EXHIBIT 10.1
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$75,000,000
CREDIT AGREEMENT
Dated as of September 28, 2004
among
▇▇▇▇▇▇▇ CABLE, INC.
and
CERTAIN OF ITS U.S. SUBSIDIARIES,
as Borrowers,
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 14.6 HEREOF,
as Lenders,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent,
ING CAPITAL LLC
and
NATIONAL CITY BUSINESS CREDIT, INC.,
as Syndication Agents,
and
PNC BANK, NATIONAL ASSOCIATION
and
ASSOCIATED BANK, NATIONAL ASSOCIATION,
as Documentation Agents
================================================================================
WACHOVIA CAPITAL MARKETS, LLC,
As Sole Lead Arranger, Manager and Book Runner
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS............................................................................................ 1
1.1 General Definitions............................................................................ 1
1.2 Accounting Terms and Determinations............................................................ 30
1.3 Other Definitional Terms....................................................................... 31
ARTICLE II LOANS................................................................................................. 31
2.1 Revolving Loans................................................................................ 31
2.2 [Intentionally Omitted]........................................................................ 36
2.3 Optional and Mandatory Prepayments; Reduction of Revolving Credit
Committed Amount............................................................................... 36
2.4 Payments and Computations...................................................................... 38
2.5 Maintenance of Account......................................................................... 40
2.6 Statement of Account........................................................................... 40
2.7 Taxes.......................................................................................... 40
2.8 Sharing of Payments............................................................................ 43
2.9 Allocation of Payments; Pro Rata Treatment..................................................... 43
2.10 Extensions and Conversions..................................................................... 45
2.11 Removal of Lenders............................................................................. 46
ARTICLE III LETTERS OF CREDIT.................................................................................... 47
3.1 Issuance....................................................................................... 47
3.2 Notice and Reports............................................................................. 47
3.3 Participation.................................................................................. 47
3.4 Reimbursement.................................................................................. 48
3.5 Repayment with Revolving Loans................................................................. 49
3.6 Renewal, Extension............................................................................. 49
3.7 Uniform Customs and Practices.................................................................. 50
3.8 Indemnification; Nature of Issuing Bank's Duties............................................... 50
3.9 Responsibility of Issuing Bank................................................................. 51
3.10 Conflict with Letter of Credit Documents....................................................... 51
ARTICLE IV INTEREST AND FEES..................................................................................... 51
4.1 Interest on Loans.............................................................................. 51
4.2 Interest After Event of Default................................................................ 52
4.3 Unused Line Fee................................................................................ 52
4.4 Agent's Fees................................................................................... 52
4.5 Letter of Credit Fees.......................................................................... 52
4.6 Authorization to Charge Account................................................................ 53
4.7 Indemnification in Certain Events.............................................................. 53
4.8 Inability To Determine Interest Rate........................................................... 53
4.9 Illegality..................................................................................... 54
4.10 Funding Indemnity.............................................................................. 54
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ARTICLE V CONDITIONS PRECEDENT................................................................................... 55
5.1 Closing Conditions............................................................................. 55
5.2 Condition to all Loans and Letters of Credit................................................... 61
ARTICLE VI. REPRESENTATIONS AND WARRANTIES....................................................................... 61
6.1 Organization and Qualification................................................................. 62
6.2 Solvency....................................................................................... 62
6.3 Liens; Inventory............................................................................... 62
6.4 No Conflict.................................................................................... 62
6.5 Enforceability................................................................................. 63
6.6 Financial Data; Projections; Material Adverse Change........................................... 63
6.7 Locations of Offices, Records and Inventory.................................................... 64
6.8 Fictitious Business Names...................................................................... 64
6.9 Subsidiaries................................................................................... 64
6.10 No Judgments or Litigation..................................................................... 65
6.11 No Defaults.................................................................................... 65
6.12 No Employee Disputes........................................................................... 65
6.13 Compliance with Law............................................................................ 65
6.14 ERISA.......................................................................................... 66
6.15 Compliance with Environmental Laws............................................................. 66
6.16 Use of Proceeds................................................................................ 67
6.17 Intellectual Property.......................................................................... 67
6.18 Licenses and Permits........................................................................... 68
6.19 Title to Property.............................................................................. 68
6.20 Labor Matters.................................................................................. 68
6.21 Investment Company, Etc........................................................................ 69
6.22 Margin Security................................................................................ 69
6.23 No Event of Default............................................................................ 69
6.24 Taxes and Tax Returns.......................................................................... 69
6.25 No Other Indebtedness.......................................................................... 70
6.26 Status of Accounts............................................................................. 70
6.27 Representations and Warranties................................................................. 70
6.28 Material Contracts............................................................................. 70
6.29 Survival of Representations.................................................................... 70
6.30 Affiliate Transactions......................................................................... 71
6.31 Trade Suppliers................................................................................ 71
6.32 Key Members of Management...................................................................... 71
6.33 Accuracy and Completeness of Information....................................................... 71
6.34 Anti-Terrorism Laws............................................................................ 71
6.35 Deposit Accounts............................................................................... 72
6.36 Force Majeure.................................................................................. 72
6.37 Buying Associations............................................................................ 72
ARTICLE VII AFFIRMATIVE COVENANTS................................................................................ 73
7.1 Financial Information.......................................................................... 73
7.2 Inventory...................................................................................... 76
7.3 Corporate Existence............................................................................ 76
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7.4 ERISA.......................................................................................... 76
7.5 Proceedings or Adverse Changes................................................................. 78
7.6 Environmental Matters.......................................................................... 78
7.7 Books and Records; Inspection.................................................................. 79
7.8 Collateral Records............................................................................. 80
7.9 Security Interests............................................................................. 80
7.10 Insurance; Casualty Loss....................................................................... 81
7.11 Taxes.......................................................................................... 82
7.12 Compliance With Laws........................................................................... 82
7.13 Use of Proceeds................................................................................ 82
7.14 Fiscal Year; Accounting Policies............................................................... 83
7.15 Notification of Certain Events................................................................. 83
7.16 Additional Borrowers and Guarantors............................................................ 83
7.17 Schedules of Accounts and Purchase Orders...................................................... 84
7.18 Collection of Accounts......................................................................... 84
7.19 Notice; Credit Memoranda; and Returned Goods................................................... 85
7.20 Acknowledgment Agreements...................................................................... 85
7.21 Trademarks..................................................................................... 85
7.22 Maintenance of Property........................................................................ 86
7.23 Revisions or Updates to Schedules.............................................................. 86
7.24 Anti-Terrorism Laws............................................................................ 86
ARTICLE VIII FINANCIAL COVENANTS................................................................................. 86
8.1 Leverage Ratio................................................................................. 87
8.2 Fixed Charge Coverage Ratio.................................................................... 87
8.3 Capital Expenditures........................................................................... 87
ARTICLE IX NEGATIVE COVENANTS.................................................................................... 87
9.1 Restrictions on Liens.......................................................................... 87
9.2 Restrictions on Additional Indebtedness........................................................ 87
9.3 Restrictions on Sale of Assets................................................................. 87
9.4 No Corporate Changes........................................................................... 88
9.5 No Guarantees.................................................................................. 88
9.6 No Restricted Payments......................................................................... 88
9.7 No Investments................................................................................. 89
9.8 No Affiliate Transactions...................................................................... 89
9.9 No Prohibited Transactions Under ERISA......................................................... 89
9.10 No Additional Bank Accounts.................................................................... 90
9.11 No Excess Cash................................................................................. 91
9.13 Issuance of Stock.............................................................................. 91
9.14 Amendments of Material Contracts............................................................... 91
9.15 Additional Negative Pledges.................................................................... 91
9.16 Other Indebtedness............................................................................. 91
9.17 Sale and Leaseback............................................................................. 92
9.18 Licenses, Etc.................................................................................. 92
9.19 Limitations.................................................................................... 92
9.20 Operating Lease Obligations.................................................................... 92
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9.21 Issuance of Capital Stock...................................................................... 92
9.22 Hedge Transactions............................................................................. 93
ARTICLE X POWERS................................................................................................. 93
10.1 Appointment as Attorney-in-Fact................................................................ 93
10.2 Limitation on Exercise of Power................................................................ 94
ARTICLE XI EVENTS OF DEFAULT AND REMEDIES........................................................................ 94
11.1 Events of Default.............................................................................. 94
11.2 Acceleration................................................................................... 96
ARTICLE XII TERMINATION.......................................................................................... 97
ARTICLE XIII THE AGENT.......................................................................................... 98
13.1 Appointment of Agent........................................................................... 98
13.2 Nature of Duties of Agent...................................................................... 98
13.3 Lack of Reliance on Agent...................................................................... 98
13.4 Certain Rights of the Agent.................................................................... 99
13.5 Reliance by Agent.............................................................................. 99
13.6 Indemnification of Agent....................................................................... 99
13.7 The Agent in its Individual Capacity........................................................... 100
13.8 Holders of Notes............................................................................... 100
13.9 Successor Agent................................................................................ 100
13.10 Collateral Matters............................................................................. 101
13.11 Actions with Respect to Defaults............................................................... 103
13.12 Delivery of Information........................................................................ 103
13.13 No Reliance on Administrative Agent's Customer Identification Program.......................... 103
13.14 USA Patriot Act................................................................................ 104
13.15 Other Agents................................................................................... 104
ARTICLE XIV MISCELLANEOUS........................................................................................ 104
14.1 Waivers........................................................................................ 104
14.2 JURY TRIAL..................................................................................... 104
14.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE............................................... 105
14.5 Notices........................................................................................ 105
14.6 Assignability.................................................................................. 107
14.7 Information.................................................................................... 109
14.8 Payment of Expenses; Indemnification........................................................... 110
14.9 Entire Agreement, Successors and Assigns....................................................... 111
14.10 Amendments, Etc................................................................................ 111
14.11 Nonliability of Agent and Lenders.............................................................. 113
14.12 Independent Nature of Lenders' Rights.......................................................... 113
14.13 Counterparts................................................................................... 113
14.14 Effectiveness.................................................................................. 113
14.15 Severability................................................................................... 113
14.16 Headings Descriptive........................................................................... 114
14.17 Maximum Rate................................................................................... 114
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14.18 Right of Setoff............................................................................... 114
14.19 Concerning Joint and Several Liability of the Borrowers....................................... 115
14.20 Delegation of Authority....................................................................... 116
EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Form of Acknowledgment Agreement
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Guaranty Agreement
Exhibit D Form of Landlord Agreement
Exhibit E Form of Pledge Agreement
Exhibit F Form of Security Agreement
Exhibit G Form of Revolving Note
Exhibit H Form of Notice of Borrowing
Exhibit H-1 Form of Daily Loan Activity Sheet
Exhibit I Form of Deposit Account Control Agreement
Exhibit J Form of Notice of Extension/Conversion
Exhibit K Form of Compliance Certificate
Exhibit L Form of Borrowing Base Certificate
Exhibit M Form of Joinder Agreement
Exhibit N Form of Solvency Certificate
Exhibit O Form of Account Designation Letter
Exhibit P Form of Licensor Consent
Exhibit Q Form of Contribution Agreement
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SCHEDULES
Schedule 1.1A Lenders and Commitments
Schedule 1.1B Liens
Schedule 1.1C Indebtedness
Schedule 1.1D Investments
Schedule 5.1(y) Capitalization
Schedule 6.1 Jurisdictions of Organization
Schedule 6.7 Collateral Locations
Schedule 6.8 Fictitious Business Names
Schedule 6.9 Subsidiaries; Ownership
Schedule 6.10 Litigation
Schedule 6.14 ERISA
Schedule 6.15 Environmental Disclosures
Schedule 6.17 Intellectual Property
Schedule 6.19 Real Estate
Schedule 6.28 Material Contracts
Schedule 6.30(a) Affiliate Transactions
Schedule 6.30(b) Non-Ordinary Course or Arm's Length Affiliate
Transactions
Schedule 6.31 Trade Suppliers
Schedule 6.32 Key Members of Management
Schedule 6.35 Bank Accounts
Schedule 6.37 Buying Associations
Schedule 14.5 Lenders' Lending Offices and Notice Information
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of September 28, 2004 among
▇▇▇▇▇▇▇ CABLE, INC., a Delaware corporation (the "Company"), the Subsidiaries of
the Company identified on the signature pages hereto and any other Subsidiaries
of the Company which may become Borrowers hereunder pursuant to Section 7.16
(collectively referred to as the "Subsidiary Borrowers" or individually referred
to as a "Subsidiary Borrower") (hereinafter, the Company and the Subsidiary
Borrowers are collectively referred to as the "Borrowers" or individually
referred to as a "Borrower"), each of the financial institutions identified as
Lenders on the signature pages hereto (together with each of their successors
and assigns, referred to individually as a "Lender" and, collectively, as the
"Lenders"), ING CAPITAL LLC and NATIONAL CITY BUSINESS CREDIT, INC., as
Syndication Agents, PNC BANK, NATIONAL ASSOCIATION and ASSOCIATED BANK, NATIONAL
ASSOCIATION, as Documentation Agents, and WACHOVIA BANK, NATIONAL ASSOCIATION
("Wachovia"), acting in the manner and to the extent described in Article XIII
hereof (in such capacity, the "Agent" or the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrowers wish to obtain a revolving credit facility for the
working capital, letter of credit and general corporate needs of the Borrowers;
and
WHEREAS, upon the terms and subject to the conditions set forth herein,
the Lenders are willing to make loans and advances to the Borrowers;
NOW, THEREFORE, the Borrowers, the Lenders and the Agent hereby agree as
follows:
ARTICLE I
DEFINITIONS.
1.1 GENERAL DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified:
"Account Designation Letter" shall mean the Notice of Account Designation
Letter dated the Closing Date from the Borrowers to the Agent substantially in
the form attached hereto as Exhibit O.
"Accounts" shall mean all of each Credit Party's "accounts" as such term
is defined in the UCC, and, in any event, includes, without limitation, (a) all
accounts receivable (whether or not specifically listed on schedules furnished
to the Agent), and all other rights to payment for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided
or to be provided, for the use or hire of a vessel under a charter or other
contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered or in connection with any other transaction
(whether or not yet earned by performance), (b) all rights in, to, and under all
purchase orders or receipts for goods or services, (c) all rights to any goods
represented by any of the foregoing, including, without limitation, all rights
of rescission, replevin, reclamation, and stoppage in transit and rights to
returned, reclaimed, or repossessed goods, (d) all reserves and credit balances
held by each Credit Party with respect to any such accounts receivable or
account debtors, (e) all books, records, computer tapes, programs and ledger
books arising therefrom or relating thereto, and (f) all guarantees and
collateral security of any kind, given by any account debtor or any other Person
with respect to any of the foregoing, all whether now owned or existing or
hereafter acquired or arising, by or in favor of, any Credit Party.
"Acknowledgment Agreements" shall mean (a) the acknowledgment agreements,
substantially in the form of Exhibit A (or such other form as shall be
reasonably acceptable to the Agent), between each Credit Party's warehousemen,
fillers, packers, processors, and other bailees and the Agent, (b) Landlord
Agreements, (c) Licensor Consents, (d) Freight Forwarder Agreements, (e) Buying
Association Supplemental Agreements or (f) any other bailee acknowledgment
and/or waiver agreement in form and substance satisfactory to the Agent.
"Affiliate" shall mean, with respect to any Person, any entity which
directly or indirectly controls, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" shall mean the
possession, directly or indirectly, of the power to (i) vote ten percent (10%)
or more of the securities having ordinary voting power for the election of
directors of such Person, or (ii) direct or cause the direction of management
and policies of a business, whether through the ownership of voting securities,
by contract or otherwise and either alone or in conjunction with others or any
group.
"Agent" or "Administrative Agent" shall mean Wachovia as provided in the
preamble to this Credit Agreement or any successor to Wachovia.
"Anti-Terrorism Law" shall mean the USA Patriot Act or any other statute,
regulation, executive order, or other law pertaining to the prevention of future
acts of terrorism, in each case as such law may be amended from time to time.
"Applicable Income Year" shall have the meaning given to such term in the
definition of Permitted Periodic Dividend.
"Applicable Percentage" shall mean for Eurodollar Loans and Base Rate
Loans, the appropriate applicable percentages corresponding to the Leverage
Ratio in effect as of the most recent Calculation Date (as defined below) as
shown below:
2
Applicable Percentage Applicable Percentage
Level Leverage Ratio for Eurodollar Loans for Base Rate Loans
----- -------------- -------------------- -------------------
1 < 4.5 to 1.0 1.75% 0.25%
2 < 5.0 to 1.0 and > 4.5 to 1.0 2.00% 0.50%
-
3 < 5.5 to 1.0 and > 5.0 to 1.0 2.25% 0.75%
-
4 < 6.0 to 1.0 and > 5.5 to 1.0 2.50% 1.00%
-
5 > 6.0 to 1.0 2.75% 1.25%
-
The Applicable Percentages shall be determined and adjusted quarterly on the
date (each a "Calculation Date") which is the first day of the first calendar
month after the date on which the Company provides the quarterly officer's
certificate for each fiscal quarter in accordance with the provisions of Section
7.1(d); provided, however, that (i) the initial Applicable Percentages shall be
based on Level 3 (as shown above) and shall remain at Level 3 until the first
Calculation Date subsequent to March 31, 2005, and, thereafter, the Level shall
be determined by the then current Leverage Ratio, and (ii) if the Company fails
to provide the officer's certificate to the Agent for any fiscal quarter as
required by and within the time limits set forth in Section 7.1(d) or an Event
of Default shall have occurred and be continuing, the Applicable Percentages
from the applicable date of such event shall be based on Level 5 until five (5)
Business Days after an appropriate officer's certificate is provided or such
Event of Default has been waived or cured to the satisfaction of the Required
Lenders, whereupon the Level shall be determined by the then current Leverage
Ratio. Except as set forth above, each Applicable Percentage shall be effective
from one Calculation Date until the next Calculation Date.
"Applicable Tax Percentage" shall mean the highest effective marginal
combined rate of federal, state and local income taxes (taking into account the
deductibility of state and local taxes for federal income tax purposes) that an
individual residing in New York, New York would be subject to in the relevant
year of determination, taking into account only such shareholder's share of
income and deductions attributable to its equity ownership interest in the
Company.
"Approved Assignee" shall mean any Lender, an Affiliate of a Lender or an
Approved Fund.
"Approved Banks" shall have the meaning given such term in the definition
of "Cash Equivalents" herein.
"Approved Fund" shall mean any Fund that is administered or managed by (a)
a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Asset Disposition" shall mean the disposition (other than (x) a
disposition described in clauses (a) or (b) of Section 9.3, (y) a disposition
described in clauses (c) or (d) of Section 9.3, so long as the proceeds thereof
are used to repair existing assets or acquire other assets or property useful in
the relevant Credit Party's business within two hundred seventy (270) days of
such
3
disposition or (z) a sale described in clause (f) of Section 9.3, so long as the
proceeds thereof are used to repay Indebtedness and taxes related to or arising
from such sale, with any unused portion of such proceeds to be applied in
accordance with Section 2.3(b)(iii)) of any or all of the assets (including,
without limitation, the Capital Stock of a Credit Party or Subsidiary of a
Credit Party) of any Credit Party or its Subsidiaries, whether by sale, lease,
transfer or otherwise, in a single transaction, or in a series of related
transactions in any consecutive 12-month period (a) that have a fair market
value in the aggregate in excess of $500,000 or (b) for Net Cash Proceeds in the
aggregate in excess of $500,000.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by an assigning Lender and an assignee Lender, accepted by the
Agent, in accordance with Section 14.6(f), in the form attached hereto as
Exhibit B.
"Bankruptcy Code" shall mean Title 11 of the United States Code, as
amended from time to time, and any successor statute thereto.
"Base Rate" shall mean, for any day, the rate per annum (rounded upwards,
if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the greater
of (a) the Federal Funds Rate in effect on such day plus 1/2 of 1% or (b) the
Prime Rate in effect on such day. If for any reason the Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable after due inquiry to ascertain the Federal Funds Rate for any
reason, including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms hereof, the Base Rate shall be
determined without regard to clause (a) of the first sentence of this definition
until the circumstances giving rise to such inability no longer exist. Any
change in the Base Rate due to a change in the Prime Rate or the Federal Funds
Rate shall be effective on the effective date of such change in the Prime Rate
or the Federal Funds Rate, respectively.
"Base Rate Loan" shall mean any Loan bearing interest at a rate determined
by reference to the Base Rate.
"Benefit Plan" shall mean a defined benefit plan as defined in Section
3(35) of ERISA (other than a Multiemployer Plan) in respect of which any Credit
Party, any Subsidiary or any ERISA Affiliate is, or within the immediately
preceding six (6) years was, an "employer" as defined in Section 3(5) of ERISA.
"Bistricer Consulting Agreement" shall mean that certain Consulting
Agreement between the Company and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ to be dated on or about
October 15, 2004.
"Blocked Person" shall have the meaning given to such term in Section
6.34.
"Borrower" and "Borrowers" shall have the meaning given to such terms in
the preamble of this Credit Agreement.
"Borrowing Base" shall mean, as of any date of determination, the
following amount (the "Borrowing Base") calculated in dollars as follows:
4
(1) an amount equal to eighty-five percent (85%) of Eligible
Accounts Receivable; plus
(2) an amount equal to the lesser of (a) the Inventory Sublimit and
(b) fifty-five percent (55%) of Eligible Inventory (provided, however,
that not more that $1,365,000 of Eligible Inventory may consist of
Processor Inventory); minus
(3) reserves established by the Agent from time to time in its
reasonable credit judgment, including, without limitation, reserves
against obligations under any Lender Hedging Agreement, rent reserves and
import duty and freight charge reserves (the "Reserves").
Subject to the relevant terms and provisions set forth in this Credit
Agreement, including specifically Section 14.10, the Agent at all times
shall be entitled to reduce or increase the advance rates and standards of
eligibility under this Credit Agreement, in each case in its reasonable
credit judgment. Promptly after making any such adjustments, the Agent
shall notify the Company thereof.
"Borrowing Base Certificate" shall mean a borrowing base certificate in
substantially the form of Exhibit L hereto.
"Business Day" shall mean any day other than a Saturday, a Sunday, a legal
holiday or a day on which banking institutions are authorized or required by law
or other governmental action to close in Charlotte, North Carolina or New York,
New York; provided that in the case of Eurodollar Loans, such day is also a day
on which dealings between banks are carried on in U.S. dollar deposits in the
London interbank market.
"Buying Association" shall mean any Person (other than a bank or other
financial institution) (a) the members of which are customers of a Borrower and
receive price rebates on the purchase of goods from such Borrower as a result of
being members in such Person and (b) that pays such Borrower's accounts
receivable owed by its members to such Borrower from amounts paid to such Person
by those members.
"Buying Association Agreement" shall mean an agreement in form and
substance satisfactory to the Agent between a Buying Association and the
applicable Borrower.
"Buying Association Supplemental Agreement" shall mean an agreement in
form and substance satisfactory to the Agent between a Buying Association and
the applicable Borrower supplementing a Buyer Association Agreement.
"Capital Expenditures" shall mean expenditures for the acquisition
(including the acquisition by capitalized lease) or improvement of capital
assets, as determined in accordance with GAAP.
5
"Capital Lease" shall mean, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Capital Stock" shall mean (a) in the case of a corporation, capital
stock, (b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (c) in the case of a partnership, partnership interests (whether
general or limited), (d) in the case of a limited liability company, membership
interests and (e) any other equity interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Concentration Account" shall mean a deposit account established and
maintained by the Company, for itself and as agent for the other Credit Parties,
over which the Agent, for itself and for the benefit of the Lenders, has
"control" (as such term is used in Article 9 of the UCC), whether by virtue of
such deposit account's being maintained at the Agent or, if required by the
Agent, pursuant to the terms of a Deposit Account Control Agreement in form and
substance satisfactory to the Agent in its reasonable discretion.
