuer, any and all fees and expenses as agreed upon by the Issuer and the
Borrowing Agent in connection with any Letter of Credit, including, without
limitation, in connection with the opening, amendment or renewal of any such
Letter of Credit and shall reimburse Agent for any and all fees and expenses, if
any, paid by Agent to the Issuer (all of the foregoing fees, the "Letter of
Credit Fees"). All such charges shall be deemed earned in full on the date when
and to the extent the same are due and payable hereunder and shall not be
subject to rebate or proration upon the termination of this Agreement for any
reason. Any such charge in effect at the time of a particular transaction shall
be the charge for that transaction, notwithstanding any subsequent change in the
Issuer's prevailing charges for that type of transaction. Upon and after the
occurrence of an Event of Default, and during the continuation thereof, the
Agent may, at its option, increase the Letter of Credit Fees by two percent
(2.0%) per annum. All Letter of Credit Fees payable hereunder shall be deemed
earned in full on the date when the same are due and payable hereunder and shall
not be subject to rebate or proration upon the termination of this Agreement for
any reason.
(b) Upon the occurrence and during the continuance of an Event of Default,
Borrowers will cause cash to be deposited and maintained in an account with
Agent, as cash collateral, in an amount equal to one hundred and five percent
(105%) of the outstanding Letters of Credit, and each Borrower hereby
irrevocably authorizes Agent, in its discretion, on such Borrower's behalf and
in such Borrower's name, to open such an account and to make and maintain
deposits therein, or in an account opened by such Borrower, in the amounts
required to be made by such Borrower, out of the proceeds of Receivables or
other Collateral or out of any other funds of such Borrower coming into any
Lender's possession at any time. No Borrower may withdraw amounts credited to
any such account except upon (i) cure of all Events of Default then existing and
the absence of any Default or Event of Default after giving effect thereto; (ii)
payment and performance in full of all Obligations and termination of this
Agreement or (iii) expiration of each Letter of Credit and return thereof to the
Issuer, but only to the extent of such expired and returned Letters of Credit.
3.3. Fee Letter.
Borrower shall pay to Agent the fees referenced in the Fee Letter (the "Fee
Letter") dated on or about the Closing Date between Agent and BJI as and when
requested thereunder.
3.4. Facility Fee.
If, for any month during the Term, the average daily unpaid balance of the
Advances for each day of such month does not equal the Maximum Revolving Advance
Amount, then Borrowers shall pay to Agent for the ratable benefit of Lenders a
fee at a rate equal to three-eighths of one percent (3/8%) per annum on the
amount by which the Maximum Revolving Advance Amount exceeds such average daily
unpaid balance. Such fee shall be payable to Agent in arrears on the first day
of each month.
3.5. Computation of Interest and Fees.
Interest and fees hereunder shall be computed on the basis of a year of 360
days and for the actual number of days elapsed. If any payment to be made
hereunder becomes due and payable on a day other than a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and interest
thereon shall be payable at the Revolving Interest Rate for Domestic Rate Loans
during such extension.
3.6. Maximum Charges.
In no event whatsoever shall interest and other charges charged hereunder
exceed the highest rate permissible under law. In the event interest and other
charges as computed hereunder would otherwise exceed the highest rate permitted
under law, such excess amount shall be first applied to any unpaid principal
balance owed by Borrowers, and if the then remaining excess amount is greater
than the previously unpaid principal balance, Lenders shall promptly refund such
excess amount to Borrowers and the provisions hereof shall be deemed amended to
provide for such permissible rate.
3.7. Increased Costs.
In the event that any applicable law, treaty or governmental regulation, or
any change therein or in the interpretation or application thereof, or
compliance by any Lender (for purposes of this Section 3.7, the term "Lender"
shall include Agent or any Lender and any corporation or bank controlling Agent
or any Lender) and the office or branch where Agent or any Lender (as so
defined) makes or maintains any Eurodollar Rate Loans with any request or
directive (whether or not having the force of law) from any central bank or
other financial, monetary or other authority, shall:
(a) subject Agent or any Lender to any tax of any kind whatsoever with
respect to this Agreement or any Other Document or change the basis of taxation
of payments to Agent or any Lender of principal, fees, interest or any other
amount payable hereunder or under any Other Documents (except for changes in the
rate of tax on the overall net income of Agent or any Lender by the jurisdiction
in which it maintains its principal office);
(b) impose, modify or hold applicable any reserve, special deposit,
assessment or similar requirement against assets held by, or deposits in or for
the account of, advances or loans by, or other credit extended by, any office of
Agent or any Lender, including (without limitation) pursuant to Regulation D of
the Board of Governors of the Federal Reserve System; or
(c) impose on Agent or any Lender or the London interbank Eurodollar market
any other condition with respect to this Agreement or any Other Document;
and the result of any of the foregoing is to increase the cost to Agent or
any Lender of making, renewing or maintaining its Advances hereunder by an
amount that Agent or such Lender deems to be material or to reduce the amount of
any payment (whether of principal, interest or otherwise) in respect of any of
the Advances by an amount that Agent or such Lender deems to be material, then,
in any case Borrowers shall promptly pay Agent or such Lender, upon its demand,
such additional amount as will compensate Agent or such Lender for such
additional cost or such reduction, as the case may be, provided that the
foregoing shall not apply to increased costs which are reflected in the Adjusted
LIBO Rate. Agent or such Lender shall certify the amount of such additional cost
or reduced amount to Borrowers, and such certification shall be conclusive
absent manifest error.
3.8. Basis For Determining Interest Rate Inadequate.
In the event that Agent or any Lender shall have determined that:
(a) reasonable means do not exist for ascertaining the Adjusted LIBO Rate
for any Interest Period; or
(b) Dollar deposits in the relevant amount and for the relevant maturity
are not available in the London interbank Eurodollar market, with respect to an
outstanding Eurodollar Rate Loan, a proposed Eurodollar Rate Loan, or a proposed
conversion of a Domestic Rate Loan into a Eurodollar Rate Loan, then Agent shall
give Borrowing Agent prompt written, telephonic or telegraphic notice of such
determination. If such notice is given, (i) any such requested Eurodollar Rate
Loan shall be made as a Domestic Rate Loan, unless Borrowing Agent shall notify
Agent no later than 10:00 a.m. (New York time) two (2) Business Days prior to
the date of such proposed borrowing, that its request for such borrowing shall
be cancelled or made as an unaffected type of Eurodollar Rate Loan, (ii) any
Domestic Rate Loan or Eurodollar Rate Loan which was to have been converted to
or continued as an affected type of Eurodollar Rate Loan shall be continued as
or converted into a Domestic Rate Loan, or, if Borrower shall notify Agent, no
later than 10:00 a.m. (New York time) two (2) Business Days prior to the
proposed conversion or continuation, shall be maintained as an unaffected type
of Eurodollar Rate Loan, and (iii) any outstanding affected Eurodollar Rate
Loans shall be converted into a Domestic Rate Loan, or, if Borrowing Agent shall
notify Agent, no later than 10:00 a.m. (New York time) two (2) Business Days
prior to the last Business Day of the then current Interest Period applicable to
such affected Eurodollar Rate Loan, shall be converted into an unaffected type
of Eurodollar Rate Loan, on the last Business Day of the then current Interest
Period for such affected Eurodollar Rate Loans. Until such notice has been
withdrawn, Lenders shall have no obligation to make an affected type of
Eurodollar Rate Loan or maintain outstanding affected Eurodollar Rate Loans and
no Borrower shall have the right to convert a Domestic Rate Loan or an
unaffected type of Eurodollar Rate Loan into an affected type of Eurodollar Rate
Loan.
3.9. Capital Adequacy.
(a) In the event that Agent or any Lender shall have determined that any
applicable law, rule, regulation or guideline regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Agent or any Lender
(for purposes of this Section 3.9, the term "Lender" shall include Agent or any
Lender and any corporation or bank controlling Agent or any Lender) and the
office or branch where Agent or any Lender (as so defined) makes or maintains
any Eurodollar Rate Loans with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on Agent's or any Lender's capital as a consequence of its obligations
hereunder to a level below that which Agent or such Lender could have achieved
but for such adoption, change or compliance (taking into consideration Agent's
and each Lender's policies with respect to capital adequacy) by an amount deemed
by Agent or any Lender to be material, then, from time to time, Borrowers shall
pay upon demand to Agent or such Lender such additional amount or amounts as
will compensate Agent or such Lender for such reduction. In determining such
amount or amounts, Agent or such Lender may use any reasonable averaging or
attribution methods. The protection of this Section 3.9 shall be available to
Agent and each Lender regardless of any possible contention of invalidity or
inapplicability with respect to the applicable law, regulation or condition.
(b) A certificate of Agent or such Lender setting forth such amount or
amounts as shall be necessary to compensate Agent or such Lender with respect to
Section 3.9(a) when delivered to Borrowers shall be conclusive absent manifest
error.
3.10. Taxes.
(a) Any and all payments by the Borrowers to each Lender or the Agent under
this Agreement and any Other Document shall be made free and clear of, and
without deduction or withholding for any Taxes. In addition, each Borrower shall
pay all Other Taxes.
(b) Each Borrower agrees to indemnify and hold harmless each Lender and the
Agent for the full amount of Taxes or Other Taxes (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this Section) paid by
any Lender or the Agent and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Payment under this indemnification shall be made within 30 days after the date
such Lender or the Agent makes written demand therefor.
(c) If any Borrower shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, then:
(i) the sum payable shall be increased as necessary so that after making
all required deductions and withholdings (including deductions and withholdings
applicable to additional sums payable under this Section) such Lender or the
Agent, as the case may be, receives an amount equal to the sum it would have
received had no such deductions or withholdings been made;
(ii) such Borrower shall make such deductions and withholdings;
(iii) such Borrower shall pay the full amount deducted or withheld to the
relevant taxing authority or other authority in accordance with applicable law;
and
(iv) such Borrower shall also pay to each Lender or the Agent for the
account of such Lender, at the time interest is paid, all additional amounts
which the respective Lender specifies as necessary to preserve the after-tax
yield such Lender would have received if such Taxes or Other Taxes had not been
imposed.
(d) At the Agent's request, within 30 days after the date of any payment by
any Borrower of Taxes or Other Taxes, such Borrower or Borrowing Agent on behalf
of such Borrower shall furnish the Agent the original or a certified copy of a
receipt evidencing payment thereof, or other evidence of payment satisfactory to
the Agent.
(e) If any Borrower is required to pay additional amounts to any Lender or
the Agent pursuant to subsection (c) of this Section, then such Lender shall use
reasonable efforts (consistent with legal and regulatory restrictions) to change
the jurisdiction of its lending office so as to eliminate any such additional
payment by such Borrower which may thereafter accrue, if such change in the
judgment of such Lender is not otherwise disadvantageous to such Lender.
IV. COLLATERAL: GENERAL TERMS.
4.1. Security Interest in the Collateral.
To secure the prompt payment and performance to Agent, each Issuer and each
Lender of the Obligations, each Loan Party hereby assigns, pledges and grants to
Agent for the ratable benefit of Agent, each Issuer and each Lender a continuing
security interest in and to all of its Collateral, whether now owned or existing
or hereafter acquired or arising and wheresoever located. Each Loan Party shall
xxxx its books and records as may be necessary or appropriate to evidence,
protect and perfect Agent's security interest and shall cause its financial
statements to reflect such security interest.
4.2. Perfection of Security Interest.
(a) Each Loan Party shall take all action that may be necessary or
desirable, or that Agent may request, so as at all times to maintain the
validity, perfection, enforceability and priority of Agent's security interest
in the Collateral or to enable Agent to protect, exercise or enforce its rights
hereunder and in the Collateral, including, but not limited to, (i) immediately
discharging all Liens other than Permitted Encumbrances, (ii) obtaining
landlords' or mortgagees' lien waivers, (iii) delivering to Agent, endorsed or
accompanied by such instruments of assignment as Agent may specify, and stamping
or marking, in such manner as Agent may specify, any and all chattel paper,
instruments, letters of credits and advices thereof and documents evidencing or
forming a part of the Collateral, (iv) entering into warehousing, lockbox,
bailee and other custodial arrangements satisfactory to Agent, and (v) executing
and delivering financing statements, instruments of pledge, mortgages, notices
and assignments, in each case in form and substance satisfactory to Agent,
relating to the creation, validity, perfection, maintenance or continuation of
Agent's security interest in the Collateral (whether now existing or hereafter
created or acquired) under the UCC or other applicable law.
(b) The Agent may at any time and from time to time file, without the
signature of any Loan Party in accordance with Section 9-509 of the UCC,
financing statements, continuation statements and amendments thereto that
describe the Collateral as "all assets" of the applicable Loan Party and which
contain any other information required by the UCC for the sufficiency or filing
office acceptance of any financing statements, continuation statements or
amendments. Each Loan Party agrees to furnish any such information to Agent
promptly upon request.
(c) Each Loan Party shall, at any time and from time to time, take such
steps as Agent may reasonably request (i) to obtain an acknowledgment, in form
and substance reasonably satisfactory to Agent, of any bailee having possession
of any of the Collateral, stating that the bailee holds such Collateral for
Agent, (ii) to obtain "control" of any letter-of-credit rights, deposit
accounts, securities accounts, commodities accounts or electronic chattel paper
(as such terms are defined in the UCC with corresponding provisions thereof
defining what constitutes "control" for such items of Collateral), with any
agreements establishing control to be in form and substance reasonably
satisfactory to Agent, and (iii) otherwise to insure the continued perfection
and priority of Agent's security interest in any of the Collateral for the
benefit of the Lenders and of its rights therein. If any Loan Party shall at any
time, acquire a "commercial tort claim" (as such term is defined in the UCC) in
excess of $500,000, such Loan Party shall promptly notify Agent thereof in
writing, therein providing a reasonable description and summary thereof, and
upon delivery thereof to Agent, such Loan Party shall be deemed to thereby grant
to Agent for the benefit of the Lenders (and each Loan Party hereby grants to
Agent, for the benefit of each Lender) a security interest and lien in and to
such commercial tort claim and all proceeds thereof, all upon the terms of and
governed by this Agreement; provided, however, that Loan Parties shall not be
required to notify Agent with respect to commercial tort claims in existence on
the Closing Date of less than $1,000,000 until thirty (30) days after the
Closing Date.
(d) Each Loan Party hereby confirms and ratifies all UCC financing
statements filed by Agent with respect to such Loan Party on or prior to the
date of this Agreement.
(e) All reasonable charges, expenses and fees Agent may incur in doing any
of the foregoing, and any local taxes relating thereto, shall be charged to
Borrowers' Account as a Revolving Advance and added to the Obligations, or, at
Agent's option, shall be paid to Agent for the ratable benefit of Lenders
immediately upon demand.
(f) In the event of a conflict between this Agreement and the Intercreditor
Agreement referenced in clause (i) of the definition of Intercreditor Agreement
set forth herein, the terms of the Intercreditor Agreement shall control as
between the Agent and the Lenders, on the one hand, and the Senior Secured Agent
and the lenders under the Senior Secured Documentation, on the other hand;
provided, however, that the foregoing shall not create rights in or be
enforceable by any Person other than the Agent, the Lenders, the Senior Secured
Agent and the lenders under the Senior Secured Documentation.
4.3. Disposition of Collateral.
Each Loan Party will safeguard and protect all Collateral for Agent's
general account and make no disposition thereof whether by sale, lease or
otherwise except (i) the sale of Inventory in the ordinary course of business;
and (ii) the sale of assets as expressly permitted under Section 2.13 (a)(ii).
4.4. Preservation of Collateral.
Following the occurrence and during the continuance of a Default or an
Event of Default, in addition to the rights and remedies set forth in Section
11.1, Agent: (a) may at any time take such steps as Agent deems necessary to
protect Agent's interest in and to preserve the Collateral, including the hiring
of such security guards or the placing of other security protection measures as
Agent may deem appropriate; (b) may employ and maintain at any Loan Party's
premises a custodian who shall have full authority to do all acts necessary to
protect Agent's interests in the Collateral; (c) may lease warehouse facilities
to which Agent may move all or part of the Collateral; (d) may use any Loan
Party's owned or leased lifts, hoists, trucks and other facilities or equipment
for handling or removing the Collateral; and (e) shall have, and is hereby
granted, a right of ingress and egress to the places where the Collateral is
located, and may proceed over and through any Loan Party's owned or leased
property. Following the occurrence and during the continuance of a Default or an
Event of Default, each Loan Party shall cooperate fully with all of Agent's
efforts to preserve the Collateral and will take such actions to preserve the
Collateral as Agent may direct. Following the occurrence and during the
continuance of a Default or an Event of Default, all of Agent's expenses of
preserving the Collateral, including any expenses relating to the bonding of a
custodian, shall be charged to Borrowers' Account as a Revolving Advance and
added to the Obligations.
4.5. Ownership of Collateral.
With respect to the Collateral, at the time the Collateral becomes subject
to Agent's security interest: (a)~each Loan Party shall be the sole owner of and
fully authorized and able to sell, transfer, pledge and/or grant a first
priority security interest in each and every item of its respective Collateral
to Agent; and, except for Permitted Encumbrances the Collateral shall be free
and clear of all Liens and encumbrances whatsoever; (b) each document and
agreement executed by each Loan Party or delivered to Agent or any Lender in
connection with this Agreement shall be true and correct in all respects;
(c)~all signatures and endorsements of each Loan Party that appear on such
documents and agreements shall be genuine and each Loan Party shall have full
capacity to execute same; and (d)~each Loan Party's Equipment and Inventory
shall be located as set forth on Schedule~4.5 or (to the extent that a Default
or Event of Default would not result therefrom) at such other location within
the continental United States as Borrowing Agent shall have given Agent fifteen
(15) days prior written notice, and shall not be removed from such location(s)
(but can be moved to and from such locations) without the prior written consent
of Agent except with respect to the sale of Inventory in the ordinary course of
business and Equipment to the extent permitted in Section 4.3.
4.6. Defense of Agent's and Lenders' Interests.
Until (a) payment and performance in full of all of the Obligations and (b)
the irrevocable termination of this Agreement, Agent's interests in the
Collateral shall continue in full force and effect. During such period no Loan
Party shall, without Agent's prior written consent, pledge, sell (except
Inventory in the ordinary course of business and Equipment to the extent
permitted in Section 4.3), assign, transfer, create or suffer to exist a Lien
upon or encumber or allow or suffer to be encumbered in any way except for
Permitted Encumbrances, any part of the Collateral. Each Loan Party shall defend
Agent's interests in the Collateral against any and all Persons whatsoever,
other than with respect to Permitted Encumbrances. At any time following and
during the continuance of a Default or Event of Default, Agent shall have the
right to take possession of the indicia of the Collateral and the Collateral in
whatever physical form contained, including without limitation: labels,
stationery, documents, instruments and advertising materials. If Agent exercises
this right to take possession of the Collateral, Loan Parties shall, upon
demand, assemble it in the best manner possible and make it available to Agent
at a place reasonably convenient to Agent. In addition, with respect to all
Collateral, Agent and Lenders shall be entitled to all of the rights and
remedies set forth herein and further provided by the UCC or other applicable
law. At any time following and during the continuance of a Default or Event of
Default, each Loan Party shall, and Agent may, at its option, instruct all
suppliers, carriers, forwarders, warehouses or others receiving or holding cash,
checks, Inventory, documents or instruments in which Agent holds a security
interest to deliver same to Agent and/or subject to Agent's order and if they
shall come into any Loan Party's possession, they, and each of them, shall be
held by such Loan Party in trust as Agent's trustee, and such Loan Party will
immediately deliver them to Agent in their original form together with any
necessary endorsement.
4.7. Books and Records.
Each Loan Party shall (a) keep proper books of record and account in which
full, true and correct entries will be made of all dealings or transactions of
or in relation to its business and affairs; (b) set up on its books accruals
with respect to all taxes, assessments, charges, levies and claims; and (c) on a
reasonably current basis set up on its books, from its earnings, allowances
against doubtful Receivables, advances and investments and all other proper
accruals (including without limitation by reason of enumeration, accruals for
premiums, if any, due on required payments and accruals for depreciation,
obsolescence, or amortization of properties), which should be set aside from
such earnings in connection with its business. All determinations pursuant to
this Section 4.7 shall be made in accordance with, or as required by, GAAP
consistently applied in the opinion of the Accountants.
4.8. Financial Disclosure.
Each Loan Party hereby irrevocably authorizes and directs all accountants
and auditors employed by such Loan Party at any time during the Term to exhibit
and deliver to Agent and each Lender copies of any of the Loan Party's financial
statements, trial balances or other accounting records of any sort in the
accountant's or auditor's possession, and to disclose to Agent and each Lender
any information such accountants may have concerning such Loan Party's financial
status and business operations. Each Loan Party hereby authorizes all federal,
state and municipal authorities to furnish to Agent and each Lender copies of
reports or examinations relating to such Loan Party, whether made by such Loan
Party or otherwise; however, Agent and each Lender will attempt to obtain such
information or materials directly from such Loan Party prior to obtaining such
information or materials from such accountants or such authorities.
4.9. Compliance with Laws.
Each Loan Party shall comply in all material respects with all acts, rules,
regulations and orders of any legislative, administrative or judicial body or
official applicable to its respective Collateral or any part thereof or to the
operation of such Loan Party's business, the non-compliance with which could
reasonably be likely to have a Material Adverse Effect. The assets of Loan
Parties at all times shall be maintained in accordance with the requirements of
all insurance carriers which provide insurance with respect to the assets of
Loan Parties so that such insurance shall remain in full force and effect.
4.10. Inspection of Premises.
At all reasonable times Agent and each Lender shall have full access to and
the right to audit, check, inspect and make abstracts and copies from each Loan
Party's books, records, audits, correspondence and all other papers relating to
the Collateral and the operation of each Loan Party's business. Agent, any
Lender and their agents may enter upon any of Loan Party's premises at any time
during business hours and at any other reasonable time, and from time to time,
for the purpose of inspecting the Collateral and any and all records pertaining
thereto and the operation of such Loan Party's business.
4.11. Insurance.
(a) Each Loan Party shall bear the full risk of any loss of any nature
whatsoever with respect to the Collateral. At each Loan Party's own cost and
expense, in such amounts as is customary in the case of companies engaged in
business similar to such Loan Party's with carriers reasonably acceptable to
Agent, each Loan Party shall (a) keep all its insurable properties and
properties in which each Loan Party has an interest insured against the hazards
of fire, flood, sprinkler leakage, those hazards covered by extended coverage
insurance and such other hazards, and for such amounts, as is customary in the
case of companies engaged in businesses similar to such Loan Party's including,
without limitation, business interruption insurance; (b) maintain a bond in such
amounts as is customary in the case of companies engaged in businesses similar
to such Loan Party insuring against larceny, embezzlement or other criminal
misappropriation of insured's officers and employees who may either singly or
jointly with others at any time have access to the assets or funds of such Loan
Party either directly or through authority to draw upon such funds or to direct
generally the disposition of such assets; (c) maintain public and product
liability insurance against claims for personal injury, death or property damage
suffered by others in such amounts as is customary in the case of companies
engaged in businesses similar to such Loan Party's; (d) maintain all such
worker's compensation or similar insurance as may be required under the laws of
any state or jurisdiction in which Loan Party is engaged in business; and (e)
furnish Agent with (i) copies of all policies and evidence of renewal thereof at
least thirty (30) days prior to the applicable expiration date, and (ii)
appropriate loss payable endorsements in form and substance satisfactory to
Agent, naming Agent as an additional insured and loss payee as its interests may
appear with respect to all insurance coverage referred to in clauses (a) and (c)
above, and providing (A) that all proceeds thereunder shall be payable to Agent,
(B) no such insurance shall be affected by any act or neglect of the insured or
owner of the property described in such policy, and (C) that such policy and
loss payable clauses may not be cancelled, amended or terminated unless at least
thirty (30) days' prior written notice is given to Agent. In the event of any
loss thereunder, the carriers named therein hereby are directed by Agent and the
applicable Loan Party to make payment for such loss to Agent and not to such
Loan Party and Agent jointly. If any insurance losses are paid by check, draft
or other instrument payable to any Loan Party and Agent jointly, Agent may
endorse such Loan Party's name thereon and do such other things as Agent may
deem advisable to reduce the same to cash. Agent is hereby authorized to adjust
and compromise claims under insurance coverage referred to in clauses (a) and
(c) above. All loss recoveries received by Agent upon any such insurance may be
applied to the Obligations, in such order as Agent in its sole discretion shall
determine. Any surplus shall be paid by Agent to Loan Parties or applied as may
be otherwise required by law.