"Cash Equivalents" shall mean, as to any Person, (a) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than one (1)
year from the date of acquisition, (b) time deposits or certificates of deposit
of any commercial bank incorporated under the laws of the United States or any
state thereof, of recognized standing having capital and unimpaired surplus in
excess of $1,000,000,000 and whose short-term commercial paper rating at the
time of acquisition is at least A-1 or the equivalent thereof by Standard &
Poor's Ratings Group or at least P-1 or the equivalent thereof by ▇▇▇▇▇'▇
Investors Services, Inc. (any such bank, an "Approved Bank"), with such deposits
or certificates having maturities of not more than one (1) year from the date of
acquisition, (c) repurchase obligations with a term of not more than seven (7)
days for underlying securities of the types described in clauses (a) and (b)
above entered into with any Approved Bank, (d) commercial paper or finance
company paper issued by any Person incorporated under the laws of the United
States or any state thereof and rated at least A-1 or the equivalent thereof by
Standard & Poor's Corporation or at least P-1 or the equivalent thereof by
▇▇▇▇▇'▇ Investors Service, Inc., and in each case maturing not more than one
year after the date of acquisition, (e) investments in money market funds that
are registered under the Investment Company Act of 1940, as amended, which have
net assets of at least $1,000,000,000 and at least eighty-five percent (85%) of
whose assets consist of securities and other obligations of the type described
in clauses (a) through (d) above, and (f) shares of any money market mutual fund
that (i) has substantially all of its assets invested continuously in the types
of investments referred to in clauses (a) through (e) above and (ii) has net
assets of not less than $500,000,000. All such Cash Equivalents must be
denominated solely for payment in Dollars.
"Cash Management Products" shall mean any one or more of the following
types of services or facilities extended to any of the Credit Parties by the
Agent, any Lender or any Affiliate of the Agent or a Lender in reliance on the
Agent's or such Lender's agreement to indemnify such Affiliate: (i) Automated
Clearing House (ACH) transactions and other similar
6
money transfer services; (ii) cash management, including controlled disbursement
and lockbox services; (iii) establishing and maintaining deposit accounts; and
(iv) credit cards or stored value cards.
"Casualty Loss" shall have the meaning given to such term in Section 7.10.
"Change of Control" shall mean the occurrence of any of the following: (i)
the Company shall fail to own one hundred percent (100%) of the outstanding
Capital Stock of each of the other Borrowers and the Guarantors, (ii) the Key
Shareholders shall fail to own, directly or indirectly, at least a majority of
each class of the outstanding Capital Stock of the Company, or (iii) ▇▇▇▇ ▇▇▇▇▇▇
shall cease to be the Chief Executive Officer of the Company or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
shall cease to be the Chief Financial Officer of the Company, and a successor
acceptable to the Agent in its reasonable discretion shall not have been
appointed within one hundred and eighty (180) days after such cessation.
"Closing" shall mean the consummation of the first to occur under this
Credit Agreement of (a) the making of the initial Loan by the Lenders to a
Borrower under this Credit Agreement and (b) the issuance of any Letter of
Credit by the Issuing Bank.
"Closing Date" shall mean the date on which the Closing occurs.
"Closing Date Dividend" shall mean the payment by the Company on the
Closing Date of up to $15,500,000 in the aggregate to the shareholders of its
common Capital Stock and bonuses to its key members of management; provided,
that not more than $15,000,000 may be paid as cash dividends to the shareholders
of the Company.
"Collateral" shall mean any and all assets and rights and interests in or
to the personal and real property of the Credit Parties pledged from time to
time as security for the Obligations pursuant to the Security Documents.
"Commitment" of any Lender shall mean the Revolving Credit Commitment of
such Lender.
"Company" shall have the meaning given to such term in the preamble to
this Credit Agreement.
"Compliance Certificate" shall mean a certificate, executed by the Chief
Executive Officer and Chief Financial Officer of the Company, substantially in
the form of Exhibit K.
"Consolidated" or "consolidated" with reference to any term defined
herein, shall mean that term as applied to the accounts of the Company and all
of its consolidated Subsidiaries, consolidated in accordance with GAAP.
"Consolidated Capital Expenditures" shall mean, for any applicable period
of computation, an amount equal to the consolidated aggregate Capital
Expenditures of the
7
Company and its consolidated Subsidiaries during such fiscal period net of
trade-ins and allowances, as determined in accordance with GAAP.
"Consolidated Cash Taxes" shall mean, for any applicable period of
computation, the sum of all taxes paid in cash by the Company and its
consolidated Subsidiaries during such period, determined on a consolidated basis
in accordance with applicable law and GAAP.
"Consolidated EBITDA" shall mean, for any applicable period of
computation, (a) Consolidated Net Income for such period, but excluding
therefrom all extraordinary items of income or loss for such period, plus (b)
the sum of the following to the extent deducted in calculating Consolidated Net
Income: (i) Consolidated Interest Expense for such period, plus (ii) tax expense
(including, without limitation, any federal, state, local and foreign income and
similar taxes) of the Company and its Subsidiaries for such period, plus (iii)
depreciation, amortization and other non-cash charges (excluding non-cash
charges that are expected to become cash charges in the next succeeding 12
months or that are reserves for future cash charges) for such period.
"Consolidated Fixed Charges" shall mean, for any applicable period of
computation, without duplication, the sum of (i) all Consolidated Interest
Expense paid in cash for such period plus (ii) Consolidated Scheduled Funded
Indebtedness Payments made during such period.
"Consolidated Funded Indebtedness" shall mean, as of any date of
determination, all Funded Indebtedness of the Company and its consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any applicable period of
computation, all interest expense, net of cash interest income, of the Company
and its consolidated Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" shall mean, for any applicable period of
computation, the net income (or net deficit) of the Company and its consolidated
Subsidiaries for such period, after deduction of interest expense, income taxes
and depreciation and amortization for such period, determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Worth" shall mean, as of any date of determination,
shareholders' equity or net worth of the Company and its consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"Consolidated Scheduled Funded Indebtedness Payments" shall mean, for any
applicable period of computation, the sum of all scheduled payments of principal
on Consolidated Funded Indebtedness for such period (including the principal
component of payments due on Capital Leases or under any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar off-balance sheet
financing product during such period), determined on a consolidated basis in
accordance with GAAP; it being understood that Consolidated Scheduled Funded
Indebtedness Payments shall not include voluntary prepayments or the mandatory
prepayments required pursuant to Section 2.4.
8
"Consulting Agreements" shall mean, collectively, the Bistricer Consulting
Agreement and the ▇▇▇▇▇ Consulting Agreement.
"Contractual Obligations" shall mean, with respect to any Person, any term
or provision of any securities issued by such Person, or any indenture,
mortgage, deed of trust, contract, undertaking, document, instrument or other
agreement to which such Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.
"Contribution Agreement" shall mean the Contribution Agreement of even
date herewith in substantially the form of Exhibit Q to be executed by each of
the Credit Parties or any Person who becomes party hereto or to the Guaranty
Agreement pursuant to a joinder agreement in form and substance satisfactory to
the Agent, including, without limitation, and any Subsidiaries of the Company
which may become Borrowers or Guarantors hereunder pursuant to Section 7.16.
"Credit Agreement" shall mean this credit agreement, dated as of the date
hereof, as the same may be modified, amended, extended, restated or supplemented
from time to time.
"Credit and Collateral Termination Events" shall have the meaning given
such term in Article XII.
"Credit Documents" shall mean, collectively, this Credit Agreement, the
Revolving Notes, the Letter of Credit Documents, each Guaranty Agreement, the
Contribution Agreement, the Security Documents and all other documents,
agreements, instruments, opinions and certificates executed and delivered in
connection herewith or therewith, excluding Lender Hedging Agreements.
"Credit Parties" shall mean the Borrowers, the Guarantors and any
affiliate of a Borrower or a Guarantor or any of their respective Subsidiaries
which has pledged Collateral or furnished a guaranty to secure the Obligations.
"Current Derivative Exposure" shall mean, as to any Person, as of any date
of determination, the amount that would be payable by such Person in the event
all transactions under its Hedging Agreements outstanding on such date were
terminated due to an event of default for which such Person was a defaulting
party under such Hedging Agreements, without giving credit for any amounts that
would be payable to such Person in connection with such terminations.
"Daily Loan Activity Sheet" shall mean the ▇▇▇▇▇▇▇ Cable, Inc. Daily Loan
Activity sheet in the form attached hereto as Exhibit H-1.
"Default" shall mean an event, condition or default which, with the giving
of notice, the passage of time or both would become an Event of Default.
"Default Rate" shall mean a rate equal to the Base Rate, plus the then
current Applicable Percentage, plus two percent (2%).
9
"Defaulting Lender" shall have the meaning given to such term in Section
2.1(d)(iii).
"Deposit Account Control Agreement" shall mean an agreement among a Credit
Party, a Lockbox Bank or other depositary institution, and the Agent, which
agreement (a) is substantially in the form of Exhibit I or (b) is in such other
form as is reasonably acceptable to the Agent and its counsel and which provides
for the Agent's having "control" (as such term is used in Article 9 of the UCC)
over the deposit accounts described therein, in each case as the same may be
amended, restated, supplemented, or otherwise modified from time to time.
"DOL" shall mean the U.S. Department of Labor and any successor department
or agency.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Domestic Subsidiaries" shall mean, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the laws of
any state of the United States or the District of Columbia.
"Eligible Accounts Receivable" shall mean the aggregate face amount of the
Accounts of each of the Credit Parties that conform to the warranties contained
herein and at all times continue to be acceptable to the Agent in its reasonable
credit judgment, less the aggregate amount of all returns, discounts, claims,
credits, charges and allowances of any nature (whether issued, owing, granted or
outstanding), and less the aggregate amount of all reserves for slow paying
accounts, foreign sales, ▇▇▇▇ and hold (or deferred shipment) transactions and
the Lenders' charges as set forth in this Credit Agreement. Unless otherwise
approved in writing by the Agent, no Account shall be deemed to be an Eligible
Account Receivable if:
(a) the Account arises out of a sale made by any Credit Party to an
Affiliate or to any employee of any Credit Party;
(b) the Account is unpaid (i) until such time as the Borrowers have
the capacity to provide the accounts receivable aged trial balances
required by Section 7.1(e), more than ninety (90) days after the original
invoice date and, (ii) thereafter, more than one hundred twenty (120) days
after the original invoice date or sixty (60) days after the original
payment due date thereof;
(c) such Account is from the same account debtor (or any affiliate
thereof) and twenty-five percent (25%) or more, in face amount, of other
Accounts from such account debtor (or any affiliate thereof) are due or
unpaid (i) until such time as the Borrowers have the capacity to provide
the accounts receivable aged trial balances required by Section 7.1(e)
more than ninety (90) days after the original invoice date and, (ii)
thereafter, more than one hundred twenty (120) days after the original
invoice date or sixty (60) days after the original payment due date
thereof;
10
(d) (i) the amount of the Account, when aggregated with all other
Accounts of any account debtor, exceeds fifteen percent (15%) in face
value of all Accounts of the Credit Parties then outstanding, but only to
the extent of such excess, or (ii) the amount of the Account owing from
account debtors that pay through the same Buying Association, when
aggregated with all other Accounts which will be paid through the same
Buying Association, exceeds thirty percent (30%) in face value of all
Accounts of the Credit Parties then outstanding, but only to the extent of
such excess;
(e) an Account for which (i) the account debtor is also a creditor
of any Credit Party, but only to the extent of the amount owed by such
Credit Party to the account debtor, (ii) the account debtor has disputed
its liability on, or the account debtor has made any claim with respect
to, such Account or any other Account due from such account debtor to such
Credit Party, which has not been resolved, or (iii) the account debtor has
or acquires any right of setoff against such Account, but only to the
extent of the amount of such setoff;
(f) the Account is owing by an account debtor that has commenced a
voluntary case under the Bankruptcy Code or made an assignment for the
benefit of creditors, or if a decree or order for relief has been entered
by a court having jurisdiction in the premises in respect to such account
debtor in an involuntary case under the Bankruptcy Code; any petition or
other application for relief under the Bankruptcy Code has been filed by
or against the account debtor; or such account debtor is generally not
paying its debts as they become due (unless such debts are the subject of
a bona fide dispute), or has suspended business, ceased to be solvent, or
consented to or suffered a receiver, trustee, liquidator or custodian to
be appointed for it or for all or a significant portion of its assets or
affairs;
(g) the Account arises from a sale to an account debtor outside the
continental United States or any province of Canada other than Quebec
(provided, that the aggregate amount of all Accounts owing from account
debtors located in Canada shall not at any time exceed $5,000,000), unless
the sale is (i) on letter of credit, guaranty or banker's acceptance
terms, in each case acceptable to the Agent in its reasonable credit
judgment, or (ii) otherwise approved by and acceptable to the Agent in its
reasonable credit judgment;
(h) the Account arises from a sale on a ▇▇▇▇-and-hold, guaranteed
sale, sale-and-return, sale on approval or consignment basis or is made
pursuant to any other written agreement providing for repurchase or
return;
(i) the Agent believes, in its reasonable credit judgment, that
collection of such Account is insecure or that such Account may not be
paid by reason of the account debtor's financial inability to pay;
(j) an Account for which the related account debtor is the United
States of America or any department, agency or instrumentality thereof,
unless the applicable
11
Credit Party duly assigns its rights to payment of such Account to the
Agent pursuant to the Assignment of Claims Act of 1940, as amended (31
U.S.C. Section 3727 et seq.);
(k) an Account for which the goods giving rise thereto have not been
shipped "FOB Shipping" or "FOB Buyer" and invoiced to the related account
debtor or its designee; the services giving rise to such Account have not
been performed by or on behalf of the applicable Credit Party and accepted
by the related account debtor or its designee; or such Account otherwise
does not represent a final sale;
(l) the aggregate face amount of the Account and all other Accounts
owing by the same account debtor exceeds a credit limit as to such account
debtor determined by the Agent, in its reasonable credit judgment, but
only to the extent such aggregate face amount exceeds such limit;
(m) any Account in which the Agent does not have a first priority,
perfected security interest;
(n) an Account for which an invoice has not been prepared and
delivered to the related account debtor; or
(o) an Account which the Agent, at any time and in the exercise of
its reasonable credit judgment, determines it to be ineligible.
"Eligible Assignee" shall mean (a) an Approved Assignee or (b) any other
Person (i) which is a commercial bank, finance company, insurance company or
other financial institution or fund and which, in the ordinary course of
business, extends credit of the type contemplated herein; (ii) whose becoming an
assignee would not constitute a prohibited transaction under Section 4975 of the
Internal Revenue Code or Section 406 of ERISA; (iii) which is organized under
the laws of the United States of America or any state thereof; and (iv) which
has capital in excess of $500,000,000, provided, however, that "Eligible
Assignee" shall not include the Credit Parties, or any of the Credit Parties'
Affiliates, financial sponsors or Subsidiaries.
"Eligible Inventory" shall mean (a) the aggregate gross amount of each
Credit Party's Inventory (excluding 80% of all work-in-process, except for
work-in-process consisting solely of drawn copper wire located at the Oswego
Facility (which shall not be excluded)), valued at the lower of cost (on a FIFO
basis) or market, which (i) is owned solely by such Credit Party and with
respect to which such Credit Party has good, valid and marketable title, (ii) is
stored on property that is either (A) owned or leased by such Credit Party or
(B) owned or leased by a warehouseman that has contracted with such Credit Party
to store Inventory on such warehouseman's property or by another bailee of such
Credit Party (other than a Processor) (provided that, with respect to Inventory
stored on property leased by such Credit Party, such Credit Party shall have
delivered in favor of the Agent an Acknowledgment Agreement from the landlord of
such leased location, and, with respect to Inventory stored on property owned or
leased by a warehouseman or other bailee (other than a Processor), such Credit
Party shall have delivered to the Agent an Acknowledgment Agreement executed by
such warehouseman or other bailee (other than a Processor)); or if not so
stored, such Inventory constitutes Processor
12
Inventory or In-Transit Inventory; (iii) is subject to a valid, enforceable and
first priority Lien in favor of Agent except, with respect to Eligible Inventory
stored at sites described in clause (B)(2) above for normal and customary
warehouseman, filler, packer and processor charges); (iv) is located in the
continental United States; and (v) is not obsolete, excess or slow moving and
for which a markdown reserve has not been made, and which otherwise conforms to
the warranties contained herein and which at all times continues to be
acceptable to the Agent in its reasonable credit judgment, less (b) the sum of
(i) Inventory consisting of manufacturing supplies (other than raw materials),
expense supplies, shipping supplies or packaging materials, (ii) reserves
imposed by the applicable Credit Party, (iii) any goods returned or rejected by
such Credit Party's customers for which a credit has not yet been issued, (iv)
goods in transit to third parties (other than to such Credit Party's agents,
warehouses, or other bailees (other than a Processor) that have furnished an
Acknowledgement Agreement to such Credit Party and the Agent or which
constitutes Processor Inventory or In-Transit Inventory), (v) damaged Inventory,
(vi) any Inventory that the Agent determines in its reasonable credit judgment
to be a no charge or sample item; (vii) a reserve equal to the amount of all
accounts payable of such Credit Party owed or owing to any filler, packer,
processor or other bailee of such Credit Party; (viii) any reserves required by
the Agent in its reasonable credit judgment, including, without limitation, for
special order goods, market value declines, shrinkage, import duty and freight
charges, rebates and purchase price variances; (ix) any Inventory which is held
by a Credit Party pursuant to consignment, sale or return, sale on approval or
similar arrangement; and (x) any Inventory that the Agent determines in its
reasonable credit judgment to be ineligible.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean any (i) corporation which is or was at any
time a member of the same controlled group of corporations (within the meaning
of Section 414(b) of the Internal Revenue Code) as the Credit Parties or any of
their Subsidiaries; (ii) partnership or other trade or business (whether or not
incorporated) at any time under common control (within the meaning of Section
414(c) of the Internal Revenue Code) with the Credit Parties or any of their
Subsidiaries; and (iii) member of the same affiliated service group (within the
meaning of Section 414(m) of the Internal Revenue Code) as the Credit Parties or
any of their Subsidiaries, any corporation described in clause (i) above, or any
partnership or trade or business described in clause (ii) above.
"Eurodollar Loan" shall mean a Loan bearing interest based at a rate
determined by reference to the Eurodollar Rate.
"Eurodollar Rate" shall mean, for the Interest Period for each Eurodollar
Loan comprising part of the same borrowing (including conversions, extensions
and renewals), a per annum interest rate determined pursuant to the following
formula:
London Interbank Offered Rate
Eurodollar Rate = ---------------------------------
1 - Eurodollar Reserve Percentage
13
"Eurodollar Reserve Percentage" shall mean for any day, that percentage
(expressed as a decimal) which is in effect from time to time under Regulation D
of the Board of Governors of the Federal Reserve System (or any successor), as
such regulation may be amended from time to time or any successor regulation, as
the maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable with respect
to Eurocurrency liabilities as that term is defined in Regulation D (or against
any other category of liabilities that includes deposits by reference to which
the interest rate of Eurodollar Loans is determined), whether or not any Lender
has any Eurocurrency liabilities subject to such reserve requirement at that
time. Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities
and as such shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from time to
time to a Lender. The Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve Percentage.
"Event(s) of Default" shall have the meaning provided for in Article XI.
"Excess Availability" shall mean, at any time, the amount, if any, by
which (a) the lesser of (i) the Revolving Credit Committed Amount and (ii) the
Borrowing Base exceeds (b) the aggregate amount of (i) the outstanding principal
amount of all Revolving Loans, plus (ii) the Letter of Credit Obligations.
"Excluded Taxes" shall have the meaning given to such term in Section 2.7.
"Federal Funds Rate" shall mean, for any period, a fluctuating interest
rate per annum equal, for each day during such period, to the weighted average
of the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by it.
"Fee Letter" shall mean the letter agreement, dated September 1, 2004 by
and between the Agent, WCM and the Borrowers regarding the fees to be paid by
the Borrowers to the Agent.
"Fees" shall mean, collectively, the fees owing to the Agent and/or WCM,
the Unused Line Fee, the Letter of Credit Fee and the Issuing Bank Fees payable
hereunder.
"Financials" shall have the meaning given to such term in Section 6.6.
"Fixed Charge Coverage Ratio" shall mean, as of the last day of each
fiscal quarter of the Company, the ratio of (a) (i) Consolidated EBITDA
(computed for the four consecutive fiscal quarterly periods then ending), minus
(ii) Unfinanced Capital Expenditures for such period, minus (iii) Consolidated
Cash Taxes for such period, minus (iv) cash dividends or other distributions and
management fees paid by the Company pursuant to Section 9.6 during such period,
to (b) Consolidated Fixed Charges (computed for the four consecutive fiscal
quarterly periods then ending).
14
"Flood Hazard Property" shall mean a property in an area designated by the
Federal Emergency Management Agency as having special flood or mud slide
hazards.
"Foreign Lender" shall mean any Lender that is not a United States person,
as such term is defined in Section 7701(a)(30) of the Internal Revenue Code.
"Foreign Subsidiary" shall mean, with respect to any Person, any
Subsidiary of such Person which is not a Domestic Subsidiary.
"Freight Forwarder Agreement" shall mean a freight forwarder agreement in
form and substance satisfactory to the Agent among a freight forwarder or other
shipping agent of a Borrower, the Agent and the applicable Borrower.
"Fund" shall mean any Person (other than a natural person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business.
"Funded Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) the principal portion of all
obligations of such Person under Capital Leases, (f) the maximum amount of all
letters of credit issued or bankers' acceptances facilities created for the
account of such Person and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed), (g) all preferred Capital Stock issued by such Person
and required by the terms thereof to be redeemed, or for which mandatory sinking
fund payments are due, by a fixed date prior to 180 days following the Maturity
Date, (h) the principal portion of all obligations of such Person under
off-balance sheet financing arrangements, (i) the amount of Current Derivative
Exposure under Hedging Agreements of such Person, (j) all Indebtedness of
another Person of the type referred to in clauses (a) through (i) above secured
by (or for which the holder of such Funded Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (k) all guaranties of
such Person with respect to Indebtedness of the type referred to in clauses (a)
through (i) above of another Person and (k) Indebtedness of the type referred to
in clauses (a) through (i) above of any partnership or unincorporated joint
venture in which such Person is legally obligated or has a reasonable
expectation of being liable with respect thereto.
"Funding Bank" shall mean Wachovia or any other banking or financial
institution from whom any of the Lenders borrow funds or obtain credit.
15
"GAAP" shall mean generally accepted accounting principles in the United
States of America, as in effect on the date hereof and applied on a consistent
basis with the Financials.
"Government Acts" shall mean any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority
"Governmental Authority" shall mean any federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Guarantor" shall mean each Person who enters into the Guaranty Agreement
or who becomes party to the Guaranty Agreement pursuant to a joinder agreement
in form and substance satisfactory to the Agent, including, without limitation,
and any Subsidiaries of the Company which may become Guarantors hereunder
pursuant to Section 7.16.
"Guaranty Agreement" shall mean, collectively, the Guaranty Agreement
substantially in the form of Exhibit C, executed in accordance with the terms of
this Credit Agreement.
"Hedging Agreements" shall mean any interest rate protection agreement,
foreign currency exchange agreement, commodity purchase or option agreement or
other interest or exchange rate or commodity price hedging agreements
"Highest Lawful Rate" shall mean, at any given time during which any
Obligations shall be outstanding hereunder, the maximum nonusurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness under this Credit
Agreement, under the laws of the State of New York (or the law of any other
jurisdiction whose laws may be mandatorily applicable notwithstanding other
provisions of this Credit Agreement and the other Credit Documents), or under
applicable federal laws which may presently or hereafter be in effect and which
allow a higher maximum nonusurious interest rate than under the State of New
York or such other jurisdiction's law, in any case after taking into account, to
the extent permitted by applicable law, any and all relevant payments or charges
under this Credit Agreement and any other Credit Documents executed in
connection herewith, and any available exemptions, exceptions and exclusions.
"In-Transit Inventory" shall mean Inventory of a Credit Party which is in
transit to such Credit Party (a) aboard trucks or other transport vehicles
within the United States or Canada owned or leased by a Credit Party or by a
common carrier that has delivered in favor of the Administrative Agent an
acknowledgement and lien waiver agreement in form and substance satisfactory to
the Administrative Agent or (b) at sea or by inland waterway to, or at a port
in, the United States or Canada so long as, with respect to Inventory in transit
at sea or by inland waterway, the applicable ▇▇▇▇ of lading shall run to the
order of the Administrative Agent and shall promptly be furnished to the
applicable freight forwarder and, with respect to Inventory at a port, the
applicable freight forwarder shall have delivered in favor of the Administrative
Agent a Freight Forwarder Agreement in form and substance satisfactory to the
Administrative Agent.
"Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by
16
bonds, debentures, notes or similar instruments, or upon which interest payments
are customarily made, (c) all obligations of such Person under conditional sale
or other title retention agreements relating to property purchased by such
Person (other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of business), (d)
all obligations of such Person issued or assumed as the deferred purchase price
of property or services purchased by such Person (other than trade debt incurred
in the ordinary course of business and due within six months of the incurrence
thereof) which would appear as liabilities on a balance sheet of such Person,
(e) all obligations of such Person under take-or-pay or similar arrangements or
under commodities agreements, (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (g) all guaranties of such Person
with respect to Indebtedness of the type referred in this definition of another
Person, (h) the principal portion of all obligations of such Person under
Capital Leases, (i) all obligations of such Person under Hedging Agreements, (j)
the maximum amount of all letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (k) all preferred Capital
Stock issued by such Person and required by the terms thereof to be redeemed, or
for which mandatory sinking fund payments are due, by a fixed date prior to 180
days following the Maturity Date, (l) the principal portion of all obligations
of such Person under off-balance sheet financing arrangements and (m) the
Indebtedness of any partnership or unincorporated joint venture in which such
Person is a general partner or a joint venturer in which such Person is legally
obligated or has a reasonable expectation of being liable with respect thereto.
"Independent Accountant" shall mean a firm of independent public
accountants of nationally recognized standing selected by the Board of Directors
of the Company, which is "independent" as that term is defined in Rule 2-01 of
Regulation S-X promulgated by the Securities and Exchange Commission.
"Interest Payment Date" shall mean (a) as to any Base Rate Loan, the last
Business Day of each calendar month to occur while such Loan is outstanding, (b)
as to any Eurodollar Loan having an Interest Period of three months or less, the
last day of such Interest Period, and (c) as to any Eurodollar Loan having an
Interest Period longer than three months, each day which is three months after
the first day of such Interest Period and the last day of such Interest Period.
"Interest Period" shall mean, as to Eurodollar Loans, a period of one
month, two months, three months or six months, as selected by the Company, on
behalf of the Borrowers, commencing on the date of the borrowing (including
continuations and conversions thereof); provided, however, (i) if any Interest
Period would end on a day which is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day (except that where the
next succeeding Business Day falls in the next succeeding calendar month, then
on the next preceding Business Day), (ii) no Interest Period shall extend beyond
the Maturity Date, and (iii) any Interest Period with respect to a Eurodollar
Loan that begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of the relevant
calendar month at the end of such Interest Period.
17
"Internal Revenue" shall mean the Internal Revenue Service and any
successor agency.
"Internal Revenue Code" or "IRC" shall mean the Internal Revenue Code of
1986, as amended from time to time, and any successor statute thereto and all
rules and regulations promulgated thereunder.
"Inventory" shall mean all of each Credit Party's inventory, including
without limitation, (a) all raw materials, work in process, parts, components,
assemblies, supplies and materials used or consumed in such Credit Party's
business; (b) all goods, wares and merchandise, finished or unfinished, held for
sale or lease or leased or furnished or to be furnished under contracts of
service; and (c) all goods returned to or repossessed by such Credit Party.
"Inventory Appraisal" shall mean an appraisal of the Inventory performed
by an appraiser selected by the Administrative Agent, in form and substance
satisfactory to the Administrative Agent.
"Inventory Sublimit" shall mean the maximum allowable amount of Eligible
Inventory-based Revolving Loans made with respect to Eligible Inventory, which
amount shall be $30,000,000.
"Investment" in any Person shall mean (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or otherwise,
but exclusive of the acquisition of inventory, supplies, equipment and other
property or assets used or consumed in the ordinary course of business of the
applicable Credit Party or any of its Subsidiaries and Consolidated Capital
Expenditures not otherwise prohibited hereunder) of assets, shares of Capital
Stock, bonds, notes, debentures, partnership interests, joint ventures or other
ownership interests or other securities of such Person, (b) any deposit (other
than deposits constituting a Permitted Lien) with, or advance, loan or other
extension of credit (other than sales of inventory on credit in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms and sales on credit of the type described in clauses (c) or (d) of
Section 9.3) to, such Person or (c) any other capital contribution to or
investment in such Person, including, without limitation, any obligation
incurred for the benefit of such Person. In determining the aggregate amount of
Investments outstanding at any particular time, (i) the amount of any Investment
represented by a guaranty shall be taken at not less than the maximum principal
amount of the obligations guaranteed and still outstanding; (ii) there shall be
deducted in respect of each such Investment any amount received as a return of
capital (but only by repurchase, redemption, retirement, repayment, liquidating
dividend or liquidating distribution); (iii) there shall not be deducted in
respect of any Investment any amounts received as earnings on such Investment,
whether as dividends, interest or otherwise; and (iv) there shall not be
deducted from or added to the aggregate amount of Investments any decrease or
increases, as the case may be, in the market value thereof.
"Issuing Bank" shall mean Wachovia.
"Issuing Bank Fees" shall have the meaning given to such term in Section
4.5(b).
18
"Key Shareholders" shall mean ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, and any of their spouses, children,
lawful heirs or beneficial trusts controlled by one or more of them.
"Landlord Agreement" shall mean a Landlord Lien Waiver Agreement,
substantially in the form of Exhibit D hereto (or such other form as shall be
reasonably acceptable to the Agent), between a Credit Party's landlord and the
Agent, acknowledging and agreeing, among other things, (a) that such landlord
does not have any Liens on any of the property of such Credit Party and (b) to
permit the Agent access to the property for the purposes of exercising its
remedies under the Security Agreement or any Mortgage.
"Leases" shall mean leases with respect to any leased real property,
together with any leases of real property entered into by a Credit Party or any
of its Subsidiaries after the date hereof.
"Lender" shall have the meaning given to such term in the preamble of this
Credit Agreement.
"Lender Hedging Agreement" shall mean any Hedging Agreement between any
Borrower or other Credit Party and any Person (or affiliate of such Person) that
was a Lender at the time it entered into such Hedging Agreement whether or not
such Person has ceased to be a Lender under the Credit Agreement.
"Lending Party" shall mean the Agent and each Lender.
"Letter of Credit Committed Amount" shall mean the maximum aggregate
amount of the Letter of Credit Obligations that is permitted to be outstanding
from time to time pursuant to clause (a) of the proviso contained in Section
3.1, which is $5,000,000.
"Letter of Credit Documents" shall mean, with respect to any Letter of
Credit, such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for (i) the
rights and obligations of the parties concerned or at risk or (ii) any
collateral security for such obligations.
"Letter of Credit Fee" shall have the meaning given to such term in
Section 4.5(a).
"Letter of Credit Obligations" shall mean, at any time of determination,
the sum of (i) the aggregate undrawn amount of all Letters of Credit outstanding
at such time, plus (ii) the aggregate amount of all drawings under Letters of
Credit for which the Issuing Bank has not at such time been reimbursed, plus
(iii) without duplication, the aggregate amount of all payments made by each
Lender to the Issuing Bank with respect to such Lender's participation in
Letters of Credit as provided in Section 3.3 for which the Borrowers have not at
such time reimbursed the Lenders, whether by way of a Revolving Loan or
otherwise.
19
"Letters of Credit" shall mean all letters of credit (whether documentary
or stand-by and whether for the purchase of inventory, equipment or otherwise)
issued by an Issuing Bank for the account of the Borrowers pursuant to this
Credit Agreement, and all amendments, renewals, extensions or replacements
thereof.
"Leverage Ratio" shall mean, as of the last day of each fiscal quarter of
the Company, the ratio of Consolidated Funded Indebtedness as of such date to
Consolidated EBITDA (computed for the four consecutive fiscal quarterly periods
then ending).
"Licensor Consent" shall mean a consent substantially in the form of
Exhibit P hereto (or such other form as shall be reasonably acceptable to the
Agent) given by the licensor of any intellectual property licensed to a Credit
Party.
"Lien(s)" shall mean any lien, claim, charge, pledge, security interest,
deed of trust, mortgage, or other encumbrance.
"Loan" or "Loans" shall mean the Revolving Loans (or a portion of any
Revolving Loan), individually or collectively, as appropriate.
"Lockbox" shall have the meaning given to such term in Section 2.4(b)(i).
"Lockbox Account" shall have the meaning given to such term in Section
2.4(b)(i).
"Lockbox Bank" shall have the meaning given to such term in Section
2.4(b)(i).
"London Interbank Offered Rate" shall mean, with respect to any Eurodollar
Loan for the Interest Period applicable thereto, the rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank offered rate
for deposits in Dollars at approximately 11:00 A.M. (London time) two (2)
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one rate is
specified on Telerate Page 3750, the applicable rate shall be the arithmetic
mean of all such rates. If, for any reason, such rate is not available, the term
"London Interbank Offered Rate" shall mean, with respect to any Eurodollar Loan
for the Interest Period applicable thereto, the rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two (2) Business Days prior to the first
day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates.
"Material Adverse Change" shall mean a material adverse change in (a)
the business, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of the Credit Parties, taken as a whole, (b)
the Collateral, (c) the Credit Parties' ability to perform their respective
obligations under the Credit Documents, or (d) the rights and remedies of the
Lenders hereunder, in each case as determined by the Agent in its reasonable
discretion.
20
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Credit Parties, taken as a whole, (b) the
Collateral, (c) the Credit Parties' ability to perform their respective
obligations under the Credit Documents, or (d) the rights and remedies of the
Lenders hereunder, in each case as determined by the Agent in its reasonable
discretion.
"Material Contract" shall mean the Consulting Agreements, the Senior Notes
Indenture, the Buying Association Agreements, and any other contract or other
arrangement (other than any of the Leases or the Credit Documents), whether
written or oral, to which any Credit Party or any of its Subsidiaries is a party
as to which the breach, nonperformance, cancellation or failure to renew by any
party thereto could reasonably be expected to have a Material Adverse Effect and
shall include in any event the Operative Documents to which a Credit Party is a
party.
"Maturity Date" shall mean the fifth anniversary of the Closing Date.
"Mortgagee Policies" shall mean ALTA mortgagee title insurance policies
issued by the Title Insurance Company.
"Mortgaged Properties" shall mean the properties subject to the Mortgages.
"Mortgages" shall mean the mortgages on owned Real Estate, and any leased
Real Estate designated in writing by the Agent in its sole discretion, granted
by the Credit Parties to secure the Obligations.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA and (i) which is, or within the immediately
preceding six (6) years was, contributed to by any Credit Parties or any of
their Subsidiaries or ERISA Affiliates or (ii) with respect to which any Credit
Parties or any of their Subsidiaries may incur any liability.
"Net Cash Proceeds" shall mean the aggregate cash proceeds received by the
Credit Parties or any of their Subsidiaries in respect of any Asset Disposition,
net of (a) direct costs (including, without limitation, legal, accounting and
investment banking fees, and sales commissions) and (b) taxes paid or payable as
a result thereof; it being understood that "Net Cash Proceeds" shall include,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received by the Credit Parties or any of their
Subsidiaries in any Asset Disposition.
"Note" or "Notes" shall mean the Revolving Notes (if any), individually or
collectively, as appropriate.
"Notice of Borrowing" shall mean a notice in the form attached hereto as
Exhibit H.
"Notice of Extension/Conversion" shall mean a notice substantially in the
form of Exhibit J.
21
"Obligations" shall mean the Loans, any other loans and advances or
extensions of credit made or to be made by any Lender to any Borrower, or to
others for any Borrower's account in each case pursuant to the terms and
provisions of this Credit Agreement, together with interest thereon (including
interest which accrues after the commencement of any bankruptcy or similar case,
whether or not such post-petition interest is allowed in such case) and,
including, without limitation, any reimbursement obligation or indemnity of the
Borrowers on account of Letters of Credit and all other Letter of Credit
Obligations and all indebtedness, fees, liabilities and obligations which may at
any time be owing by any Borrower to any Lender (or an Affiliate of a Lender) or
the Agent in each case pursuant to this Credit Agreement or any other Credit
Document, whether now in existence or incurred by a Borrower from time to time
hereafter, whether unsecured or secured by pledge, Lien upon or security
interest in any of a Borrower's assets or property or the assets or property of
any other Person, whether such indebtedness is absolute or contingent, joint or
several, matured or unmatured, direct or indirect and whether such Borrower is
liable to such Lender (or an Affiliate of a Lender) for such indebtedness as
principal, surety, endorser, guarantor or otherwise. Obligations shall also
include any other indebtedness owing to any Lender (or an Affiliate of a Lender)
by any Borrower under this Credit Agreement and the other Credit Documents, any
Borrower's liability to any Lender (or an Affiliate of a Lender) pursuant to
this Credit Agreement as maker or endorser of any promissory note or other
instrument for the payment of money, any Borrower's liability to any Lender (or
an Affiliate of a Lender) pursuant to this Credit Agreement or any other Credit
Document under any instrument of guaranty or indemnity, or arising under any
guaranty, endorsement or undertaking which any Lender (or an Affiliate of a
Lender) may make or issue to others for any such Borrower's account pursuant to
this Credit Agreement, including any accommodation extended with respect to
applications for Letters of Credit, all liabilities and obligations arising
under Lender Hedging Agreements owing from any Borrower or another Credit Party
to the Agent, any Lender, or any Affiliate of the Agent or any Lender (or any
Person that was a Lender or an affiliate of a Lender at the time such Lender
Hedging Agreement was entered into), permitted under Section 9.2, all
liabilities and obligations now or hereafter arising to the Agent, any Lender or
any Affiliate of the Agent or any Lender from or in connection with any Cash
Management Products, and all obligations of the Guarantors to the Agent, any
Lender (or an Affiliate of the Agent or any Lender) arising under or in
connection with the Guaranty Agreement or any other Credit Document, including,
without limitation, the Guaranteed Obligations (as defined in the Guaranty
Agreement).
"Operative Documents" shall mean the Credit Documents, the Security
Documents, any employment contracts, the Consulting Agreements and the Senior
Note Debt Documents.
"Oswego Facility" shall mean the plant of Oswego Wire Corporation located
at One Wire Drive, Oswego, New York.
"Oswego Zero Coupon Bond" shall mean the 8.7% Zero Coupon Bond issued by
the Municipal Authority of ▇▇▇▇▇▇▇▇▇▇▇▇ County, Pennsylvania, redeemable in the
amount of $5,700,000 on July 11, 2012.
"Other Taxes" shall have the meaning given to such term in Section 2.7(c).
22
"Overadvance" shall mean, as of any date of determination, the amount, if
any, by which the outstanding principal balance of Revolving Loans and Letter of
Credit Obligations exceeds the Borrowing Base.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.
"Permitted Indebtedness" shall mean:
(i) Indebtedness to the Lenders with respect to the Revolving Loans,
the Letters of Credit or otherwise, pursuant to the Credit Documents;
(ii) trade payables incurred in the ordinary course of the Credit
Parties' business;
(iii) purchase money Indebtedness (including Capital Leases)
hereafter incurred by the Credit Parties or any of their Subsidiaries to
finance the purchase of fixed assets provided that (A) the total of all
such Indebtedness for all such Persons taken together shall not exceed an
aggregate principal amount of $1,000,000 at any one time outstanding
(including any such Indebtedness referred to in clause (v) immediately
below); (B) such Indebtedness when incurred shall not exceed the purchase
price of the asset(s) financed; and (C) no such Indebtedness shall be
refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing;
(iv) obligations of a Borrower or other Credit Party in respect of
Hedging Agreements entered into in order to manage existing or anticipated
interest rate, exchange rate or commodity risks and not for speculative
purposes and otherwise in accordance with Section 9.22;
(v) Indebtedness described on Schedule 1.1C attached hereto
(including Indebtedness related to the Oswego Facility) and any
refinancings of such Indebtedness; provided that the aggregate principal
amount of such Indebtedness is not increased, the scheduled maturity dates
of such Indebtedness are not shortened and such refinancing is on terms
and conditions no more restrictive than the terms and conditions of the
Indebtedness being refinanced; and
(vi) the Senior Note Debt.
"Permitted Investments" shall mean:
(i) Cash Equivalents;
(ii) interest-bearing demand or time deposits (including
certificates of deposit) which are insured by the Federal Deposit
Insurance Corporation ("FDIC") or a similar federal insurance program;
provided, however, that the Credit Parties may, in the ordinary course of
their respective businesses, maintain in their disbursement accounts
23
from time to time amounts in excess of then applicable FDIC or other
program insurance limits;
(iii) Investments existing on the Closing Date and set forth on
Schedule 1.1D attached hereto;
(iv) advances to officers, directors and employees for expenses
incurred or anticipated to be incurred in the ordinary course;
(v) loans and Investments in (A) the Credit Parties and (B) newly
created Domestic Subsidiaries, provided that the applicable requirements
of Section 7.16 are satisfied;
(vi) investments (including debt obligations) received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(vii) Hedging Agreements entered into by a Borrower or other Credit
Party in order to manage existing or anticipated interest rate, exchange
rate or commodity risks and not for speculative purposes and otherwise in
accordance with Section 9.22; and
(viii) such other Investments as the Agent may approve in its sole
discretion.
"Permitted Liens" shall mean
(i) Liens granted to the Agent or the Lenders (or their Affiliates
to secure Lender Hedging Agreements) by the Credit Parties pursuant to any
Credit Document;
(ii) Liens listed on Schedule 1.1B;
(iii) Liens on assets securing purchase money Indebtedness
(including Capital Leases) to the extent permitted under Section 9.2,
provided that (A) any such Lien attaches to such assets concurrently with
or within thirty (30) days after the acquisition thereof and only to the
assets to be acquired and (B) a description of the assets so acquired is
furnished to the Agent;
(iv) Liens of warehousemen, mechanics, materialmen, workers,
repairmen, fillers, packagers, processors, common carriers, landlords and
other similar Liens arising by operation of law or otherwise, not waived
in connection herewith, for amounts that are not yet due and payable or
which are being diligently contested in good faith by the relevant Credit
Party by appropriate proceedings, provided that in any such case an
adequate reserve is being maintained by such Credit Party for the payment
of same;
(v) attachment or judgment Liens individually or in the aggregate
not in excess of $1,000,000 (exclusive of (a) any amounts that are duly
bonded to the
24
satisfaction of the Agent in its reasonable discretion or (b) any amount
adequately covered by insurance as to which the insurance company has
acknowledged in writing its obligations for coverage);
(vi) Liens for taxes, assessments or other governmental charges not
yet due and payable or which are being diligently contested in good faith
by a Credit Party by appropriate proceedings, provided that in any such
case an adequate reserve is being maintained by such Credit Party for the
payment of same in accordance with GAAP;
(vii) zoning ordinances, easements, covenants and other customary
restrictions on the use of real property and other title exceptions that
do not interfere in any material respect with the ordinary course of
business;
(viii) deposits or pledges to secure obligations under workmen's
compensation, social security or similar laws, or under unemployment
insurance; and
(ix) deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, regulatory or statutory
obligations, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of business.
"Permitted Periodic Dividend" shall mean the payment by the Company to the
holders of the common Capital Stock of the Company of an aggregate amount of up
to the sum of (a) fifty percent of Consolidated Net Income for the fiscal year
prior to the fiscal year in which such payment is made (the "Applicable Income
Year") less (b) the aggregate amount of tax distributions payable to the
shareholders of the Company for the Applicable Income Year.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, limited liability company, trust, unincorporated organization,
association, corporation, institution, entity, party or government (including
any division, agency or department thereof), and, as applicable, the successors,
heirs and assigns of each.
"Plan" shall mean any employee benefit plan, program or arrangement,
whether oral or written, maintained or contributed to by any Credit Party or any
of its Subsidiaries, or with respect to which any Credit Party or any such
Subsidiary may incur liability.
"Pledge Agreement" shall mean the Pledge Agreement, of even date herewith,
between the Agent and the relevant Credit Parties, in the form attached hereto
as Exhibit E.
"Pledged Collateral" shall have the meaning given to such term in the
Pledge Agreement.
"Prime Rate" shall mean the rate which Wachovia announces from time to
time as its prime or base lending rate, as in effect from time to time. The
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. Wachovia (and its affiliates) may
make commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
25
"Processor" shall have the meaning given such term in the definition of
Processor Inventory.
"Processor Inventory" shall mean Inventory of a Credit Party (other than
work-in-process) which is stored on property that is owned or leased by a
filler, packer or processor which has contracted with such Credit Party (each, a
"Processor") and (a) such Credit Party shall have delivered to the Agent an
Acknowledgment Agreement executed by such Processor; (b) such Inventory is
segregated from other goods at the location of such Processor and is identified
as the inventory of such Credit Party; (c) such Inventory is fully insured on
terms acceptable to the Agent in the exercise of its reasonable credit judgment;
and (d) such Inventory is reported on, in the Borrowers' monthly collateral
reports delivered pursuant to Section 7.1(e) hereof, as a separate item from
other Eligible Inventory.
"Projections" shall have the meaning given to such term in Section 6.6.
"Proprietary Rights" shall have the meaning given to such term in Section
6.17.
"Real Estate" shall mean the real property owned or leased by the relevant
Credit Parties described in Schedule 6.19, as it may be updated from time to
time pursuant to Sections 7.9 and 7.23, together with all Structures thereon.
"Related Parties" shall mean, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.
"Reportable Event" shall mean any of the events described in Section 4043
of ERISA and the regulations thereunder.
"Required Lenders" shall mean, at any time, Lenders which are then in
compliance with their obligations hereunder (as determined by the Agent) and
holding in the aggregate at least 51% of (i) the Revolving Credit Commitments or
(ii) if the Commitments have been terminated, the outstanding Loans and
participation interests (including the participation interests of the Issuing
Bank in any Letters of Credit).
"Reserves" shall have the meaning given to such term in the definition of
Borrowing Base.
"Restricted Payment" shall mean (i) any cash dividend or other cash
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any Credit Party or any of its Subsidiaries, as the case may
be, now or hereafter outstanding, (ii) any redemption, retirement, sinking fund
or similar payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of Capital Stock of any Credit Party or any of its
Subsidiaries now or hereafter outstanding by such Credit Party or Subsidiary, as
the case may be, except for any redemption, retirement, sinking funds or similar
payment payable solely in such shares of that class of stock or in any class of
stock junior to that class, (iii) any cash payment made to redeem, purchase,
repurchase or retire, or to obtain the surrender of, any outstanding warrants,
26
options or other rights to acquire any shares of any class of Capital Stock of
any Credit Party or any of its Subsidiaries now or hereafter outstanding, or
(iv) any payment to any Affiliate of any Credit Party (including any consulting
or management fees).
"Revolving Credit Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make its portion of the Revolving Loans in a
principal amount up to such Lender's Revolving Credit Commitment Percentage of
the Revolving Credit Committed Amount.
"Revolving Credit Commitment Percentage" shall mean, for any Lender, the
percentage identified as its Revolving Credit Commitment Percentage on Schedule
1.1A, as such percentage may be modified in connection with any assignment made
in accordance with the provisions of Section 14.6
"Revolving Credit Committed Amount" shall mean the aggregate revolving
credit line extended by the Lenders to the Borrowers for Revolving Loans and
Letters of Credit pursuant to and in accordance with the terms of this Credit
Agreement, in an amount of up to $75,000,000, as such revolving credit line may
be reduced from time to time in accordance with Section 2.3(c).
"Revolving Loans" shall mean loans and advances made to the Borrowers on a
revolving basis pursuant to Section 2.1, and includes Base Rate Loans and
Eurodollar Loans.