(b) Anything in Section 4.11(a) to the contrary notwithstanding, and
provided that no Default or Event of Default shall have occurred and be
continuing, Agent shall remit to Loan Parties insurance proceeds received by
Agent during any calendar year under insurance policies procured and maintained
by Loan Parties which insure Loan Parties' insurable properties to the extent
such insurance proceeds do not exceed $250,000 in the aggregate during such
calendar year or $100,000 per occurrence. Notwithstanding the foregoing, Agent
shall not be obligated to remit the insurance proceeds to Loan Parties (x) if
the failure to apply such net proceeds to the Obligations shall result in an
obligation on the part of the applicable Loan Party to apply such net proceeds
to the Senior Secured Debt, Subordinated Debt or any other Indebtedness and (y)
unless Loan Parties shall provide Agent with evidence reasonably satisfactory to
Agent that the insurance proceeds will be used by Loan Parties within ninety
(90) days of such Loan Party's receipt of such insurance proceeds to repair,
replace or restore the insured property which was the subject of the insurable
loss, and if Agent does not remit such proceeds, then such proceeds shall be
applied to the Obligations in such order as Agent shall determine.
4.12. Failure to Pay Insurance.
If any Loan Party fails to obtain insurance as hereinabove provided, or to
keep the same in force, Agent, if Agent so elects, may obtain such insurance and
pay the premium therefor for Borrowers' Account, and charge Borrowers' Account
therefor and such expenses so paid shall be part of the Obligations.
4.13. Payment of Taxes.
Each Loan Party will pay, when due, all taxes, assessments and other
Charges lawfully levied or assessed upon such Loan Party or any of the
Collateral including, without limitation, real and personal property taxes,
assessments and charges and all franchise, income, employment, social security
benefits, withholding, and sales taxes; provided, however, that Loan Party shall
not be required to pay any taxes, assessments or Charges to the extent that they
are less than $250,000 in the aggregate for all Loan Parties or to the extent
that that any Loan Party has contested or disputed those taxes, assessments or
Charges in good faith, by expeditious protest, administrative or judicial appeal
or similar proceeding provided that any related tax Lien is stayed and
sufficient reserves are established to the reasonable satisfaction of Agent to
protect Agent's security interest in or Lien on the Collateral. If any tax by
any governmental authority is or may be imposed on or as a result of any
transaction between any Loan Party and Agent or any Lender which Agent or any
Lender may be required to withhold or pay or if any taxes, assessments, or other
Charges remain unpaid after the date fixed for their payment, or if any claim
shall be made which, in Agent's or any Lender's opinion, may possibly create a
valid Lien on the Collateral, Agent may without notice to Loan Parties pay the
taxes, assessments or other Charges and each Loan Party hereby indemnifies and
holds Agent and each Lender harmless in respect thereof. Agent will not pay any
taxes, assessments or Charges to the extent that any Loan Party has contested or
disputed those taxes, assessments or Charges in good faith, by expeditious
protest, administrative or judicial appeal or similar proceeding provided that
any related tax Lien is stayed and sufficient reserves are established to the
reasonable satisfaction of Agent to protect Agent's security interest in or Lien
on the Collateral. The amount of any payment by Agent under this Section 4.13
shall be charged to Borrowers' Account as a Revolving Advance and added to the
Obligations and, until Loan Parties shall furnish Agent with an indemnity
therefor (or supply Agent with evidence satisfactory to Agent that due provision
for the payment thereof has been made), Agent may hold without interest any
balance standing to Loan Parties' credit and Agent shall retain its security
interest in any and all Collateral held by Agent.
4.14. Payment of Leasehold Obligations.
Each Loan Party shall at all times pay, when and as due, its rental
obligations under all leases under which it is a tenant, and shall otherwise
comply, in all material respects, with all other terms of such leases and keep
them in full force and effect and, at Agent's request will provide evidence of
having done so.
4.15. Receivables.
(a) Nature of Receivables. Each of the Receivables shall be a bona fide and
valid account representing a bona fide indebtedness incurred by the Customer
therein named, for a fixed sum as set forth in the invoice relating thereto
(provided immaterial or unintentional invoice errors shall not be deemed to be a
breach hereof) with respect to an absolute sale or lease and delivery of goods
upon stated terms of a Loan Party, or work, labor or services theretofore
rendered by a Loan Party as of the date each Receivable is created. Same shall
be due and owing in accordance with the applicable Loan Party's ordinary course
of business terms of sale without dispute, setoff or counterclaim except as may
be stated on the accounts receivable schedules delivered by Loan Parties to
Agent.
(b) Solvency of Customers. Each Customer, to Loan Party's knowledge, as of
the date each Receivable is created, is solvent and able to pay all Receivables
on which the Customer is obligated in full when due or with respect to such
Customers of any Loan Party who are not solvent such Loan Party has set up on
its books and in its financial records bad debt reserves reasonably adequate to
cover such Receivables on a basis consistent with GAAP.
(c) Locations of Loan Party. Each Loan Party's chief executive office is
located at the addresses set forth on Schedule 4.15(c). Until written notice is
given to Agent by Borrowing Agent of any other office at which any Loan Party
keeps its records pertaining to Receivables, all such records shall be kept at
such executive office.
(d) Collection of Receivables. Until any Loan Party's authority to do so is
terminated by Agent (which notice Agent may give at any time following the
occurrence and during the continuance of an Event of Default or a Default), each
Loan Party will, at such Loan Party's sole cost and expense, but on Agent's
behalf and for Agent's account, collect as Agent's property and in trust for
Agent all amounts received on Receivables, and shall not commingle such
collections with any Loan Party's funds or use the same except to pay
Obligations. Each Loan Party shall, upon request, deliver to Agent, or deposit
in the Blocked Account, in original form and on the date of receipt thereof, all
checks, drafts, notes, money orders, acceptances, cash and other evidences of
Indebtedness.
(e) Notification of Assignment of Receivables. At any time following the
occurrence and during the continuance of an Event of Default or a Default, Agent
shall have the right to send notice of the assignment of, and Agent's security
interest in, the Receivables to any and all Customers or any third party holding
or otherwise concerned with any of the Collateral. Thereafter, Agent shall have
the sole right to collect the Receivables, take possession of the Collateral, or
both. Agent's actual collection expenses, including, but not limited to,
stationery and postage, telephone and telecopy, secretarial and clerical
expenses and the salaries of any collection personnel used for collection, may
be charged to Borrowers' Account and added to the Obligations.
(f) Power of Agent to Act on Loan Parties' Behalf. Agent shall have the
right to receive, endorse, assign and/or deliver in the name of Agent or any
Loan Party any and all checks, drafts and other instruments for the payment of
money relating to the Receivables, and each Loan Party hereby waives notice of
presentment, protest and non-payment of any instrument so endorsed. Each Loan
Party hereby constitutes Agent or Agent's designee as such Loan Party's attorney
with power (x) at any time upon the occurrence and during the continuance of a
Default or Event of Default (i) to demand payment of the Receivables; (ii) to
enforce payment of the Receivables by legal proceedings or otherwise; (iii) to
exercise all of Loan Parties' rights and remedies with respect to the collection
of the Receivables and any other Collateral; (iv) to settle, adjust, compromise,
extend or renew the Receivables; (v) to settle, adjust or compromise any legal
proceedings brought to collect Receivables; (vi) to prepare, file and sign such
Loan Party's name on a proof of claim in bankruptcy or similar document against
any Customer; and (vii) to prepare, file and sign such Loan Party's name on any
notice of Lien, assignment or satisfaction of Lien or similar document in
connection with the Receivables; and (y) at any time whether or not a Default or
Event of Default has occurred or is continuing (i) to endorse such Loan Party's
name upon any notes, acceptances, checks, drafts, money orders or other
evidences of payment or Collateral; (ii) to send verifications of Receivables to
any Customer; (iii) to sign such Loan Party's name on all financing statements
or any other documents or instruments deemed necessary or appropriate by Agent
to preserve, protect, or perfect Agent's interest in the Collateral and to file
same; and (iv) to do all other acts and things necessary to carry out this
Agreement. All acts of said attorney or designee are hereby ratified and
approved, and said attorney or designee shall not be liable for any acts of
omission or commission nor for any error of judgment or mistake of fact or of
law, unless done maliciously or with gross (not mere) negligence; this power
being coupled with an interest is irrevocable while any of the Obligations
remain unpaid. Agent shall have the right at any time following the occurrence
and during the continuance of an Event of Default or Default, to change the
address for delivery of mail addressed to any Loan Party to such address as
Agent may designate and to receive, open and dispose of all mail addressed to
any Loan Party.
(g) No Liability. Neither Agent nor any Lender shall, under any
circumstances or in any event whatsoever, have any liability for any error or
omission or delay of any kind occurring in the settlement, collection or payment
of any of the Receivables or any instrument received in payment thereof, or for
any damage resulting therefrom, except for Agent's or such Lender's gross
negligence or willful misconduct. Following the occurrence and during the
continuance of an Event of Default or Default, Agent may, without notice to or
consent from any Loan Party, xxx upon or otherwise collect, extend the time of
payment of, compromise or settle for cash, credit or upon any terms any of the
Receivables or any other securities, instruments or insurance applicable thereto
and/or release any obligor thereof. Agent is authorized and empowered to accept
following the occurrence and during the continuance of an Event of Default or
Default the return of the goods represented by any of the Receivables, without
notice to or consent by any Loan Party, all without discharging or in any way
affecting any Loan Party's liability hereunder.
(h) Establishment of a Lockbox Account, Dominion Account. All proceeds of
Collateral shall, at the direction of Agent, be deposited by Loan Parties into a
lockbox account, dominion account or such other blocked account (collectively,
the "Blocked Accounts") as Agent may require pursuant to an arrangement with
such bank as may be selected by Loan Parties and be acceptable to Agent. Loan
Parties shall issue to any such bank, an irrevocable letter of instruction
directing said bank to transfer such funds so deposited to Agent, either to any
account maintained by Agent at said bank or by wire transfer to appropriate
account(s) of Agent. All funds deposited in a Blocked Account shall immediately
become the property of Agent and Loan Parties shall obtain the agreement by such
bank to waive any offset rights against the funds so deposited. Neither Agent
nor any Lender assumes any responsibility for any Blocked Account arrangement,
including without limitation, any claim of accord and satisfaction or release
with respect to deposits accepted by any bank thereunder. Alternatively, Agent
may establish depository accounts (collectively, the "Depository Accounts") in
the name of Agent at a bank or banks for the deposit of such funds and Loan
Parties shall deposit all proceeds of Collateral or cause same to be deposited,
in kind, in such Depository Accounts of Agent in lieu of depositing same to the
Blocked Accounts.
(i) Adjustments. No Loan Party will, without Agent's consent, compromise or
adjust any Receivables (or extend the time for payment thereof) or accept any
returns of merchandise or grant any additional discounts, allowances or credits
thereon except for those compromises, adjustments, returns, discounts, credits
and allowances as have been heretofore customary in the business of such Loan
Party or are immaterial in amount.
4.16. Inventory.
To the extent Inventory held for sale or lease has been produced by any
Loan Party, it has been and will be produced by such Loan Party in accordance
with the Federal Fair Labor Standards Act of 1938, as amended, and all rules,
regulations and orders thereunder.
4.17. Maintenance of Equipment.
The Equipment shall be maintained in good operating condition and repair
(reasonable wear and tear excepted) and all necessary replacements of and
repairs thereto shall be made so that the value and operating efficiency of the
Equipment shall be maintained and preserved in accordance with reasonable
business practices. No Loan Party shall use or operate the Equipment in
violation of any law, statute, ordinance, code, rule or regulation which could
reasonably be expected to have a Material Adverse Effect. Each Loan Party shall
have the right to sell Equipment to the extent set forth in Section 4.3.
4.18. Exculpation of Liability.
Nothing herein contained shall be construed to constitute Agent or any
Lender as any Loan Party's agent for any purpose whatsoever, nor shall Agent or
any Lender be responsible or liable for any shortage, discrepancy, damage, loss
or destruction of any part of the Collateral wherever the same may be located
and regardless of the cause thereof. Neither Agent nor any Lender, whether by
anything herein or in any assignment or otherwise, assume any of Loan Party's
obligations under any contract or agreement assigned to Agent or such Lender,
and neither Agent nor any Lender shall be responsible in any way for the
performance by Loan Party of any of the terms and conditions thereof.
4.19. Environmental Matters.
(a) Loan Parties shall ensure that the Real Property remains in compliance
with all Environmental Laws, except to the extent that any non-compliance could
not reasonably be likely to have a Material Adverse Effect or a material adverse
effect on the value of the affected parcel of Real Property, and they shall not
place or permit to be placed any Hazardous Substances on any Real Property
except as not prohibited by applicable law or appropriate governmental
authorities.
(b) Loan Parties shall establish and maintain a system to assure and
monitor continued material compliance with all applicable Environmental Laws
which system shall include periodic reviews of such compliance.
(c) Loan Parties shall (i) employ in connection with the use of the Real
Property appropriate technology necessary to maintain compliance with any
applicable Environmental Laws and (ii) dispose of any and all Hazardous Waste
generated at the Real Property only at facilities and with carriers that
maintain valid permits under RCRA and any other applicable Environmental Laws,
provided, however, that any violations of Environmental Laws committed by any
such facilities or carriers of which Loan Parties have no knowledge shall not be
a breach hereof. Loan Parties shall use reasonable efforts to obtain
certificates of disposal, such as hazardous waste manifest receipts, from all
treatment, transport, storage or disposal facilities or operators employed by
Loan Parties in connection with the transport or disposal of any Hazardous Waste
generated at the Real Property.
(d) In the event any Loan Party obtains, gives or receives notice of any
Release or threat of Release of a reportable quantity of any Hazardous
Substances at the Real Property (any such event being hereinafter referred to as
a "Hazardous Discharge") or receives any notice of violation, request for
information or notification that it is potentially responsible for investigation
or cleanup of environmental conditions at the Real Property, demand letter or
complaint, order, citation, or other written notice with regard to any Hazardous
Discharge or violation of Environmental Laws affecting the Real Property or any
Loan Party's interest therein (any of the foregoing is referred to herein as an
"Environmental Complaint") from any Person, including any state agency
responsible in whole or in part for environmental matters in the state in which
the Real Property is located or the United States Environmental Protection
Agency (any such person or entity hereinafter the "Authority"), then Borrowing
Agent shall, within five (5) Business Days, give written notice of same to Agent
detailing facts and circumstances of which any Loan Party is aware giving rise
to the Hazardous Discharge or Environmental Complaint. Such information is to be
provided to allow Agent to protect its security interest in the Real Property
and the other Collateral and is not intended to create nor shall it create any
obligation upon Agent or any Lender with respect thereto.
(e) Loan Parties shall promptly forward to Agent copies of any request for
information, notification of potential liability, demand letter relating to
potential responsibility with respect to the investigation or cleanup of
Hazardous Substances at any other site owned, operated or used by any Loan Party
to dispose of Hazardous Substances, and shall continue to forward copies of
correspondence between any Loan Party and the Authority regarding such claims to
Agent until the claim is settled. Loan Parties shall promptly forward to Agent
copies of all documents and reports concerning a Hazardous Discharge at the Real
Property that any Loan Party is required to file under any Environmental Laws,
to the extent that such Hazardous Discharge could reasonably be likely to have a
Material Adverse Effect or a material adverse effect on the value of the
affected parcel of Real Property. Such information is to be provided solely to
allow Agent to protect Agent's security interest in the Real Property and the
other Collateral.
(f) Loan Parties shall respond promptly to any Hazardous Discharge or
Environmental Complaint and take all necessary action in order to safeguard the
health of any Person and to avoid subjecting the Real Property or other
Collateral to any Lien. If any Loan Party shall fail to respond promptly to any
Hazardous Discharge or Environmental Complaint or any Loan Party shall fail to
comply with any of the requirements of any Environmental Laws, to the extent
that any of the foregoing could reasonably be likely to have a Material Adverse
Effect or a material adverse effect on the value of the affected parcel of Real
Property, Agent on behalf of Lenders may, but without the obligation to do so,
for the sole purpose of protecting Agent's interest in the Real Property or
other Collateral: (A) give such notices or (B)~enter onto the Real Property (or
authorize third parties to enter onto the Real Property) and take such actions
as Agent (or such third parties as directed by Agent) deem reasonably necessary
or advisable, to clean up, remove, mitigate or otherwise deal with any such
Hazardous Discharge or Environmental Complaint. All reasonable costs and
expenses incurred by Agent and Lenders (or such third parties) in the exercise
of any such rights, including any sums paid in connection with any judicial or
administrative investigation or proceedings, fines and penalties, together with
interest thereon from the date expended at the Default Rate for Revolving
Advances constituting Domestic Rate Loans shall be paid upon demand by Loan
Parties, and until paid shall be added to and become a part of the Obligations
secured by the Liens created by the terms of this Agreement or any other
agreement between Agent, any Lender and any Loan Party.
(g) Promptly upon the written request of Agent from time to time asserting
that Agent reasonably believes that a Hazardous Discharge has occurred on the
Real Property or Hazardous Substances are otherwise present thereon and the
potential liability therefor or cleanup costs thereof could reasonably be likely
to have a Material Adverse Effect or a material adverse effect on the value of
the affected parcel of Real Property, Loan Parties shall provide Agent, at Loan
Parties' expense, with an environmental site assessment or environmental audit
report prepared by an environmental engineering firm acceptable in the
reasonable opinion of Agent, to assess with a reasonable degree of certainty the
existence of a Hazardous Discharge and the potential costs in connection with
abatement, cleanup and removal of any Hazardous Substances found on, under, at
or within the Real Property. Any report or investigation of such Hazardous
Discharge proposed and acceptable to an appropriate Authority that is charged to
oversee the clean-up of such Hazardous Discharge shall be acceptable to Agent.
If such estimates, individually or in the aggregate, exceed $250,000, Agent
shall have the right to require Loan Parties to post a bond, letter of credit or
other security reasonably satisfactory to Agent to secure payment of these costs
and expenses.
(h) Loan Parties shall defend and indemnify Agent and Lenders and hold
Agent, Lenders and their respective employees, agents, directors and officers
harmless from and against all loss, liability, damage and expense, claims,
costs, fines and penalties, including attorney's fees, suffered or incurred by
Agent or Lenders under or on account of any Environmental Laws, including,
without limitation, the assertion of any Lien thereunder, with respect to any
Hazardous Discharge, the presence of any Hazardous Substances affecting the Real
Property, whether or not the same originates or emerges from the Real Property
or any contiguous real estate, including any loss of value of the Real Property
as a result of the foregoing except to the extent such loss, liability, damage
and expense is attributable to any Hazardous Discharge resulting from actions on
the part of Agent or any Lender. Loan Parties' obligations under this Section
4.19 shall arise upon the discovery of the presence of any Hazardous Substances
at the Real Property, whether or not any federal, state, or local environmental
agency has taken or threatened any action in connection with the presence of any
Hazardous Substances. Loan Parties' obligation and the indemnifications
hereunder shall survive the termination of this Agreement.
(i) For purposes of Sections 4.19 and 5.7, all references to Real Property
shall be deemed to include all of Loan Parties' right, title and interest in and
to its owned and leased premises.
4.20. Financing Statements.
Except as respects the financing statements filed by Agent and the
financing statements described on Schedule 7.2, no financing statement covering
any of the Collateral or any proceeds thereof is on file in any public office;
provided, however, that subsequent to the Closing Date financing statements may
also be filed with respect to Liens described in clauses (a) and (g) of the
definition of Permitted Encumbrances.
4.21 Additional Collateral. (a) Subject to this Section 4.21, with respect
to any property acquired after the Closing Date by any Loan Party that is
intended to be subject to the Lien created by this Agreement and/or any of the
Other Documents but is not so subject, the Loan Parties shall promptly (and in
any event within 30 days after the acquisition thereof) (i) execute and deliver
to the Agent such amendments or supplements to this Agreement and/or the
relevant Other Documents or such other documents as the Agent shall deem
necessary or advisable to grant to the Agent, for its benefit and for the
benefit of the Lenders, a Lien on such property subject to no Liens (other than
Permitted Encumbrances and subject to the terms of the Intercreditor Agreement),
and (ii) take all actions necessary to cause such Lien to be duly perfected to
the extent required by this Agreement and/or such Other Document in accordance
with all applicable requirements of law, including the filing of financing
statements in such jurisdictions as may be reasonably requested by the Agent.
The Loan Parties shall otherwise take such actions and execute and/or deliver to
the Agent such documents as the Agent shall reasonably require (consistent with
the closing conditions hereof) to confirm the validity, perfection and priority
of the Lien of this Agreement and the Other Documents against such
after-acquired properties.
(b) The Loan Parties shall Promptly grant to the Agent, within 75 days of
the acquisition thereof, as security interest in and Mortgage on (i) each Real
Property owned in fee by such Loan Party as is acquired by such Loan Party after
the Closing Date and that, together with any improvements thereon, individually
has a fair market value of at least $250,000, and (ii)~unless the Agent or the
Required Lenders otherwise consent, each leased Real Property of such Loan Party
which lease individually has a fair market value of at least $1,000,000, in each
case, as additional security for the Obligations (unless the subject property is
already mortgaged to a third party to the extent permitted by Section 4.22).
Such Mortgages shall be granted pursuant to documentation reasonably
satisfactory in form and substance to the Agent and shall constitute valid and
enforceable perfected Liens subject only to Permitted Encumbrances described in
clauses (a), (b), (f), and (h) (but prior to any Liens described in clauses (a),
(b) and (f) of the definition thereof. The Mortgages or instruments related
thereto shall be duly recorded or filed in such manner and in such places as are
required by law to establish, perfect, preserve and protect the Liens in favor
of the Agent required to be granted pursuant to the Mortgages and all taxes,
fees and other charges payable in connection therewith shall be paid in full.
Such Loan Party shall otherwise take such actions and execute and/or deliver to
the Agent such documents as the Agent shall require to confirm the validity,
perfection and priority of the Lien of any existing Mortgage or new Mortgage
against such after-acquired Real Property (including a Title Policy, a Survey
and local counsel opinion (in form and substance reasonably satisfactory to the
Agent in respect of such Mortgage).
4.22 Certain Post-Closing Matters.
The Loan Parties shall deliver to the Agent within 75 days of the date
hereof, unless such date is extended by the Agent, acting reasonably:
(i) a first priority Mortgage encumbering each parcel of Real Property in
favor of the Agent, for the benefit of Agent and the Lenders, duly executed and
acknowledged by each Loan Party that is the owner of or holder of any interest
in such Mortgaged Property, and otherwise in form for recording in the recording
office of each applicable political subdivision where each such Mortgaged
Property is situated, together with such certificates, affidavits,
questionnaires or returns as shall be required in connection with the recording
or filing thereof to create a lien under applicable law, and such financing
statements and any other instruments necessary to grant a mortgage lien under
the laws of any applicable jurisdiction, all of which shall be in form and
substance reasonably satisfactory to the Agent;
(ii) with respect to each parcel of Mortgaged Property is subject to a
Mortgage, such consents, approvals, amendments, supplements, estoppels, tenant
subordination agreements or other instruments as necessary to consummate the
transactions contemplated under this Section 4.22 or as shall reasonably be
deemed necessary by the Agent in order for the owner or holder of the fee or
leasehold interest constituting such Mortgaged Property to grant the Lien
contemplated by the Mortgage with respect to such Mortgaged Property; provided,
however, that with respect to any of the same relating to leasehold Mortgaged
Property only, the Loan Parties shall have satisfied the requirement in this
clause (ii) if, after having used commercially reasonable efforts as determined
in the reasonable judgment of the Agent, they are unable to obtain such
consents, approvals, amendments, supplements, estoppels, tenant subordination
agreements or other instruments;
(iii) with respect to each Mortgage, a policy of title insurance (or marked
up title insurance commitment having the effect of a policy of title insurance)
insuring the Lien of such Mortgage as a valid first mortgage Lien on the
Mortgaged Property and fixtures described therein in the amount equal to not
less than 115% of the fair market value of such Mortgaged Property and fixtures,
which fair market value is set forth on Schedule 4.22 (iii), which policy (or
such marked-up commitment) (each, a "Title Policy") shall (A) be issued by the
Title Company, (B) to the extent necessary, include such reinsurance
arrangements (with provisions for direct access, if necessary) as shall be
reasonably acceptable to the Agent, (C) contain a "tie-in" or "cluster"
endorsement, if available under applicable law (i.e., policies which insure
against losses regardless of location or allocated value of the insured property
up to a stated maximum coverage amount), (D) have been supplemented by such
endorsements as shall be reasonably requested by the Agent (including
endorsements on matters relating to usury, first loss, last dollar, zoning,
contiguity, revolving credit, doing business, non-imputation, public road
access, survey, variable rate, environmental lien, subdivision, separate tax lot
and so-called comprehensive coverage over covenants and restrictions), and (E)
contain no exceptions to title other than exceptions acceptable to the Agent;
(iv) with respect to each parcel of Mortgaged Property, such affidavits,
certificates, information (including financial data) and instruments of
indemnification (including a so-called "gap" indemnification) as shall be
required to induce the Title Company to issue the Title Policy/ies and
endorsements contemplated above;
(v) evidence reasonably acceptable to the Agent of payment by the Loan
Parties of all Title Policy premiums, search and examination charges, escrow
charges and related charges, mortgage recording taxes, fees, charges, costs and
expenses required for the recording of the Mortgages and issuance of the Title
Policies referred to above;
(vi) with respect to each Real Property or Mortgaged Property, copies of
all leases in which any Loan Party holds the lessor's interest or other
agreements relating to possessory interests, if any. To the extent any of the
foregoing affect any Mortgaged Property subject to a Mortgage, such agreement
shall be subordinate to the Lien of the Mortgage to be recorded against such
Mortgaged Property, either expressly by its terms or pursuant to a
subordination, non-disturbance and attornment agreement, and shall otherwise be
reasonably acceptable to the Agent;
(vii) with respect to each parcel of Mortgaged Property, the Loan Parties
shall have made all notifications, registrations and filings, to the extent
required by, and in accordance with, all governmental real property disclosure
requirements applicable to such Real Property; and
(viii) surveys with respect to each Parcel of Real Property subject to a
Mortgage.
4.23 Mexican Loan Parties.
Within 75 days of the Closing Date, unless such date is extended by the
Agent, acting reasonably, the Loan Parties shall deliver to the Agent a
favorable written opinion of counsel relating to the perfection of the pledge of
capital stock of Maquilados Technicos S.A. de S.V., execute a security agreement
compatible with the laws of Mexico and any stock pledge agreement and/or any
other documentation or instruments requested by Agent in connection therewith,
such opinion of counsel, documentation or instruments being in form and
substance reasonably satisfactory to the Agent.
V. REPRESENTATIONS AND WARRANTIES.
Each Loan Party represents and warrants as follows:
5.1. Authority.
Each Loan Party has full power, authority and legal right to enter into
this Agreement and the Other Documents and to perform all its respective
Obligations hereunder and thereunder. The execution, delivery and performance of
this Agreement and of the Other Documents (a) are within such Loan Party's
limited liability company, partnership or corporate powers, have been duly
authorized, are not in contravention of any law or the terms of such Loan
Party's certificate of formation, partnership agreement, limited liability
company agreement, by-laws, certificate of incorporation or other applicable
documents relating to such Loan Party's formation or to the conduct of such Loan
Party's business or of any material agreement or undertaking to which such Loan
Party is a party or by which such Loan Party is bound, and (b) will not conflict
with nor result in any breach in any of the provisions of or constitute a
default under or result in the creation of any Lien except Permitted
Encumbrances upon any asset of such Loan Party under the provisions of any
agreement, charter document, instrument, by-law, or other instrument to which
such Loan Party or its property is a party or by which it may be bound.
5.2. Formation and Qualification.
(a) Each Loan Party is duly formed or incorporated and in good standing
under the laws of the state listed on Schedule 5.2(a) and is qualified to do
business and is in good standing in the states listed on Schedule'5.2(a) which
constitute all states in which qualification and good standing are necessary for
such Loan Party to conduct its business and own its property and where the
failure to so qualify could reasonably be expected to have a Material Adverse
Effect. The exact State organizational number of each Loan Party is set forth on
Schedule 5.2(a). Each Loan Party has delivered to Agent true and complete copies
of its certificate of formation, certificate of limited partnership, partnership
agreement, limited liability company agreement, certificate of incorporation and
by-laws, as the case may be, and will promptly notify Agent of any amendment or
changes thereto.
(b) The only Subsidiaries of each Loan Party are listed on Schedule 5.2(b).
5.3. Survival of Representations and Warranties.
All representations and warranties of each Loan Party contained in this
Agreement and the Other Documents shall be true at the time of such Loan Party's
execution of this Agreement and the Other Documents, and shall survive the
execution, delivery and acceptance thereof by the parties thereto and the
closing of the transactions described therein or related thereto.
5.4. Tax Returns.
Each Loan Party's federal tax identification number is set forth on
Schedule 5.4. Each Loan Party has filed all federal, state and local tax returns
and other reports each is required by law to file and has paid all taxes,
assessments, fees and other governmental charges that are due and payable.
Federal, state and local income tax returns of each Loan Party have been
examined and reported upon by the appropriate taxing authority or closed by
applicable statute and satisfied for all fiscal years prior to and including the
fiscal year ending December 31, 2002. The provision for taxes on the books of
each Loan Party are adequate for all years not closed by applicable statutes,
and for its current fiscal year, and no Loan Party has any knowledge of any
deficiency or additional assessment in connection therewith not provided for on
its books.
5.5. Financial Statements.
(a) The pro forma balance sheet of the Loan Parties on a Consolidated Basis
(the "Pro Forma Balance Sheet") furnished to Agent on the Closing Date reflects
the consummation of the transactions contemplated by the Senior Secured
Documentation, the IRB Documentation, the Subordinated Debt Documentation and
under this Agreement (the "Transactions") and is accurate, complete and correct
in all material respects and fairly reflects the financial condition of the Loan
Parties on a Consolidated Basis as of the Closing Date after giving effect to
the Transactions, and has been prepared on a basis consistent with GAAP,
consistently applied. The Pro Forma Balance Sheet has been certified as
accurate, complete and correct in all material respects by the Chief
Administrative Officer and Chief Financial Officer of the Loan Parties. All
financial statements referred to in this Section 5.5(a), including the related
schedules and notes thereto, have been prepared, in accordance with GAAP, except
as may be disclosed in such financial statements.
(b) The twelve-month cash flow projections ending December 31, 2004 of the
Loan Parties on a Consolidated Basis and their projected balance sheets as of
the Closing Date (the "Projections"), copies of which are annexed hereto as
Exhibit 5.5, were prepared by the Loan Parties, are based on underlying
assumptions which provide a reasonable basis for the projections contained
therein and reflect Loan Parties' judgment based on present circumstances of the
most likely set of conditions and course of action for the projected period. The
Projections together with the Pro Forma Balance Sheet are referred to as the
"Pro Forma Financial Statements".
(c) The consolidated balance sheet of the Loan Parties, their Subsidiaries
and such other Persons described therein (including the accounts of all
Subsidiaries for the respective periods during which a subsidiary relationship
existed) as of December 31, 2002, and the related statements of income, changes
in stockholder's equity, and changes in cash flow for the period ended on such
date, all accompanied by reports thereon containing opinions without
qualification by independent certified public accountants, copies of which have
been delivered to Agent, have been prepared in accordance with GAAP,
consistently applied (except for changes in application in which such
accountants concur) and present fairly the financial position of the Loan
Parties and their Subsidiaries at such date and the results of their operations
for such period. Since December 31, 2002 there has been no change in the
condition, financial or otherwise, of Loan Parties or their Subsidiaries as
shown on the consolidated balance sheet as of such date and changes in the
ordinary course of business, none of which individually or in the aggregate has
been materially adverse and, except as reflected in the unaudited consolidated
financial statement of BJI for the period ending December 31, 2003, a copy of
which has been delivered to Agent.
(d) The consolidated unaudited balance sheet of the Loan Parties, their
Subsidiaries and such other Persons described therein (including the accounts of
all Subsidiaries for the respective periods during which a subsidiary
relationship existed) as of December 31, 2003, and the related statements of
income, changes in stockholder's equity, and changes in cash flow for the period
ended on such date, copies of which have been delivered to Agent, have been
prepared on a basis consistent with GAAP, consistently applied, and present
fairly the financial position of the Loan Parties and their Subsidiaries at such
date and the results of their operations for such period. Since December 31,
2003 there has been no change in the condition, financial or otherwise, of Loan
Parties or their Subsidiaries as shown on the consolidated balance sheet as of
such date and changes in the ordinary course of business.
5.6. Loan Party Name.
The exact name of each Loan Party is set forth in the first paragraph to
this Agreement (or, if such Loan Party is not listed in such first paragraph,
such exact name is set forth on Schedule 5.6). No Loan Party has been known by
any other corporate, limited liability company or partnership name in the past
five years and no Loan Party sells Inventory under any other name except as set
forth on Schedule 5.6, nor has any Loan Party been the surviving entity of a
merger or consolidation or acquired all or substantially all of the assets of
any Person during the preceding five (5) years.
5.7. O.S.H.A. and Environmental Compliance.
(a) Each Loan Party has duly complied with, and its facilities, business,
assets, property, leaseholds and Equipment are in compliance in all material
respects with, the provisions of the Federal Occupational Safety and Health Act,
the Environmental Protection Act, RCRA and all other Environmental Laws; there
have been no outstanding citations, notices or orders of non-compliance issued
to any Loan Party or relating to its business, assets, property, leaseholds or
Equipment under any such laws, rules or regulations, in each case except (i) as
set forth on Schedule 5.7, or (ii) to the extent that any of the foregoing could
not reasonably be likely to have a Material Adverse Effect or a material adverse
effect on the value of the affected parcel of Real Property.
(b) Each Loan Party has been issued all required federal, state and local
licenses, certificates or permits relating to all applicable Environmental Laws,
except (i) as set forth on Schedule 5.7, or (ii) to the extent that failure to
obtain any such licenses, certificates or permits could not reasonably be likely
to have a Material Adverse Effect or a material adverse effect on the value of
the affected parcel of Real Property.
(c) To the best knowledge of the Loan Parties after due inquiry of all Real
Property facility managers and supervisors: (i) there are no visible signs of
releases, spills, discharges, leaks or disposal (each, a "Release") of Hazardous
Substances at, upon, under or within any Real Property; (ii) there are no
underground storage tanks or polychlorinated biphenyls on the Real Property;
(iii) the Real Property has never been used as a treatment, storage or disposal
facility of Hazardous Waste; and (iv) no Hazardous Substances are present on the
Real Property, excepting such quantities as are handled in accordance with all
applicable manufacturer's instructions and governmental regulations and in
proper storage containers and as are necessary for the operation of the
commercial business of any Loan Party or of its tenants, in each case except as
set forth on Schedule 5.7.
5.8. Solvency; No Litigation, Violation, Indebtedness or Default.
(a) After giving effect to the Transactions, each Loan Party will be
solvent, able to pay its debts as they mature, have capital sufficient to carry
on its business and all businesses in which it is about to engage, and (i) as of
the Closing Date, the fair present saleable value of each Loan Party's assets,
calculated with respect to all of the Loan Parties on a going concern basis, is
in excess of the amount of its liabilities and (ii) subsequent to the Closing
Date, the fair saleable value of each Loan Party's assets, calculated with
respect to all of the Loan Parties on a going concern basis, will be in excess
of the amount of its liabilities.
(b) Except as disclosed in Schedule 5.8(b), as of the Closing Date no Loan
Party has (i) any pending or threatened litigation, arbitration, actions or
proceedings which could reasonably be likely to have a Material Adverse Effect,
and (ii)'any liabilities nor indebtedness for borrowed money other than the
Obligations.
(c) No Loan Party is in violation of any applicable statute, regulation or
ordinance in any respect which could reasonably be expected to have a Material
Adverse Effect, nor is any Loan Party in violation of any order of any court,
governmental authority or arbitration board or tribunal.
(d) No Loan Party nor any member of the Controlled Group maintains or
contributes to any Plan other than those listed on Schedule 5.8(d). Except as
set forth in Schedule 5.8(d), or to the extent that a breach of any of the
following representations with respect to any Plan or Multiemployer Plan could
not, individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect, (i) no Plan has incurred any "accumulated funding deficiency,"
as defined in Section 302(a)(2) of ERISA and Section 412(a) of the Code, whether
or not waived, and each Loan Party and each member of the Controlled Group has
met all applicable minimum funding requirements under Section 302 of ERISA in
respect of each Plan, (ii) each Plan which is intended to be a qualified plan
under Section 401(a) of the Code as currently in effect has been determined by
the Internal Revenue Service to be qualified under Section 401(a) of the Code
and the trust related thereto is exempt from federal income tax under Section
501(a) of the Code, (iii) no Loan Party nor any member of the Controlled Group
has incurred any liability to the PBGC other than for the payment of premiums,
and there are no premium payments which have become due which are unpaid, (iv)
no Plan has been terminated by the plan administrator thereof nor by the PBGC,
and to the knowledge of the Loan Parties there is no occurrence which would
cause the PBGC to institute proceedings under Title IV of ERISA to terminate any
Plan, (v) as of the most recent actuarial valuation date, the current value of
the assets of each Plan exceeds the present value of the accrued benefits and
other liabilities of such Plan and no Loan Party nor any member of the
Controlled Group knows of any facts or circumstances which would materially
change the value of such assets and accrued benefits and other liabilities, (vi)
no Loan Party or any member of the Controlled Group has breached any of the
responsibilities, obligations or duties imposed on it by ERISA with respect to
any Plan, (vii) no Loan Party nor any member of a Controlled Group has incurred
any liability for any excise tax arising under Section 4972 or 4980B of the
Code, and, to the knowledge of the Loan Parties, no fact exists which could give
rise to any such liability, (viii) no Loan Party nor any member of the
Controlled Group nor any fiduciary of, nor any trustee to, any Plan, has engaged
in a "prohibited transaction" described in Section 406 of ERISA or Section 4975
of the Code nor taken any action which would constitute or result in a
Termination Event with respect to any such Plan which is subject to ERISA, (ix)
each Loan Party and each member of the Controlled Group has made all
contributions due and payable with respect to each Plan, (x) there exists no
event described in Section 4043(b) of ERISA, for which the thirty (30) day
notice period contained in 29 CFR 2615.3 has not been waived, (xi) no Loan
Party nor any member of the Controlled Group has any fiduciary responsibility
for investments with respect to any plan existing for the benefit of persons
other than employees or former employees of any Loan Party and any member of the
Controlled Group, and (xii) no Loan Party nor any member of the Controlled Group
has withdrawn, completely or partially, from any Multiemployer Plan so as to
incur liability under the Multiemployer Pension Plan Amendments Act of 1980.
5.9. Patents, Trademarks, Copyrights and Licenses.
All material patents, patent applications, trademarks, trademark
applications, service marks, service xxxx applications, copyrights, copyright
applications, design rights, tradenames, assumed names, trade secrets and
licenses owned or utilized by any Loan Party are set forth on Schedule 5.9, are
valid and have been duly registered or filed with all appropriate governmental
authorities and constitute all of the intellectual property rights which are
necessary for the operation of its business; there is no objection to or pending
challenge to the validity of any such material patent, trademark, copyright,
design right, tradename, trade secret or license and no Loan Party is aware of
any grounds for any challenge, except as set forth in Schedule 5.9. Each patent,
patent application, patent license, trademark, trademark application, trademark
license, service xxxx, service xxxx application, service xxxx license,
copyright, copyright application and copyright license owned or held by any Loan
Party and all trade secrets used by any Loan Party consist of original material
or property developed by such Loan Party or was lawfully acquired by such Loan
Party to its knowledge from the proper and lawful owner thereof. Each of such
items has been maintained so as to preserve the value thereof from the date of
creation or acquisition thereof. With respect to all software used by any Loan
Party (other than commercially available software), such Loan Party is in
possession of all source and object codes related to each piece of software or
is the beneficiary of a source code escrow agreement, each such source code
escrow agreement being listed on Schedule 5.9.
5.10. Licenses and Permits.
Except as set forth in Schedule 5.10, each Loan Party (a) is in compliance
with and (b) has procured and is now in possession of, all material licenses or
permits required by any applicable federal, state, provincial or local law or
regulation for the operation of its business in each jurisdiction wherein it is
now conducting or proposes to conduct business and where the failure to procure
such licenses or permits could reasonably be expected to have a Material Adverse
Effect.
5.11. No Defaults.
(a) On the Closing Date, no Loan Party is in default in the payment of the
principal of or interest on any Indebtedness or under any instrument or
agreement under or subject to which any Indebtedness has been issued and no
event has occurred under the provisions of any such instrument or agreement
which with or without the lapse of time or the giving of notice, or both,
constitutes or would constitute an event of default thereunder, except to the
extent the same would not result in a Default or Event of Default under this
Agreement and could not reasonably be expected to have a Material Adverse
Effect.
(b) On the Closing Date, no Loan Party is in default in the payment or
performance of any other contractual obligations and no Default has occurred,
except to the extent the same would not result in a Default or Event of Default
under this Agreement and could not reasonably be expected to have a Material
Adverse Effect.
5.12. No Burdensome Restrictions.
No Loan Party is party to any contract or agreement the performance of
which could reasonably be expected to have a Material Adverse Effect. No Loan
Party has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien which is not a Permitted
Encumbrance.
5.13. No Labor Disputes, Etc.
No Loan Party is the subject in any labor dispute involving ten (10) or
more employees as a group; there are no strikes or walkouts or union
organization of any Loan Party's employees threatened or in existence and no
labor contract is scheduled to expire during the Term other than as set forth on
Schedule 5.13. Schedule 5.13 sets forth a description of all collective
bargaining agreements with respect to the employees of any Loan Party.
5.14. Margin Regulations.
No Loan Party is engaged, nor will it engage, principally or as one of its
important activities, in the business of extending credit for the purpose of
"purchasing" or "carrying" any "margin stock" within the meaning of the quoted
term under Regulation U of the Board of Governors of the Federal Reserve System
as now and from time to time hereafter in effect. No part of the proceeds of any
Advance will be used for "purchasing" or "carrying" "margin stock" as defined in
Regulation U of such Board of Governors.
5.15. Investment Company Act.
No Loan Party is an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, nor is it
controlled by such a company.
5.16. Disclosure.
No representation or warranty made by any Loan Party in this Agreement or
in any financial statement, report, certificate or any other document furnished
to Agent or any Lender in connection herewith contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements herein or therein not misleading. Other than general industry
knowledge, there is no fact known to any member of management of any Loan
Parties which could reasonably be expected to have a Material Adverse Effect
that has not been disclosed to Agent in writing.
5.17. Delivery of Senior Secured Documentation, IRB Documentation and
Subordinated Debt Documentation.
Agent has received complete copies of the Senior Secured Documentation, IRB
Documentation and the Subordinated Debt Documentation (including all exhibits,
schedules and disclosure letters referred to therein or delivered pursuant
thereto, if any) and all amendments thereto, waivers relating thereto and other
side letters or agreements affecting the terms thereof. None of such documents
and agreements has been amended or supplemented, nor have any of the provisions
thereof been waived, except pursuant to a written agreement or instrument which
has heretofore been delivered to Agent.
5.18. Hedge Agreements.
No Loan Party is a party to, nor will it be a party to, any Currency
Agreement or Interest Rate Agreement, other than Hedge Agreements entered into
on a non-speculative basis.
5.19. Conflicting Agreements.
No provision of any mortgage, indenture, contract, agreement, judgment,
decree or order binding on any Loan Party or affecting the Collateral conflicts
with, or requires any Consent which has not already been obtained to the extent
the failure to obtain same could reasonably be likely to have a Material Adverse
Effect, or would in any way prevent the execution, delivery or performance of,
the terms of this Agreement or the Other Documents.
5.20. Application of Certain Laws and Regulations.
No Loan Party nor any Affiliate of any Loan Party is subject to any
statute, rule, regulation or executive order which (a) regulates the incurrence
of any Indebtedness or (b) would prohibit or restrict the Agent or the Lenders
from entering into, or consummating the transactions contemplated by, this
Agreement.
5.21. Business and Property of Loan Parties.
Upon and after the Closing Date, Loan Parties do not propose to engage in
any business other than the design, manufacture and sale of furnishings and
activities necessary or appropriate to further the foregoing or reasonably
related or complementary thereto. On the Closing Date, each Loan Party will own
all the property and possess all of the rights and Consents necessary for the
conduct of the business of such Loan Party on the date hereof, except to the
extent that any failure thereof could not reasonably be likely to have a
Material Adverse Effect.
5.22. Material Contracts.
Schedule 5.22 contains a true, correct and complete list of all contracts
which are material to the operation of any Loan Party's business. Except as set
forth on Schedule 5.22, each such contract is in full force and effect and no
material defaults enforceable against such Loan Party exist thereunder to the
extent that any such default could reasonably be expected to have a Material
Adverse Effect. No Loan Party has received notice from any party to such
contract stating that it intends to terminate or amend such contract to the
extent that such termination or amendment could reasonably be likely to have a
Material Adverse Effect.
5.23 Senior Indebtedness; Designated Senior Indebtedness;
Permitted Indebtedness.
The Obligations constitute, and will at all times continue to constitute,
"Senior Indebtedness," "Designated Senior Indebtedness" and "Permitted
Indebtedness" under the Subordinated Debt Documentation and the Senior Secured
Debt Documentation. The Obligations (together with the Indebtedness under the
Senior Secured Documentation) constitute the "Senior Credit Facility" under and
as defined in the Subordinated Debt Documentation.
VI. AFFIRMATIVE COVENANTS.
Each Loan Party shall, until payment in full of the Obligations and
termination of this Agreement:
6.1. Payment of Fees.
Pay to Agent on demand all usual and customary fees and expenses which
Agent incurs in connection with (a) the forwarding of Advance proceeds and (b)
the establishment and maintenance of any Blocked Accounts or Depository Accounts
as provided for in Section 4.15(h). Agent may, without making demand, charge
Borrowers' Account for all such fees and expenses.