"Revolving Notes" shall mean promissory notes of the Borrowers to the
Lenders that request such notes pursuant to Section 2.1(c), substantially in the
form of Exhibit G.
"Security Agreement" shall mean the Security Agreement, of even date
herewith, between the Agent and the Credit Parties(and such other Persons who
may from time to time become party thereto by joinder agreement), substantially
in the form of Exhibit F.
"Security Documents" shall mean, collectively, the Pledge Agreement, the
Security Agreement, each Acknowledgment Agreement, each Deposit Account Control
Agreement, each Mortgage and any other document or agreement granting or
acknowledging a security interest in favor of the Agent to secure the
Obligations.
"Senior Note Debt" shall mean the Indebtedness evidenced by the Senior
Note Debt Documents.
"Senior Note Debt Documents" shall mean the Senior Notes, the Senior Note
Indenture, and all other documents, agreements, instruments, opinions and
certificates executed and delivered in connection therewith.
"Senior Note Indenture" shall mean that certain Indenture, dated as of
September 28, 2004, among the Company, the "Note Guarantors" which may from time
to time become party thereto and Deutsche Bank Trust Company Americas, as
trustee, as supplemented, amended or otherwise modified from time to time.
27
"Senior Notes" shall mean the Senior Notes due 2012 bearing interest at a
rate equal to 9.875 % per annum in the aggregate principal amount of
$120,000,000 issued on the Closing Date by the Company.
"Settlement Period" shall mean each week, or such lesser period or periods
as the Agent shall determine.
"Solvency Certificate" shall mean an officer's certificate of the Company
prepared by the chief financial officer or the chief executive officer of the
Company as to the financial condition, solvency and related matters of the
Credit Parties, in each case on a pro forma basis after giving effect to the
initial borrowings under the Credit Documents and the transactions contemplated
by the Senior Notes, substantially in the form of Exhibit N hereto.
"▇▇▇▇▇ Consulting Agreement" shall mean that certain Consulting Agreement
between the Company and ▇▇▇▇▇▇ ▇▇▇▇▇ to be dated on or about October 15, 2004.
"Structures" shall mean all plants, offices, manufacturing facilities,
warehouses, administration buildings and related facilities of the Credit
Parties located on the Real Estate described on Schedule 6.19 attached hereto.
"Subsidiary" shall mean, as to any Person, (a) any corporation more than
50% of whose Capital Stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time, any class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time owned by such Person directly or indirectly
through Subsidiaries, (b) any partnership, association, joint venture or other
entity in which such Person directly or indirectly through Subsidiaries has more
than a fifty percent (50%) interest in the total capital, total income and/or
total ownership interests of such entity at any time and (c) any partnership in
which such Person is a general partner. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Credit Agreement shall
refer to a Subsidiary or Subsidiaries of the Company.
"Subsidiary Borrower" and "Subsidiary Borrowers" shall have the meaning
given to such terms in the preamble of this Credit Agreement.
"Tax Amount" shall mean, with respect to any period, an amount equal to
(1) the product of (a) the Taxable Income of the Company and (b) the Applicable
Tax Percentage, less (2) to the extent not previously taken into account, any
income tax benefit attributable to the Company that could be utilized by its
shareholders, in the current or any prior year, or portion thereof, from and
after the Closing Date (including any tax losses or tax credits), computed at
the Applicable Tax Percentage of the year that such benefit is taken into
account for purposes of this computation; provided, however, that the
computation of Tax Amount shall also take into account (a) the deductibility of
state and local taxes for federal income tax purposes, and (b) any difference in
the Applicable Tax Percentage resulting from the nature of the Taxable Income
(such as capital gain as opposed to ordinary income).
28
"Taxable Income" shall mean, with respect to any Person for any period,
the taxable income (including all separately stated items of income) or loss of
such Person (including any such taxable income payable by such Person's
shareholders as a result of such Person's election to be taxed as an S
corporation pursuant to Section 1361 of the Code) for such person for federal
income tax purposes.
"Taxes" shall mean any federal, state, local or foreign income, sales,
use, transfer, payroll, personal, property, occupancy, franchise or other tax,
levy, impost, fee, imposition, assessment or similar charge, together with any
interest or penalties thereon.
"Termination Event" shall mean (i) a Reportable Event with respect to any
Benefit Plan or Multiemployer Plan; (ii) the withdrawal of any Credit Parties or
any of their Subsidiaries or ERISA Affiliates from a Benefit 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
Benefit Plan pursuant to Section 4041 of ERISA; (iv) the institution by the PBGC
of proceedings to terminate a Benefit Plan or Multiemployer Plan; (v) any event
or condition (a) which might constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Benefit
Plan or Multiemployer Plan, or (b) that may 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 Credit Parties or any of their Subsidiaries or ERISA Affiliates from a
Multiemployer Plan.
"Title Insurance Company" shall mean Chicago Title Insurance Company.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York.
"UCP" shall mean The Uniform Customs and Practice for Documentary Credits,
as published as of the date of issue of any Letter of Credit by the
International Chamber of Commerce (the "UCP")
Unfinanced Capital Expenditures" shall mean for any period Capital
Expenditures made during such period and not financed from the proceeds of
Funded Indebtedness.
"Unused Line Fee" shall mean the fee required to be paid to the Agent for
the benefit of the Lenders at the end of each calendar quarter as partial
compensation for extending the Revolving Credit Committed Amount to the
Borrowers, and shall be determined by multiplying (i) the positive difference,
if any, between (A) the Revolving Credit Committed Amount in effect at such time
and (B) the average daily amount of Revolving Loans and Letter of Credit
Obligations outstanding during such calendar quarter by (ii) the Unused Line
Percentage then in effect for the number of days in said calendar quarter.
"Unused Line Percentage" shall mean the appropriate applicable percentages
corresponding to the Usage Percentage in effect as of the end of the most recent
calendar quarter as shown below:
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Unused Line
Level Usage Percentage Percentage
---- --------------------- ----------
1 Less than 33% 0.50%
2 Greater than or equal 0.375%
to 33%, but less than
66%
3 Greater than or equal 0.25%
to 66%
"USA Patriot Act" shall mean the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT) Act of 2001, as in effect from time to time.
"Usage Percentage" shall mean, for any period, the percentage obtained by
dividing (a) the average daily amount of Revolving Loans and Letter of Credit
Obligations outstanding during such period by (b) the Revolving Credit Committed
Amount in effect at such time.
"Voting Stock" shall mean, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
"Wachovia" shall mean Wachovia Bank, National Association and its
successors and permitted assigns.
"WCM" shall mean Wachovia Capital Markets, LLC and its successors and
permitted assigns.
1.2 ACCOUNTING TERMS AND DETERMINATIONS
Unless otherwise defined or specified herein, all accounting terms shall
be construed herein and all accounting determinations for purposes of
determining compliance with Sections 8.1 through 8.3 hereof and otherwise to be
made under this Credit Agreement shall be made in accordance with GAAP applied
on a basis consistent in all material respects with the Financials. All
financial statements required to be delivered hereunder from and after the
Closing Date and all financial records shall be maintained in accordance with
GAAP. If GAAP shall change from the basis used in preparing the Financials, the
certificates required to be delivered pursuant to Section 7.1 demonstrating
compliance with the covenants contained herein shall include calculations
setting forth the adjustments necessary to demonstrate how the Credit Parties
are in compliance with the financial covenants based upon GAAP as in effect on
the Closing Date. If the Credit Parties shall change their method of inventory
accounting, all calculations necessary to determine compliance with the
covenants contained herein shall be made as if such method of inventory
accounting had not been so changed.
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The Credit Parties shall deliver to the Agent and each Lender at the same
time as the delivery of any annual financial statements given in accordance with
the provisions of Section 7.1, (i) a description in reasonable detail of any
material change in the application of accounting principles employed in the
preparation of such financial statements from those applied in the most recently
preceding annual financial statements and (ii) a reasonable estimate of the
effect on the financial statements on account of such changes in application.
1.3 OTHER DEFINITIONAL TERMS.
Terms not otherwise defined herein which are defined in the UCC shall have
the meanings given them in the UCC. The words "hereof", "herein" and "hereunder"
and words of similar import when used in this Credit Agreement shall refer to
the Credit Agreement as a whole and not to any particular provision of this
Credit Agreement, unless otherwise specifically provided. References in this
Credit Agreement to "Articles", "Sections", "Schedules" or "Exhibits" shall be
to Articles, Sections, Schedules or Exhibits of or to this Credit Agreement
unless otherwise specifically provided. Any of the terms defined in Section 1.1
may, unless the context otherwise requires, be used in the singular or plural
depending on the reference. "Include", "includes" and "including" shall be
deemed to be followed by "without limitation" whether or not they are in fact
followed by such words or words of like import. "Writing", "written" and
comparable terms refer to printing, typing, computer disk, e-mail and other
means of reproducing words in a visible form. References to any agreement or
contract are to such agreement or contract as amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms hereof and
thereof. References to any Person include the successors and permitted assigns
of such Person. References "from" or "through" any date mean, unless otherwise
specified, "from and including" or "through and including", respectively.
References to any times herein shall refer to Eastern Standard or Daylight
Savings time, as applicable.
ARTICLE II
LOANS
2.1 REVOLVING LOANS.
(a) Revolving Credit Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set forth
herein, each of the Lenders severally agrees to lend to the Borrowers at
any time or from time to time on or after the Closing Date and before the
Maturity Date, such Lender's Revolving Credit Commitment Percentage of the
Revolving Loans as may be requested or deemed requested by the Borrowers.
(b) Determination of Borrowing Base.
(i) The Lenders agree, subject to the terms and conditions of
this Credit Agreement, from time to time, to make Revolving Loans to
the Borrowers
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on a revolving basis. The Revolving Loans, together with the Letter
of Credit Obligations, shall not in the aggregate exceed the lesser
of (A) the Revolving Credit Committed Amount then in effect and (B)
the Borrowing Base.
(ii) No Lender shall be obligated at any time to make
available to the Borrowers its Revolving Credit Commitment
Percentage of any requested Revolving Loan if such amount plus its
Revolving Credit Commitment Percentage of all Revolving Loans and
its Revolving Credit Commitment Percentage of all Letter of Credit
Obligations would exceed such Lender's Revolving Credit Commitment
at such time. The aggregate balance of Revolving Loans and the
Letter of Credit Obligations shall not at any time exceed the
Revolving Credit Committed Amount. No Lender shall be obligated to
make available (except pursuant to and in accordance with Section
2.1(d)(vii), nor shall the Agent make available, any Revolving Loans
to any of the Borrowers to the extent such Revolving Loan when added
to the then outstanding Revolving Loans and Letter of Credit
Obligations would cause the aggregate s outstanding Revolving Loans
and Letter of Credit Obligations to exceed the Borrowing Base. The
full amount of the Revolving Loans to be disbursed on the Closing
Date shall be disbursed as Base Rate Loans.
(c) Revolving Notes. If so requested by a Lender (at or at any after
the Closing Date), the obligations of the Borrowers to repay the Revolving
Loans to such Lender and to pay interest thereon shall be evidenced by a
separate Revolving Note to such Lender, with appropriate insertions. One
Revolving Note shall be payable to the order of each Lender which so
requests a Revolving Note, and each such Revolving Note shall be in a
principal amount equal to such Lender's Revolving Credit Commitment and
shall represent the obligations of the Borrowers to pay such Lender the
amount of such Lender's Revolving Credit Commitment or, if less, the
aggregate unpaid principal amount of all Revolving Loans made by such
Lender hereunder, plus interest accrued thereon, as set forth herein. The
Borrowers irrevocably authorize each Lender which has been issued a
Revolving Note to make or cause to be made appropriate notations on its
Revolving Note, or on a record pertaining thereto, reflecting Revolving
Loans and repayments thereof. The outstanding amount of the Revolving
Loans set forth on such Lender's Revolving Note or record shall be prima
facie evidence of the principal amount thereof owing and unpaid to such
Lender, but the failure to make such notation or record, or any error in
such notation or record shall not limit or otherwise affect the
obligations of the Borrowers hereunder or under any Revolving Note to make
payments of principal of or interest on any Revolving Note when due. Any
of the foregoing to the contrary notwithstanding, any lack of a Lender's
request to be issued a Revolving Note shall not, in any manner, diminish
the Borrowers' obligations to repay the Revolving Loans made by such
Lender, together with all other amounts owing to such Lender by the
Borrowers.
(d) Borrowings under Revolving Notes.
(i) Each request for borrowings hereunder shall be made by a Notice
of Borrowing from the Company on behalf of the Borrowers to the Agent
(together with a
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completed Daily Loan Activity Sheet), given not later than 11:00 A.M. (A)
on the Business Day on which the proposed borrowing is requested to be
made for Revolving Loans that will be Base Rate Loans and (B) three
Business Days prior to the date of the requested borrowing of Revolving
Loans that will be Eurodollar Loans. Each Notice of Borrowing shall be
given by either telephone or telecopy, and confirmed in writing if by
telephone, setting forth (1) the requested date of such borrowing, (2) the
aggregate amount of such requested borrowing, (3) whether such Revolving
Loans will be Base Rate Loans or the Eurodollar Rate Loans, and if
appropriate, the applicable Interest Period, (4) certification by the
Company on behalf of the Borrowers that they have complied in all material
respects with Article V, all of which shall be specified in such manner as
is necessary to comply with all limitations on Revolving Loans outstanding
hereunder (including, without limitation, availability under the Borrowing
Base) and (5) the account at which such requested funds should be made
available. Each Notice of Borrowing shall be irrevocable by and binding on
the Borrowers. The Borrowers shall be entitled to borrow Revolving Loans
in a minimum principal amount of $50,000 and integral multiples of $10,000
in excess thereof (or the remaining amount of the Revolving Credit
Committed Amount, if less) and shall be entitled to borrow Base Rate Loans
or Eurodollar Loans, or a combination thereof, as the Borrowers may
request; provided, that no more than five (5) Eurodollar Loans shall be
outstanding hereunder at any one time; and provided, further, that
Eurodollar Loans shall be in a minimum principal amount of at least
$5,000,000 and integral multiples of $1,000,000 in excess thereof.
Revolving Loans may be repaid and reborrowed in accordance with the
provisions hereof.
The Agent shall give to each Lender prompt notice (but in no event
later than 2:00 P.M. on the date of the Agent's receipt of notice from the
Borrowers) of each Notice of Borrowing by telecopy, telex or cable (other
than any Notice of Borrowing which will be funded by the Agent in
accordance with subsection (d)(ii) below). No later than 3:00 P.M. on the
date on which a borrowing is requested to be made pursuant to the
applicable Notice of Borrowing, each Lender will make available to the
Agent at the address of the Agent set forth on the signature pages hereto,
in immediately available funds, its Revolving Credit Commitment Percentage
of such borrowing requested to be made (unless such funding is to be made
by the Agent in accordance with subsection (d)(ii) below). Unless the
Agent shall have been notified by any Lender prior to the date of
borrowing that such Lender does not intend to make available to the Agent
its portion of the borrowing to be made on such date, the Agent may assume
that such Lender will make such amount available to the Agent as required
above and the Agent may, in reliance upon such assumption, make available
the amount of the borrowing to be provided by such Lender. Upon
fulfillment of the conditions set forth in Article V for such borrowing,
the Agent will make such funds available to the Borrowers at the account
specified by the Borrowers in such Notice of Borrowing.
(ii) Because the Borrowers anticipate requesting borrowings of
Revolving Loans on a daily basis and repaying Revolving Loans on a daily
basis through the collection of Accounts and the proceeds of other
Collateral, resulting in the amount of outstanding Revolving Loans
fluctuating from day to day, in order to administer the Revolving Loans in
an efficient manner and to minimize the transfer of funds between
33
the Agent and the Lenders, the Lenders hereby instruct the Agent, and the
Agent may (but is not obligated to) (A) make available, on behalf of the
Lenders, the full amount of all Revolving Loans requested by the Borrowers
not to exceed $5,000,000 in the aggregate at any one time outstanding
without requiring that the Borrowers give the Agent a Notice of Borrowing
with respect to such borrowing (provided, that the Borrower shall in any
event furnish to the Agent a completed Daily Loan Activity Sheet) and
without giving each Lender prior notice of the proposed borrowing, of such
Lender's Revolving Credit Commitment Percentage thereof and the other
matters covered by the Notice of Borrowing and (B) if the Agent has made
any such amounts available as provided in clause (A), upon repayment of
Revolving Loans by the Borrowers, apply such amounts repaid directly to
the amounts made available by the Agent in accordance with clause (A) and
not yet settled as described below; provided that the Agent shall not
advance funds as described in clause (A) above if the Agent has actually
received prior to such borrowing (1) an officer's certificate from the
Company or any other Borrower pursuant to and in accordance with Section
7.1(j) that a Default or Event of Default is in existence or (2) a Notice
of Borrowing from any Borrower wherein the certification provided therein
states that the conditions to the making of the requested Revolving Loans
have not been satisfied or (3) a written notice from the Required Lenders
that the conditions to such borrowing have not been satisfied, which
officer's certificate, Notice of Borrowing or notice, in each case, shall
not have been rescinded. If the Agent advances Revolving Loans on behalf
of the Lenders, as provided in the immediately preceding sentence, the
amount of outstanding Revolving Loans and each Lender's Revolving Credit
Commitment Percentage thereof shall be computed weekly rather than daily
and shall be adjusted upward or downward on the basis of the amount of
outstanding Revolving Loans as of 5:00 P.M. on the Business Day
immediately preceding the date of each computation; provided, however,
that the Agent retains the absolute right at any time or from time to time
to make the foregoing adjustments at intervals more frequent than weekly.
The Agent shall deliver to each of the Lenders after the end of each
Settlement Period, a summary statement of the amount of outstanding
Revolving Loans for such period. If the summary statement is sent by the
Agent and received by the Lenders prior to 12:00 Noon on any Business Day
each Lender shall make the transfers described in the next succeeding
sentence no later than 3:00 P.M. on the day such summary statement was
sent; and if such summary statement is sent by the Agent and received by
the Lenders after 12:00 Noon on any Business Day, each Lender shall make
such transfers no later than 3:00 P.M. on the next succeeding Business
Day. If in any Settlement Period, the amount of a Lender's Revolving
Credit Commitment Percentage of the Revolving Loans is in excess of the
amount of Revolving Loans actually funded by such Lender, such Lender
shall forthwith (but in no event later than the time set forth in the next
preceding sentence) transfer to the Agent by wire transfer in immediately
available funds the amount of such excess; and, on the other hand, if the
amount of a Lender's Revolving Credit Commitment Percentage of the
Revolving Loans in any Settlement Period is less than the amount of
Revolving Loans actually funded by such Lender, the Agent shall forthwith
transfer to such Lender by wire transfer in immediately available funds
the amount of such difference. The obligation of each of the Lenders to
transfer such funds shall be irrevocable and unconditional and without
recourse to or warranty by the Agent. Each of the Agent and the Lenders
agree to ▇▇▇▇
34
their respective books and records at the end of each Settlement Period to
show at all times the dollar amount of their respective Revolving Credit
Commitment Percentages of the outstanding Revolving Loans. Because the
Agent on behalf of the Lenders may be advancing and/or may be repaid
Revolving Loans prior to the time when the Lenders will actually advance
and/or be repaid Revolving Loans, interest with respect to Revolving Loans
shall be allocated by the Agent to each Lender (including the Agent) in
accordance with the amount of Revolving Loans actually advanced by and
repaid to each Lender (including the Agent) during each Settlement Period
and shall accrue from and including the date such Revolving Loans are
advanced by the Agent to but excluding the date such Revolving Loans are
repaid by the Borrowers in accordance with Section 2.4 or actually settled
by the applicable Lender as described in this Section 2.1(d)(ii). All such
Revolving Loans under this Section 2.1(d)(ii) shall be made as Base Rate
Loans.
(iii) If the amounts described in subsection (d)(i) or (d)(ii) of
this Section 2.1 are not in fact made available to the Agent by a Lender
(such Lender being hereinafter referred to as a "Defaulting Lender") and
the Agent has made such amount available to the Borrowers, the Agent shall
be entitled to recover such corresponding amount on demand from such
Defaulting Lender. If such Defaulting Lender does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
shall promptly notify the Borrowers and the Borrowers shall immediately
(but in no event later than five Business Days after such demand) pay such
corresponding amount to the Agent. The Agent shall also be entitled to
recover from such Defaulting Lender and the Borrowers, (A) interest on
such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrowers to
the date such corresponding amount is recovered by the Agent, at a rate
per annum equal to either (1) if paid by such Defaulting Lender, the
overnight Federal Funds Rate or (2) if paid by the Borrowers, the then
applicable rate of interest, calculated in accordance with Section 4.1,
plus (B) in each case, an amount equal to any costs (including legal
expenses) and losses incurred as a result of the failure of such
Defaulting Lender to provide such amount as provided in this Credit
Agreement. Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights
which the Borrowers may have against any Lender as a result of any default
by such Lender hereunder, including, without limitation, the right of the
Borrowers to seek reimbursement from any Defaulting Lender for any amounts
paid by the Borrowers under clause (B) above on account of such Defaulting
Lender's default.
(iv) The failure of any Lender to make the Revolving Loan to be made
by it as part of any borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Revolving Loan on the date of
such borrowing, but no Lender shall be responsible for the failure of any
other Lender to make the Revolving Loan to be made by such other Lender on
the date of any borrowing.
(v) Each Lender shall be entitled to earn interest at the then
applicable rate of interest, calculated in accordance with Article IV, on
outstanding Revolving Loans which it has funded to the Agent from the date
such Lender funded such Revolving Loan to, but excluding, the date on
which such Lender is repaid with respect to such Revolving Loan.
35
(vi) Notwithstanding the obligation of the Borrowers to send written
confirmation of a Notice of Borrowing made by telephone, in the event that
the Agent agrees to accept a Notice of Borrowing made by telephone, such
telephonic Notice of Borrowing shall be binding on the Borrowers whether
or not written confirmation is sent by the Borrowers or requested by the
Agent. The Agent may act prior to the receipt of any requested written
confirmation, without any liability whatsoever, based upon telephonic
notice believed by the Agent in good faith to be from a Borrower or its
agents. The Agent's records of the terms of any telephonic Notices of
Borrowing shall be conclusive on the Borrowers in the absence of gross
negligence or willful misconduct on the part of the Agent in connection
therewith.
(vii) Notwithstanding anything to the contrary contained elsewhere
herein, and whether or not a Default or Event of Default exists at the
time, unless otherwise objected to by the Required Lenders in writing, the
Agent may in its discretion require all Lenders to honor requests or
deemed requests by the Borrowers for Revolving Loans at a time that an
Overadvance exists or which would result in an Overadvance and each Lender
shall be obligated to continue to make its pro rata share of Revolving
Loans, up to a maximum amount outstanding equal to its Revolving Credit
Commitment, so long as such Overadvance is not known by the Agent to
exceed $2,500,000 and so long as such Overadvance is not outstanding for
more than ten (10) Business Days.
2.2 [INTENTIONALLY OMITTED]
2.3 OPTIONAL AND MANDATORY PREPAYMENTS; REDUCTION OF REVOLVING CREDIT
COMMITTED AMOUNT.
(a) Voluntary Prepayments. The Borrowers shall have the right to
prepay Loans in whole or in part from time to time, but otherwise without
premium or penalty; provided, however, that (i) Loans that are Eurodollar
Loans may only be prepaid on three Business Days' prior written notice to
the Agent specifying the applicable Loans to be prepaid; (ii) any
prepayment of Loans that are Eurodollar Loans will be subject to Section
4.10; (iii) each such partial prepayment of Loans shall be in a minimum
principal amount of $50,000 and integral multiples of $10,000. Subject to
the foregoing terms, amounts prepaid under this Section 2.3(a) shall be
applied to the Revolving Loans. Prepayments on Revolving Loans shall be
applied first to Base Rate Loans and then to Eurodollar Loans in direct
order of Interest Period maturities.
(b) Mandatory Prepayments.
(i) Revolving Credit Committed Amount. If at any time, the sum
of the aggregate principal amount of outstanding Revolving Loans
plus the Letter of Credit Obligations outstanding shall exceed the
lesser of (A) the Revolving Credit Committed Amount and (B) the
Borrowing Base, subject to any Overadvance permitted to be
outstanding under Section 2.1(d)(vii), the Borrowers immediately
36
shall pay to the Agent, for the ratable account of the Lenders, an
amount sufficient to eliminate such excess.
(ii) Casualty Loss. To the extent of cash proceeds received in
connection with a Casualty Loss, the Borrowers shall prepay the
Loans in an amount equal to one hundred percent (100%) of such cash
proceeds if the Agent shall have elected to apply the proceeds
realized from such Casualty Loss to the prepayment of the Loans
(such prepayment to be applied as set forth in clause (iv) below).
(iii) Asset Dispositions. Promptly and in any event within
five (5) days following the occurrence of any Asset Disposition, the
Borrowers shall prepay the Loans in an aggregate amount equal to the
Net Cash Proceeds of the related Asset Disposition. Such prepayment
shall be applied as set forth in clause (iv) below.
(iv) Application of Mandatory Prepayments. All amounts
required to be paid pursuant to this Section 2.3(b) shall be applied
to reduce the Revolving Loans, (after all Revolving Loans have been
repaid) to a cash collateral account held by the Agent in respect of
Letter of Credit Obligations (in an amount equal to 105% of the
aggregate amount thereof) and (after all Revolving Loans have been
repaid and all Letter of Credit Obligations have been cash
collateralized) to a cash collateral account held by the Agent in
respect of Current Derivative Exposure under Lender Hedging
Agreements (in an amount equal to 105% of the aggregate amount
thereof). Within the parameters of the applications set forth above
for Revolving Loans, prepayments shall be applied first to Base Rate
Loans and then to Eurodollar Loans in direct order of Interest
Period maturities. All prepayments under this Section 2.3(b) shall
be subject to Section 4.10.
(c) Voluntary Reductions of Revolving Credit Committed Amount. The
Borrowers may from time to time permanently reduce or terminate the
Revolving Credit Committed Amount in whole or in part (in minimum
aggregate amounts of $5,000,000 or in integral multiples of $5,000,000 in
excess thereof (or, if less, the full remaining amount of the then
applicable Revolving Credit Committed Amount)) upon three (3) Business
Days' prior written notice to the Agent; provided, however, no such
termination or reduction shall be made which would cause the aggregate
principal amount of outstanding Revolving Loans plus Letter of Credit
Obligations outstanding to exceed the lesser of (A) the Revolving Credit
Committed Amount and (B) the Borrowing Base, unless, concurrently with
such termination or reduction, the Borrowers make a mandatory prepayment
in accordance with the provisions of Section 2.3(b)(i). The Agent shall
promptly notify each affected Lender of receipt by the Agent of any notice
from the Borrowers pursuant to this Section 2.3(c).
(d) Maturity Date. The Revolving Credit Commitment of the Lenders
and the Letter of Credit Commitment of the Issuing Bank shall
automatically terminate on the Maturity Date.
(e) General. The Borrowers shall pay to the Agent for the account of
the Lenders in accordance with the terms of Section 4.3, on the date of
each termination or
37
reduction of the Revolving Credit Committed Amount, the Unused Line Fee
accrued through the date of such termination or reduction on the amount of
the Revolving Credit Committed Amount so terminated or reduced.
(f) Hedging Obligations Unaffected. Any prepayment made pursuant to
this Section 2.3 shall not affect any Borrower's or other Credit Party's
obligation to continue to make payments under any Lender Hedging
Agreement, which shall remain in full force and effect notwithstanding
such prepayment, subject to the terms of such Lender Hedging Agreement.
2.4 PAYMENTS AND COMPUTATIONS.
(a) The Borrowers shall make each payment hereunder and under the
Notes not later than 2:00 P.M. on the day when due (unless such payments
are otherwise paid by the Agent from amounts in the Cash Concentration
Account as provided in Section 2.4(b) below)). Payments made by the
Borrowers shall be in Dollars to the Agent at its address referred to in
Section 14.5 in immediately available funds without deduction,
withholding, setoff or counterclaim. Payments made with respect to the
Revolving Loans shall be applied to repay Revolving Loans consisting of
Base Rate Loans first and then Revolving Loans consisting of Eurodollar
Loans. As soon as practicable after the Agent receives payment from the
Borrowers, but in no event later than one Business Day after such payment
has been made, subject to Section 2.1(d)(ii), the Agent will cause to be
distributed like funds relating to the payment of principal, interest, or
Fees (other than amounts payable to the Agent to reimburse the Agent and
the Issuing Bank for fees and expenses payable solely to them pursuant to
Article IV) or expenses payable to the Agent and the Lenders in accordance
with Section 14.8 ratably to the Lenders, and like funds relating to the
payment of any other amounts payable to such Lender. The Borrowers'
obligations to the Lenders with respect to such payments shall be
discharged by making such payments to the Agent pursuant to this Section
2.4(a) or if not timely paid or any Event of Default then exists, may be
added to the principal amount of the Revolving Loans outstanding.
(b) (i) The Credit Parties, individually or through the Company,
shall establish and shall maintain one or more lockboxes (each a
"Lockbox") with financial institutions, including, without
limitation, Wachovia, selected by the Company and reasonably
acceptable to the Agent (each a "Lockbox Bank") and shall instruct
all account debtors on the Accounts of each Credit Party to remit
all payments to its respective Lockboxes. All amounts received by
the Credit Parties from any account debtor, in addition to all other
cash received from any other source (including but not limited to
proceeds from asset sales and judgments), shall be promptly
deposited into an account which is maintained at a Lockbox Bank and
which is subject to a Deposit Account Control Agreement in favor of
the Agent (each such account, a "Lockbox Account") or into the Cash
Concentration Account. The foregoing notwithstanding, unless the
Agent otherwise requires, no Deposit Account Control Agreement shall
be required with
38
respect to any Lockbox Account maintained with the Agent, so long as
the Agent has "control" (as such term is used in Article 9 of the
UCC) over such account.
(ii) All receipts held in the Lockboxes shall be remitted
daily to the appropriate Lockbox Account. All funds deposited into
the Lockbox Accounts on any Business Day shall be transferred to the
Cash Concentration Account. All good funds deposited on any Business
Day to the Cash Concentration Account shall be applied by the Agent
on the following Business Day to reduce the then outstanding balance
of the Revolving Loans and to pay accrued interest thereon and to
pay any other outstanding Obligations which are then due and payable
hereunder; provided that for the purpose of determining the
availability of Revolving Loans hereunder, such funds deposited into
the Cash Concentration Account shall be deemed to have reduced the
outstanding Revolving Loans on the Business Day such funds were
deposited into such account. All amounts received directly by the
Credit Parties from any account debtor, in addition to all other
cash received from any other source (including, without limitation,
proceeds from asset sales and judgments), shall be held in trust by
the Credit Parties and promptly deposited into a Lockbox Account or,
if made by wire transfer, directly to the Cash Concentration
Account.
(iii) All funds deposited into the Cash Concentration Account
shall immediately become the property of the Agent and the Credit
Parties shall obtain the agreement by the Lockbox Banks to waive any
offset rights against the funds so deposited. The Agent assumes no
responsibility for the Lockbox arrangements, including without
limitation, any claim of accord and satisfaction or release with
respect to deposits accepted by the Lockbox Banks thereunder.
(iv) The Credit Parties may close Lockboxes only with the
prior written consent of the Agent and subject to the terms and
conditions set forth in any applicable Deposit Account Control
Agreement. The Credit Parties may open new Lockboxes and Lockbox
Accounts, subject to such Lockbox Account's being subject to a
Deposit Account Control Agreement as contemplated above.
(v) No Credit Party shall direct any account debtor to submit
payment on any Account to any address or location other than to a
Lockbox. No collections from any Account shall be deposited into any
account other than a Lockbox Account or the Cash Concentration
Account.
(c) The Borrowers hereby authorize each Lender to charge from time
to time against any or all of the Borrowers' accounts with such Lender any
of the Obligations which are then due and payable. Each Lender receiving
any payment as a result of charging any such account shall promptly notify
the Agent thereof and make such arrangements as the Agent shall request to
share the benefit thereof in accordance with Section 2.8.
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(d) Except as otherwise provided herein with respect to Eurodollar
Loans, any payments falling due under this Credit Agreement on a day other
than a Business Day shall be due and payable on the next succeeding
Business Day and shall accrue interest at the applicable interest rate
provided for in this Credit Agreement to but excluding such Business Day.
Except as otherwise provided herein, computation of interest and fees
hereunder shall be made on the basis of actual number of days elapsed over
a year of 360 days. Interest on Base Rate Loans bearing interest based on
the Prime Rate shall be calculated on the basis of a year of 365 (or 366,
if applicable) days.
2.5 MAINTENANCE OF ACCOUNT.
The Agent shall maintain an account on its books in the name of the
Borrowers in which the Borrowers will be charged with all loans and advances
made by the Lenders to the Borrowers or for the Borrowers' account, including
the Revolving Loans, the Letter of Credit Obligations and any other Obligations,
including any and all costs, expenses and reasonable attorney's fees which the
Agent may incur, including, without limitation, in connection with the exercise
by or for the Lenders of any of the rights or powers herein conferred upon the
Agent (other than in connection with any assignments or participations by any
Lender) or in the prosecution or defense of any action or proceeding by or
against any Borrower or the Lenders concerning any matter arising out of,
connected with, or relating to this Credit Agreement or the Accounts, or any
Obligations owing to the Lenders by any Borrower. The Borrowers will be credited
in accordance with Section 2.4(b)(ii)(B) above, with all amounts received by the
Lenders from the Borrowers or from others for the Borrowers' account, including,
as above set forth, all amounts received by the Agent in payment of Accounts. In
no event shall prior recourse to any Accounts or other Collateral be a
prerequisite to the Agent's right to demand payment of any Obligation upon its
maturity. Further, it is understood that the Agent shall have no obligation
whatsoever to perform in any respect any of the Borrowers' contracts or
obligations relating to the Accounts.
2.6 STATEMENT OF ACCOUNT
Within fifteen (15) days after the end of each month the Agent shall send
the Borrowers a statement showing the accounting for the charges, loans,
advances and other transactions occurring between the Lenders and the Borrowers
during that month. The monthly statements shall be deemed correct and binding
upon the Borrowers and shall constitute an account stated between the Borrowers
and the Lenders unless the Agent receives a written statement of the Borrowers'
exceptions within thirty (30) days after same is mailed to the Borrowers.
2.7 TAXES.
(a) All payments made by the Borrowers hereunder or under any Note
will be, except as provided in Section 2.7(b), made free and clear of, and
without deduction or withholding for, any present or future taxes, levies,
imposts, duties, fees, assessments or other charges of whatever nature now
or hereafter imposed by any Governmental Authority or by any political
subdivision or taxing authority thereof or therein with respect to such
payments (but excluding any tax imposed on or measured by the net income
or profits of a Lender pursuant to the laws of the jurisdiction in which
it is
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organized or the jurisdiction in which the principal office or applicable
lending office of such Lender is located or any subdivision thereof or
therein (the "Excluded Taxes")) and all interest, penalties or similar
liabilities with respect thereto (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as "Payment Taxes"). If any Payment Taxes are so levied or
imposed, the Borrowers jointly and severally agree to pay the full amount
of such Payment Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under this Credit Agreement or any
other Credit Document, after withholding or deduction for or on account of
any Payment Taxes, will not be less than the amount provided for herein or
therein. The Borrowers jointly and severally agree to indemnify and hold
harmless each Lender, and reimburse such Lender upon its written request,
for the amount of any Payment Taxes so levied or imposed and paid by such
Lender.
(b) Each Foreign Lender agrees to deliver to the Borrowers and the
Agent on or prior to the Closing Date, or in the case of a Lender that is
an assignee or transferee of an interest under this Credit Agreement
pursuant to Section 14.6(c) (unless the respective Lender was already a
Lender hereunder immediately prior to such assignment or transfer), on the
date of such assignment or transfer to such Foreign Lender, two accurate
and complete original signed copies of Internal Revenue Service Form ▇-▇
▇▇▇, ▇-▇ ECI or W-8 IMY, as applicable (or successor forms) certifying
such Foreign Lender's entitlement to a complete exemption from United
States withholding tax with respect to payments to be made under this
Credit Agreement and under any Note. In addition, each Foreign Lender
agrees that it will deliver updated versions of the foregoing, as
applicable, whenever the previous certification has become obsolete or
inaccurate in any material respect, together with such other forms as may
be required in order to confirm or establish the entitlement of such
Foreign Lender to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any
Note. Notwithstanding anything to the contrary contained in Section
2.7(a), but subject to the immediately succeeding sentence, (x) each
Borrower shall be entitled, to the extent it is required to do so by law,
to deduct or withhold Payment Taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from
interest, fees or other amounts payable hereunder for the account of any
Foreign Lender to the extent that such Foreign Lender has not provided to
the Borrowers U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) the
Borrowers shall not be obligated pursuant to Section 2.7(a) to gross-up
payments to be made to a Foreign Lender in respect of Payment Taxes
imposed by the United States if such Foreign Lender has not provided to
the Borrowers the Internal Revenue Service Forms required to be provided
to the Borrowers pursuant to this Section 2.7(b). Notwithstanding anything
to the contrary contained in the preceding sentence or elsewhere in this
Section 2.7, the Borrowers jointly and severally agree to pay additional
amounts and to indemnify each Lender in the manner set forth in Section
2.7(a) (without regard to the identity of the jurisdiction requiring the
deduction or withholding) in respect of any amounts deducted or withheld
by it as described in the immediately preceding sentence as a result of
any changes after the Closing Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of
Payment Taxes.
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(c) Each Lender agrees to use reasonable efforts (including
reasonable efforts to change its lending office) to avoid or to minimize
any amounts which might otherwise be payable pursuant to this Section 2.7;
provided, however, that such efforts shall not cause the imposition on
such Lender of any additional costs or legal or regulatory burdens deemed
by such Lender in its sole discretion to be material.
(d) If the Borrowers pay any additional amount pursuant to this
Section 2.7 with respect to a Lender, such Lender shall use reasonable
efforts to obtain a refund of tax or credit against its tax liabilities on
account of such payment; provided that such Lender shall have no
obligation to use such reasonable efforts if either (i) it is in an excess
foreign tax credit position or (ii) it believes in good faith, in its sole
discretion, that claiming a refund or credit would cause adverse tax
consequences to it. In the event that such Lender receives such a refund
or credit, such Lender shall pay to the Borrowers an amount that such
Lender reasonably determines is equal to the net tax benefit obtained by
such Lender as a result of such payment by the Borrowers. In the event
that no refund or credit is obtained with respect to the Borrowers'
payments to such Lender pursuant to this Section 2.7, then such Lender
shall upon request provide a certification that such Lender has not
received a refund or credit for such payments. Nothing contained in this
Section 2.7 shall require a Lender to disclose or detail the basis of its
calculation of the amount of any tax benefit or any other amount or the
basis of its determination referred to in the proviso to the first
sentence of this Section 2.7(a) to the Borrowers or any other party.
(e) In addition, the Borrowers agree to pay any present or future
stamp, documentary, privilege, intangible or similar Taxes or any other
excise or property Taxes, charges or similar levies that arise at any time
or from time to time (other than Excluded Taxes) (i) from any payment made
under any and all Credit Documents, (ii) from the transfer of the rights
of any Lender under any Credit Documents to any other Lender or Lenders or
(iii) from the execution or delivery by any Borrower of, or from the
filing or recording or maintenance of, or otherwise with respect to, any
and all Credit Documents (hereinafter referred to as "Other Taxes").
(f) The Borrowers will indemnify each Lender and the Agent for the
full amount of Payment Taxes (including, without limitation and without
duplication, any Payment Taxes imposed by any jurisdiction on amounts
payable under this Section 2.7), subject to (i) the exclusion set out in
the first sentence of Section 2.7(a), and (ii) the provisions of Section
2.7(b), and will indemnify each Lender and the Agent for the full amount
of Other Taxes (including, without limitation and without duplication, any
Payment Taxes imposed by any jurisdiction on amounts payable under this
Section 2.7) paid by such Lender or the Agent (on its own behalf or on
behalf of any Lender), as the case may be, in respect of payments made or
to be made hereunder, and any liability (including penalties, interest and
expenses) arising solely therefrom or with respect thereto, whether or not
such Payment Taxes or Other Taxes were correctly or legally asserted.
Payment of this indemnification shall be made within thirty (30) days from
the date such Lender or the Agent, as the case may be, makes written
demand therefor.
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(g) Within thirty (30) days after the date of any payment of Payment
Taxes or Other Taxes, the applicable Borrower shall furnish to the Agent,
at its address referred to in Section 14.5, the original or certified copy
of a receipt evidencing payment thereof.
(h) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 2.7 shall survive the payment in full of all
Obligations hereunder and under the Notes.
2.8 SHARING OF PAYMENTS.
If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of setoff or otherwise) on account of the
Loans made by it in excess of its pro rata share of such payment as provided in
this Credit Agreement or its participation in Letters of Credit in excess of its
pro rata share of its participation therein as provided for in this Credit
Agreement, such Lender shall forthwith purchase from the other Lenders such
participations in the Loans made by them or in their participation in Letters of
Credit as shall be necessary to cause such purchasing Lender to share the excess
payment accruing to all Lenders in accordance with their respective ratable
shares as provided for in this Credit Agreement; provided, however, that if all
or any portion of such excess is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and each such Lender
shall repay to the purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Lender's ratable share (according
to the proportion of (i) the amount of such Lender's required repayment to (ii)
the total amount so recovered from the purchasing Lender) or any interest or
other amount paid or payable by the purchasing Lender in respect to the total
amount so recovered. The Borrowers agree that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.8 may, to the
fullest extent permitted by law, exercise all of its rights of payment
(including the right of setoff) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrowers in the amount of such
participation.
2.9 ALLOCATION OF PAYMENTS; PRO RATA TREATMENT.
(a) Allocation of Payments Prior to Event of Default; Payments
Generally. Each borrowing of Revolving Loans and any reduction of the
Revolving Credit Commitments shall be made pro rata according to the
respective Revolving Credit Commitment Percentages of the Lenders. Each
payment under this Agreement or any Note shall be applied, first, to any
Fees then due and owing pursuant to Article IV, second, to interest then
due and owing in respect of the Loans and, third, to principal then due
and owing hereunder and under the Loans. Each payment on account of any
Fees pursuant to Section Article IV shall be made pro rata in accordance
with the respective amounts due and owing (except the Issuing Bank Fees
which shall be payable solely to the Issuing Bank). Each payment (other
than prepayments) by the Borrower on account of principal of and interest
on the Loans shall be allocated pro rata among the Lenders in accordance
with the respective principal amounts of their outstanding Loans. Payments
made pursuant to Section 4.9 shall be applied in accordance with such
Section. Each
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voluntary and mandatory prepayment on account of principal of the Loans
shall be applied in accordance with Section 2.3(a) or (b), as applicable.
(b) Allocation of Payments After Event of Default and Collateral
Proceeds. Notwithstanding any other provisions of this Credit Agreement or
any other Credit Document to the contrary, after the occurrence and during
the continuance of an Event of Default, all amounts collected or received
by the Agent or any Lender on account of the Obligations (whether in an
insolvency or bankruptcy case or proceeding or otherwise) or any other
amounts outstanding under any of the Credit Documents or in respect of the
Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys'
fees) of the Agent in connection with enforcing the rights of the
Lenders under the Credit Documents, any protective advances made by
the Agent with respect to the Collateral under or pursuant to the
terms of the Security Documents and all liabilities and obligations
now or hereafter arising from or in connection with any Cash
Management Products provided by the Agent;
SECOND, to payment of any fees owed to the Agent or an Issuing
Bank hereunder or under any other Credit Document;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses, (including, without limitation, reasonable attorneys'
fees) of each of the Lenders in connection with enforcing its rights
under the Credit Documents;
FOURTH, to the payment of all Obligations consisting of
accrued fees and interest payable to the Lenders hereunder, and
including with respect to any Lender Hedging Agreement, to the
extent such Lender Hedging Agreement is permitted by this Agreement,
any fees, premiums and scheduled periodic payments due under such
Lender Hedging Agreement and any interest accrued thereon;
FIFTH, to the payment of the outstanding principal amount of
the Loans and to the payment or cash collateralization of the
outstanding Letters of Credit Obligations (in an amount equal to
105% of the aggregate amount thereof) and cash collateralization of
Current Derivative Exposure under Lender Hedging Agreements, pro
rata, as set forth below and including with respect to any Lender
Hedging Agreement, to the extent such Lender Hedging Agreement is
permitted by this Agreement, any breakage, termination or other
payments due under such Lender Hedging Agreement and any interest
accrued thereon;
SIXTH, to all liabilities and obligations now or hereafter
arising from or in connection with any Cash Management Products
provided by the Lenders (other than the Administrative Agent);
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SEVENTH, to all other Obligations which shall have become due
and payable under the Credit Documents and not repaid pursuant to
clauses "FIRST" through "SIXTH" above; and
EIGHTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in
the numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that its then outstanding Revolving
Loans, Letters of Credit Obligations and obligations outstanding under the
Lender Hedging Agreements permitted by this Agreement bears to the aggregate
then outstanding Revolving Loans, Letters of Credit Obligations, and obligations
outstanding under the Lender Hedging Agreements) of amounts available to be
applied pursuant to clauses "THIRD", "FOURTH," "FIFTH," "SIXTH", and "SEVENTH"
above; (c) to the extent that any amounts available for distribution pursuant to
clause "FIFTH" above are attributable to the issued but undrawn amount of
outstanding Letters of Credit, such amounts shall be held by the Agent in a cash
collateral account (which account shall be an interest bearing checking account)
and applied (x) first, to reimburse the Issuing Bank from time to time for any
drawings under such Letters of Credit and (y) then, following the expiration of
all Letters of Credit, to all other obligations of the types described in clause
"SEVENTH" above in the manner provided in this Section 2.9 and in the Security
Documents.
2.10 EXTENSIONS AND CONVERSIONS.
Subject to the terms of Article V, the Borrowers shall have the option, on
any Business Day, to extend existing Eurodollar Loans into a subsequent
permissible Interest Period, to convert Base Rate Loans into Eurodollar Loans,
or to convert Eurodollar Loans into Base Rate Loans; provided, however, that (i)
except as provided in Section 4.10, Eurodollar Loans may be converted into Base
Rate Loans only on the last day of the Interest Period applicable thereto, (ii)
Eurodollar Loans may be extended, and Base Rate Loans may be converted into
Eurodollar Loans, only if no Event of Default is in existence on the date of
extension or conversion, (iii) Loans extended as, or converted into, Eurodollar
Loans shall be subject to the terms of the definition of "Interest Period" and
shall be in such minimum amounts as provided in Section 2.1(d)(i), and (iv) no
more than five (5) separate Eurodollar Loans shall be outstanding hereunder at
any time. Each such extension or conversion shall be effected by the Borrowers
by giving a written Notice of Extension/Conversion (or telephone notice promptly
confirmed in writing) to the Agent prior to 11:00 A.M. on the Business Day of,
in the case of the conversion of a Eurodollar Loan into a Base Rate Loan, and on
the third Business Day prior to, in the case of the extension of a Eurodollar
Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan, the date of
the proposed extension or conversion, specifying the date of the proposed
extension or conversion, the Loans to be so extended or converted, the types of
Loans into which such Loans are to be converted and, if appropriate, the
applicable Interest Periods with respect thereto. Each request for extension or
conversion shall constitute a representation and warranty by the Borrowers of
the matters specified in Article V. In the event the Borrowers fail to request
extension or conversion of any Eurodollar Loan in accordance with this Section,
or any such
45
conversion or extension is not permitted or required by this Section, then such
Loan shall be automatically converted into a Base Rate Loan at the end of the
Interest Period applicable thereto. The Agent shall give each Lender notice as
promptly as practicable of any such proposed extension or conversion affecting
any Loan.