6.2. Conduct of Business and Maintenance of Existence and Assets.
(i) Conduct continuously and operate actively its business according to
prudent business practices and maintain all of its properties useful or
necessary in its business in good working order and condition (reasonable wear
and tear excepted and except as may be disposed of in accordance with the terms
of this Agreement), including, without limitation, all licenses, patents,
copyrights, design rights, domain names and addresses, tradenames, trade secrets
and trademarks and take all actions necessary to enforce and protect the
validity of any intellectual property right or other right included in the
Collateral where the failure to do so could reasonably be likely to have a
Material Adverse Effect; (ii) keep in full force and effect its existence and
comply in all material respects with the laws and regulations governing the
conduct of its business where the failure to do so could reasonably be expected
to have a Material Adverse Effect; and (iii) make all such reports and pay all
such franchise and other taxes and license fees and do all such other acts and
things as may be lawfully required to maintain its rights, licenses, leases,
powers and franchises under the laws of the United States or any political
subdivision thereof where the failure to do so could reasonably be expected to
have a Material Adverse Effect.
6.3. Violations.
Promptly notify Agent in writing of any known violation of any law,
statute, regulation or ordinance of any Governmental Body, or of any agency
thereof, applicable to any Loan Party which could reasonably be expected to have
a Material Adverse Effect.
6.4. Government Receivables.
Take all steps reasonably necessary to protect Agent's interest in the
Collateral under the Federal Assignment of Claims Act or other applicable state
or local statutes or ordinances and deliver to Agent appropriately endorsed, any
instrument or chattel paper connected with any Receivable arising out of
contracts between any Loan Party and the United States, any state or any
department, agency or instrumentality of any of them.
6.5. Execution of Supplemental Instruments.
Execute and deliver to Agent from time to time, upon demand, such
supplemental agreements, statements, assignments and transfers, or instructions
or documents relating to the Collateral, and such other instruments as Agent may
reasonably request, in order that the full intent of this Agreement may be
carried into effect.
6.6. Payment of Indebtedness.
Subject at all times to any applicable subordination arrangement in favor
of Agent and/or Lenders, pay, discharge or otherwise satisfy at or before
maturity (subject, where applicable, to specified grace periods and, in the case
of the trade payables, to normal payment practices) all its obligations and
liabilities of whatever nature, except when the failure to do so could not
reasonably be expected to have a Material Adverse Effect or when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and each Loan Party shall have provided for such reserves as
required by GAAP.
6.7. Standards of Financial Statements.
Cause all financial statements referred to in Sections 9.7, 9.8, 9.9, 9.10
and 9.12 as to which GAAP is applicable to be complete and correct in all
material respects (subject, in the case of interim financial statements, to
normal year-end audit adjustments) and to be prepared in reasonable detail and
in accordance with GAAP applied consistently throughout the periods reflected
therein (except as concurred in by such reporting accountants or officer, as the
case may be, and disclosed therein).
6.8. Financial Covenant.
(a) Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage Ratio of
at least 1.0 to 1.0 for the Loan Parties on a Consolidated Basis as of the end
of each fiscal quarter for the four consecutive fiscal quarters ending on such
fiscal quarter; provided, however, that Loan Parties shall only be required to
comply with the foregoing Fixed Charge Coverage Ratio covenant if Undrawn
Availability was less than $9,000,000 at any time during the fiscal quarter
being tested.
6.9. Minimum Undrawn Availability.
Maintain at all times Undrawn Availability of not less than $5,000,000.
6.10. Taxes and Other Governmental Charges.
(a) File, and cause each of its Subsidiaries to file, when due, all tax
returns and other reports which it is required to file and (b) pay, and cause
each of its Subsidiaries to pay, or provide for the payment, when due, of all
taxes, fees, assessments and other governmental charges against it or upon its
property, income and franchises, make all required withholding and other tax
deposits, and establish adequate reserves for the payment of all such items, and
provide to the Agent and the Lenders, upon request, satisfactory evidence of its
timely compliance with the foregoing; provided, however, that the foregoing
shall not apply to taxes, fees, assessments and governmental charges not in
excess of $250,000 for the Loan Parties in the aggregate and to taxes, fees,
assessments and governmental charges in excess of $250,000 for the Loan Parties
in the aggregate so long as the Loan Parties have has notified the Agent in
writing, none of the Loan Parties or any of their respective Subsidiaries need
pay any tax, fee, assessment, or governmental charge (i)~it is contesting in
good faith by appropriate proceedings diligently pursued, (ii) as to which the
appropriate Loan Party or Subsidiary, as the case may be, has established proper
reserves as required under GAAP, and (iii)~the nonpayment of which does not
result in the imposition of a Lien (other than a Permitted Encumbrance described
in clause (b) of the definition thereof).
6.11. Revisions or Updates to Schedules.
Should any of the information or disclosures provided on any of the
schedules originally attached hereto become outdated or incorrect in any
material respect, the Loan Parties shall deliver to the Agent and the Lenders as
part of the officer's certificate required pursuant to Section 9.9 such
revisions or updates to such schedule(s) as may be necessary or appropriate to
update or correct such schedule(s), provided that no such revisions or updates
to any schedule(s) shall be deemed to have amended, modified or superseded such
schedule(s) as originally attached hereto, or to have cured any breach of
warranty or representation resulting from the inaccuracy or incompleteness of
any such schedule(s), unless and until the Required Lenders shall have accepted
in writing such revisions or updates to such schedule(s).
6.12 Bond Make-Well Documentation.
Deliver to Agent true and correct copies of all material Bond Make-well
Documentation no less than ten (10) days prior to the proposed execution thereof
by the parties thereto.
VII. NEGATIVE COVENANTS.
No Loan Party shall, until satisfaction in full of the Obligations and
termination of this Agreement without the written consent of the Required
Lenders:
7.1. Merger, Consolidation, Acquisition and Sale of Assets.
(a) Enter into any merger, consolidation or other reorganization with or
into any other Person or acquire all or a substantial portion of the assets or
stock of any Person or permit any other Person to consolidate with or merge with
it other than a merger or consolidation of a Borrower into another Borrower, a
direct or indirect wholly-owned Subsidiary of a Borrower into any Borrower,
and/or of Loan Parties that are not Borrowers into each other.
(b) Sell, lease, transfer or otherwise dispose of any of its properties or
assets, except in the ordinary course of its business and as permitted under
Section 4.3.
7.2. Creation of Liens.
Create or suffer to exist any Lien or transfer upon or against any of its
property or assets now owned or hereafter acquired, except Permitted
Encumbrances. 7.3. Guarantees.
Become liable upon the obligations of any Person by assumption, endorsement
or guaranty thereof or otherwise (other than to Lenders) except (a) as disclosed
on Schedule 7.3, (b)~guarantees made in the ordinary course of business up to an
aggregate amount at any time outstanding of $250,000 during the Term for all
Loan Parties, (c) the endorsement of checks in the ordinary course of business,
(d) guarantees included in the Senior Secured Documentation, (e) guarantees by
one Loan Party of the Obligations of another Loan Party otherwise permitted
hereunder, and (f) unsecured guarantees in an amount not to exceed $250,000.
7.4. Investments.
Make or agree to make any Investments, except (i) Cash Equivalents; (ii)
investments in Loan Parties; (iii) investments acquired in respect of the
bankruptcy or reorganization of customers and suppliers pursuant to a plan of
reorganization; (iv) loans permitted under Section 7.5; (v) the sale of
inventory on credit in the ordinary course of business; and (vi) other
Investments not to exceed $500,000 outstanding at any one time for the Loan
Parties in the aggregate; provided, however, that the Loan Parties may make
Investments under this clause (vi) in an amount in excess of $500,000 but less
than $3,000,000 outstanding at any one time for the Loan Parties in the
aggregate to the extent that the pro forma Fixed Charge Coverage Ratio
(including such Investments under this clause (vi) in clause (b) of the Fixed
Charge Coverage Ratio) for the Loan Parties for the twelve months ending on the
month-end immediately preceding such Investment would exceed 1.0 to 1.0 (the
foregoing determination to be made by Agent in its reasonable judgment based
upon, among other things, a certificate of the Chief Financial Officer or Chief
Administrative Officer of the Loan Parties).
7.5. Loans.
Make advances, loans or extensions of credit to any Person, including
without limitation, any Parent, Subsidiary or Affiliate except with respect to
(i) the extension of commercial trade credit in connection with the sale of
Inventory in the ordinary course of its business; (ii) loans to employees on an
arm's-length basis in the ordinary course of business consistent with the Loan
Parties' past practices for travel expenses, relocation costs and similar
purposes up to a maximum of $100,000 to any employee and up to a maximum of
$250,000 in the aggregate at any one time outstanding; (iii) loans by a Loan
Party to another Loan Party in the ordinary course of business (provided that
any promissory note or other instrument in connection therewith shall be
endorsed and delivered to Agent as Collateral for the Obligations); and (iv)
loans to employees to acquire BJI common stock in an amount not to exceed
$500,000 at any time outstanding.
7.6. Dividends and Distributions.
Declare, pay or make any dividend or distribution on any shares of the
common stock, preferred stock or other equity interests of any Loan Party (other
than dividends or distributions payable in its stock or other equity interests
or split-ups or reclassifications of its stock or other equity interests) or
apply any of its funds, property or assets to the purchase, redemption or other
retirement of any common or preferred stock or any other equity interests, or of
any options to purchase or acquire any such shares of common or preferred stock
or other equity interests of any Loan Party except that so long as (a) a notice
of termination with regard to this Agreement shall not be outstanding, (b) no
Event of Default or Default shall have occurred and be continuing, and (c) the
purpose for such purchase, redemption or dividend shall be as set forth in
writing to Agent at least ten (10) days prior to such purchase, redemption or
dividend and such purchase, redemption or dividend shall in fact be used for
such purpose, Loan Parties shall be permitted to pay dividends (i) to Parent, to
pay professional fees, franchise taxes and other ordinary course of business
operating expenses (excluding salaries and other employee compensation) incurred
by Parent solely in its capacity as parent corporation of Loan Parties and (ii)
to Parent (excluding BJI Parent), to pay interest accrued on the Senior Secured
Debt and/or the Subordinated Debt and/or the Make-Well Bond Debt and/or the
management fees and expenses owed to Trivest from time to time pursuant to the
terms of the Management Agreement as in effect on the Closing Date, to the
extent permitted by the terms of the applicable Intercreditor Agreement or
subordination provisions, provided, however, that both before and after giving
effect to the payment of such purchases, redemptions and/or dividends there
shall not exist any Event of Default or Default.
7.7. Indebtedness.
Create, incur, assume or suffer to exist any Indebtedness except in respect
of (i) Indebtedness to the Agent, Lenders and Issuing Bank pursuant to this
Agreement; (ii) Purchase Money Indebtedness not in excess of $1,000,000 per
fiscal year; (iii) Indebtedness existing on the Closing Date as set forth on
Schedule 7.7 and any Permitted Refinancing thereof; (iv) Indebtedness under the
Subordinated Debt Documentation and any Permitted Refinancing thereof, provided,
however, that the maximum aggregate amount of such Indebtedness shall not exceed
$105,000,000 plus unpaid interest and reasonable transaction costs for which
Loan Parties are responsible as of the date of the Permitted Refinancing, less
all previously made principal repayments; (v) Indebtedness under the Senior
Secured Documentation and any Permitted Refinancing thereof; provided, however,
that the maximum aggregate principal amount of such Indebtedness shall not
exceed $135,000,000 plus unpaid interest and direct transaction costs for which
Loan Parties are responsible as of the date of the Permitted Refinancing, less
all previously made principal repayments; (vi) Indebtedness under the Bond
Make-Well Documentation; provided, however, that the maximum aggregate amount of
such Indebtedness shall not exceed $13,700,000 (excluding capitalized interest
to the extent provided for therein) plus reasonable transaction costs for which
Loan Parties are responsible as of the date of the Permitted Refinancing, less
all previously made principal repayments; (vii) guarantees permitted hereunder;
and (viii) other unsecured indebtedness not to exceed $1,000,000 at any time
outstanding.
7.8. Nature of Business.
Substantially change the nature of the business in which it is presently
engaged, nor except as specifically permitted hereby purchase or invest,
directly or indirectly, in any assets or property other than in the ordinary
course of business for assets or property which are useful in, necessary for and
are to be used in its business as presently conducted and/or are expressly
permitted hereunder to be conducted in the future.
7.9. Transactions with Affiliates.
Directly or indirectly, purchase, acquire or lease any property from, or
sell, transfer or lease any property to, or otherwise deal with, any Affiliate
(other than transactions between Borrowers), except transactions in the ordinary
course of business, on an arm's-length basis on terms no less favorable than
terms which would have been obtainable from a Person other than an Affiliate and
in any event disclosed to Agent if in an amount over $750,000 and except the
Management Agreement and the Bond Make-Well Debt.
7.10. [Reserved.]
7.11. Subsidiaries.
(a) Form any Subsidiary (other than a Foreign Subsidiary) unless (i) such
Subsidiary expressly joins in this Agreement as a Loan Party and becomes jointly
and severally liable for the obligations of Loan Parties hereunder, under the
Notes, and under any other agreement between any Loan Party and Lenders and (ii)
Agent shall have received all documents, including legal opinions, it may
reasonably require to establish compliance with each of the foregoing
conditions.
(b) Enter into any partnership, joint venture or similar arrangement,
except for Investments as a limited partner (or similar investor) to the extent
permitted under Section 7.4(vi).
7.12. Fiscal Year and Accounting Changes.
Change its fiscal year from December 31 or make any significant change
(i)~in accounting treatment and reporting practices except as required by GAAP
or (ii)~in tax reporting treatment except as required by law.
7.13. Pledge of Credit.
Now or hereafter pledge Agent's or any Lender's credit on any purchases or
for any purpose whatsoever or use any portion of any Advance in or for any
business other than the applicable Loan Party's business as conducted on the
date of this Agreement.
7.14. Amendment of Organizational Documents.
Amend, modify or waive any term or provision of its certificate or articles
of formation, limited liability company agreement, partnership agreement,
certificate of incorporation, by-laws, or any other applicable documents
relating to such Loan Party's formation or organization, or any shareholders'
agreement, unless required by law, in any manner that could be adverse to the
interests of Agent and Lenders hereunder (and in any event upon prior written
notice to Agent).
7.15. Compliance with ERISA.
(i) (x) Without prior written notice to Agent, maintain, or permit any
member of the Controlled Group to maintain, or (y) become obligated to
contribute to, or permit any member of the Controlled Group to become obligated
to contribute to, any Plan, other than those Plans disclosed on Schedule 5.8(d),
unless such maintenance or obligation could not reasonably be likely to have a
Material Adverse Effect, (ii) engage, or permit any member of the Controlled
Group to engage, in any non-exempt "prohibited transaction", as that term is
defined in section 406 of ERISA and Section 4975 of the Code, (iii) incur, or
permit any member of the Controlled Group to incur, any "accumulated funding
deficiency", as that term is defined in Section 302 of ERISA or Section 412 of
the Code, unless such incurrence could not reasonably be likely to have a
Material Adverse Effect, (iv) terminate, or permit any member of the Controlled
Group to terminate, any Plan where such event could result in any liability of
any Loan Party or any member of the Controlled Group or the imposition of a lien
on the property of any Loan Party or any member of the Controlled Group pursuant
to Section 4068 of ERISA, unless such termination could not reasonably be likely
to have a Material Adverse Effect, (v) without prior written notice to Agent,
assume, or permit any member of the Controlled Group to assume, any obligation
to contribute to any Multiemployer Plan not disclosed on Schedule 5.8(d), (vi)
incur, or permit any member of the Controlled Group to incur, any withdrawal
liability to any Multiemployer Plan, unless such incurrence could not reasonably
be likely to have a Material Adverse Effect, (vii) fail promptly to notify Agent
of the occurrence of any Termination Event, (viii) fail to comply, or permit a
member of the Controlled Group to fail to comply, with the requirements of ERISA
or the Code or other applicable laws in respect of any Plan, unless such failure
could not reasonably be likely to have a Material Adverse Effect, or (ix) fail
to meet, or permit any member of the Controlled Group to fail to meet, all
minimum funding requirements under ERISA or the Code or postpone or delay or
allow any member of the Controlled Group to postpone or delay any funding
requirement with respect of any Plan, unless such failure, postponement or delay
could not reasonably be likely to have a Material Adverse Effect.
7.16. Prepayment of Indebtedness.
Except as permitted pursuant to Section 7.17, at any time, directly or
indirectly, prepay any Indebtedness (other than to Lenders), or repurchase,
redeem, retire or otherwise acquire any Indebtedness of any Loan Party.
7.17. Subordinated Debt Documentation; Senior Secured Documentation; Bond
Make-Well Documentation; IRB Documentation.
At any time, directly or indirectly, pay, prepay, repurchase, redeem,
retire or otherwise acquire, or make any payment on account of any principal of,
interest on or premium payable in connection with the repayment or redemption of
the (i) Indebtedness under the Senior Secured Documentation, except for the
payment of interest thereon and payments of principal on the Senior Secured Debt
pursuant to the terms of paragraph 3(b) of the Note (as defined in the Senior
Secured Documentation) as in effect on the Closing Date; (ii) Indebtedness under
the Bond Make-Well Documentation, except for the payment of interest thereon;
(iii) Indebtedness under any IRB, except for the payment of interest and
scheduled payments of principal thereon; and (iv) Indebtedness under the
Subordinated Debt Documentation, except as permitted under the subordination
provisions of the Subordinated Debt Documentation; provided, however, that none
of the payments permitted under clauses (i), (ii), (iii) or (iv) above may be
made if a Default or Event of Default shall be in existence or would result
therefrom.
7.18. State of Organization.
Change the State in which it is incorporated or otherwise organized, unless
it has given the Agent not less than thirty (30) days prior written notice
thereof.
7.19. Amendment and/or Modification of Agreements.
Enter into any amendment, waiver or modification of the Senior Secured
Documentation (except as not prohibited by the related Intercreditor Agreement),
Bond Make-Well Documentation, IRBs or Subordinated Debt Documentation, or any
related agreements that would be adverse to the Agent or the Lenders, without
the prior written consent of Agent and the Required Lenders.
7.20. IRS Form 8821.
Revoke IRS Form 8821 designating Agent as Borrowers' appointee to receive
directly from the IRS, on an on-going basis, certain tax information, notices
and other written communication or fail to take actions necessary to renew such
Form 8821 prior to its expiration for all time periods prior to the Termination
Date.
7.21. BJI Parent.
Notwithstanding any provisions of this Article VII to the contrary, BJI
Parent shall not (i) own any assets, (ii) incur or suffer to exist any
Indebtedness, or (iii) engage in any business activity of any kind, other than
as described on Schedules 7.21(i), (ii) and (iii). IN ADDITION, SUBJECT TO THE
EXPRESS TERMS OF THE DEFINITION OF BJI PARENT, IT IS HEREBY AGREED THAT BJI
PARENT SHALL NOT CONSTITUTE A BORROWER OR GUARANTOR HEREUNDER AND THAT THE SOLE
RECOURSE OF THE AGENT AND THE LENDERS WITH RESPECT TO BJI PARENT SHALL BE TO THE
COLLATERAL IN WHICH BJI PARENT HAS GRANTED A LIEN TO AGENT UNDER THIS AGREEMENT
AND THE BJI PARENT PLEDGE AGREEMENT.
7.22 Most Favored Indebtedness.
Directly or indirectly, (a) incur any Indebtedness that purports to be by
its terms (or by the terms of any agreement governing such Indebtedness)
subordinated to any other Indebtedness of any of the Loan Parties, as the case
may be, unless such Indebtedness is also by its terms (or by the terms of any
agreement governing such Indebtedness) made expressly subordinate to the
Obligations to at least the same extent and in the same manner as such
Indebtedness is subordinated to such other Indebtedness of the Loan Parties, as
the case may be; (b) xxxxx x Xxxx in any of its assets, rights or properties (or
any of the assets, rights or properties of any of its Subsidiaries) without at
the same time granting a Lien in such asset, right and/or property to the Agent
hereunder as Collateral for the Obligations (such Lien to be a first priority
perfected Lien, subject to Permitted Encumbrances and the terms of the
Intercreditor Agreement); or (c) Guarantee, or permit any of its Subsidiaries to
guarantee, any Indebtedness, without providing, or causing such Subsidiary to
provide, a Guaranty to Agent of the Obligations pursuant to terms acceptable to
Agent.
VIII. CONDITIONS PRECEDENT.
8.1. Conditions to Initial Advances.
The agreement of Lenders to make the initial Advances requested to be made
on the Closing Date is subject to the satisfaction, or waiver by Lenders,
immediately prior to or concurrently with the making of such Advances, of the
following conditions precedent:
(a) Notes. Agent shall have received the Notes duly executed and delivered
by an authorized officer of each Borrower;
(b) Filings, Registrations, Recordings and Searches. Each document
(including, without limitation, any UCC financing statement) required by this
Agreement, any related agreement or under law or reasonably requested by the
Agent to be filed, registered or recorded in order to create, in favor of Agent,
a perfected security interest in or lien upon the Collateral shall have been
properly filed, registered or recorded in each jurisdiction in which the filing,
registration or recordation thereof is so required or requested, and Agent shall
have received an acknowledgment copy, or other evidence satisfactory to it, of
each such filing, registration or recordation and satisfactory evidence of the
payment of any necessary fee, tax or expense relating thereto. The Agent shall
also have received UCC, tax, judgment and other lien searches with respect to
each Loan Party in such jurisdictions as the Agent shall require, and the
results of such searches shall be satisfactory to the Agent;
(c) Proceedings of Loan Parties. Agent shall have received a copy of the
resolutions in form and substance reasonably satisfactory to Agent, of the Board
of Directors (or equivalent authority) of each Loan Party authorizing (i) the
execution, delivery and performance of this Agreement, the Other Documents, and
all other agreements related to the Transactions (collectively the "Transaction
Documents") and (ii) the granting by each Loan Party of the security interests
in and liens upon the Collateral, in each case certified by the Secretary or an
Assistant Secretary of each Loan Party as of the Closing Date; and, such
certificate shall state that the resolutions thereby certified are in accordance
with the provisions of the charter, operating agreement, LLC agreement or
partnership agreement and the law of the jurisdiction of such Loan Party's
organizations or formation and have not been amended, modified, revoked or
rescinded as of the date of such certificate;
(d) Incumbency Certificates of Loan Parties. Agent shall have received a
certificate of the Secretary or an Assistant Secretary of each Loan Party, dated
the Closing Date, as to the incumbency and signature of the officers of each
Loan Party executing this Agreement, any certificate or other documents to be
delivered by it pursuant hereto, together with evidence of the incumbency of
such Secretary or Assistant Secretary;
(e) Certificates. Agent shall have received a copy of the articles or
certificate of incorporation or other charter documents of each Loan Party, and
all amendments thereto, certified by the Secretary of State or other appropriate
official of its jurisdiction of organization as of a date that is not more than
thirty (30) days prior to the Closing Date, together with copies of the by-laws
or similar documents of each Loan Party and all agreements of each Loan Party's
shareholders or other equityholders certified as accurate and complete by the
Secretary of each Loan Party;
(f) Good Standing Certificates. Agent shall have received good standing
certificates for each Loan Party dated not more than thirty (30) days prior to
the Closing Date, issued by the Secretary of State or other appropriate official
of each Loan Party's jurisdiction of organization and each jurisdiction where
the conduct of each Loan Party's business activities or the ownership of its
properties necessitates qualification;
(g) Legal Opinion. Agent shall have received the executed legal opinions of
Akerman Senterfitt & Xxxxxx, P.A. and local counsel to Loan Parties, each in
form and substance satisfactory to Agent which shall cover such matters incident
to the transactions contemplated by this Agreement and the Other Documents as
Agent may reasonably require and each Loan Party hereby authorizes and directs
such counsel to deliver such opinions to Agent and Lenders;
(h) No Litigation. (i) No litigation, investigation or proceeding before or
by any arbitrator or Governmental Body shall be continuing or threatened against
any Loan Party or against the officers or directors of, or equivalent Persons
with respect to, any Loan Party (A) in connection with this Agreement and/or the
Other Documents or any of the transactions contemplated thereby and which, in
the reasonable opinion of Agent, is deemed material or (B) which could, in the
reasonable opinion of Agent, have a Material Adverse Effect; and (ii) no
injunction, writ, restraining order or other order of any nature materially
adverse to any Loan Party or the conduct of its business or inconsistent with
the due consummation of the Transactions shall have been issued by any
Governmental Body;
(i) Financial Condition Certificates. Agent shall have received an executed
Financial Condition Certificate in the form of Exhibit 8.1(i).