2.11 REMOVAL OF LENDERS.
The Borrowers shall be permitted to replace with a replacement financial
institution satisfactory to the Agent (i) any Lender that requests reimbursement
for amounts owing or payments of additional amounts pursuant to Section 2.7, 4.7
or 4.9; (ii) any Defaulting Lender; or (iii) any Lender (other than Wachovia
Bank, National Association) that fails to consent to any proposed amendment,
modification, termination, waiver or consent with respect to any provision
hereof or of any other Credit Document that requires the unanimous approval of
all of the Lenders, the approval of all of the Lenders affected thereby or the
approval of a class of Lenders, in each case in accordance with the terms of
Section 14.10, so long as the consent of the Required Lenders shall have been
obtained with respect to such amendment, modification, termination, waiver or
consent; provided that (A) such replacement does not conflict with any
applicable law, treaty, rule or regulation or determination of an arbitrator or
a court or other Governmental Authority, (B) except with respect to clause (iii)
above, no Event of Default shall have occurred and be continuing at the time of
such replacement, (C) the replacement financial institution shall purchase, at
par, all Loans and other amounts owing to such replaced Lender on or prior to
the date of replacement, (D) with respect to clause (iii) above, the replacement
financial institution shall approve the proposed amendment, modification,
termination, waiver or consent, (E) the Borrowers shall be liable to such
replaced Lender under Section 4.10 if any Eurodollar Loan owing to such replaced
Lender shall be purchased other than on the last day of the Interest Period
relating thereto, (F) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 14.6(c) (provided that
the Borrowers shall be obligated to pay the registration and processing fee
referred to therein), (G) until such time as such replacement shall be
consummated, the Borrowers shall pay to the replaced Lender all additional
amounts (if any) required pursuant to Section 2.7, 4.7 or 4.9, as the case may
be, (H) in the case of clause (iii) above, the Borrowers provide at least three
(3) Business Days' prior notice to such replaced Lender, and (I) any such
replacement shall not be deemed to be a waiver of any rights that the Borrowers,
the Agent or any other Lender shall have against the replaced Lender. In the
event any replaced Lender fails to execute the agreements required under Section
14.6 in connection with an assignment pursuant to this Section 2.11, the
Borrowers may, upon two (2) Business Days' prior notice to such replaced Lender,
execute such agreements on behalf of such replaced Lender. A Lender shall not be
required to be replaced if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrowers to require such
replacement cease to apply.
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ARTICLE III
LETTERS OF CREDIT
3.1 ISSUANCE.
Subject to the terms and conditions hereof and of the Letter of Credit
Documents, if any, and any other terms and conditions which the Issuing Bank may
reasonably require, the Lenders will participate in the issuance by the Issuing
Bank from time to time of such Letters of Credit in Dollars from the Closing
Date until the Maturity Date as the Borrowers may request, in a form acceptable
to the Issuing Bank; provided, however, that (a) the Letter of Credit
Obligations outstanding shall not at any time exceed the Letter of Credit
Committed Amount and (b) the sum of the aggregate principal amount of
outstanding Revolving Loans plus Letter of Credit Obligations outstanding shall
not at any time exceed the lesser of (i) the Revolving Credit Committed Amount
and (ii) the Borrowing Base. No Letter of Credit shall (x) have an original
expiry date more than one year from the date of issuance or (y) as originally
issued or as extended, have an expiry date extending beyond the Maturity Date.
Each Letter of Credit shall comply with the related Letter of Credit Documents.
The issuance and expiry date of each Letter of Credit shall comply with the
related Letter of Credit Documents. The issuance and expiry date of each Letter
of Credit shall be a Business Day.
3.2 NOTICE AND REPORTS.
The request for the issuance of a Letter of Credit shall be submitted by
the Borrowers to the Issuing Bank at least three (3) Business Days prior to the
requested date of issuance. The Issuing Bank will, upon request, disseminate to
each of the Lenders a detailed report specifying the Letters of Credit which are
then issued and outstanding and any activity with respect thereto which may have
occurred since the date of the prior report, and including therein, among other
things, the beneficiary, the face amount and the expiry date as well as any
payment or expirations which may have occurred.
3.3 PARTICIPATION.
Each Lender, upon issuance of a Letter of Credit, shall be deemed to have
purchased without recourse a risk participation from the Issuing Bank in such
Letter of Credit and the obligations arising thereunder, in each case in an
amount equal to its Revolving Credit Commitment Percentage of such Letter of
Credit, and shall absolutely, unconditionally and irrevocably assume, as primary
obligor and not as surety, and be obligated to pay to the Issuing Bank therefor
and discharge when due, its Revolving Credit Commitment Percentage of the
obligations arising under such Letter of Credit. Without limiting the scope and
nature of each Lender's participation in any Letter of Credit, to the extent
that the Issuing Bank has not been reimbursed as required hereunder or under any
such Letter of Credit, each such Lender shall pay to the Issuing Bank its
Revolving Credit Commitment Percentage of such unreimbursed drawing pursuant to
the provisions of Section 3.4. The obligation of each Lender to so reimburse the
Issuing Bank shall be absolute and unconditional and shall not be affected by
the occurrence of a Default, an Event of Default or any other occurrence or
event. Any such reimbursement shall
47
not relieve or otherwise impair the obligation of the Borrowers to reimburse the
Issuing Bank under any Letter of Credit, together with interest as hereinafter
provided.
3.4 REIMBURSEMENT.
In the event of any drawing under any Letter of Credit, the Issuing Bank
will promptly notify the Borrowers. Unless the Borrowers shall immediately
notify the Issuing Bank that the Borrowers intend to otherwise reimburse the
Issuing Bank for such drawing, the Borrowers shall be deemed to have requested
that the Lenders make a Revolving Loan in the amount of the drawing as provided
in Section 3.5 on the related Letter of Credit, the proceeds of which will be
used to satisfy the related reimbursement obligations. The Borrowers promise to
reimburse the Issuing Bank on the day of drawing under any Letter of Credit
(either with the proceeds of a Revolving Loan obtained hereunder or otherwise)
in same day funds. If the Borrowers shall fail to reimburse the Issuing Bank as
provided hereinabove, the unreimbursed amount of such drawing shall bear
interest at a per annum rate equal to the Base Rate plus the sum of (i) the
Applicable Percentage for Base Rate Loans and (ii) two percent (2%). The
Borrowers' reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of setoff,
counterclaim or defense to payment the Borrowers may claim or have against the
Issuing Bank, the Agent, the Lenders, the beneficiary of the Letter of Credit
drawn upon or any other Person, including without limitation any defense based
on any failure of the Borrowers to receive consideration or the legality,
validity, regularity or unenforceability of the Letter of Credit. The Issuing
Bank will promptly notify the other Lenders of the amount of any unreimbursed
drawing and each Lender shall promptly pay to the Agent for the account of the
Issuing Bank in Dollars and in immediately available funds, the amount of such
Lender's Revolving Credit Commitment Percentage of such unreimbursed drawing.
Such payment shall be made on the Business Day such notice is received by such
Lender from the Issuing Bank if such notice is received at or before 2:00 P.M.
otherwise such payment shall be made at or before 12:00 Noon on the Business Day
next succeeding the day such notice is received. If such Lender does not pay
such amount to the Issuing Bank in full upon such request, such Lender shall, on
demand, pay to the Agent for the account of the Issuing Bank interest on the
unpaid amount during the period from the date of such drawing until such Lender
pays such amount to the Issuing Bank in full at a rate per annum equal to, if
paid within two (2) Business Days of the date that such Lender is required to
make payments of such amount pursuant to the preceding sentence, the Federal
Funds Rate and thereafter at a rate equal to the Base Rate. Each Lender's
obligation to make such payment to the Issuing Bank, and the right of the
Issuing Bank to receive the same, shall be absolute and unconditional, shall not
be affected by any circumstance whatsoever and without regard to the termination
of this Credit Agreement or the Commitments hereunder, the existence of a
Default or Event of Default or the acceleration of the obligations of the
Borrowers hereunder and shall be made without any offset, abatement, withholding
or reduction whatsoever. Simultaneously with the making of each such payment by
a Lender to the Issuing Bank, such Lender shall, automatically and without any
further action on the part of the Issuing Bank or such Lender, acquire a
participation in an amount equal to such payment (excluding the portion of such
payment constituting interest owing to the Issuing Bank) in the related
unreimbursed drawing portion of the Letter of Credit Obligation and in the
interest thereon and in the related Letter of Credit Documents, and shall have a
claim against the Borrowers with respect thereto.
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3.5 REPAYMENT WITH REVOLVING LOANS.
On any day on which the Borrowers shall have requested, or been deemed to
have requested, a Revolving Loan advance to reimburse a drawing under a Letter
of Credit, the Agent shall give notice to the Lenders that a Revolving Loan has
been requested or deemed requested by the Borrowers to be made in connection
with a drawing under a Letter of Credit, in which case a Revolving Loan advance
comprised of Base Rate Loans (or Eurodollar Loans to the extent the Borrower has
complied with the procedures of Section 2.1(d)(i) with respect thereto) shall be
immediately made to the Borrowers by all Lenders (notwithstanding any
termination of the Commitments pursuant to Section 11.2) pro rata based on the
respective Revolving Credit Commitment Percentages of the Lenders (determined
before giving effect to any termination of the Commitments pursuant to Section
11.2) and the proceeds thereof shall be paid directly by the Agent to the
Issuing Bank for application to the respective Letter of Credit Obligations.
Each such Lender hereby irrevocably agrees to make its Revolving Credit
Commitment Percentage of each such Revolving Loan immediately upon any such
request or deemed request in the amount, in the manner and on the date specified
in the preceding sentence notwithstanding (i) the amount of such borrowing may
not comply with the minimum amount for advances of Revolving Loans otherwise
required hereunder, (ii) whether any conditions specified in Article V are then
satisfied, (iii) whether a Default or an Event of Default then exists, (iv)
failure for any such request or deemed request for Revolving Loan to be made by
the time otherwise required hereunder, (v) whether the date of such borrowing is
a date on which Revolving Loans are otherwise permitted to be made hereunder or
(vi) any termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Loan
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a bankruptcy or
insolvency case or proceeding with respect to any Borrower), then each such
Lender hereby agrees that it shall forthwith purchase (as of the date such
borrowing would otherwise have occurred, but adjusted for any payments received
from the Borrowers on or after such date and prior to such purchase) from the
Issuing Bank such participation in the outstanding Letter of Credit Obligations
as shall be necessary to cause each such Lender to share in such Letter of
Credit Obligations ratably (based upon the respective Revolving Credit
Commitment Percentages of the Lenders (determined before giving effect to any
termination of the Commitments pursuant to Section 11.2)), provided that at the
time any purchase of participation pursuant to this sentence is actually made,
the purchasing Lender shall be required to pay to the Issuing Bank, to the
extent not paid to the Issuing Bank by the Borrowers in accordance with the
terms of Section 3.4, interest on the principal amount of participation
purchased for each day from and including the day upon which such borrowing
would otherwise have occurred to but excluding the date of payment for such
participation, at the rate equal to, if paid within two (2) Business Days of the
date of the Revolving Loan advance, the Federal Funds Rate, and thereafter at a
rate equal to the Base Rate.
3.6 RENEWAL, EXTENSION.
The renewal or extension of any Letter of Credit shall, for purposes
hereof, be treated in all respects the same as the issuance of a new Letter of
Credit hereunder.
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3.7 UNIFORM CUSTOMS AND PRACTICES.
The Issuing Bank may provide that the Letters of Credit shall be subject
to the UCP, in which case the UCP may be incorporated by reference therein and
deemed in all respects to be a part thereof.
3.8 INDEMNIFICATION; NATURE OF ISSUING BANK'S DUTIES.
(a) In addition to their other obligations under this Article III,
the Borrowers agree to protect, indemnify, pay and save the Issuing Bank
harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Bank may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of the Issuing Bank to honor a drawing under a
Letter of Credit as a result of Government Acts.
(b) As between the Borrowers and the Issuing Bank, the Borrowers
shall assume all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. The Issuing Bank shall not be
responsible: (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (iii) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by
mail, cable, telegraph, telex or otherwise, whether or not they be in
cipher; (iv) for any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under a Letter of Credit or
of the proceeds thereof; and (v) for any consequences arising from causes
beyond the control of the Issuing Bank, including, without limitation, any
Government Acts. None of the above shall affect, impair, or prevent the
vesting of the Issuing Bank's rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
the Issuing Bank, under or in connection with any Letter of Credit or the
related certificates, if taken or omitted in good faith, shall not put
such Issuing Bank under any resulting liability to any Borrower. It is the
intention of the parties that this Credit Agreement shall be construed and
applied to protect and indemnify the Issuing Bank against any and all
risks involved in the issuance of the Letters of Credit, all of which
risks are hereby assumed by the Borrowers, including, without limitation,
any and all Government Acts. The Issuing Bank shall not, in any way, be
liable for any failure by the Issuing Bank or anyone else to pay any
drawing under any Letter of Credit as a result of any Government Acts or
any other cause beyond the control of the Issuing Bank.
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(d) Nothing in this Section 3.8 is intended to limit the
reimbursement obligations of the Borrower contained in Section 3.4. The
obligations of the Borrowers under this Section 3.8 shall survive the
termination of this Credit Agreement. No act or omission of any current or
prior beneficiary of a Letter of Credit shall in any way affect or impair
the rights of the Issuing Bank to enforce any right, power or benefit
under this Credit Agreement.
(e) Notwithstanding anything to the contrary contained in this
Section 3.8, the Borrowers shall have no obligation to indemnify the
Issuing Bank in respect of any liability incurred by the Issuing Bank (i)
to the extent arising out of the gross negligence or willful misconduct of
the Issuing Bank, as determined by a court of competent jurisdiction, or
(ii) caused by the Issuing Bank's failure to pay under any Letter of
Credit after presentation to it of a request strictly complying with the
terms and conditions of such Letter of Credit, as determined by a court of
competent jurisdiction, unless such payment is prohibited by any law,
regulation, court order or decree.
3.9 RESPONSIBILITY OF ISSUING BANK.
It is expressly understood and agreed that the obligations of the Issuing
Bank hereunder to the Lenders are only those expressly set forth in this Credit
Agreement and that the Issuing Bank shall be entitled to assume that the
conditions precedent set forth in Article III or V have been satisfied unless it
shall have acquired actual knowledge that any such condition precedent has not
been satisfied; provided, however, that nothing set forth in this Article III
shall be deemed to prejudice the right of any Lender to recover from the Issuing
Bank any amounts made available by such Lender to the Issuing Bank pursuant to
this Article III in the event that it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit constituted
gross negligence or willful misconduct on the part of the Issuing Bank.
3.10 CONFLICT WITH LETTER OF CREDIT DOCUMENTS.
In the event of any conflict between this Credit Agreement and any Letter
of Credit Document (including any letter of credit application), this Credit
Agreement shall control.
ARTICLE IV
INTEREST AND FEES
4.1 INTEREST ON LOANS.
Subject to the provisions of Section 4.2, the Loans shall bear interest as
follows:
(a) Base Rate Loans. During such periods as the Loans shall be comprised
of Base Rate Loans, each such Base Rate Loan shall bear interest at a per annum
rate equal to the sum of the Base Rate plus the Applicable Percentage; and
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(b) Eurodollar Loans. During such periods as the Loans shall be
comprised of Eurodollar Loans, each such Eurodollar Loan shall bear interest at
a per annum rate equal to the sum of the Eurodollar Rate plus the Applicable
Percentage.
Interest on the Loans shall be payable in arrears on each Interest Payment
Date.
4.2 INTEREST AFTER EVENT OF DEFAULT.
(a) If any Event of Default under Section 11.1(a) (without regard to any
applicable grace period), (e), (f) or (h) shall have occurred and be continuing,
the Borrowers shall pay interest on the principal amount of all outstanding
Obligations hereunder at the Default Rate.
(b) Upon the request of the Administrative Agent or the Required
Lenders, while any other Event of Default exists, (i) the Borrowers shall pay
interest on the principal amount of all outstanding Obligations hereunder at the
Default Rate and (ii) all Letter of Credit Fees and other fees payable pursuant
to Section 4.5 shall accrue at a per annum rate 2% greater than the rate which
would otherwise be applicable.
Accrued and unpaid interest on past due amounts (including interest on
past due interest) shall be due and payable upon demand.
4.3 UNUSED LINE FEE.
At the end of each calendar quarter the Borrowers shall pay to the Agent
for the benefit of the Lenders the Unused Line Fee due in respect of such
calendar quarter.
4.4 AGENT'S FEES.
The Borrowers shall pay all ongoing fees required to be paid to the Agent
under the Fee Letter at the times and in the amounts set forth therein.
4.5 LETTER OF CREDIT FEES.
(a) Letter of Credit Fee. In consideration of the issuance of
Letters of Credit hereunder, the Borrowers promise to pay to the Agent for
the account of each Lender a fee (the "Letter of Credit Fee") on such
Lender's Revolving Credit Commitment Percentage of the average daily
maximum amount available to be drawn under each such Letter of Credit
computed at a per annum rate for each day from the date of issuance to the
date of expiration equal to the Applicable Percentage for Eurodollar
Loans. The Letter of Credit Fee will be payable monthly in arrears on the
last day of each calendar month.
(b) Issuing Bank Fees. In addition to the Letter of Credit Fee
payable pursuant to clause (a) above, the Borrowers promise to pay to the
Issuing Bank for its own account without sharing by the other Lenders the
letter of credit fronting and
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negotiation fees agreed to by the Borrowers and the Issuing Bank from time
to time and the customary charges from time to time of the Issuing Bank
with respect to the issuance, amendment, transfer, administration,
cancellation and conversion of, and drawings under, such Letters of Credit
(collectively, the "Issuing Bank Fees").
4.6 AUTHORIZATION TO CHARGE ACCOUNT.
The Borrowers hereby authorize the Agent to charge the Borrowers'
Revolving Loan accounts with the amount of all payments and fees due hereunder
to the Lenders, the Agent and the Issuing Bank as and when such payments become
due. The Borrowers confirm that any charges which the Agent may so make to the
Borrowers' Revolving Loan accounts as herein provided will be made as an
accommodation to the Borrowers and solely at the Agent's discretion.
4.7 INDEMNIFICATION IN CERTAIN EVENTS.
If after the Closing Date, either (a) any change in or in the
interpretation of any law or regulation is introduced, including, without
limitation, with respect to reserve requirements, applicable to any Funding Bank
or any of the Lenders or (b) a Funding Bank or any of the Lenders complies with
any future guideline or request from any central bank or other Governmental
Authority or (c) a Funding Bank or any of the Lenders determines that the
adoption of any applicable law, rule or regulation 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 has or would have the effect
described below, or a Funding Bank or any of the Lenders complies 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, and in the
case of any event set forth in this clause (c), such adoption, change or
compliance has or would have the direct or indirect effect of reducing the rate
of return on any of the Lenders' capital as a consequence of its obligations
hereunder to a level below that which such Lender could have achieved but for
such adoption, change or compliance (taking into consideration the Funding
Bank's or Lenders' policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, and the result of any of the foregoing
events described in clauses (a), (b) or (c) is or results in an increase in the
cost to any of the Lenders of funding or maintaining the Revolving Credit
Committed Amount, the Revolving Loans or the Letters of Credit, then the
Borrowers shall from time to time upon demand by the Agent, pay to the Agent
additional amounts sufficient to indemnify the Lenders against such increased
cost. A certificate as to the amount of such increased cost shall be submitted
to the Borrowers by the Agent and shall be conclusive and binding absent
manifest error.
4.8 INABILITY TO DETERMINE INTEREST RATE.
If prior to the first day of any Interest Period, (a) the Agent shall have
determined in good faith (which determination shall be conclusive and binding
upon the Borrowers) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, (b) the Agent has received notice from
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the Required Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders of making or maintaining their Eurodollar Loans during such Interest
Period, or (c) Dollar deposits in the principal amounts of the Eurodollar Loans
to which such Interest Period is to be applicable are not generally available in
the London interbank market, the Agent shall give telecopy or telephonic notice
thereof to the Borrowers and the Lenders as soon as practicable thereafter, and
will also give prompt written notice to the Borrowers when such conditions no
longer exist. If such notice is given (i) any Eurodollar Loans requested to be
made on the first day of such Interest Period shall be made as Base Rate Loans,
(ii) any Loans that were to have been converted on the first day of such
Interest Period to or continued as Eurodollar Loans shall be converted to or
continued as Base Rate Loans and (iii) each outstanding Eurodollar Loan shall be
converted, on the last day of the then-current Interest Period thereof, to Base
Rate Loans. Until such notice has been withdrawn by the Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall the Borrowers
have the right to convert Base Rate Loans to Eurodollar Loans.
4.9 ILLEGALITY.
Notwithstanding any other provision herein, if the adoption of or any
change in any law, treaty, rule or regulation or final, non-appealable
determination of an arbitrator or a court or other Governmental Authority or in
the interpretation or application thereof occurring after the Closing Date shall
make it unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Credit Agreement, (a) such Lender shall promptly give
written notice of such circumstances to the Borrowers and the Agent (which
notice shall be withdrawn whenever such circumstances no longer exist), (b) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert a Base Rate Loan to Eurodollar Loans shall
forthwith be canceled and, until such time as it shall no longer be unlawful for
such Lender to make or maintain Eurodollar Loans, such Lender shall then have a
commitment only to make a Base Rate Loan when a Eurodollar Loan is requested and
(c) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrowers shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 4.10.
4.10 FUNDING INDEMNITY.
The Borrowers, jointly and severally, promise to indemnify each Lender and
to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur (other than through such Lender's gross negligence or willful
misconduct) as a consequence of (a) default by the Borrowers in making a
borrowing of, conversion into or extension of Eurodollar Loans after the
Borrowers have given a notice requesting the same in accordance with the
provisions of this Credit Agreement, (b) default by the Borrowers in making any
prepayment of a Eurodollar Loan after the Borrowers have given a notice thereof
in accordance with the provisions of this Credit Agreement, and (c) the making
of a prepayment of Eurodollar Loans on a day which is not the last day of an
Interest Period with respect thereto. With respect to Eurodollar Loans, such
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indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or extended, for the period from the date of such prepayment
or of such failure to borrow, convert or extend to the last day of the
applicable Interest Period (or, in the case of a failure to borrow, convert or
extend, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Loans provided for herein over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank Eurodollar market. This covenant shall survive the
termination of this Credit Agreement and the payment of the Loans and all other
amounts payable hereunder.
ARTICLE V
CONDITIONS PRECEDENT
The obligation of the Lenders to make any Revolving Loan or of the Issuing
Bank to issue any Letter of Credit hereunder is subject to the satisfaction of,
or waiver of, immediately prior to or concurrently with the making of any
Revolving Loan or issuance of such Letter of Credit the following conditions
precedent:
5.1 CLOSING CONDITIONS.
The obligation of each Lender to make the Loans and/or of the
Issuing Bank to issue Letters of Credit hereunder shall be subject to the
satisfaction or waiver by the Agent in its reasonable discretion, on or prior to
the Closing Date, of the following conditions precedent:
(a) Executed Credit Documents. Receipt by the Agent of duly executed
counterparts of: this Credit Agreement; any requested Notes; the Contribution
Agreement; the Security Documents; and all other Credit Documents, each in form
and substance acceptable to the Lenders in their sole discretion.
(b) Organizational Documents. Receipt by the Agent of the following:
(i) Charter Documents. Copies of the articles or certificates of
incorporation or other formation or charter documents of each Credit Party
certified to be true and complete as of a recent date by the appropriate
Governmental Authority of the state or other jurisdiction of its
incorporation or organization and certified by a secretary or assistant
secretary of such Credit Party to be true and correct as of the Closing
Date.
(ii) Bylaws. A copy of the bylaws or operating agreement or similar
agreement of each Credit Party certified by a secretary or assistant
secretary of such Credit Party to be true and correct as of the Closing
Date.