(j) Collateral Examination; Consultant's Report. Agent shall have received
(x) completed Collateral examinations and received appraisals, the results of
which shall be satisfactory in form and substance to Agents, of the Receivables
and Inventory, and (y) a consultant's report conducted by Evergreen LLC with
respect to the Loan Parties' business, operations, financial condition, assets
and systems, in form and substance satisfactory to Agent;
(k) Fees. Agent shall have received all fees payable to Agent and Lenders
on or prior to the Closing Date pursuant to Article
III and under the Fee Letter;
(l) Pro Forma Financial Statements. Agent shall have received a copy of the
Pro Forma Financial Statements, which shall be satisfactory in all respects to
Lenders;
(m) Senior Secured Documentation IRB Documentation and Subordinated Debt
Documentation. Agent shall have received final executed copies of the Senior
Secured Documentation, IRB Documentation and the Subordinated Debt Documentation
and all related agreements, documents and instruments as in effect on the
Closing Date and the transactions contemplated by such documentation shall be
consummated prior to or concurrently with the making of the initial Advance
including, without limitation, the receipt by Borrowers of the cash proceeds of
the Senior Secured Documentation in the sum of $135,000,000;
(n) Intercreditor Agreements. Agent shall have received the Intercreditor
Agreements duly executed by all parties thereto, in each instance satisfactory
in form and substance to Agent in its sole discretion;
(o) Guaranties, Pledge Agreement, Other Documents. Agent shall have
received the executed BJI Parent Pledge Agreement and all Other Documents, each
in form and substance satisfactory to Lenders;
(p) Insurance. Agent shall have received in form and substance satisfactory
to Agent, true and correct copies of Loan Parties' casualty insurance policies,
together with loss payable endorsements on Agent's standard form of loss payee
endorsement naming Agent as loss payee, and true and correct copies of Loan
Parties' liability insurance policies, together with endorsements naming Agent
as an additional insured;
(q) Environmental Reports. Agent shall have received all environmental
studies and reports prepared by independent environmental engineering firms with
respect to all Real Property owned or leased by Loan Parties, the foregoing to
be in form and substance satisfactory to Agent;
(r) Payment Instructions. Agent shall have received written instructions
from Loan Parties directing the application of proceeds of the initial Advances
made pursuant to this Agreement;
(s) Blocked Accounts. Agent shall have received duly executed agreements
establishing the Blocked Accounts or Depository Accounts with financial
institutions acceptable to Agent for the collection or servicing of the
Receivables and proceeds of the Collateral;
(t) Consents. Agent shall have received any and all Consents necessary to
permit the effectuation of the transactions contemplated by this Agreement and
the Other Documents; and, Agent shall have received such Consents and waivers of
such third parties as might assert claims with respect to the Collateral, as
Agent and its counsel shall deem necessary, provided, however, that no such
Consent from a landlord or bailee of any Inventory, shall be required with
respect to any Real Property owned by such landlord or bailee, if such Consent
can not be obtained by the applicable Loan Party after such Loan Party shall
have used all commercially reasonable efforts to do so;
(u) No Material Adverse Change. (i) since December 31, 2003, there shall
not have occurred any event, condition or state of facts which could reasonably
be expected to have a Material Adverse Effect and (ii) no representations made
or information supplied to Agent and/or Lenders shall have been proven to be
inaccurate or misleading in any material respect;
(v) Leasehold Agreements. Agent shall have received landlord or warehouse
agreements satisfactory to Agent with respect to all premises leased by Loan
Parties at which Inventory or Equipment is located;
(w) Contract Review. Agent shall have reviewed all material contracts of
Loan Parties including, without limitation, leases, union contracts, labor
contracts, vendor supply contracts, license agreements and distributorship
agreements and such contracts and agreements shall be satisfactory in all
respects to Agent;
(x) Officer's Certificate. Agent shall have received an officer's
certificate signed by the Chief Financial Officer of each Loan Party dated as of
the date hereof, stating that (i) all representations and warranties set forth
in this Agreement and the Other Documents are true and correct on and as of such
date, (ii) Loan Parties are on such date in compliance with all the terms and
provisions set forth in this Agreement and the Other Documents and (iii) on such
date no Default or Event of Default has occurred or is continuing;
(y) Borrowing Base. Agent shall have received a duly executed Borrowing
Base Certificate (prepared on a consolidated basis) which shall indicate that
the aggregate amount of Eligible Receivables and Eligible Inventory is
sufficient in value and amount to support Revolving Advances and Letters of
Credit in the amount requested by Borrowers on the Closing Date;
(z) Undrawn Availability. After giving effect to the initial Advances
hereunder, Borrowers shall have Undrawn Availability of at least $12,500,000;
(aa) Control Agreements. Agent shall have received control agreements with
respect to all Collateral in which a security interest may be perfected by means
of control under the UCC; and
(bb) Other. All corporate and other proceedings, and all documents,
instruments, information and other legal matters in connection with the
Transactions, including, without limitation, the tax identification number for
each Loan Party and any and all documents, instruments, information and other
legal matters pertaining to the identify of each Loan Party and Affiliate, shall
be satisfactory in form and substance to Agent, Lenders and their counsel.
8.2. Conditions to Each Advance.
The agreement of Lenders to make any Advance requested to be made on any
date (including, without limitation, the initial Advance), is subject to the
satisfaction of the following conditions precedent as of the date such Advance
is made:
(a) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to this Agreement and any
related agreements to which it is a party, and each of the representations and
warranties contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this Agreement or
any related agreement shall be true and correct in all material respects on and
as of such date as if made on and as of such date (unless such representation or
warranty expressly refers to a specific date);
(b) No Default. No Event of Default or Default shall have occurred and be
continuing on such date, or would exist after giving effect to the Advances
requested to be made, on such date and, in the case of the initial Advance,
after giving effect to the consummation of the Transactions; provided, however,
that Lenders, in their sole discretion, may continue to make Advances
notwithstanding the existence of an Event of Default or Default and that any
Advances so made shall not be deemed a waiver of any such Event of Default or
Default;
(c) Maximum Revolving Advances. In the case of any Revolving Advances
requested to be made, after giving effect thereto, the aggregate Revolving
Advances shall not exceed the maximum amount of Revolving Advances permitted
under Section 2.1; and
(d) Maximum Letters of Credit. In the case of any Letters of Credit
requested to be made, after giving effect thereto, the aggregate Letter of
Credit Obligations shall not exceed the maximum amount permitted under Section
2.8.
(e) IRB Letter of Credit. In the case that a Letter of Credit is requested
to be issued with respect to the IRB, in addition to the foregoing requirements,
Agent and Issuer shall receive such agreements, documents, opinions and
information as is customary with respect to Letters of Credit provided as
support for industrial revenue bonds or similar instruments, including the
agreements, security agreements and opinions provided to the existing letter of
credit issuer with respect to the IRB (provided, however, that the form of
Letter of Credit issued with respect to the IRB shall include such modifications
as may be reasonably requested by Agent and/or Issuer (including a confirmation
that the Letter of Credit need not be "reinstated" in connection with a tender
of any IRB, unless the Agent and/or Issuer shall be reimbursed for the related
draw under the Letter of Credit through the receipt of remarketing proceeds)).
(f) Each request for an Advance by any Borrower hereunder shall constitute
a representation and warranty by each Borrower as of the date of such Advance
that the conditions contained in this subsection shall have been satisfied.
IX. INFORMATION AS TO LOAN PARTIES.
Each Loan Party shall, until satisfaction in full of the Obligations and
the termination of this Agreement:
9.1. Disclosure of Material Matters.
Immediately upon learning thereof, report to Agent all matters materially
adversely affecting the value, enforceability or collectibility of any material
portion of the Collateral including, without limitation, any Loan Party's
reclamation or repossession of, or the return to any Loan Party of, a material
amount of goods or claims or disputes asserted by any Customer or other obligor.
9.2. Schedules.
(a) Deliver to Agent, on Wednesday of each Week (or more frequently if
Undrawn Availability is less than $9,000,000), a Borrowing Base Certificate
(which shall be calculated as of the last day of the immediately preceding Week
and which shall not be binding upon Agent or restrictive of Agent's rights under
this Agreement).
(b) Deliver to Agent on or before the fifteenth (15th) day of each month as
and for the prior month (a) accounts receivable agings, (b) accounts payable
agings, and (c) Inventory reports. In addition, each Loan Party shall deliver to
Agent at such intervals as Agent may reasonably require: (i) confirmatory
assignment schedules, (ii) copies of Customer's invoices, (iii) evidence of
shipment or delivery, and (iv) such further schedules, documents and/or
information regarding the Collateral as Agent may require including, without
limitation, trial balances and test verifications. Agent shall have the right to
confirm and verify all Receivables by any manner and through any medium it
considers advisable and do whatever it may deem reasonably necessary to protect
its interests hereunder.
(c) The items to be provided under Sections 9.2(a) and 9.2(b) are to be in
form reasonably satisfactory to Agent and executed by each Loan Party and
delivered to Agent from time to time solely for Agent's convenience in
maintaining records of the Collateral, and any Loan Party's failure to deliver
any of such items to Agent shall not affect, terminate, modify or otherwise
limit Agent's Lien with respect to the Collateral.
9.3. Environmental Reports.
Furnish Agent, concurrently with the delivery of the financial statements
referred to in Sections 9.7 and 9.8, with a certificate signed by the President
or Chief Administrative Officer of each Loan Party, in his capacity as such,
stating, to the best of his knowledge, that each Loan Party is in compliance in
all material respects with all federal, state and local laws relating to
environmental protection and control and occupational safety and health except
to the extent the failure to so be in compliance could not reasonably be
expected to have a Material Adverse Effect or a material adverse effect on the
value of the affected parcel of Real Property . To the extent any Loan Party is
not in material compliance with the foregoing laws, the certificate shall set
forth with specificity all areas of non-compliance and the proposed action such
Loan Party will implement in order to achieve full compliance.
9.4. Litigation.
Promptly notify Agent in writing of any litigation, suit or administrative
proceeding affecting any Loan Party, whether or not the claim is covered by
insurance, and of any suit or administrative proceeding, which in any such case
could reasonably be expected to have a Material Adverse Effect.
9.5. Material Occurrences.
Promptly notify Agent in writing upon the occurrence of (a) any Event of
Default or Default; (b) any event of default under the Senior Secured
Documentation, Bond Make-Well Documentation, any IRBs and/or Subordinated Debt
Documentation; (c) any event which with the giving of notice or lapse of time,
or both, would constitute an event of default under the Subordinated Debt
Documentation; (d) any event, development or circumstance whereby any financial
statements or other reports furnished to Agent fail in any material respect to
present fairly, in accordance with GAAP consistently applied, the financial
condition or operating results of any Loan Party as of the date of such
statements; (e) any material accumulated retirement plan funding deficiency
which, if such deficiency continued for two plan years and was not corrected as
provided in Section 4971 of the Code, could subject any Loan Party to a tax
imposed by Section 4971 of the Code; (f) each and every default by any Loan
Party which might result in the acceleration of the maturity of any material
Indebtedness, including the names and addresses of the holders of such
Indebtedness with respect to which there is a default existing or with respect
to which the maturity has been or could be accelerated, and the amount of such
Indebtedness; and (g) any other development in the business or affairs of any
Loan Party which could reasonably be expected to have a Material Adverse Effect;
in each case describing the nature thereof and the action Loan Parties propose
to take with respect thereto.
9.6. Government Receivables.
Notify Agent promptly if any of its Receivables arise out of contracts
between any Loan Party and the United States, any state, or any department,
agency or instrumentality of any of them.
9.7. Annual Financial Statements.
Furnish Agent as soon as available (but in any event within (i) one hundred
twenty (120) days after the end of the 2003 fiscal year of Loan Parties and (ii)
ninety (90) days after the end of each subsequent fiscal year of Loan Parties),
financial statements of Loan Parties on a consolidated basis including, but not
limited to, statements of income and stockholders' equity and cash flow from the
beginning of the current fiscal year to the end of such fiscal year and the
balance sheet as at the end of such fiscal year, all prepared in accordance with
GAAP applied on a basis consistent with prior practices, and in reasonable
detail and reported upon without qualification by an independent certified
public accounting firm selected by Loan Parties and satisfactory to Agent (the
"Accountants"). In addition, the reports shall be accompanied by a certificate
of each Loan Party's Chief Administrative Officer or Chief Financial Officer in
his capacity as such which shall state that, based on an examination sufficient
to permit him to make an informed statement, no Default or Event of Default
exists, or, if such is not the case, specifying such Default or Event of
Default, its nature, when it occurred, whether it is continuing and the steps
being taken by Loan Parties with respect to such event, and such certificate
shall have appended thereto calculations which set forth Loan Parties'
compliance with the requirements or restrictions imposed by Section 6.8. The
foregoing certificate of each Loan Party's Chief Financial Officer or Chief
Administrative Officer shall also set forth a calculation of Senior Secured
Leverage Ratio for the purposes of determining the Applicable Margin with
respect to the then current Calculation Period.
9.8. Quarterly Financial Statements.
Furnish Agent as soon as available (but in any event within forty-five (45)
days after the end of each fiscal quarter, an unaudited balance sheet of Loan
Parties on a consolidated basis and unaudited statements of income and
stockholders' equity and cash flow of Loan Parties reflecting results of
operations from the beginning of the fiscal year to the end of such quarter and
for such quarter, prepared on a basis consistent with prior practices and
complete and correct in all material respects, subject to normal and recurring
year end adjustments that individually and in the aggregate are not material to
the business of Loan Parties. Each such balance sheet, statement of income and
stockholders' equity and statement of cash flow shall set forth a comparison of
the figures for (w) the current fiscal period and (x) the current year-to-date
with the figures for (y) the same fiscal period and year-to-date period of the
immediately preceding fiscal year and (z) the projections for such fiscal period
and year-to-date period delivered pursuant to Section 5.5(b) or Section 9.12, as
applicable. The financial statements shall be accompanied by a certificate
signed by the Chief Financial Officer or Chief Administrative Officer of each
Loan Party in his capacity as such, which shall state that, based on an
examination sufficient to permit him to make an informed statement, no Default
or Event of Default exists, or, if such is not the case, specifying such Default
or Event of Default, its nature, when it occurred, whether it is continuing and
the steps being taken by Loan Parties with respect to such default, and such
certificate shall have appended thereto calculations which set forth Loan
Parties' compliance with the requirements or restrictions imposed by Section
6.8. The foregoing certificate of each Loan Party's Chief Financial Officer or
Chief Administrative Officer shall also set forth a calculation of Senior
Secured Leverage Ratio for the purposes of determining the Applicable Margin
with respect to the then current Calculation Period.
9.9. Monthly Financial Statements.
Furnish Agent as soon as available (but in any event within thirty (30)
days after the end of each month), an unaudited balance sheet of Loan Parties'
on a consolidated basis and unaudited statements of income and stockholders'
equity and cash flow of Loan Parties on a consolidated basis reflecting results
of operations from the beginning of the fiscal year to the end of such month and
for such month, prepared on a basis consistent with prior practices and complete
and correct in all material respects, subject to normal and recurring quarterly
and year-end adjustments that individually and in the aggregate are not material
to the business of Loan Parties. Each such balance sheet, statement of income
and stockholders' equity and statement of cash flow shall set forth a comparison
of the figures for (w) the current fiscal period and (x) the current
year-to-date with the figures for (y) the same fiscal period and year-to-date
period of the immediately preceding fiscal year and (z) the projections for such
fiscal period and year-to-date period delivered pursuant to Section 5.5(b) or
Section 9.12, as applicable. The financial statements shall be accompanied by a
certificate of each Loan Party's Chief Financial Officer or Chief Administrative
Officer, which shall state that, based on an examination sufficient to permit
him to make an informed statement, no Default or Event of Default exists, or, if
such is not the case, specifying such Default or Event of Default, its nature,
when it occurred, whether it is continuing and the steps being taken by Loan
Parties with respect to such event, and such certificate shall have appended
thereto calculations which set forth Loan Parties' compliance with the
requirements or restrictions imposed by Section 6.8.
9.10. Other Reports.
Furnish Agent as soon as available, but in any event within ten (10) days
after the issuance thereof, with (i) copies of such financial statements,
reports and returns as each Loan Party shall send to its stockholders and (ii)
copies of all notices sent pursuant to the Senior Secured Documentation, Bond
Make-Well Documentation, IRBs and/or Subordinated Debt Documentation.
9.11. Additional Information.
Furnish Agent with such additional information as Agent shall reasonably
request in order to enable Agent to determine whether the terms, covenants,
provisions and conditions of this Agreement and the Other Documents have been
complied with by Loan Parties including, without limitation and without the
necessity of any request by Agent, (a) copies of all environmental audits and
reviews, (b) at least thirty (30) days prior thereto, notice of any Loan Party's
opening of any new office or place of business or any Loan Party's closing of
any existing office or place of business, (c) promptly upon any Loan Party's
learning thereof, notice of any material labor dispute to which any Loan Party
may become a party, any strikes or walkouts relating to any of its plants or
other facilities, and the expiration of any labor contract to which any Loan
Party is a party or by which any Loan Party is bound; and (d) any financial
reports or other information furnished to the Senior Secured Agent or any of the
holder of the Senior Secured Debt.
9.12. Projected Operating Budget.
Furnish Agent, no later than thirty (30) days prior to the beginning of
each Loan Party's fiscal years commencing with fiscal year 2004, a
month-by-month projected operating budget and cash flow of Loan Parties on a
consolidated basis for such fiscal year (including an income statement for each
month and a balance sheet as at the end of the last month in each fiscal
quarter), such projections to be accompanied by a certificate signed by the
President or Chief Financial Officer of each Loan Party to the effect that such
projections have been prepared on the basis of sound financial planning practice
consistent with past budgets and financial statements and that such officer has
no reason to question the reasonableness of any material assumptions on which
such projections were prepared.
9.13. Variances From Operating Budget.
Furnish Agent on a prompt monthly basis with a copy of the Borrowing
Agent's internally prepared management analysis and commentary pertaining to
material variances from budgets submitted by Loan Parties pursuant to this
Agreement.
9.14. Notice of Suits, Adverse Events.
Furnish Agent with prompt notice of (i) any lapse or other termination of
any Consent issued to any Loan Party by any Governmental Body or any other
Person that is material to the operation of any Loan Party's business, (ii) any
refusal by any Governmental Body or any other Person to renew or extend any such
Consent; and (iii) copies of any periodic or special reports filed by any Loan
Party with any Governmental Body or Person, if such reports indicate any
material change in the business, operations, affairs or condition of any Loan
Party, or if copies thereof are requested by Agent or any Lender, and (iv)
copies of any material notices and other communications from any Governmental
Body or Person which specifically relate to any Loan Party.
9.15. ERISA Notices and Requests.
Furnish Agent with prompt written notice in the event that (i) any Loan
Party or any member of the Controlled Group knows or has reason to know that a
Termination Event has occurred to the extent that such Termination Event could
reasonably be expected to have a Material Adverse Effect, together with a
written statement describing such Termination Event and the action, if any,
which such Loan Party or member of the Controlled Group has taken, is taking, or
proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, Department of Labor or PBGC with
respect thereto, (ii) any Loan Party or any member of the Controlled Group knows
or has reason to know that a prohibited transaction (as defined in Sections 406
of ERISA and 4975 of the Code) has occurred together with a written statement
describing such transaction and the action which such Loan Party or any member
of the Controlled Group has taken, is taking or proposes to take with respect
thereto, (iii) a funding waiver request has been filed with respect to any Plan
together with all communications received by any Loan Party or any member of the
Controlled Group with respect to such request, (iv) any increase in the benefits
of any existing Plan or the establishment of any new Plan or the commencement of
contributions to any Plan to which any Loan Party or any member of the
Controlled Group was not previously contributing shall occur to the extent that
any of the foregoing could reasonably be expected to have a Material Adverse
Effect, (v) any Loan Party or any member of the Controlled Group shall receive
from the PBGC a notice of intention to terminate a Plan or to have a trustee
appointed to administer a Plan, together with copies of each such notice, (vi)
any Loan Party or any member of the Controlled Group shall receive any
unfavorable determination letter from the Internal Revenue Service regarding the
qualification of a Plan under Section 401(a) of the Code, to the extent that any
such determination could reasonably be expected to have a Material Adverse
Effect, together with copies of each such letter; (vii) any Loan Party or any
member of the Controlled Group shall receive a notice regarding the imposition
of withdrawal liability, together with copies of each such notice; (viii) any
Loan Party or any member of the Controlled Group shall fail to make a required
installment or any other required payment under Section 412 of the Code on or
before the due date for such installment or payment if the failure to do so
could reasonably be expected to have a Material Adverse Effect; or (ix) any Loan
Party or any member of the Controlled Group knows that (a) a Multiemployer Plan
has been terminated, (b) the administrator or plan sponsor of a Multiemployer
Plan intends to terminate a Multiemployer Plan, or (c) the PBGC has instituted
or will institute proceedings under Section 4042 of ERISA to terminate a
Multiemployer Plan.
9.16. Additional Documents.
Execute and deliver to Agent, upon request, such documents and agreements
as Agent may, from time to time, reasonably request to carry out the purposes,
terms or conditions of this Agreement.
X. EVENTS OF DEFAULT.
The occurrence of any one or more of the following events shall constitute
an "Event of Default":
10.1. Failure by any Loan Party to pay any principal or interest on the
Obligations when due, whether at maturity or by reason of acceleration pursuant
to the terms of this Agreement or by notice of intention to prepay, or by
required prepayment or failure to pay any other liabilities or make any other
payment, fee or charge provided for herein when due or in any Other Document;
10.2. (i) Failure by Loan Parties to perform, keep or observe any provision
of Sections 4.2, 4.3, 4.4, 4.5, 4.6, 4.9, 4.10, 4.11, 4.15(h), 4.21, 4.22, 4.23,
6.8, 6.9, 6.12 or Article VII or (ii) any representation or warranty made or
deemed made by any Loan Party in this Agreement or any Other Document or in any
certificate, document or financial or other statement furnished at any time in
connection herewith or therewith shall be false or inaccurate in any material
respect on the date when made or deemed to have been made;
10.3. Failure by any Loan Party to (i) furnish financial information
(including, without limitation, information to be furnished under Article IX) or
other information and documentation, in each case, when due or when reasonably
requested or (ii) permit the inspection of its books or records;
10.4. Issuance of a notice of Lien, levy, assessment, injunction or
attachment against a material portion of any Loan Party's property which is not
stayed or lifted within thirty (30) days;
10.5. Failure or neglect of any Loan Party to perform, keep or observe any
term, provision, condition or covenant herein contained, or contained in any
Other Document, now or hereafter entered into between any Loan Party, Agent
and/or any Lender (to the extent such breach is not otherwise embodied in any
other provision of this Article X for which a different grace or cure period is
specified or which constitutes an immediate Event of Default under this
Agreement or the Other Documents), which is not cured or waived within ten (10)
days after the earlier of (i) an officer of such Loan Party becoming aware of
such default or (ii) receipt by such Loan Party of notice from the Agent of such
default;
10.6. Any judgment or judgments are rendered or judgment Liens filed
against one or more Loan Parties or any Subsidiary or any of their respective
assets for an aggregate amount in excess of $1,500,000 (which is not covered by
insurance or as to which the insurance company has not acknowledged coverage and
liability) which within thirty (30) days of such rendering or filing (or in any
event no less than five (5) days prior to the date of any proposed sale
thereunder) is not either satisfied, stayed, vacated, bonded or discharged of
record;
10.7. Any Loan Party or Subsidiary thereof shall (i) apply for, consent to
or suffer the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or similar fiduciary of itself or of all or a
substantial part of its property, (ii) make a general assignment for the benefit
of creditors, (iii) commence a voluntary case under any state or federal
bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a bankrupt
or insolvent, (v) file a petition seeking to take advantage of any other law
providing for the relief of debtors, (vi) acquiesce to, or fail to have
dismissed, within thirty (30) days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (vii) take any action for the
purpose of effecting any of the foregoing;
10.8. Any Loan Party shall admit in writing its inability, or be generally
unable, to pay its debts as they become due or cease operations of its present
business;
10.9. Any change in any Loan Party's condition or affairs (financial or
otherwise) which in Agent's reasonable opinion has caused or evidences a
Material Adverse Effect;
10.10. Any event shall occur which requires any Loan Party or any
Subsidiary to purchase, redeem or otherwise acquire or offer to purchase, redeem
or otherwise acquire all or any portion of any Subordinated Debt; or any Loan
Party or any Subsidiary shall for any other reason purchase, redeem or otherwise
acquire or offer to purchase , redeem or otherwise acquire, or make any other
payments in respect of, all or any portion of any Subordinated Indebtedness,
except to the extent expressly permitted hereunder;
10.11. (i) Failure of any Loan Party or any Subsidiary to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in Section 10.1)
having an aggregate principal amount in excess of $1,500,000, beyond the end of
any grace period provided therefor; or (ii) breach or default by any Loan Party
or any Subsidiary with respect to any other material term of (a) one or more
items of Indebtedness in the aggregate principal of $1,500,000, or (b) any loan
agreement, indenture or other agreement relating to such items(s) of
Indebtedness, if the effect of such breach or default is to cause, or to permit
the holder or holders of that Indebtedness (or trustee on behalf of such
holders) to cause, that Indebtedness to become or be declared due and payable
prior to its stated maturity (upon the giving or receiving of notice, lapse of
time, both, or otherwise);
10.12. Any Lien created hereunder or provided for hereby or under any Other
Document for any reason ceases to be or is not a valid and perfected Lien having
a first priority interest (subject, as to priority, to Liens described in
clauses (d), (e) and/or (g) of the definition of Permitted Encumbrances);
10.13. An event of default has occurred and been declared under the Senior
Secured Documentation, Bond Make-Well Documentation, IRBs and/or Subordinated
Debt Documentation, which default shall not have been cured or waived within any
applicable grace period and for which lenders or agents thereunder are permitted
to take action;
10.14. Termination or breach of any Guaranty or similar agreement executed
and delivered to Agent in connection with the Obligations of any Loan Party, or
if any Guarantor attempts to terminate, challenges the validity of, or its
liability under, any such Guaranty or similar agreement;
10.15. Any Change of Control shall occur; or
10.16. Any material provision of this Agreement or any Other Document
shall, for any reason, cease to be valid and binding on any Loan Party, or any
Loan Party shall so claim in writing to Agent;
10.17. Any portion of the Collateral shall be seized or taken by a
Governmental Body, or any Loan Party or the title and rights of any Loan Party
shall have become the subject matter of litigation which might, in the opinion
of Agent, upon final determination, result in impairment or loss of the security
provided by this Agreement or the Other Documents;
10.18. If any Loan Party attempts to terminate or challenge the validity of
any Intercreditor Agreement;
10.19. An event or condition specified in Section 7.15 or Section 9.15
shall occur or exist with respect to any Plan and, as a result of such event or
condition, together with all other such events or conditions, any Loan Party or
any member of the Controlled Group shall incur, or in the opinion of Agent be
reasonably likely to incur, a liability to a Plan or the PBGC (or both) which,
in the reasonable judgment of Agent, would have a Material Adverse Effect; or
10.20. Any Loan Party or Affiliate thereof shall be subject to any statute,
rule, regulation or executive order which would prohibit or restrict the Agent
or the Lenders from entering into, or consummating the transactions contemplated
by, this Agreement, including without limitation, (a) rules or regulations
issued by the United States Treasury Department, including, without limitation,
the Office of Foreign Asset Control, and (b) executive orders, or lists
appending executive orders, pursuant to which (1) property or interests in
property have been blocked, or (2) persons have been identified as parties with
whom the Agent or the Lenders may not transact business.
XI. AGENT'S AND LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT.
11.1. Rights and Remedies.
Upon the occurrence of (i) an Event of Default pursuant to Section 10.7,
all Obligations shall be immediately due and payable and this Agreement and the
obligation of Lenders to make Advances shall be deemed terminated; (ii) any of
the other Events of Default and at any time thereafter (such default not having
previously been cured), at the option of Required Lenders all Obligations shall
be immediately due and payable and Lenders shall have the right to terminate
this Agreement and to terminate the obligation of Lenders to make Advances and
(iii) a filing of a petition against any Loan Party in any involuntary case
under any state or federal bankruptcy laws, the obligation of Lenders to make
Advances hereunder shall be terminated other than as may be required by an
appropriate order of the bankruptcy court having jurisdiction over any Loan
Party. Upon the occurrence and continuance of any Event of Default, Agent shall
have the right to exercise any and all other rights and remedies provided for
herein, under the UCC and at law or equity generally, including, without
limitation, the right to foreclose the security interests granted herein and to
realize upon any Collateral by any available judicial procedure and/or to take
possession of and sell any or all of the Collateral with or without judicial
process. Agent may enter any Loan Party's premises or other premises without
legal process and without incurring liability to any Loan Party therefor, and
Agent may thereupon, or at any time thereafter, in its discretion without notice
or demand, take the Collateral and remove the same to such place as Agent may
deem advisable and Agent may require Loan Parties to make the Collateral
available to Agent at a convenient place. With or without having the Collateral
at the time or place of sale, Agent may sell the Collateral, or any part
thereof, at public or private sale, at any time or place, in one or more sales,
at such price or prices, and upon such terms, either for cash, credit or future
delivery, as Agent may elect. Except as to that part of the Collateral which is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, Agent shall give Loan Parties reasonable
notification of such sale or sales, it being agreed that in all events written
notice mailed to Loan Parties at least five (5) days prior to such sale or sales
is reasonable notification. At any public sale Agent or any Lender may bid for
and become the purchaser, and Agent, any Lender or any other purchaser at any
such sale thereafter shall hold the Collateral sold absolutely free from any
claim or right of whatsoever kind, including any equity of redemption and such
right and equity are hereby expressly waived and released by each Loan Party.
Agent may specifically disclaim any warranties of title or the like at any sale
of Collateral. In connection with the exercise of the foregoing remedies, Agent
is granted permission to use all of each Loan Party's trademarks, trade styles,
trade names, patents, patent applications, licenses, franchises and other
proprietary rights which are used in connection with (a) Inventory for the
purpose of disposing of such Inventory and (b) Equipment for the purpose of
completing the manufacture of unfinished goods.
11.2. Application of Proceeds.
Subject to the terms of the Intercreditor Agreements, the proceeds realized
from the sale of any Collateral shall be applied as follows: first, to the
reasonable costs, expenses and attorneys' fees and expenses incurred by Agent
for collection and for acquisition, completion, protection, removal, storage,
sale and delivery of the Collateral; second, to interest due upon any of the
Obligations; third, to fees payable in connection with this Agreement; fourth,
to furnish to Agent cash collateral in an amount not less than 105% of the
aggregate undrawn amount of all Letters of Credit, such cash collateral
arrangements to be in form and substance satisfactory to Agent; fifth, to the
principal of the Obligations; sixth, to all remaining unpaid Obligations; and
seventh, to the appropriate Loan Party (subject to the equal or prior claims of
other Persons under applicable law). If any deficiency shall arise, Loan Parties
shall remain liable to Agent and Lenders therefor. If it is determined by an
authority of competent jurisdiction that a disposition by Agent did not occur in
a commercially reasonably manner, Agent may obtain a deficiency judgment for the
difference between the amount of the Obligation and the amount that a
commercially reasonable sale would have yielded. Agent will not be considered to
have offered to retain the Collateral in satisfaction of the Obligations unless
Agent has entered into a written agreement with Loan Party to that effect.
11.3. Agent's Discretion.
Agent shall have the right in its sole discretion to determine which
rights, Liens, security interests or remedies Agent may at any time pursue,
relinquish, subordinate, or modify or to take any other action with respect
thereto and such determination will not in any way modify or affect any of
Agent's or Lenders' rights hereunder.
11.4. Setoff.
In addition to any other rights which Agent, any Lender or any Issuer may
have under applicable law, upon the occurrence of an Event of Default hereunder,
Agent, such Lender and such Issuer shall have a right to apply any Loan Party's
property held by Agent, such Lender or such Issuer to reduce the Obligations.
11.5. Rights and Remedies not Exclusive.
The enumeration of the foregoing rights and remedies is not intended to be
exhaustive and the exercise of any right or remedy shall not preclude the
exercise of any other right or remedies provided for herein or otherwise
provided by law, all of which shall be cumulative and not alternative.
XII. WAIVERS AND JUDICIAL PROCEEDINGS.
12.1. Waiver of Notice.
Each Loan Party hereby waives notice of non-payment of any of the
Receivables, demand, presentment, protest and notice thereof with respect to any
and all instruments, notice of acceptance hereof, notice of loans or advances
made, credit extended, Collateral received or delivered, or any other action
taken in reliance hereon, and all other demands and notices of any description,
except such as are expressly provided for herein.
12.2. Delay.
No delay or omission on Agent's or any Lender's part in exercising any
right, remedy or option shall operate as a waiver of such or any other right,
remedy or option or of any default.
12.3. Jury Waiver.
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
XIII. EFFECTIVE DATE AND TERMINATION.
13.1. Term.
This Agreement, which shall inure to the benefit of and shall be binding
upon the respective successors and permitted assigns of each Loan Party, Agent
and each Lender, shall become effective on the date hereof and shall continue in
full force and effect until the earliest of (x) May 1, 2007 (the "Original
Term"), (y) the acceleration of all Obligations pursuant to the terms of this
Agreement or (z) the date on which this Agreement shall be terminated in
accordance with the provisions hereof or by operation of law (the earliest of
(x), (y) and (z), the "Termination Date"). Loan Parties may terminate this
Agreement at any time upon fifteen (15) days' prior written notice upon payment
in full of the Obligations.
13.2. Termination.
The termination of the Agreement shall not affect any Loan Party's, Agent's
or any Lender's rights, or any of the Obligations having their inception prior
to the effective date of such termination, and the provisions hereof shall
continue to be fully operative until all transactions entered into, rights or
interests created or Obligations have been fully disposed of, concluded or
liquidated. The Liens and rights granted to Agent and Lenders hereunder and the
financing statements filed hereunder shall continue in full force and effect,
notwithstanding the termination of this Agreement or the fact that Borrowers'
Account may from time to time be temporarily in a zero or credit position, until
all of the Obligations of each Loan Party have been paid or performed in full
after the termination of this Agreement or each Loan Party has furnished Agent
and Lenders with an indemnification reasonably satisfactory to Agent and Lenders
with respect thereto. Accordingly, each Loan Party waives any rights which it
may have under Section 9-513(c) of the UCC to demand the filing of termination
statements with respect to the Collateral, and Agent shall not be required to
send such termination statements to each Loan Party, or to file them with any
filing office, unless and until this Agreement shall have been terminated in
accordance with its terms and all Obligations paid in full in immediately
available funds. All representations, warranties, covenants, waivers and
agreements contained herein shall survive termination hereof until all
Obligations are paid or performed in full.
XIV. REGARDING AGENT.
14.1. Appointment.
Each Lender hereby designates GMACCF to act as Agent for such Lender under
this Agreement and the Other Documents. Each Lender hereby irrevocably
authorizes Agent to take such action on its behalf under the provisions of this
Agreement and the Other Documents and to exercise such powers and to perform
such duties hereunder and thereunder as are specifically delegated to or
required of Agent by the terms hereof and thereof and such other powers as are
reasonably incidental thereto and Agent shall hold all Collateral, payments of
principal and interest, fees (except the fees set forth in the Fee Letter),
charges and collections (without giving effect to any collection days) received
pursuant to this Agreement, for the ratable benefit of Lenders. Agent may
perform any of its duties hereunder by or through its agents or employees. As to
any matters not expressly provided for by this Agreement (including without
limitation, collection of the Note) Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be
binding; provided, however, that Agent shall not be required to take any action
which exposes Agent to liability or which is contrary to this Agreement or the
Other Documents or applicable law unless Agent is furnished with an
indemnification reasonably satisfactory to Agent with respect thereto.
14.2. Nature of Duties.
Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement and the Other Documents. None of Agent, any Lender, or
any Issuer nor any of their respective officers, directors, employees or agents
shall be (i) liable for any action taken or omitted by them as such hereunder or
in connection herewith, unless caused by their gross (not mere) negligence or
willful misconduct, or (ii) responsible in any manner for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement, or in any of the Other Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any of the
Other Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, or any of the Other Documents
or for any failure of Loan Party to perform its obligations hereunder. Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any of the Other Documents, or to inspect the
properties, books or records of any Loan Party. The duties of Agent as respects
the Advances to Borrowers shall be mechanical and administrative in nature;
Agent shall not have by reason of this Agreement a fiduciary relationship in
respect of any Lender; and nothing in this Agreement, expressed or implied, is
intended to or shall be so construed as to impose upon Agent any obligations in
respect of this Agreement except as expressly set forth herein.
14.3. Lack of Reliance on Agent and Resignation.
(a) Independently and without reliance upon Agent, any Issuer or any other
Lender, each Lender has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of each Loan Party in
connection with the making and the continuance of the Advances hereunder and the
taking or not taking of any action in connection herewith, and (ii) its own
appraisal of the creditworthiness of each Loan Party. 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 making of the Advances or at any time or times
thereafter except as shall be provided by any Loan Party pursuant to the terms
hereof. Agent shall not be responsible to any Lender for any recitals,
statements, information, representations or warranties herein or in any
agreement, document, certificate or a statement delivered in connection with or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement or any Other Document, or of the
financial condition of any Loan Party, or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement, the Other Documents or the financial condition
of any Loan Party, or the existence of any Event of Default or any Default.
(b) Agent may resign on sixty (60) days' written notice to each of Lenders
and Borrowing Agent and upon such resignation, the Required Lenders will
promptly designate a successor Agent reasonably satisfactory to Loan Parties. If
no such successor Agent is appointed at the end of such sixty (60) day period,
Agent may designate one of the Lenders as a successor Agent.
(c) Any such successor Agent shall succeed to the rights, powers and duties
of Agent, and the term "Agent" shall mean such successor agent effective upon
its appointment, and the former Agent's rights, powers and duties as Agent shall
be terminated, without any other or further act or deed on the part of such
former Agent. After any Agent's resignation as Agent, the provisions of this
Article XIV shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
14.4. Certain Rights of Agent.
If Agent shall request instructions from Lenders with respect to any act or
action (including failure to act) in connection with this Agreement or any Other
Document, Agent shall be entitled to refrain from such act or taking such action
unless and until Agent shall have received instructions from the Required
Lenders; and Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, Lenders shall not have any right of
action whatsoever against Agent as a result of its acting or refraining from
acting hereunder in accordance with the instructions of the Required Lenders.
14.5. Reliance.
Agent shall be entitled to rely, and shall be fully protected in relying,
upon any note, writing, resolution, notice, statement, certificate, telex,
teletype or telecopier message, cablegram, order or other document, electronic
or "e-mail" message or telephone message believed by it to be genuine and
correct and to have been signed, sent or made by the proper person or entity,
and, with respect to all legal matters pertaining to this Agreement and the
Other Documents and its duties hereunder, upon advice of counsel selected by it.
Agent may employ agents and attorneys-in-fact and shall not be liable for the
default or misconduct of any such agents or attorneys-in-fact selected by Agent
with reasonable care.
14.6. Notice of Default.
Agent shall not be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default hereunder or under the Other Documents, unless
Agent has received notice from a Lender or a Loan Party referring to this
Agreement or the Other Documents, describing such Default or Event of Default
and stating that such notice is a "notice of default". In the event that Agent
receives such a notice, Agent shall give notice thereof to Lenders. Agent shall
take such action with respect to such Default or Event of Default (including,
without limitation, the institution of the Default Rate pursuant to Section 3.1
hereof) as shall be reasonably directed by the Required Lenders; provided, that,
unless and until Agent shall have received such directions, Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default (including, without limitation, the
institution of the Default Rate pursuant to Section 3.1 hereof) as it shall deem
advisable in the best interests of Lenders.
14.7. Indemnification.
To the extent Agent is not reimbursed and indemnified by Loan Parties, each
Lender will reimburse and indemnify Agent and each Issuer in proportion to its
respective portion of the Advances (or, if no Advances are outstanding,
according to its Commitment Percentage), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against Agent and such Issuer in performing
its duties hereunder, or in any way relating to or arising out of this Agreement
or any Other Document; provided that, Lenders shall not be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
indemnified party's gross (not mere) negligence or willful misconduct.
14.8. Agent in its Individual Capacity.
With respect to the obligation of Agent to lend under this Agreement, the
Advances made by it shall have the same rights and powers hereunder as any other
Lender and as if it were not performing the duties as Agent specified herein;
and the term "Lender" or any similar term shall, unless the context clearly
otherwise indicates, include Agent in its individual capacity as a Lender. Agent
may engage in business with any Loan Party as if it were not performing the
duties specified herein, and may accept fees and other consideration from any
Loan Party for services in connection with this Agreement or otherwise without
having to give notice to or account for the same to Lenders.
14.9. Delivery of Documents.
To the extent Agent receives documents and information from any Loan Party
pursuant to Sections 9.7, 9.8 and 9.9, Agent will promptly furnish such
documents and information to Lenders.
14.10. Loan Parties' Undertaking to Agent.
Without prejudice to their respective obligations to Lenders under the
other provisions of this Agreement, each Loan Party hereby undertakes with Agent
to pay to Agent from time to time on demand all amounts from time to time due
and payable by it for the account of Agent or Lenders or any of them pursuant to
this Agreement to the extent not already paid. Any payment made pursuant to any
such demand shall pro tanto satisfy the relevant Loan Party's obligations to
make payments for the account of Lenders or the relevant one or more of them
pursuant to this Agreement.
XV. GUARANTY.
15.1. Guaranty.
Each Guarantor hereby unconditionally guarantees, as a primary obligor and
not merely as a surety, jointly and severally with each other Guarantor when and
as due, whether at maturity, by acceleration, by notice of prepayment or
otherwise, the due and punctual performance of all Obligations. Each payment
made by any Guarantor pursuant to this Guaranty shall be made in lawful money of
the United States in immediately available funds.
15.2. Waivers.
Each Guarantor hereby absolutely, unconditionally and irrevocably waives
(i) promptness, diligence, notice of acceptance, notice of presentment of
payment and any other notice hereunder, (ii) demand of payment, protest, notice
of dishonor or nonpayment, notice of the present and future amount of the
Obligations and any other notice with respect to the Obligations, (iii) any
requirement that the Agent or any Lender protect, secure, perfect or insure any
Lien or any property subject thereto or exhaust any right or take any action
against any other Loan Party, or any Person or any Collateral, (iv) any other
action, event or precondition to the enforcement hereof or the performance by
each such Guarantor of the Obligations, and (v) any defense arising by any lack
of capacity or authority or any other defense of any Loan Party or any notice,
demand or defense by reason of cessation from any cause of Obligations other
than payment and performance in full of the Obligations by the Loan Parties and
any defense that any other guarantee or security was or was to be obtained by
Agent.
15.3. No Defense.
No invalidity, irregularity, voidableness, voidness or unenforceability of
this Agreement or any Other Document or any other agreement or instrument
relating thereto, or of all or any part of the Obligations or of any collateral
security therefor shall affect, impair or be a defense hereunder.
15.4. Guaranty of Payment.
The Guaranty hereunder is one of payment and performance, not collection,
and the obligations of each Guarantor hereunder are independent of the
Obligations of the other Loan Parties, and a separate action or actions may be
brought and prosecuted against any Guarantor to enforce the terms and conditions
of this Article XV, irrespective of whether any action is brought against any
other Loan Party or other Persons or whether any other Loan Party or other
Persons are joined in any such action or actions. Each Guarantor waives any
right to require that any resort be had by Agent or any Lender to any security
held for payment of the Obligations or to any balance of any deposit account or
credit on the books of any Agent or any Lender in favor of any Loan Party or any
other Person. No election to proceed in one form of action or proceedings, or
against any Person, or on any Obligations, shall constitute a waiver of Agent's
right to proceed in any other form of action or proceeding or against any other
Person unless Agent has expressed any such right in writing. Without limiting
the generality of the foregoing, no action or proceeding by Agent against any
Loan Party under any document evidencing or securing indebtedness of any Loan
Party to Agent shall diminish the liability of any Guarantor hereunder, except
to the extent Agent receives actual payment on account of Obligations by such
action or proceeding, notwithstanding the effect of any such election, action or
proceeding upon the right of subrogation of any Guarantor in respect of any Loan
Party.
15.5. Liabilities Absolute.
The liability of each Guarantor hereunder shall be absolute, unlimited and
unconditional and shall not be subject to any reduction, limitation, impairment,
discharge or termination for any reason, including, without limitation, any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any claim, defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of any
other Obligation or otherwise. Without limiting the generality of the foregoing,
the obligations of each Guarantor shall not be discharged or impaired, released,
limited or otherwise affected by:
(i) any change in the manner, place or terms of payment or performance,
and/or any change or extension of the time of payment or performance of,
release, renewal or alteration of, or any new agreements relating to any
Obligation, any security therefor, or any liability incurred directly or
indirectly in respect thereof, or any rescission of, or amendment, waiver or
other modification of, or any consent to departure from, this Agreement or any
Other Document, including any increase in the Obligations resulting from the
extension of additional credit to any Borrower or otherwise;
(ii) any sale, exchange, release, surrender, loss, abandonment, realization
upon any property by whomsoever at any time pledged or mortgaged to secure, or
howsoever securing, all or any of the Obligations, and/or any offset there
against, or failure to perfect, or continue the perfection of, any Lien in any
such property, or delay in the perfection of any such Lien, or any amendment or
waiver of or consent to departure from any other guaranty for all or any of the
Obligations;
(iii) the failure of the Agent or any Lender to assert any claim or demand
or to enforce any right or remedy against any Borrower or any other Loan Party
or any other Person under the provisions of this Agreement or any Other Document
or any other document or instrument executed and delivered in connection
herewith or therewith;
(iv) any settlement or compromise of any Obligation, any security therefor
or any liability (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and any subordination of the payment of
all or any part thereof to the payment of any obligation (whether due or not) of
any Loan Party to creditors of any Loan Party other than any other Loan Party;
(v) any manner of application of Collateral, or proceeds thereof, to all or
any of the Obligations, or any manner of sale or other disposition of any
Collateral for all or any of the Obligations or any other assets of any Loan
Party; and
(vi) any other agreements or circumstance of any nature whatsoever that may
or might in any manner or to any extent vary the risk of any Guarantor, or that
might otherwise at law or in equity constitute a defense available to, or a
discharge of, the Guaranty hereunder and/or the obligations of any Guarantor, or
a defense to, or discharge of, any Loan Party or any other Person or party
hereto or the Obligations or otherwise with respect to the Advances or other
financial accommodations to any Borrower pursuant to this Agreement and/or the
Other Documents.
15.6. Waiver of Notice.
The Agent shall have the right to do any of the above without notice to or
the consent of any Guarantor and each Guarantor expressly waives any right to
notice of, consent to, knowledge of and participation in any agreements relating
to any of the above or any other present or future event relating to Obligations
whether under this Agreement or otherwise or any right to challenge or question
any of the above and waives any defenses of such Guarantor which might arise as
a result of such actions.