(iii) Resolutions. Copies of resolutions of the Board of Directors
or similar managing body of each Credit Party approving and adopting the
Credit Documents to which
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it is a party, the transactions contemplated therein and authorizing
execution and delivery thereof, certified by a secretary or assistant
secretary of such Credit Party to be true and correct and in force and
effect as of the Closing Date.
(iv) Good Standing. Copies of (i) certificates of good standing,
existence or its equivalent with respect to each Credit Party certified as
of a recent date by the appropriate Governmental Authorities of the state
or other jurisdiction of incorporation or organization and each other
jurisdiction in which the failure to so qualify and be in good standing
could reasonably be expected to have a Material Adverse Effect and (ii) to
the extent available, a certificate indicating payment of all corporate or
other franchise taxes certified as of a recent date by the appropriate
taxing Governmental Authorities.
(v) Incumbency. An incumbency certificate of each Credit Party
certified by a secretary or assistant secretary to be true and correct as
of the Closing Date.
(c) Financial Statements. Receipt by the Agent and the Lenders of (a)
the financial statements, the certifications referred to therein and the
accountants' unqualified opinion and management letter prepared in connection
therewith described in Section 6.6, (b) the financial and operational
projections described in Section 6.6 and (c) such other information relating to
the Credit Parties as the Agent may reasonably require in connection with the
structuring and syndication of credit facilities of the type described herein.
(d) Opinions of Counsel. Receipt by the Agent of an opinion, or opinions
(which shall cover, among other things, authority, legality, validity, binding
effect, enforceability and attachment and perfection of liens), satisfactory to
the Agent, addressed to the Agent and the Lenders and dated the Closing Date,
from legal counsel to the Credit Parties.
(e) Environmental Reports. Receipt by the Agent of the environmental
assessment reports, together with reliance letters thereon addressed to the
Agent and the Lenders, and related documents prepared in connection with the
Mortgaged Properties, in each case, in form and substance satisfactory to the
Agent.
(f) Personal Property Collateral. The Agent shall have received:
(i) searches of UCC filings in the jurisdiction of organization of
each Credit Party, the chief executive office of each Credit Party and
each jurisdiction where any Collateral is located or where a filing could
have been properly made by a creditor of a Credit Party, copies of the
financing statements on file in such jurisdictions and evidence that no
Liens exist other than Permitted Liens;
(ii) UCC financing statements for each appropriate jurisdiction as
is necessary, in the Agent's sole discretion, to perfect the Agent's
security interest in the Collateral;
56
(iii) searches of ownership of intellectual property in the
appropriate governmental offices and such patent/trademark/copyright
filings as requested by the Agent in order to perfect the Agent's security
interest in the Collateral;
(iv) all stock certificates evidencing the Capital Stock pledged to
the Agent pursuant to the Pledge Agreement, together with duly executed in
blank undated stock powers attached thereto;
(v) Deposit Account Control Agreements with respect to all deposit
accounts of the Credit Parties listed on Schedule 6.35, except as
otherwise provided in Section 9.10;
(vi) all instruments and chattel paper in the possession of any of
the Credit Parties, together with allonges or assignments as may be
necessary or appropriate to perfect the Agent's security interest in the
Collateral to the extent required under the Security Documents; and
(vii) duly executed consents as are necessary, in the Agent's sole
discretion, to perfect the Lenders' security interest in the Collateral,
including, without limitation, (A) such Acknowledgment Agreements from
lessors of real property, warehousemen and other third parties as the
Agent may require, (B) such freight forwarder agreements from third
parties acting as freight forwarders for the Credit Parties in form and
substance satisfactory to the Agent and (C) Buying Association
Supplemental Agreements with each of the Buying Associations in form and
substance satisfactory to the Agent;
(g) Real Property Collateral. Receipt by Agent of the following:
(i) Fully executed and notarized Mortgages encumbering the fee
interest of the Credit Parties in the Mortgaged Properties.
(ii) The Agent shall have received, and the title insurance company
issuing the title policies (the "Title Insurance Company") shall have
received, maps or plats of an as-built survey of the sites of the real
property covered by the Mortgages certified to the Agent and the Title
Insurance Company in a manner reasonably satisfactory to each of the Agent
and the Title Insurance Company, dated a date reasonably satisfactory to
the Agent and the Title Insurance Company by an independent professional
licensed land surveyor, which maps or plats and the surveys on which they
are based shall be made in accordance with standards that enable the Title
Insurance Company to issue the title policies without exception for
"Survey matters", except for matters as are reasonably acceptable to the
Agent.
(iii) The Mortgage Policies, in amounts not less than the respective
amounts designated in Schedule 6.19 with respect to any particular
Mortgaged Property, assuring the Agent that each of the Mortgage
Instruments creates a valid and enforceable first priority mortgage lien
on the applicable Mortgaged Property, free and clear of all defects and
encumbrances except Permitted Liens, which Mortgage Policies shall be in
form and
57
substance reasonably satisfactory to the Agent and shall provide for
affirmative insurance and such reinsurance as the Agent may reasonably
request, all of the foregoing in form and substance reasonably
satisfactory to the Agent.
(iv) Evidence, which may be in the form of a letter from an
insurance broker or a municipal engineer, as to whether (i) any Mortgaged
Property is a Flood Hazard Property and (ii) the community in which such
Flood Hazard Property is located is participating in the National Flood
Insurance Program.
(v) If there are any Flood Hazard Properties, the applicable
Credit Party's written acknowledgment of receipt of written notification
from the Agent (i) as to the existence of each such Flood Hazard Property
and (ii) as to whether the community in which each such Flood Hazard
Property is located is participating in the National Flood Insurance
Program.
(vi) Evidence satisfactory to the Agent that each of the Mortgaged
Properties, and the uses of the Mortgaged Properties, are in compliance in
all material respects with all applicable laws, regulations.
(vii) UCC fixture financing statements for each Mortgaged Property
to be filed in the appropriate jurisdiction as is necessary, in the
Agent's sole discretion, to perfect the Agent's lien on such Mortgaged
Property.
(h) Priority of Liens. The Agent shall have received satisfactory
evidence that (i) the Agent, on behalf of the Lenders, holds a perfected, first
priority Lien on all Collateral (subject to clause (ii) and the provisions of
the Security Agreement) and (ii) none of the Collateral is subject to any other
Liens other than Permitted Liens.
(i) Opening Borrowing Base Certificate. Receipt by the Agent of a
Borrowing Base Certificate as of the Closing Date, substantially in the form of
Exhibit L and certified by the chief financial officer or chief executive
officer of the Company to be true and correct as of the Closing Date.
(j) Evidence of Insurance. Receipt by the Agent of copies of insurance
policies or certificates of insurance of the Credit Parties evidencing liability
and casualty insurance meeting the requirements set forth in the Credit
Documents, including, without limitation, naming the Agent as lender loss payee
on behalf of the Lenders and each Lender as additional insured and copies of any
credit insurance policies insuring foreign Accounts to be included as Eligible
Accounts Receivable.
(k) Corporate Structure. The corporate capital and ownership structure
of the Company and its Subsidiaries shall be as described in Schedule 6.9.
(l) Governmental, Shareholder and Third Party Consents. Receipt by the
Agent of evidence that all governmental, shareholder and third party consents
and approvals necessary in connection with the transactions and the related
financings contemplated hereby and by the Senior Notes and expiration of all
applicable waiting periods without any action being taken by any
58
authority that could restrain, prevent or impose any material adverse conditions
on such transactions or that could seek or threaten any of the foregoing, and no
law or regulation shall be applicable which in the judgment of the Agent could
have such effect.
(m) Litigation. There shall not exist any pending or threatened action,
suit, investigation or proceeding against any Credit Party or its assets that
could reasonably be expected to (i) have a Material Adverse Effect or (ii)
affect any transaction contemplated by this Credit Agreement or any other Credit
Document or the ability of the Credit Parties to perform their respective
obligations under the Credit Documents.
(n) Other Indebtedness. Receipt by the Agent of evidence that, after
giving effect to the making of the Loans made on the Closing Date and the
issuance of the Senior Notes on the Closing Date, the Credit Parties shall have
no Funded Indebtedness other than the Permitted Indebtedness.
(o) Solvency Certificate. Receipt by the Agent of the Solvency
Certificate.
(p) Officer's Certificates. Receipt by the Agent of a certificate or
certificates executed by the chief executive officer and chief financial officer
of the Company as of the Closing Date stating that (i) after giving effect to
the making of the Loans and application of the proceeds thereof and the
consummation of the transactions contemplated by the Senior Notes, each Credit
Party is in compliance with all existing financial obligations, (ii) all
governmental, shareholder and third party consents and approvals, if any, with
respect to the Credit Documents and the transactions contemplated thereby have
been obtained, (iii) no action, suit, investigation or proceeding is pending or
threatened in any court or before any arbitrator or governmental instrumentality
that purports to affect any Credit Party or any transaction contemplated by the
Credit Documents, if such action, suit, investigation or proceeding could
reasonably be expected to have a Material Adverse Effect and (iv) immediately
after giving effect to this Credit Agreement, the other Credit Documents, the
Senior Notes and all the transactions contemplated herein or therein to occur on
such date, (A) each of the Credit Parties is solvent, (B) no Default or Event of
Default exists, (C) all representations and warranties contained herein and in
the other Credit Documents are true and correct in all material respects, and
(D) the Borrowers are in compliance with each of the financial covenants set
forth in Article VIII.
(q) Fees and Expenses. Payment by the Borrowers of all fees and expenses
owed by them to the Lenders and the Agent, including, without limitation,
payment to the Agent and/or WCM of the fees set forth in the Fee Letter.
(r) Sources and Uses; Payment Instructions. Receipt by the Agent of (a)
a statement of sources and uses of funds covering all payments reasonably
expected to be made by the Borrowers in connection with the transactions
contemplated by the Credit Documents to be consummated on the Closing Date,
including an itemized estimate of all fees, expenses and other closing costs and
(b) payment instructions with respect to each wire transfer to be made by the
Agent on behalf of the Lenders or the Company or the Borrowers on the Closing
Date setting forth the amount of such transfer, the purpose of such transfer,
the name and number of the account to which such transfer is to be made, the
name and ABA number of the bank or other financial institution where such
account
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is located and the name and telephone number of an individual that can be
contacted to confirm receipt of such transfer.
(s) Closing Date Dividend. Receipt by the Agent of evidence satisfactory
to the Agent that a dividend has been paid to the shareholders of the common
Capital Stock of the Company in an amount not exceeding the amount of the
Closing Date Dividend.
(t) Senior Note Debt. Receipt by the Agent of duly executed copies of
the Senior Note Debt Documents, each in form and substance reasonably acceptable
to the Lenders in their sole discretion, and evidence that the Company has
received gross proceeds of the Senior Notes in an amount of not less than
$120,000,000.
(u) Account Designation Letter. Receipt by the Agent of an Account
Designation Letter.
(v) Material Adverse Change. (i) No Material Adverse Change, or
development reasonably likely to have a Material Adverse Effect, shall have
occurred since December 31, 2003, (ii) no occurrence or event which is
reasonably likely to have a Material Adverse Effect shall have occurred since
December 31, 2003 and be continuing and (iii) on or prior to the Closing Date,
no adverse conditions in the financial, banking or capital markets are in
existence, as determined by Wachovia in its sole and absolute discretion, which
have adversely affected the syndication of the Revolving Credit Committed Amount
or the transactions contemplated hereby.
(w) Minimum Excess Availability. Receipt by the Agent of evidence
satisfactory to the Agent that the Borrowers have Excess Availability of at
least $20,000,000 as of the Closing Date, after giving effect to the payment of
fees and expenses associated with the closing of this Credit Agreement, the
making of the Loans, the consummation of the transactions contemplated by the
Senior Note Debt Documents and the other extensions of credit and the
application of the proceeds thereof to be made on the Closing Date and after
deductions for past due payables and other obligations.
(x) USA Patriot Act Certificate. Receipt by the Agent, at least five (5)
Business Days prior to the Closing Date, of a certificate reasonably
satisfactory to the Agent, for benefit of itself and the Lenders, provided by
the Company that sets forth information required by the USA Patriot Act
including, without limitation, the identity of the Credit Parties, the name and
address of the Credit Parties and other information that will allow the
Administrative Agent or any Lender, as applicable, to identify the Credit
Parties in accordance with the USA Patriot Act.
(y) Capitalization. On the Closing Date, the capitalization and stock
ownership of the Company shall be as set forth in Schedule 5.1(y).
(z) Other. Receipt by the Lenders of such other documents, instruments,
agreements or information as reasonably requested by any Lender, including,
without limitation, information regarding litigation, tax, accounting, labor,
insurance, pension liabilities (actual or contingent), real
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estate leases, material contracts, debt agreements, property ownership and
contingent liabilities of the Credit Parties.
5.2 CONDITION TO ALL LOANS AND LETTERS OF CREDIT.
(a) On the date of the making of any Revolving Loan or the issuance of
any Letter of Credit, both before and after giving effect thereto and to the
application of the proceeds therefrom, the following statements shall be true to
the satisfaction of the Agent (and each request for a Revolving Loan and request
for a Letter of Credit, and the acceptance by the Borrower of the proceeds of
such Revolving Loan or issuance of such Letter of Credit, shall constitute a
representation and warranty by the Borrowers that on the date of such Revolving
Loan or issuance of such Letter of Credit before and after giving effect thereto
and to the application of the proceeds therefrom, such statements are true):
(i) the representations and warranties contained in this Credit
Agreement are true and correct in all material respects on and as of the
date of such Revolving Loan or issuance of such Letter of Credit as though
made on and as of such date, except to the extent that such
representations and warranties expressly relate solely to an earlier date
(in which case such representations and warranties shall have been true
and complete on and as of such earlier date);
(ii) no event has occurred and is continuing, or would result from
such, Revolving Loan or issuance of such Letter of Credit or the
application of the proceeds thereof, which would constitute a Default or
an Event of Default under this Credit Agreement; and
(iii) no Material Adverse Change shall have occurred and be
continuing.
(b) Notice of Borrowing. On the date of the making of any Revolving
Loan, the Agent shall have received a Notice of Borrowing to the extent such
Notice of Borrowing is required to be given with respect to the making of such
Revolving Loan.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Credit Agreement and the
Issuing Bank to issue the Letters of Credit, and to make available the credit
facilities contemplated hereby, each Borrower and (by execution and delivery of
the Guaranty Agreement or of a joinder thereto and incorporation by reference
therein) each Guarantor hereby represents and warrants to the Lenders and the
Issuing Bank as of the Closing Date, the Closing Date and on the date of each
extension of credit hereunder, as follows:
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6.1 ORGANIZATION AND QUALIFICATION.
Such Credit Party and each of its Subsidiaries (i) is a corporation or
limited liability company duly organized, validly existing and in good standing
under the laws of the state of its organization, (ii) has the power and
authority to own its properties and assets and to transact the businesses in
which it is presently, or proposes to be, engaged, and (iii) is duly qualified
and is authorized to do business and is in good standing in every jurisdiction
in which the failure to be so qualified could reasonably be expected to have a
Material Adverse Effect. Schedule 6.1 contains a true, correct and complete list
of all jurisdictions in which such Credit Party and its Subsidiaries are
qualified to do business as a foreign corporation or foreign limited liability
company as of the Closing Date.
6.2 SOLVENCY.
The fair saleable value of such Credit Party's assets exceeds all probable
liabilities, including those to be incurred pursuant to this Credit Agreement.
Such Credit Party (i) does not have unreasonably small capital in relation to
the business in which it is or proposes to be engaged or (ii) has not incurred,
and does not believe that it will incur after giving effect to the transactions
contemplated by this Credit Agreement and by the Senior Note Debt Documents,
debts beyond its ability to pay such debts as they become due.
6.3 LIENS; INVENTORY.
There are no Liens in favor of third parties with respect to any of the
Collateral, including, without limitation, with respect to the Inventory,
wherever located, other than Permitted Liens. To the best of such Credit Party's
knowledge, no lessor, warehouseman, filler, processor or packer of such Credit
Party has been granted any Lien with respect to the Inventory maintained by such
Credit Party at the property of any such lessor, warehousemen, filler, processor
or packer. Upon the proper filing of financing statements and the proper
recordation of other applicable documents with the appropriate filing or
recordation offices in each of the necessary jurisdictions, the security
interests granted pursuant to the Credit Documents constitute and shall at all
times constitute valid and enforceable first, prior and perfected Liens on the
Collateral (other than Permitted Liens). The Credit Parties are or will be at
the time additional Collateral is acquired by them, the absolute owners of the
Collateral with full right to pledge, sell, consign, transfer and create a Lien
therein, free and clear of any and all Liens in favor of third parties, except
Permitted Liens. The Credit Parties will at their expense warrant, until payment
in full of the Obligations and termination of the Commitments, and, at the
Agent's request, defend the Collateral from any and all Liens (other than
Permitted Liens) of any third party. The Credit Parties will not grant, create
or permit to exist, any Lien upon the Collateral, or any proceeds thereof, in
favor of any third party (other than Permitted Liens).
6.4 NO CONFLICT.
The execution and delivery by such Borrower of this Credit Agreement and
by the Credit Parties of each of the other Credit Documents executed and
delivered in connection herewith and the performance of the obligations of such
Credit Party hereunder and thereunder, as applicable,
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and the consummation by such Credit Party of the transactions contemplated
hereby and thereby: (i) are within the corporate or other organizational, as the
case may be, powers of such Credit Party; (ii) are duly authorized by the Board
of Directors or similar managing body of such Credit Party; (iii) are not in
contravention of the terms of the organizational documents of such Credit Party
or of any indenture, contract, lease, agreement instrument or other commitment
to which such Credit Party is a party or by which such Credit Party or any of
its properties are bound; (iv) do not require the consent, registration or
approval of any Governmental Authority or any other Person (except such as have
been duly obtained, made or given, and are in full force and effect); (v) do not
contravene any statute, law, ordinance regulation, rule, order or other
governmental restriction applicable to or binding upon such Credit Party; and
(vi) will not, except as contemplated herein for the benefit of the Agent on
behalf of the Lenders, result in the imposition of any Liens upon any property
of such Credit Party under any existing indenture, mortgage, deed of trust, loan
or credit agreement or other material agreement or instrument to which such
Credit Party is a party or by which it or any of its property may be bound or
affected.
6.5 ENFORCEABILITY.
The Credit Agreement and all of the other Credit Documents, as applicable,
are the legal, valid and binding obligations of such Credit Party, and with
respect to those Credit Documents executed and delivered by any other
Subsidiary, of each such other Subsidiary, and are enforceable against such
Credit Party and such other Subsidiaries, as the case may be, in accordance with
their terms except as such enforceability may be limited by (i) the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally and (ii) general principles of
equity.
6.6 FINANCIAL DATA; PROJECTIONS; MATERIAL ADVERSE CHANGE.
(a) The Company has furnished to the Lenders the following financial
statements (the "Financials") and the Projections referenced below: (i) the
consolidated balance sheet of the Company as of, and consolidated statements of
income, retained earnings and changes in financial position for the fiscal years
ended December 31, 2001, 2002 and 2003 audited by independent certified public
accountants, (ii) the unaudited consolidated balance sheet of the Company as of,
and consolidated statement of income, retained earnings and changes in financial
position for the period ending June 30, 2004 reviewed by Deloitte & Touche LLP
and certified by the Chief Executive Officer and Chief Financial Officer of the
Company, (iii) an unaudited opening consolidated balance sheet of the Company
dated the Closing Date, after giving effect to the making of the Loans and
application of proceeds thereof, the consummation of the transactions
contemplated by the Senior Note Debt Documents and the making of the Closing
Date Dividend, prepared by the chief financial officer of the Company and (iv)
monthly financial and operational projections for each month during fiscal years
2004 and 2005 and yearly financial and operational projections for fiscal years
2006, 2007, 2008 and 2009 (the "Projections"). The Financials are and the
historical financial statements to be furnished to the Lenders in accordance
with subsection 7.1 below will be in accordance with the books and records of
the Company and fairly present the financial condition of each of the Credit
Parties at the dates thereof and the results of operations for the periods
indicated (subject, in the case of unaudited financial statements, to normal
year-end adjustments), and such financial statements
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have been and will be prepared in conformity with GAAP consistently applied
throughout the periods involved. The Projections have been prepared in good
faith based on reasonable assumptions at the time made.
(b) Since the date of the Financials, there have been no changes in the
condition, financial or otherwise, of such predecessor corporations or any of
the Credit Parties as shown on the respective balance sheets of such predecessor
corporations and each of the Credit Parties described above, except (i) as
contemplated herein and (ii) for changes in the ordinary course of business
(none of which individually or in the aggregate constitutes a Material Adverse
Change).
6.7 LOCATIONS OF OFFICES, RECORDS AND INVENTORY.
The Credit Parties' states of domicile, principal places of business and
chief executive offices are set forth in Schedule 6.7, and the books and records
of the Credit Parties and all chattel paper and all records of accounts are
located at the principal places of business and chief executive offices of the
Credit Parties. There is no jurisdiction in which any Credit Party has any
Collateral (except for vehicles, Inventory held for shipment by third Persons,
Inventory in transit, Inventory held for processing by third Persons, or
immaterial quantities of assets, equipment or Inventory) other than those
jurisdictions listed on Schedule 6.7. Schedule 6.7 is a true, correct and
complete list of (i) the legal names and addresses of each warehouseman, filler,
processor and packer at which Inventory is stored, (ii) the address of the chief
executive offices of the Credit Parties and each of their Subsidiaries and (iii)
the address of all offices where records and books of account of the Credit
Parties and each of their Subsidiaries are kept. None of the receipts received
by any of the Credit Parties from any warehouseman, filler, processor or packer
states that the goods covered thereby are to be delivered to bearer or to the
order of a named person or to a named person and such named person's assigns.
6.8 FICTITIOUS BUSINESS NAMES.
No Credit Party has used any corporate or fictitious name during the five
(5) years preceding the date hereof, other than the corporate name shown on its
or such Credit Party's articles or certificate of incorporation or formation and
as set forth on Schedule 6.8.
6.9 SUBSIDIARIES.
The only direct or indirect Subsidiaries of the Company are those listed
on Schedule 6.9. The Persons identified on Schedule 6.9 are the record and
beneficial owner of all of the shares of Capital Stock of each of the Persons
listed on Schedule 6.9 as being owned thereby, there are no proxies, irrevocable
or otherwise, with respect to such shares, and no equity securities of any of
any of such Persons are or may become required to be issued by reason of any
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of any Capital Stock of any such Person, and there are
no contracts, commitments, understandings or arrangements by which any such
Person is or may become bound to issue additional shares of its Capital Stock or
securities convertible into or exchangeable for such shares. All of such shares
are owned by such Persons free and clear of any Liens other than Permitted
Liens.
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6.10 NO JUDGMENTS OR LITIGATION.
Except as set forth on Schedule 6.10, no judgments, orders, writs or
decrees are outstanding against such Credit Parties or any of its Subsidiaries
nor is there now pending or, to the best of such Credit Party's knowledge after
diligent inquiry, threatened any litigation, contested claim, investigation,
arbitration, or governmental proceeding by or against such Credit Party or any
of its Subsidiaries except judgments and pending or threatened litigation,
contested claims, investigations, arbitrations and governmental proceedings
which could not reasonably be expected to have a Material Adverse Effect.
6.11 NO DEFAULTS.
Neither such Credit Party nor any of its Subsidiaries is in default under
any term of any indenture, contract, lease, agreement, instrument or other
commitment to which any of them is a party or by which any of them is bound
which default has had or could be reasonably expected to have a Material Adverse
Effect. Such Credit Party knows of no dispute regarding any indenture, contract,
lease, agreement, instrument or other commitment which could reasonably be
expected to have a Material Adverse Effect.
6.12 NO EMPLOYEE DISPUTES.
There are no controversies pending or, to the best of such Credit Party's
knowledge after diligent inquiry, threatened between such Credit Party or any of
its Subsidiaries and any of their respective employees, other than those arising
in the ordinary course of business which could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.