15.7. Agent's Discretion.
Agent may at any time and from time to time (whether prior to or after the
revocation or termination of this Agreement) without the consent of, or notice
to, any Guarantor, and without incurring responsibility to any Guarantor or
impairing or releasing the Obligations, apply any sums by whomsoever paid or
howsoever realized to any Obligations regardless of what Obligations remain
unpaid.
15.8. Reinstatement.
(a) The Guaranty provisions herein contained shall continue to be effective
or be reinstated, as the case may be, if claim is ever made upon the Agent or
any Lender for repayment or recovery of any amount or amounts received by such
Person in payment or on account of any of the Obligations and such Person repays
all or part of said amount for any reason whatsoever, including, without
limitation, by reason of any judgment, decree or order of any court or
administrative body having jurisdiction over such Person or the respective
property of each, or any settlement or compromise of any claim effected by such
Person with any such claimant (including any Loan Party); and in such event each
Guarantor hereby agrees that any such judgment, decree, order, settlement or
compromise or other circumstances shall be binding upon such Guarantor,
notwithstanding any revocation hereof or the cancellation of any note or other
instrument evidencing any Obligation, and each Guarantor shall be and remain
liable to the Agent and/or Lenders for the amount so repaid or recovered to the
same extent as if such amount had never originally been received by such
Person(s).
(b) Agent shall not be required to marshal any assets in favor of any
Guarantor, or against or in payment of Obligations.
(c) No Guarantor shall be entitled to claim against any present or future
security held by Agent from any Person for Obligations in priority to or equally
with any claim of Agent, any Lender or Issuer, or assert any claim for any
liability of any Loan Party to any Guarantor in priority to or equally with
claims of Agent, any Lender or Issuer for Obligations, and no Guarantor shall be
entitled to compete with Agent with respect to, or to advance any equal or prior
claim to any security held by Agent for Obligations.
(d) If any Loan Party makes any payment to Agent, which payment is wholly
or partly subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to any Person under any federal or provincial
statute or at common law or under equitable principles, then to the extent of
such payment, the Obligation intended to be paid shall be revived and continued
in full force and effect as if the payment had not been made, and the resulting
revived Obligation shall continue to be guaranteed, uninterrupted, by each
Guarantor hereunder.
(e) All present and future monies payable by any Loan Party to any
Guarantor, whether arising out of a right of subrogation or otherwise, are
assigned to Agent for its benefit and for the ratable benefit of Lenders as
security for such Guarantor's liability to Agent and Lenders hereunder and are
postponed and subordinated to Agent's prior right to payment in full of
Obligations. Except to the extent prohibited otherwise by this Agreement, all
monies received by any Guarantor from any Loan Party shall be held by such
Guarantor as agent and trustee for Agent. This assignment, postponement and
subordination shall only terminate when the Obligations are paid in full in cash
and this Agreement is irrevocably terminated.
(f) Each Loan Party acknowledges this assignment, postponement and
subordination and, except as otherwise set forth herein, agrees to make no
payments to any Guarantor without the prior written consent of Agent. Each Loan
Party agrees to give full effect to the provisions hereof.
15.9. Action Upon Event of Default.
Upon the occurrence and during the continuance of any Event of Default, the
Agent may and upon written request of the Required Lenders shall, without notice
to or demand upon any Loan Party or any other Person, declare any obligations of
such Guarantor hereunder immediately due and payable, and shall be entitled to
enforce the obligations of each Guarantor. Upon such declaration by the Agent,
the Agent and Lenders (and any Affiliates thereof) are hereby authorized at any
time and from time to time to set off and apply any and all deposits (general or
special, time or demand, provisions or final) at any time held and other
indebtedness at any time owing by the Agent or Lenders (or such Affiliate) to or
for the credit or the account of any Guarantor against any and all of the
obligations of each Guarantor now or hereafter existing hereunder, whether or
not the Agent or Lenders shall have made any demand hereunder against any other
Loan Party and although such obligations may be contingent and unmatured. The
rights of the Agent and Lenders hereunder are in addition to other rights and
remedies (including other rights of set-off) which the Agent and Lenders may
have. Upon such declaration by the Agent, with respect to any claims of any
Guarantor against any Loan Party (the "Claims"), the Agent shall have the full
right on the part of the Agent in its own name or in the name of such Guarantor
to collect and enforce such Claims by legal action, proof of debt in bankruptcy
or other liquidation proceedings, vote in any proceeding for the arrangement of
debts at any time proposed, or otherwise, the Agent and each of its officers
being hereby irrevocably constituted attorneys-in-fact for each Guarantor for
the purpose of such enforcement and for the purpose of endorsing in the name of
each Guarantor any instrument for the payment of money. Each Guarantor will
receive as trustee for the Agent and will pay to the Agent forthwith upon
receipt thereof any amounts which such Guarantor may receive from any Loan Party
on account of the Claims. Each Guarantor agrees that at no time hereafter will
any of the Claims be represented by any notes, other negotiable instruments or
writings, except and in such event they shall either be made payable to the
Agent, or if payable to any Guarantor, shall forthwith be endorsed by such
Guarantor to the Agent. Each Guarantor agrees that no payment on account of the
Claims or any security interest therein shall be created, received, accepted or
retained during the continuance of any Event of Default nor shall any financing
statement be filed with respect thereto by any Guarantor.
15.10. Statute of Limitations.
Any acknowledgment or new promise, whether by payment of principal or
interest or otherwise and whether by any Loan Party or others (including any
Lenders) with respect to any of the Obligations shall, if the statute of
limitations in favor of any Guarantor against the Agent or Lenders shall have
commenced to run, toll the running of such statute of limitations and, if the
period of such statute of limitations shall have expired, prevent the operation
of such statute of limitations.
15.11. Interest.
All amounts due, owing and unpaid from time to time by any Guarantor
hereunder shall bear interest at the interest rate per annum then chargeable
with respect to Domestic Rate Loans constituting Revolving Advances.
15.12. Guarantor's Investigation.
Each Guarantor acknowledges receipt of a copy of each of this Agreement and
the Other Documents. Each Guarantor has made an independent investigation of the
Loan Parties and of the financial condition of the Loan Parties. Neither Agent
nor any Lender has made and neither Agent nor any Lender does make any
representations or warranties as to the income, expense, operation, finances or
any other matter or thing affecting any Loan Party nor has Agent or any Lender
made any representations or warranties as to the amount or nature of the
Obligations of any Loan Party to which this Article XV applies as specifically
herein set forth, nor has Agent or any Lender or any officer, agent or employee
of Agent or any Lender or any representative thereof, made any other oral
representations, agreements or commitments of any kind or nature, and each
Guarantor hereby expressly acknowledges that no such representations or
warranties have been made and such Guarantor expressly disclaims reliance on any
such representations or warranties.
15.13. Termination.
The provisions of this Article XV shall remain in effect until the
indefeasible payment in full in cash of all Obligations and irrevocable
termination of this Agreement.
XVI. BORROWING AGENCY.
16.1. Borrowing Agency Provisions.
(a) Each Borrower hereby irrevocably designates Borrowing Agent to be its
attorney and agent and in such capacity to borrow, sign and endorse notes, and
execute and deliver all instruments, documents, writings and further assurances
now or hereafter required hereunder, on behalf of such Borrower or Borrowers,
and hereby authorizes Agent to pay over or credit all loan proceeds hereunder in
accordance with the request of Borrowing Agent.
(b) The handling of this credit facility as a co-borrowing facility with a
borrowing agent in the manner set forth in this Agreement is solely as an
accommodation to Borrowers and at their request. None of Agent, any Issuer or
any Lender shall incur liability to Borrowers as a result thereof. To induce
Agent and Lenders to do so and in consideration thereof, each Borrower hereby
indemnifies Agent, each Issuer and each Lender and holds Agent, each Issuer and
each Lender harmless from and against any and all liabilities, expenses, losses,
damages and claims of damage or injury asserted against Agent, any Issuer or any
Lender by any Person arising from or incurred by reason of the handling of the
financing arrangements of Borrowers as provided herein, reliance by Agent or any
Lender on any request or instruction from Borrowing Agent or any other action
taken by Agent or any Lender with respect to this Section 16.1 except due to
willful misconduct or gross (not mere) negligence by the indemnified party.
(c) All Obligations shall be joint and several, and each Borrower shall
make payment upon the maturity of the Obligations by acceleration or otherwise,
and such obligation and liability on the part of each Borrower shall in no way
be affected by any extensions, renewals and forbearance granted by Agent or any
Lender to any Loan Party, failure of Agent or any Lender to give any Borrower
notice of borrowing or any other notice, any failure of Agent or any Lender to
pursue or preserve its rights against any Loan Party, the release by Agent or
any Lender of any Collateral now or thereafter acquired from any Loan Party, and
such agreement by each Loan Party to pay upon any notice issued pursuant thereto
is unconditional and unaffected by prior recourse by Agent or any Lender to the
other Loan Parties or any Collateral for such Loan Party's Obligations or the
lack thereof.
XVII. MISCELLANEOUS.
17.1. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applied to contracts to be performed wholly within
the State of New York. Any judicial proceeding brought by or against any Loan
Party with respect to any of the Obligations, this Agreement or any related
agreement may be brought in any court of competent jurisdiction in the State of
New York, United States of America, and, by execution and delivery of this
Agreement, each Loan Party accepts for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. Each Loan Party hereby irrevocably
waives the right to remove any action commenced by the Agent or any Lender in a
state court to federal court. Each Loan Party hereby waives personal service of
any and all process and agrees that all such service of process may be made upon
Borrowing Agent as agent for each Loan Party by certified or registered mail,
return receipt requested, addressed to Borrowing Agent, at the address set forth
in Section 17.6 of this Agreement and service so made shall be complete five (5)
days after the same has been posted. Each Loan Party irrevocably appoints
Borrowing Agent as such Loan Party's agent for the purpose of accepting service
within the State of New York. Nothing herein shall affect the right to serve
process in any manner permitted by law or shall limit the right of Agent or any
Lender to bring proceedings against any Loan Party in the courts of any other
jurisdiction. Each Loan Party waives any objection to jurisdiction and venue of
any action instituted hereunder and shall not assert any defense based on lack
of jurisdiction or venue or based upon forum non conveniens. Any judicial
proceeding by any Loan Party against Agent or any Lender involving, directly or
indirectly, any matter or claim in any way arising out of, related to or
connected with this Agreement or any related agreement, shall be brought only in
a federal or state court located in the City of New York, State of New York. In
any litigation, trial, arbitration or other dispute resolution proceeding
relating to this Agreement or any of the Other Documents, all directors,
officers, employees and agents of any Loan Party or of its affiliates shall be
deemed to be employees or managing agents of Loan Party for purposes of all
applicable law or court rules regarding the production of witnesses by notice
for testimony (whether in a deposition, at trial or otherwise). Each Loan Party
agrees that Agent's counsel in any such dispute resolution proceeding may
examine any of these individuals as if under cross-examination and that any
discovery deposition of any of them may be used in that proceeding as if it were
an evidence deposition. Each Loan Party in any event will use all commercially
reasonable efforts to produce in any such dispute resolution proceeding, at the
time and in the manner requested by agent or any lender, all persons, documents
(whether in tangible, electronic or other form) or other things under its
control and relating to the dispute.
17.2. Entire Understanding; Amendments.
(a) This Agreement and the documents executed concurrently herewith contain
the entire understanding between each Loan Party, Agent and each Lender and
supersedes all prior agreements and understandings, if any, relating to the
subject matter hereof. Any promises, representations, warranties or guarantees
not herein contained and hereinafter made shall have no force and effect unless
in writing, signed by Loan Parties', Agent's and each Lender's respective
officers as required under Section 17.2(b) hereof. Neither this Agreement nor
any portion or provisions hereof may be changed, modified, amended, waived,
supplemented, discharged, cancelled or terminated orally or by any course of
dealing, or in any manner other than by an agreement in writing complying with
Section 17.2(b) hereof. Each Loan Party acknowledges that it has been advised by
counsel in connection with the execution of this Agreement and Other Documents
and is not relying upon oral representations or statements inconsistent with the
terms and provisions of this Agreement.
(b) The Required Lenders, Agent with the consent in writing of the Required
Lenders, and Borrowers may, subject to the provisions of this Section 17.2(b),
from time to time enter into written supplemental agreements to this Agreement
or the Other Documents executed by Borrowers, for the purpose of adding or
deleting any provisions or otherwise changing, varying or waiving in any manner
the rights of Lenders, Agent or Loan Parties hereunder or thereunder or the
conditions, provisions or terms hereof or thereof or waiving any Event of
Default hereunder or thereunder, but only to the extent specified in such
written agreements; provided, however, that no such supplemental agreement
shall, without the consent of all Lenders:
(i) increase the Commitment Percentage of any Lender;
(ii) increase the Maximum Revolving Advance Amount;
(iii) extend the maturity of any Note or the due date for any amount
payable hereunder, or decrease the rate of interest or reduce any scheduled
principal payment or fee payable by Borrowers to Lenders pursuant to this
Agreement;
(iv) alter the definition of the term Required Lenders or alter, amend or
modify this Section 17.2(b);
(v) release any Collateral during any calendar year (other than in
accordance with the provisions of this Agreement) having an aggregate value in
excess of $1,000,000;
(vi) change the rights and duties of Agent;
(vii) permit any Revolving Advance to be made if after giving effect
thereto the total of Revolving Advances, Swingline Loans and Letter of Credit
Obligations outstanding hereunder would exceed the Formula Amount for more than
thirty (30) consecutive Business Days or exceed one hundred and ten percent
(110%) of the Formula Amount; or
(viii) increase the Advance Rates above the Advance Rates in effect on the
Closing Date;
and provided, further, that the Maximum Swingline Loan Amount may not be
increased without the consent of the Swingline Lender.
Any such supplemental agreement shall apply equally to each Lender and
shall be binding upon Loan Parties, Lenders and Agent and all future holders of
the Obligations. In the case of any waiver, Loan Parties, Agent and Lenders
shall be restored to their former positions and rights, and any Event of Default
waived shall be deemed to be cured and not continuing, but no waiver of a
specific Event of Default shall extend to any subsequent Event of Default
(whether or not the subsequent Event of Default is the same as the Event of
Default which was waived), or impair any right consequent thereon.
(c) In the event that Agent requests the consent of a Lender pursuant to
this Section 17.2 and such Lender shall not respond or reply to Agent in writing
within ten (10) days of delivery of such request, such Lender shall be deemed to
have consented to the matter that was the subject of the request. In the event
that Agent requests the consent of a Lender pursuant to this Section 17.2 and
such consent is denied, then GMACCF may, at its option, require such Lender to
assign its interest in the Advances to GMACCF or to another Lender or to any
other Person designated by the Agent (the "Designated Lender"), for a price
equal to the then outstanding principal amount thereof plus accrued and unpaid
interest and fees due such Lender, which interest and fees shall be paid when
collected from Borrowers. In the event GMACCF elects to require any Lender to
assign its interest to GMACCF or to the Designated Lender, GMACCF will so notify
such Lender in writing within forty-five (45) days following such Lender's
denial, and such Lender will assign its interest to GMACCF or the Designated
Lender no later than five (5) days following receipt of such notice pursuant to
a Commitment Transfer Supplement executed by such Lender, GMACCF or the
Designated Lender, as appropriate, and Agent.
(d) Notwithstanding the foregoing, Agent may at its discretion and without
the consent of the Required Lenders, voluntarily permit the outstanding
Revolving Advances at any time to exceed the Formula Amount by up to one hundred
and ten percent (110%) of the Formula Amount for up to thirty (30) consecutive
Business Days. For purposes of the preceding sentence, the discretion granted to
Agent hereunder shall not preclude involuntary overadvances that may result from
time to time due to the fact that the Formula Amount was unintentionally
exceeded for any reason, including, but not limited to, Collateral previously
deemed to be either "Eligible Receivables" or "Eligible Inventory", as
applicable, becomes ineligible, collections of Receivables applied to reduce
outstanding Loan Advances are thereafter returned for insufficient funds or
overadvances are made to protect or preserve the Collateral. In the event Agent
involuntarily permits the outstanding Revolving Advances to exceed the Formula
Amount by more than ten percent (10%), Agent shall decrease such excess in as
expeditious a manner as is practicable under the circumstances and not
inconsistent with the reason for such excess. Revolving Advances made after
Agent has determined the existence of involuntary overadvances shall be deemed
to be involuntary overadvances and shall be decreased in accordance with the
preceding sentence.
17.3. Successors and Assigns; Participations; New Lenders.
(a) This Agreement shall be binding upon and inure to the benefit of Loan
Parties, Agent, each Lender, all future holders of the Obligations and their
respective successors and assigns, except that no Loan Party may assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of Agent and each Lender.
(b) Each Loan Party acknowledges that in the regular course of commercial
banking business one or more Lenders may at any time and from time to time sell
participating interests in the Advances to other financial institutions (each
such transferee or purchaser of a participating interest, a "Transferee"). Each
Transferee may exercise all rights of payment (including without limitation
rights of set-off) with respect to the portion of such Advances held by it or
other Obligations payable hereunder as fully as if such Transferee were the
direct holder thereof provided that Loan Parties shall not be required to pay to
any Transferee more than the amount which it would have been required to pay to
Lender which granted an interest in its Advances or other Obligations payable
hereunder to such Transferee had such Lender retained such interest in the
Advances hereunder or other Obligations payable hereunder and in no event shall
Loan Parties be required to pay any such amount arising from the same
circumstances and with respect to the same Advances or other Obligations payable
hereunder to both such Lender and such Transferee. Each Loan Party hereby grants
to any Transferee a continuing security interest in any deposits, moneys or
other property actually or constructively held by such Transferee as security
for the Transferee's interest in the Advances.
(c) Any Lender may with the consent of Agent (which consent shall not be
unreasonably withheld or delayed) sell, assign or transfer all or any part of
its rights under this Agreement and the Other Documents to one or more
additional banks or financial institutions and one or more additional banks or
financial institutions may commit to make Advances hereunder (each a "Purchasing
Lender"), in minimum amounts of not less than $5,000,000, pursuant to a
Commitment Transfer Supplement, executed by a Purchasing Lender, the transferor
Lender, and Agent and delivered to Agent for recording. Upon such execution,
delivery, acceptance and recording, from and after the transfer effective date
determined pursuant to such Commitment Transfer Supplement, (i) Purchasing
Lender thereunder shall be a party hereto and, to the extent provided in such
Commitment Transfer Supplement, have the rights and obligations of a Lender
thereunder with a Commitment Percentage as set forth therein, and (ii) the
transferor Lender thereunder shall, to the extent provided in such Commitment
Transfer Supplement, be released from its obligations under this Agreement, the
Commitment Transfer Supplement creating a novation for that purpose. Such
Commitment Transfer Supplement shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of the Commitment Percentages
arising from the purchase by such Purchasing Lender of all or a portion of the
rights and obligations of such transferor Lender under this Agreement and the
Other Documents. Loan Parties hereby consent to the addition of such Purchasing
Lender and the resulting adjustment of the Commitment Percentages arising from
the purchase by such Purchasing Lender of all or a portion of the rights and
obligations of such transferor Lender under this Agreement and the Other
Documents. Loan Parties shall execute and deliver such further documents and do
such further acts and things in order to effectuate the foregoing.
(d) Agent shall maintain at its address a copy of each Commitment Transfer
Supplement delivered to it and a register (the "Register") for the recordation
of the names and addresses of the Advances owing to each Lender from time to
time. The entries in the Register shall be conclusive, in the absence of
manifest error, and Loan Parties, Agent and Lenders may treat each Person whose
name is recorded in the Register as the owner of the Advance recorded therein
for the purposes of this Agreement. The Register shall be available for
inspection by Loan Parties or any Lender at any reasonable time and from time to
time upon reasonable prior notice. Agent shall receive a fee in the amount of
$3,500 payable by the applicable Purchasing Lender upon the effective date of
each transfer or assignment to such Purchasing Lender.
(e) Loan Parties authorize each Lender to disclose to any Transferee or
Purchasing Lender and any prospective Transferee or Purchasing Lender any and
all financial information in such Lender's possession concerning Loan Parties
which has been delivered to such Lender by or on behalf of Loan Parties pursuant
to this Agreement or in connection with such Lender's credit evaluation of Loan
Parties.
(f) (A) If any Lender or participant is a "foreign corporation, partnership
or trust" within the meaning of the Code (hereinafter, "Foreign Lender") and the
Foreign Lender claims exemption from, or a reduction of, U.S. withholding tax
under Sections 1441 or 1442 of the Code, such Foreign Lender agrees with and in
favor of the Agent, to deliver to the Agent:
(1) if such Foreign Lender claims an exemption from, or a reduction of,
withholding tax under a United States of America tax treaty, properly completed
IRS Forms W-8BEN and W-8ECI before the payment of any interest in the first
calendar year and before the payment of any interest in each third succeeding
calendar year during which interest may be paid under this Agreement;
(2) if such Foreign Lender claims that interest paid under this Agreement
is exempt from United States of America withholding tax because it is
effectively connected with a United States of America trade or business of such
Foreign Lender, two properly completed and executed copies of IRS Form W-8ECI
before the payment of any interest is due in the first taxable year of such
Foreign Lender and in each succeeding taxable year of such Foreign Lender during
which interest may be paid under this Agreement, and IRS Form W-9; and
(3) such other form or forms as may be required under the Code or other
laws of the United States of America as a condition to exemption from, or
reduction of, United States of America withholding tax.
(B) Such Foreign Lender agrees to promptly notify the Agent of any change
in circumstances which would modify or render invalid any claimed exemption or
reduction.
(C) If any Foreign Lender claims exemption from, or reduction of,
withholding tax under a United States of America tax treaty by providing IRS
Form W-8BEN and such Foreign Lender sells, assigns, grants a participation in,
or otherwise transfers all or part of the Obligations owing to such Foreign
Lender, such Foreign Lender agrees to notify the Agent of the percentage amount
in which it is no longer the beneficial owner of Obligations of any Borrower to
such Foreign Lender. To the extent of such percentage amount, the Agent will
treat such Foreign Lender's IRS Form W-8BEN as no longer valid.
(D) If any Foreign Lender claiming exemption from United States of America
withholding tax by filing IRS Form W-8ECI with the Agent sells, assigns, grants
a participation in, or otherwise transfers all or part of the Obligations owing
to such Foreign Lender, such Foreign Lender agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.
(E) If any Foreign Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such
Foreign Lender an amount equivalent to the applicable withholding tax after
taking into account such reduction. If the forms or other documentation required
by subsection (A) of this Section are not delivered to the Agent, then the Agent
may withhold from any interest payment to such Foreign Lender not providing such
forms or other documentation an amount equivalent to the applicable withholding
tax.
(F) If the IRS or any other Governmental Body of the United States of
America or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Foreign Lender
(because the appropriate form was not delivered, was not properly executed, or
because such Foreign Lender failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Foreign Lender shall indemnify
the Agent fully for all amounts paid, directly or indirectly, by the Agent as
tax or otherwise, including penalties and interest, and including any taxes
imposed by any jurisdiction on the amounts payable to the Agent under this
Section, together with all costs and expenses (including the fees, expenses and
disbursements of counsel for Agent). The obligation of the Foreign Lenders under
this subsection shall survive the payment of all Obligations, the termination of
this Agreement and the resignation or replacement of the Agent.
(g) At the request of Agent from time to time both before and after the
Closing Date, the Loan Parties will assist Agent in the syndication of the
credit facility provided pursuant to this Agreement and the Other Documents.
Such assistance shall include, but not be limited to (i) prompt assistance in
the preparation of an information memorandum and the verification of the
completeness and accuracy of the information and the reasonableness of the
projections contained therein, (ii) preparation of offering materials and
financial projections by Loan Parties and their advisors, (iii) providing Agent
with all information reasonably deemed necessary by Agent to successfully
complete the syndication, (iv) confirmation as to the accuracy and completeness
of such offering materials and information and confirmation that management's
projections are based on assumptions believed by the Loan Parties to be
reasonable at the time made, and (v) participation of the Loan Parties' senior
management in meetings and conference calls with potential lenders at such times
and places as Agent may reasonably request.
17.4. Application of Payments.
Agent shall have the continuing and exclusive right to apply or reverse and
re-apply any payment and any and all proceeds of Collateral to any portion of
the Obligations. To the extent that any Loan Party makes a payment or Agent or
any Lender receives any payment or proceeds of the Collateral for any Loan
Party's benefit, which are subsequently invalidated, declared to be fraudulent
or preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver, custodian or any other party under any bankruptcy law,
common law or equitable cause, then, to such extent, the Obligations or part
thereof intended to be satisfied shall be revived and continue as if such
payment or proceeds had not been received by Agent or such Lender.
17.5. Indemnity.
Each Loan Party shall indemnify Agent, each Issuer, each Lender and each of
their respective officers, directors, Affiliates, employees and agents from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements of any kind or
nature whatsoever (including, without limitation, reasonable fees and
disbursements of counsel) which may be imposed on, incurred by, or asserted
against Agent, such Issuer or any Lender in any litigation, proceeding or
investigation instituted or conducted by any governmental agency or
instrumentality or any other Person with respect to any aspect of, or any
transaction contemplated by, or referred to in, or any matter related to, this
Agreement or the Other Documents, whether or not Agent, any Issuer or any Lender
is a party thereto, except to the extent that any of the foregoing arises out of
the gross negligence or willful misconduct of the party being indemnified.
17.6. Notice.
Any notice or request hereunder may be given to any Loan Party or to Agent
or any Lender at their respective addresses set forth below or at such other
address as may hereafter be specified in a notice designated as a notice of
change of address under this Section 17.6. Any notice or request hereunder shall
be given by (a) hand delivery, (b) overnight courier, (c) registered or
certified mail, return receipt requested, or (d) telecopy to the number set out
below (or such other number as may hereafter be specified in a notice designated
as a notice of change of address) with electronic confirmation of its receipt.
Any notice or other communication required or permitted pursuant to this
Agreement shall be deemed given (a) when personally delivered to any officer of
the party to whom it is addressed, (b) on the earlier of actual receipt thereof
or three (3) days following posting thereof by certified or registered mail,
postage prepaid, (c) upon actual receipt thereof when sent by a recognized
overnight delivery service or (d) upon actual receipt thereof when sent by
telecopier to the number set forth below with electronic confirmation of its
receipt, in each case addressed to each party at its address set forth below or
at such other address as has been furnished in writing by a party to the other
by like notice:
(A) If to Agent or to GMACCF GMAC COMMERCIAL FINANCE LLC
as Lender: 1290 Avenue of the Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copies to: GMAC COMMERCIAL FINANCE LLC
1290 Avenue of the Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
and: Xxxx & Hessen LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxx Podair, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(B) If to a Lender other than GMACCF, as specified on the signature pages
hereof.
(C) If to Borrowing Agent or any Xxxxx Xxxxxx International, Inc.
Loan Party: 0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with copies to: Xxxxx Xxxxxx International, Inc.
c/o Trivest Partners, L.P.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
and: Akerman Senterfitt & Xxxxxx, P.A.
Xxx Xxxxxxxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
17.7. Survival.
The obligations of Loan Parties under Sections 2.2(g), 3.7, 3.9, 4.19(h),
14.7 and 17.5 shall survive termination of this Agreement and the Other
Documents and payment in full of the Obligations.
17.8. Waiver of Subrogation.
Each Loan Party expressly waives any and all rights of subrogation,
reimbursement, indemnity, exoneration, contribution or any other claim which
such Loan Party may now or hereafter have against the other Loan Parties or
other Person directly or contingently liable for 'he Obligations hereunder, or
against or with respect to the other Loan Parties' property (including, without
limitation, any property which is Collateral for the Obligations), arising from
the existence or performance of this Agreement, until termination of this
Agreement and repayment in full of the Obligations.
17.9. Severability.
If any part of this Agreement is contrary to, prohibited by, or deemed
invalid under applicable laws or regulations, such provision shall be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given effect so far as possible.
17.10. Expenses.
All costs and expenses including, without limitation:
(a) reasonable attorneys' fees and disbursements incurred by Agent and
Agent on behalf of Lenders (i) in all efforts made to enforce payment of any
Obligation or effect collection of any Collateral, or (ii) in connection with
the entering into, modification, amendment, administration and enforcement of
this Agreement or any consents or waivers hereunder and all related agreements,
documents and instruments, or (iii) in instituting, maintaining, preserving,
enforcing and foreclosing on Agent's Lien on any of the Collateral, whether
through judicial proceedings or otherwise, or (iv) in defending or prosecuting
any actions or proceedings arising out of or relating to Agent's or any Lender's
transactions with any Loan Party, or (v) in connection with any advice given to
Agent or any Lender with respect to its rights and obligations under this
Agreement and all related agreements;
(b) reasonable attorneys' fees and disbursements incurred by Lenders (i) in
all efforts made to enforce payment of any Obligation or effect collection of
any Collateral, or (ii) in defending or prosecuting any actions or proceedings
arising out of or relating to any Lender's transactions with any Loan Party; and
(c) reasonable fees and disbursements incurred by Agent or Agent on behalf
of Lenders in connection with any appraisals of Inventory or other Collateral,
field examinations, collateral analysis or monitoring or other business analysis
conducted by outside Persons in connection with this Agreement and all related
agreements;
may be charged to Borrowers' Account and shall be part of the Obligations,
provided, however, that so long as no Default or Event of Default shall be in
existence or Undrawn Availability is in excess of $10,000,000, the Loan Parties
shall be obligated to pay for no more than two (2) collateral audits per
calendar year.
17.11. Injunctive Relief.
Each Loan Party recognizes that, in the event any Loan Party fails to
perform, observe or discharge any of its obligations or liabilities under or in
connection with this Agreement, any remedy at law may prove to be inadequate
relief to Lenders; therefore, Agent, if Agent so requests, shall be entitled to
temporary and permanent injunctive relief in any such case without the necessity
of proving that actual damages are not an adequate remedy.
17.12. Consequential Damages.
None of Agent, any Issuer, any Lender, nor any agent or attorney for any of
them, shall be liable to any Loan Party for consequential damages arising from
any breach of contract, tort or other wrong relating to the establishment,
administration or collection of the Obligations.
17.13. Captions.
The captions at various places in this Agreement are intended for
convenience only and do not constitute and shall not be interpreted as part of
this Agreement.
17.14. Counterparts; Telecopied Signatures.
This Agreement may be executed in any number of and by different parties
hereto on separate counterparts, all of which, when so executed, shall be deemed
an original, but all such counterparts shall constitute one and the same
agreement. Any signature delivered by a party by facsimile transmission shall be
deemed to be an original signature hereto.
17.15. Construction.
The parties acknowledge that each party and its counsel have reviewed this
Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendments, schedules or exhibits
thereto.
17.16. Confidentiality; Sharing Information.
(a) Agent, each Lender and each Transferee shall hold all non-public
information obtained by Agent, such Lender or such Transferee pursuant to the
requirements of this Agreement in accordance with Agent's, such Lender's and
such Transferee's customary procedures for handling confidential information of
this nature; provided, however, Agent, each Lender and each Transferee may
disclose such confidential information (i) to its examiners, affiliates, outside
auditors, counsel and other professional advisors, (ii) to Agent, any Lender or
to any prospective Transferees and Purchasing Lenders, and (iii) as required or
requested by any Governmental Body or representative thereof or pursuant to
legal process; provided, further that (x) unless specifically prohibited by
applicable law or court order, Agent, each Lender and each Transferee shall use
reasonable efforts prior to disclosure thereof, to notify the Borrowing Agent of
the applicable request for disclosure of such non-public information (A) by a
Governmental Body or representative thereof (other than any such request in
connection with an examination of the financial condition of a Lender or a
Transferee by such Governmental Body) or (B) pursuant to legal process and (y)
in no event shall Agent, any Lender or any Transferee be obligated to return any
materials furnished by any Loan Party other than those documents and instruments
in possession of Agent or any Lender in order to perfect its Lien on the
Collateral once the Obligations have been paid in full and this Agreement has
been terminated.
(b) Each Loan Party acknowledges that from time to time financial advisory,
investment banking and other services may be offered or provided to such Loan
Party or one or more of its Affiliates (in connection with this Agreement or
otherwise) by any Lender or by one or more Subsidiaries or Affiliates of such
Lender and each Loan Party hereby authorizes each Lender to share any
information delivered to such Lender by such Loan Party and its Subsidiaries
pursuant to this Agreement, or in connection with the decision of such Lender to
enter into this Agreement, to any such Subsidiary or Affiliate of such Lender,
it being understood that any such Subsidiary or Affiliate of any Lender
receiving such information shall be bound by the provision of this Section 17.16
as if it were a Lender hereunder. Such authorization shall survive the repayment
of the Obligations and the termination of this Agreement.
(c) Notwithstanding anything herein to the contrary, the Agent, each Lender
and each Loan Party agrees that each Loan Party (and each Affiliate of such Loan
Party) may disclose to any and all persons, without limitation of any kind, the
tax treatment and tax structure of the transaction and all materials of any kind
(including opinions or other tax analyses) that are provided to such Loan Party
or Affiliate relating to such tax treatment and tax structure, except to the
extent necessary to comply with any applicable federal or state securities laws.
This authorization is not intended to permit disclosure of any other information
including (without limitation) (i) any portion of any materials to the extent
not related to the tax treatment or tax structure of the transaction, (ii) the
identities of participants or potential participants in the transaction, (iii)
the existence or status of any negotiations, (iv) any pricing or financial
information (except to the extent such pricing or financial information is
related to the tax treatment or tax structure of the transaction) or (v) any
other term or detail not relevant to the tax treatment or the tax structure of
the transaction.
17.17. Publicity.
Agent, with the written consent of the Borrowing Agent, may make
appropriate announcements of the financial arrangement entered into among Loan
Parties, Agent and Lenders, including, without limitation, announcements which
are commonly known as tombstones, in such publications and to such selected
parties as Borrowing Agent may approve in its sole discretion.
[THE REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK.]
[SIGNATURE PAGES FOLLOW.]
Each of the parties has signed this Loan and Security Agreement as of the
day and year first above written.
XXXXX XXXXXX INTERNATIONAL, INC.,
as Borrowing Agent and as a Borrower
By: _______________________________
Xxxx X. Xxxxxxxxx,
Executive Vice President and
Chief Administrative Officer
BJ MEXICO IV, INC.
BJ MEXICO V, INC.
XXXXX XXXXXX COMPANY
CASUAL LIVING WORLDWIDE, INC.
CHARTER FURNITURE CORPORATION
LODGING BY LIBERTY, INC.
LOEWENSTEIN, INC.
POMPEII FURNITURE CO., INC.
SOUTHERN WOOD PRODUCTS, INC.
TEXACRAFT, INC.
TROPIC CRAFT, INC.
WABASH VALLEY MANUFACTURING, INC.
WINSTON FURNITURE COMPANY OF
ALABAMA, INC.
THE WOODSMITHS COMPANY,
as Borrowers
By: _______________________________
Xxxx X. Xxxxxxxxx,
Executive Vice President and
Chief Administrative Officer
BJCLW HOLDINGS, INC.
BJI EMPLOYEES SERVICES, INC.
BJIP, INC.
WINSTON PROPERTIES, INC.,
as Guarantors
By: _______________________________
Xxxx X. Xxxxxxxxx,
Executive Vice President and
Chief Administrative Officer
WLFI HOLDINGS, INC.,
as a Loan Party
By: _______________________________
Xxxx X. Xxxxxxxxx,
Executive Vice President and
Chief Administrative Officer
GMAC COMMERCIAL FINANCE LLC,
as a Lender, as Swingline Lender and as Agent
By:_______________________________
Xxxxxx Xxxxxxx,
Director
Commitment Percentage: 100%
Commitment: $90,000,000
STATE OF NEW YORK___ )
) ss:
COUNTY OF NEW YORK_ )
On this _____ day of March, 2004, before me personally came Xxxx X.
Xxxxxxxxx, to me known, who, being by me duly sworn, did depose and say that he
is the Executive Vice President and Chief Administrative Officer of each of the
Loan Parties described in and which executed the foregoing instrument, and that
he signed his name thereto by order of the Board of Directors of each such
corporation.
______________________________
NOTARY PUBLIC
TABLE OF CONTENTS
I. DEFINITIONS..............................................................................................1
1.1. Accounting Terms................................................................................1
1.2. General Terms...................................................................................1
1.3. UCC Terms......................................................................................26
1.4. Certain Matters of Construction................................................................26
II. ADVANCES, PAYMENTS......................................................................................26
2.1. Revolving Advances and Swingline Loans.........................................................26
2.2. Procedure for Borrowing........................................................................28
2.3. Disbursement of Loan Advance Proceeds..........................................................30
2.4. Maximum Revolving Advances.....................................................................31
2.5. Repayment of Loan Advances.....................................................................31
2.6. Repayment of Excess Advances...................................................................32
2.7. Statement of Account...........................................................................32
2.8. Letters of Credit..............................................................................32
2.9. Issuance of Letters of Credit..................................................................32
2.10. Requirements For Issuance of Letters of Credit.................................................33
2.11. Additional Payments............................................................................35
2.12. Manner of Borrowing and Payment................................................................35
2.13. Mandatory Prepayments..........................................................................36
2.14. Use of Proceeds................................................................................37
2.15. Defaulting Lender..............................................................................37
III. INTEREST AND FEES.......................................................................................38
3.1. Interest.......................................................................................38
3.2. Letter of Credit Fees; Cash Collateral.........................................................39
3.3. Fee Letter.....................................................................................40
3.4. Facility Fee...................................................................................40
3.5. Computation of Interest and Fees...............................................................40
3.6. Maximum Charges................................................................................40
3.7. Increased Costs................................................................................40
3.8. Basis For Determining Interest Rate Inadequate.................................................41
3.9. Capital Adequacy...............................................................................42
3.10. Taxes..........................................................................................42
IV. COLLATERAL: GENERAL TERMS..............................................................................43
4.1. Security Interest in the Collateral............................................................43
4.2. Perfection of Security Interest................................................................44
4.3. Disposition of Collateral......................................................................45
4.4. Preservation of Collateral.....................................................................45
4.5. Ownership of Collateral........................................................................45
4.6. Defense of Agent's and Lenders' Interests......................................................46
4.7. Books and Records..............................................................................46
4.8. Financial Disclosure...........................................................................47
4.9. Compliance with Laws...........................................................................47
4.10. Inspection of Premises.........................................................................47
4.11. Insurance......................................................................................47
4.12. Failure to Pay Insurance.......................................................................49
4.13. Payment of Taxes...............................................................................49
4.14. Payment of Leasehold Obligations...............................................................49
4.15. Receivables....................................................................................49
4.16. Inventory......................................................................................52
4.17. Maintenance of Equipment.......................................................................52
4.18. Exculpation of Liability.......................................................................52
4.19. Environmental Matters..........................................................................52
4.20. Financing Statements...........................................................................55
4.21 Additional Collateral..........................................................................55
4.22 Certain Post-Closing Matters...................................................................56
V. REPRESENTATIONS AND WARRANTIES..........................................................................57
5.1. Authority......................................................................................58
5.2. Formation and Qualification....................................................................58
5.3. Survival of Representations and Warranties.....................................................58
5.4. Tax Returns....................................................................................58
5.5. Financial Statements...........................................................................59
5.6. Loan Party Name................................................................................60
5.7. O.S.H.A. and Environmental Compliance..........................................................60
5.8. Solvency; No Litigation, Violation, Indebtedness or Default....................................61
5.9. Patents, Trademarks, Copyrights and Licenses...................................................62
5.10. Licenses and Permits...........................................................................62
5.11. No Defaults....................................................................................62
5.12. No Burdensome Restrictions.....................................................................63
5.13. No Labor Disputes, Etc.........................................................................63
5.14. Margin Regulations.............................................................................63
5.15. Investment Company Act.........................................................................63
5.16. Disclosure.....................................................................................63
5.17. Delivery of Senior Secured Documentation, IRB Documentation and Subordinated Debt Documentation.64
5.18. Hedge Agreements...............................................................................64
5.19. Conflicting Agreements.........................................................................64
5.20. Application of Certain Laws and Regulations....................................................64
5.21. Business and Property of Loan Parties..........................................................64
5.22. Material Contracts.............................................................................64
VI. AFFIRMATIVE COVENANTS...................................................................................65
6.1. Payment of Fees................................................................................65
6.2. Conduct of Business and Maintenance of Existence and Assets....................................65
6.3. Violations.....................................................................................65
6.4. Government Receivables.........................................................................66
6.5. Execution of Supplemental Instruments..........................................................66
6.6. Payment of Indebtedness........................................................................66
6.7. Standards of Financial Statements..............................................................66
6.8. Financial Covenant.............................................................................66
6.9. Minimum Undrawn Availability...................................................................66
6.10. Taxes and Other Governmental Charges...........................................................67
6.11. Revisions or Updates to Schedules..............................................................67
VII. NEGATIVE COVENANTS......................................................................................67
7.1. Merger, Consolidation, Acquisition and Sale of Assets..........................................67
7.2. Creation of Liens..............................................................................68
7.3. Guarantees.....................................................................................68
7.4. Investments....................................................................................68
7.5. Loans..........................................................................................68
7.6. Dividends and Distributions....................................................................69
7.7. Indebtedness...................................................................................69
7.8. Nature of Business.............................................................................70
7.9. Transactions with Affiliates...................................................................70
7.10. [Reserved.]....................................................................................70
7.11. Subsidiaries...................................................................................70
7.12. Fiscal Year and Accounting Changes.............................................................70
7.13. Pledge of Credit...............................................................................70
7.14. Amendment of Organizational Documents..........................................................71
7.15. Compliance with ERISA..........................................................................71
7.16. Prepayment of Indebtedness.....................................................................71
7.17. Subordinated Debt Documentation; Senior Secured Documentation; Bond Make-Well Documentation; IRB
Documentation..................................................................................72
7.18. State of Organization..........................................................................72
7.19. Amendment and/or Modification of Agreements....................................................72
7.20. IRS Form 8821..................................................................................72
7.21. BJI Parent.....................................................................................72
VIII. CONDITIONS PRECEDENT....................................................................................73
8.1. Conditions to Initial Advances.................................................................73
8.2. Conditions to Each Advance.....................................................................77
IX. INFORMATION AS TO LOAN PARTIES..........................................................................78
9.1. Disclosure of Material Matters.................................................................78
9.2. Schedules......................................................................................78
9.3. Environmental Reports..........................................................................78
9.4. Litigation.....................................................................................79
9.5. Material Occurrences...........................................................................79
9.6. Government Receivables.........................................................................79
9.7. Annual Financial Statements....................................................................79
9.8. Quarterly Financial Statements.................................................................80
9.9. Monthly Financial Statements...................................................................80
9.10. Other Reports..................................................................................81
9.11. Additional Information.........................................................................81
9.12. Projected Operating Budget.....................................................................81
9.13. Variances From Operating Budget................................................................82
9.14. Notice of Suits, Adverse Events................................................................82
9.15. ERISA Notices and Requests.....................................................................82
9.16. Additional Documents...........................................................................83
X. EVENTS OF DEFAULT.......................................................................................83
XI. AGENT'S AND LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT..................................................86
11.1. Rights and Remedies............................................................................86
11.2. Application of Proceeds........................................................................86
11.3. Agent's Discretion.............................................................................87
11.4. Setoff.........................................................................................87
11.5. Rights and Remedies not Exclusive..............................................................87
XII. WAIVERS AND JUDICIAL PROCEEDINGS........................................................................87
12.1. Waiver of Notice...............................................................................87
12.2. Delay..........................................................................................88
12.3. Jury Waiver....................................................................................88
XIII. EFFECTIVE DATE AND TERMINATION..........................................................................88
13.1. Term...........................................................................................88
13.2. Termination....................................................................................88
XIV. REGARDING AGENT.........................................................................................89
14.1. Appointment....................................................................................89
14.2. Nature of Duties...............................................................................89
14.3. Lack of Reliance on Agent and Resignation......................................................90
14.4. Certain Rights of Agent........................................................................90
14.5. Reliance.......................................................................................91
14.6. Notice of Default..............................................................................91
14.7. Indemnification................................................................................91
14.8. Agent in its Individual Capacity...............................................................91
14.9. Delivery of Documents..........................................................................92
14.10. Loan Parties' Undertaking to Agent.............................................................92
XV. GUARANTY................................................................................................92
15.1. Guaranty.......................................................................................92
15.2. Waivers........................................................................................92
15.3. No Defense.....................................................................................93
15.4. Guaranty of Payment............................................................................93
15.5. Liabilities Absolute...........................................................................93
15.6. Waiver of Notice...............................................................................94
15.7. Agent's Discretion.............................................................................94
15.8. Reinstatement..................................................................................95
15.9. Action Upon Event of Default...................................................................96
15.10. Statute of Limitations.........................................................................96
15.11. Interest.......................................................................................96
15.12. Guarantor's Investigation......................................................................97
15.13. Termination....................................................................................97
XVI. BORROWING AGENCY........................................................................................97
16.1. Borrowing Agency Provisions....................................................................97
XVII. MISCELLANEOUS...........................................................................................98
17.1. Governing Law..................................................................................98
17.2. Entire Understanding; Amendments...............................................................99
17.3. Successors and Assigns; Participations; New Lenders...........................................101
17.4. Application of Payments.......................................................................104
17.5. Indemnity.....................................................................................104
17.6. Notice........................................................................................104
17.7. Survival......................................................................................106
17.8. Waiver of Subrogation.........................................................................106
17.9. Severability..................................................................................106
17.10. Expenses......................................................................................106
17.11. Injunctive Relief.............................................................................107
17.12. Consequential Damages.........................................................................107
17.13. Captions......................................................................................107
17.14. Counterparts; Telecopied Signatures...........................................................107
17.15. Construction..................................................................................107
17.16. Confidentiality; Sharing Information..........................................................107
17.17. Publicity.....................................................................................108
List of Exhibits and Schedules
Exhibits
Exhibit A .........Borrowing Base Certificate
Exhibit 2.1(a) .........Revolving Credit Note
Exhibit 2.1(c) .........Swingline Note
Exhibit 5.5 .........Financial Projections
Exhibit 8.1(i) .........Financial Condition Certificate
Exhibit 17.3 Commitment Transfer Supplement
Schedules
Schedule 1.01(a) Mortgaged Property
Schedule 1.01(b) Certain Leases
Schedule 4.5 .........Equipment and Inventory Locations
Schedule 4.15(c) Location of Executive Offices
Schedule 4.19 .........Real Property
Schedule 4.22(iii).........Certain Post-Closing Matters
Schedule 5.2(a) States of Qualification and Good Standing
Schedule 5.2(b) Subsidiaries
Schedule 5.4 .........Federal Tax Identification Number
Schedule 5.6 .........Loan Party Name and Prior Names
Schedule 5.7 .........Environmental
Schedule 5.8(b) Litigation
Schedule 5.8(d) Plans
Schedule 5.9 .........Intellectual Property, Source Code Escrow Agreements
Schedule 5.10 ........Licenses and Permits
Schedule 5.13 .........Labor Disputes
Schedule 5.22 .........Material Contracts
Schedule 7.2 .........Existing Liens
Schedule 7.3 .........Guarantees
Schedule 7.7 .........Existing Indebtedness
Schedule 7.21 .........WLFI Assets, Indebtedness and Business Activity