6.13 COMPLIANCE WITH LAW.
Neither such Credit Party nor any of its Subsidiaries has violated or
failed to comply with any statute, law, ordinance, regulation, rule or order of
any foreign, federal, state or local government, or any other Governmental
Authority or any self regulatory organization, or any judgment, decree or order
of any court, applicable to its business or operations except where the
aggregate of all such violations or failures to comply could not reasonably be
expected to have a Material Adverse Effect. The conduct of the business of such
Credit Party and each of its Subsidiaries is in conformity with all securities,
commodities, energy, public utility, zoning, building code, health, OSHA and
environmental requirements and all other foreign, federal, state and local
governmental and regulatory requirements and requirements of any self regulatory
organizations, except where such non-conformities could not reasonably be
expected to have a Material Adverse Effect. Neither such Credit Party nor any of
its Subsidiaries has received any notice to the effect that, or otherwise been
advised that, it is not in compliance with, and neither such Credit Party nor
any of its Subsidiaries has any reason to anticipate that any currently existing
circumstances are likely to result in the violation of any such statute, law,
ordinance, regulation, rule, judgment, decree or order which failure or
violation could reasonably be expected to have a Material Adverse Effect.
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6.14 ERISA.
None of such Credit Parties or any of their Subsidiaries or ERISA
Affiliates maintains or contributes to any Benefit Plan other than those listed
on Schedule 6.14. Each Benefit Plan has been and is being maintained and funded
in accordance with its terms and in compliance in all material respects with all
provisions of ERISA and the Internal Revenue Code applicable thereto. Such
Credit Party, each of its Subsidiaries and each of its ERISA Affiliates has
fulfilled all obligations related to the minimum funding standards of ERISA and
the Internal Revenue Code for each Benefit Plan, is in compliance in all
material respects with the currently applicable provisions of ERISA and of the
Internal Revenue Code and has not incurred any liability (other than routine
liability for premiums) under Title IV of ERISA. No Termination Event has
occurred nor has any other event occurred that may result in such a Termination
Event. To the best of the Credit Parties' knowledge, no event or events have
occurred in connection with which such Credit Parties or any of its Subsidiaries
or ERISA Affiliates, any fiduciary of a Benefit Plan or any Benefit Plan,
directly or indirectly, would be subject to any material liability, individually
or in the aggregate, under ERISA, the Internal Revenue Code or any other law,
regulation or governmental order or under any agreement, instrument, statute,
rule of law or regulation pursuant to or under which any such entity has agreed
to indemnify or is required to indemnify any person against liability incurred
under, or for a violation or failure to satisfy the requirements of, any such
statute, regulation or order.
6.15 COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) The operations of such Credit Party and each of its Subsidiaries
comply with all applicable federal, state or local environmental, health and
safety statutes, regulations, directions, ordinances, criteria or guidelines and
(b) none of the operations of such Credit Party or any of its Subsidiaries is
the subject of any judicial or administrative proceeding alleging the violation
of any federal, state or local environmental, health or safety statute,
regulation, direction, ordinance, criteria or guidelines, except where the
failure to so comply or such violation could not reasonably be expected to have
a Material Adverse Effect. Except as disclosed on Schedule 6.15, to the best of
the Credit Parties' knowledge, none of the operations of such Credit Party or
any of its Subsidiaries is the subject of any federal or state investigation
evaluating whether such Credit Party or any of its Subsidiaries disposed any
hazardous or toxic waste, substance or constituent or other substance at any
site that may require remedial action, or any federal or state investigation
evaluating whether any remedial action is needed to respond to a release of any
hazardous or toxic waste, substance or constituent, or other substance into the
environment. Except as disclosed on Schedule 6.15, neither such Credit Party nor
any of its Subsidiaries have filed any notice under any federal or state law
indicating past or present treatment, storage or disposal of a hazardous waste
or reporting a spill or release of a hazardous or toxic waste, substance or
constituent, or other substance into the environment. Except as disclosed on
Schedule 6.15, neither such Credit Party nor any of its Subsidiaries have any
contingent liability of which such Credit Party has knowledge or reasonably
should have knowledge in connection with any release of any hazardous or toxic
waste, substance or constituent, or other substance into the environment, nor
has such Credit Party or any of its Subsidiaries received any notice,
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letter or other indication of potential liability arising from the disposal of
any hazardous or toxic waste, substance or constituent or other substance into
the environment.
6.16 USE OF PROCEEDS.
All proceeds of the Loans will be used only in accordance with Section
7.13.
6.17 INTELLECTUAL PROPERTY.
Such Credit Party and each of its Subsidiaries possesses adequate assets,
licenses, patents, patent applications, copyrights, service marks, trademarks
and tradenames to continue to conduct its business as heretofore conducted by
it. Schedule 6.17 sets forth (a) all of the federal, state and foreign
registrations of trademarks, service marks and other marks, trade names or other
trade rights of such Credit Party and its Subsidiaries, and all pending
applications for any such registrations, (b) all of the patents and copyrights
of such Credit Party and its Subsidiaries and all pending applications therefor
and (c) all other trademarks, service marks and other marks, trade names and
other trade rights used by such Credit Party or any of its Subsidiaries in
connection with their businesses (collectively, the "Proprietary Rights"). Such
Credit Party and its Subsidiaries are collectively the owners of each of the
trademarks listed on Schedule 6.17 as indicated on such schedule, and no other
Person has the right to use any of such marks in commerce either in the
identical form or in such near resemblance thereto as may be likely to cause
confusion or to cause mistake or to deceive. Each of the trademarks listed on
Schedule 6.17 is a federally registered trademark of such Credit Party or its
Subsidiaries having the registration number and issue date set forth on Schedule
6.17, except as disclosed on Schedule 6.17. The Proprietary Rights listed on
Schedule 6.17 are all those used in the businesses of such Credit Party and its
Subsidiaries. Except as disclosed on Schedule 6.17, no person has a right to
receive any royalty or similar payment in respect of any Proprietary Rights
pursuant to any contractual arrangements entered into by such Credit Party, or
any of its Subsidiaries and no person otherwise has a right to receive any
royalty or similar payment in respect of any such Proprietary Rights except as
disclosed on Schedule 6.17. Neither such Credit Party nor any of its
Subsidiaries has granted any license or sold or otherwise transferred any
interest in any of the Proprietary Rights to any other person, except as
disclosed on Schedule 6.17. To the best of the Credit Parties' knowledge, the
use of each of the Proprietary Rights by such Credit Party and its Subsidiaries
is not infringing upon or otherwise violating the rights of any third party in
or to such Proprietary Rights, and no proceeding has been instituted against or
notice received by such Credit Party or any of its Subsidiaries that are
presently outstanding alleging that the use of any of the Proprietary Rights
infringes upon or otherwise violates the rights of any third party in or to any
of the Proprietary Rights. Neither such Credit Party nor any of its Subsidiaries
have given notice to any Person that it is infringing on any of the Proprietary
Rights and to the best of such Credit Party's knowledge, no Person is infringing
on any of the Proprietary Rights. All of the Proprietary Rights of such Credit
Party and its Subsidiaries are valid and enforceable rights of such Credit Party
and its Subsidiaries and will not cease to be valid and in full force and effect
by reason of the execution and delivery of this Credit Agreement or the Credit
Documents or the consummation of the transactions contemplated hereby or
thereby.
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6.18 LICENSES AND PERMITS.
Such Credit Party and each of its Subsidiaries have obtained and hold in
full force and effect, all material franchises, licenses, leases, permits,
certificates, authorizations, qualifications, easements, rights of way and other
rights and approvals which are necessary or appropriate for the operation of
their businesses as presently conducted and as proposed to be conducted, except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect. Neither any such Credit Party nor any of its Subsidiaries is in
violation of the terms of any such franchise, license, lease, permit,
certificate, authorization, qualification, easement, right of way, right or
approval in any such case which could not reasonably be expected to have a
Material Adverse Effect.
6.19 TITLE TO PROPERTY.
Such Credit Party has (i) good and marketable fee simple title to or valid
leasehold interests in all of its real property, including, without limitation,
the Real Estate (all such real property and the nature of such Credit Party's or
any of its Subsidiary's interest therein is disclosed on Schedule 6.19, as it
may be updated from time to time pursuant to Section 7.9,) and (ii) good and
marketable title to all of its other property (including without limitation, all
real and other property in each case as reflected in the Financial Statements
delivered to the Agent hereunder), other than, with respect to properties
described in clause (ii) above, properties disposed of in the ordinary course of
business or in any manner otherwise permitted under this Credit Agreement since
the date of the most recent audited consolidated balance sheet of the Company,
and in each case subject to no Liens other than Permitted Liens. Such Credit
Party and its Subsidiaries enjoy peaceful and undisturbed possession of all its
real property, including, without limitation, the Real Estate, and there is no
pending or, to the best of their knowledge, threatened condemnation proceeding
relating to any such real property. None of the Leases contains provisions which
have or could reasonably be expected to have a Material Adverse Effect. No
material default exists under any Lease. All of the Structures and other
tangible assets owned, leased or used by such Credit Party or any of its
Subsidiaries in the conduct of their respective businesses are (a) insured to
the extent and in a manner customary in the industry in which such Credit Party
or such Subsidiaries are engaged, (b) structurally sound with no known defects
which have or could reasonably be expected to have a Material Adverse Effect,
(c) in good operating condition and repair, subject to ordinary wear and tear,
(d) not in need of maintenance or repair except for ordinary, routine
maintenance and repair the cost of which is immaterial, (e) sufficient for the
operation of the businesses of such Credit Party and its Subsidiaries as
currently conducted and (f) in conformity with all applicable laws, ordinances,
orders, regulations and other requirements (including applicable zoning,
environmental, motor vehicle safety, occupational safety and health laws and
regulations) relating thereto, except where the failure to conform could not
reasonably be expected to have a Material Adverse Effect.
6.20 LABOR MATTERS.
Neither such Credit Party nor any of its Subsidiaries is engaged in any
unfair labor practice. There is (a) no material unfair labor practice complaint
pending against such Credit
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Party or any of its Subsidiaries or, to the best knowledge of such Credit Party,
threatened against any of them, before the National Labor Relations Board, and
no grievance or arbitration proceeding arising out of or under collective
bargaining agreements that has or could reasonably be expected to have a
Material Adverse Effect is so pending against such Credit Party or any of its
Subsidiaries or, to the best knowledge of such Credit Party, threatened against
any of them, (b) no strike, labor dispute, slowdown or stoppage pending against
either of such Credit Party or any of its Subsidiaries or, to the best knowledge
of such Credit Party, threatened against any of them, and (c) no union
representation questions with respect to the employees of such Credit Party or
any Subsidiaries and no union organizing activities.
6.21 INVESTMENT COMPANY, ETC.
Neither such Credit Party nor any of its Subsidiaries is (a) an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, (b) a "holding
company" or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935, as amended, or
(c) subject to any other law which purports to regulate or restrict its ability
to borrow money or to consummate the transactions contemplated by this Credit
Agreement or the other Credit Documents or to perform its obligations hereunder
or thereunder.
6.22 MARGIN SECURITY.
Such Borrower does not own any margin stock and no portion of the proceeds
of any Loans or Letters of Credit shall be used by the Borrowers for the purpose
of purchasing or carrying any "margin stock" (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) or for any other purpose which
violates the provisions or Regulation U, T, U or X of said Board of Governors or
for any other purpose in violation of any applicable statute or regulation, or
of the terms and conditions of this Credit Agreement.
6.23 NO EVENT OF DEFAULT.
No Default or Event of Default has occurred and is continuing.
6.24 TAXES AND TAX RETURNS.
Each Credit Party has filed, or caused to be filed, all material tax returns
(federal, state, local and foreign) required to be filed and paid all amounts of
taxes shown thereon to be due (including interest and penalties) and has paid
all other material taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes (a) that are not yet delinquent or (b)
that are being contested in good faith and by proper proceedings, and against
which adequate reserves are being maintained in accordance with GAAP. None of
the Credit Parties is aware of any proposed material tax assessments against it
or any other Credit Party.
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6.25 NO OTHER INDEBTEDNESS.
Such Credit Party has no Indebtedness that is senior, pari passu or
subordinated in right of payment to their Indebtedness to the Lenders hereunder,
except for Permitted Indebtedness.
6.26 STATUS OF ACCOUNTS.
Each Account is based on an actual and bona fide sale and delivery of
goods or rendition of services to customers, made by such Credit Party in the
ordinary course of its business; the goods and inventory being sold and the
Accounts created are its exclusive property and are not and shall not be subject
to any Lien, consignment arrangement, encumbrance, security interest or
financing statement whatsoever, other than the Permitted Liens; and such Credit
Party's customers have accepted the goods or services, owe and are obligated to
pay the full amounts stated in the invoices according to their terms, without
any dispute, offset, defense, counterclaim or contra that could reasonably be
expected to have, when aggregated with any such other disputes, offsets,
defenses, counterclaims or contras, a Material Adverse Effect. Such Credit Party
confirms to the Lenders that any and all taxes or fees relating to its business,
its sales, the Accounts or the goods relating thereto, are its sole
responsibility and that same will be paid by such Credit Party when due (unless
duly contested and adequately reserved for) and that none of said taxes or fees
is or will become a lien on or claim against the Accounts.
6.27 REPRESENTATIONS AND WARRANTIES.
As of the Closing Date, each of the representations and warranties made in
the Operative Documents by each of the Credit Parties and their Subsidiaries,
and to the knowledge of each such Credit Party and its Subsidiaries, each other
party thereto is true and correct in all material respects, and such
representations and warranties are hereby incorporated herein by reference with
the same effect as though set forth in their entirety herein, as qualified
therein.
6.28 MATERIAL CONTRACTS.
Schedule 6.28 sets forth a true, correct and complete list of all the
Material Contracts currently in effect on the date hereof. None of the Material
Contracts contains provisions the performance or nonperformance of which have or
could reasonably be expected to have a Material Adverse Effect. All of the
Material Contracts are in full force and effect, and no material defaults
currently exist thereunder.
6.29 SURVIVAL OF REPRESENTATIONS.
All representations made by such Credit Party in this Credit Agreement
(including by incorporation by reference in the Guaranty Agreement) and in any
other Credit Document shall survive the execution and delivery hereof and
thereof.
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6.30 AFFILIATE TRANSACTIONS.
Except as set forth on Schedule 6.30(a), neither such Credit Party nor any
of its Subsidiaries is a party to or bound by any agreement or arrangement
(whether oral or written) to which any Affiliate of such Credit Party or any of
its Subsidiaries is a party. Except as set forth on Schedule 6.30(b), neither
such Credit Party nor any of its Subsidiaries is a party to or bound by any
agreement or arrangement (whether oral or written) to which any Affiliate of
such Credit Party or any of its Subsidiaries is a party except (a) in the
ordinary course of and pursuant to the reasonable requirements of such Credit
Party's or such Subsidiary's business and (b) upon fair and reasonable terms no
less favorable to such Credit Party and such Subsidiary than it could obtain in
a comparable arm's-length transaction with an unaffiliated Person.
6.31 TRADE SUPPLIERS.
Schedule 6.31 is a true, correct and complete list of all of the suppliers
who have sold goods to such Credit Party or any of its Subsidiaries (or their
predecessor entities) during the calendar year ended December 31, 2003, for an
amount representing five (5) percent or more of the accounts of such Credit
Party and its Subsidiaries payable for such year.
6.32 KEY MEMBERS OF MANAGEMENT.
Schedule 6.32 is a true, correct and complete list of the key members of
management and the members of the Board of Directors or other managing body of
such Credit Party as of the Closing Date.
6.33 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Credit Parties or any of their respective
Subsidiaries in writing to the Agent, any Lender, or the Independent Accountant
for purposes of or in connection with this Credit Agreement or any Credit
Documents, or any transaction contemplated hereby or thereby is or will be true
and accurate in all material respects on the date as of which such information
is dated or certified and not incomplete by omitting to state any material fact
necessary to make such information not misleading at such time. There is no fact
now known to any officer of any Credit Party or any of its Subsidiaries which
has, or would have, a Material Adverse Effect which fact has not been set forth
herein, in the Financials, or any certificate, opinion or other written
statement made or furnished by any Credit Party to the Agent.
6.34 ANTI-TERRORISM LAWS.
(a) General. None of the Credit Parties or their Affiliates is in
violation of any Anti-Terrorism Law or engages in or conspires to engage
in any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any Anti-Terrorism Law.
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(b) Executive Order No. 13224. None of the Credit Party or their
Affiliates is any of the following (each a "Blocked Person"):
(i) a Person owned or controlled by, or acting for or on
behalf of, any Person that is listed in the annex to, or is
otherwise subject to the provisions of, Executive Order No. 13224;
(ii) a Person or entity with which any bank or other
financial institution is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;
(iii) a Person or entity that commits, threatens or conspires
to commit or supports "terrorism" as defined in Executive Order No.
13224;
(iv) a Person or entity that is named as a "specially
designated national" on the most current list published by the U.S.
Treasury Department Office of Foreign Asset Control at its official
website or any replacement website or other replacement official
publication of such list; or
(v) a Person or entity who is affiliated with a Person or
entity listed above.
(c) None of the Credit Parties or their Affiliates (i) conducts
any business or engages in making or receiving any contribution of funds,
goods or services to or for the benefit of any Blocked Person or (ii)
deals in, or otherwise engages in any transaction relating to, any
property or interests in property blocked pursuant to Executive Order No.
13224.
6.35 DEPOSIT ACCOUNTS.
As of the Closing Date, none of the Credit Parties has any checking,
savings or other accounts at any bank or other financial institution, or any
other account where money is or may be deposited or maintained with any Person
that is not described on Schedule 6.35, Schedule 6.35 accurately sets forth the
purpose for which each such deposit account is maintained.
6.36 FORCE MAJEURE.
None of any Credit Party's business is suffering from effects of fire,
accident, strike, drought, storm, earthquake, embargo, tornado, hurricane, act
of God, acts of public enemy or other casualty that would reasonably be likely
to have a Material Adverse Effect.
6.37 BUYING ASSOCIATIONS.
None of the Borrowers sells any goods to any Person which requires payment
to be made through any Buying Association other than the Buying Associations
listed on Schedule 6.37. No new Buying Associations may be engaged by the Credit
Parties without the prior written consent of the Agent.
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ARTICLE VII
AFFIRMATIVE COVENANTS
Until termination of this Credit Agreement and the Commitments hereunder
and payment and satisfaction of all Obligations due or to become due hereunder,
each Borrower and (by execution and delivery of the Guaranty Agreement or of a
joinder thereto and incorporation by reference therein) each Guarantor agrees
that, unless the Required Lenders shall have otherwise consented in writing:
7.1 FINANCIAL INFORMATION.
The Company will furnish to the Lenders the following information within
the following time periods:
(a) within ninety (90) days after the close of the fiscal year of
the Company, (i) the audited consolidated and consolidating balance sheets
and statements of income and retained earnings and of changes in cash flow
of the Company and its Subsidiaries, for such year, each in reasonable
detail, each setting forth in comparative form the corresponding figures
for the preceding year, prepared in accordance with GAAP, and accompanied
by a report and opinion of Deloitte & Touche LLP (which report and opinion
shall be prepared in accordance with generally accepted auditing standards
and shall not be subject to any "going concern" or like assumption,
qualification or exception or any assumption, qualification or exception
as to the scope of the audit) or other Independent Accountant selected by
the Company and approved by the Required Lenders and (ii) a divisional
operating income analysis for such year, in reasonable detail, setting
forth in comparative form the corresponding analysis for the preceding
year, prepared by the Company. The delivery by electronic mail or other
form of electronic distribution reasonably satisfactory to the Agent of a
Form 10-K as filed with the SEC within 90 days after the end of such
fiscal year shall be deemed to satisfy the requirements contained in this
Section 7.1(a);
(b) within forty-five days (45) after the end of each fiscal
quarter of the Company other than the final fiscal quarter, unaudited
consolidated and consolidating financial statements and divisional
operating income analyses similar to those required by clause (a) above as
of the end of such period and for such period then ended and for the
period from the beginning of the current fiscal year to the end of such
period, setting forth in comparative form the corresponding figures for
the comparable period in the preceding fiscal year and to the figures set
forth in the business plan provided pursuant to Section 7.1(h) for the
comparable period, prepared in accordance with GAAP (except that such
quarterly statements need not include footnotes) and certified by both the
Chief Financial Officer and the Chief Executive Officer of the Company.
The delivery by electronic mail or other form of electronic distribution
reasonably satisfactory to the
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Agent of a Form 10-Q as filed with the SEC within 45 days after the end of
such fiscal quarter shall be deemed to satisfy the requirements contained
in this Section 7.1(b);
(c) within thirty (30) days after the end of each fiscal month of
the Company other than the final month of each fiscal quarter, unaudited
consolidated and consolidating financial statements and divisional
operating income analyses similar to those required by clause (a) above as
of the end of such period and for such period then ended and for the
period from the beginning of the current fiscal year to the end of such
period, setting forth in comparative form the corresponding figures for
the comparable period in the preceding fiscal year and to the figures set
forth in the business plan provided pursuant to Section 7.1(h) for the
comparable period, prepared in accordance with GAAP (except that such
monthly statements need not include footnotes) and certified by the Chief
Financial Officer or the Chief Executive Officer of the Company;
(d) at the time of delivery of each quarterly and annual
statement, a Compliance Certificate signed by both the Chief Financial
Officer and the Chief Executive Officer of the Company stating that both
signing officers have caused this Credit Agreement to be reviewed and have
no knowledge of any default by the Company in the performance or
observance of any of the provisions of this Credit Agreement, during such
quarter or at the end of such year, or, if such officer has such
knowledge, specifying each default and the nature thereof, and showing
compliance by the Company as of the date of such statement with the
financial covenants set forth in Article VIII and the other applicable
covenants set forth in Exhibit K;
(e) not later than 12:00 Noon on the 15th day of each month (or if
such day is not a Business Day, then on the next succeeding Business Day),
a Borrowing Base Certificate, duly completed and certified by the
Company's chief executive officer or chief financial officer, detailing
the Borrowers' Eligible Accounts Receivable as of the last day of the
immediately preceding month and Eligible Inventory as of the most recent
date of determination which shall be determined not less frequently than
monthly. In addition, on the 15th day of each month (or if such day is not
a Business Day, then on the next succeeding Business Day), the Company
shall furnish a written report to the Lenders setting forth (i) the
accounts receivable aged trial balance at the immediately preceding month
end for each account debtor, aged by due date, which aging reports shall
indicate which Accounts are current, up to 30, 30 to 60 and over 60 days
past due, and which Accounts are up to 30, 30 to 60, 60 to 90, 90 to 120
days and over 120 days past their invoice date, and shall list the names
and addresses of all applicable account debtors, (ii) an accounts payable
aged trial balance at the immediately preceding month end for each account
creditor, aged by due date, which aging reports shall indicate which
Accounts are current, up to 30, 30 to 60 and over 60 days past due and
shall list the names and addresses of all applicable account creditors),
(iii) a schedule of Inventory owned by each Borrower by location and
category; and (iv) an accounts receivable aged trial balance at the
immediately preceding month end for each account debtor that pays through
a Buying Association, organized and listed by Buying Association, and aged
by due date, which aging reports shall indicate which Accounts are
current, up to 30, 30 to 60 and over 60 days past due, and which Accounts
are up to 30, 30 to 60, 60 to 90, 90 to 120 days and
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over 120 days past their invoice date, and shall list the names and
addresses of all applicable account debtors, such information to be
presented by individual account debtor and by Buying Association
(aggregated for all account debtors which are members of a single Buying
Association). The Agent may, but shall not be required to, rely on each
Borrowing Base Certificate delivered hereunder as accurately setting forth
the available Borrowing Base for all purposes of this Credit Agreement
until such time as a new Borrowing Base Certificate is delivered to the
Agent in accordance herewith; Borrowing Base Certificates may be prepared
and submitted to the Lenders on a more frequent basis than monthly as
required by Agent, provided that such certificate complies with the
requirements set forth elsewhere herein;
(f) promptly upon receipt thereof, copies of all management
letters and other material reports which are submitted to the Company by
its Independent Accountant in connection with any annual or interim audit
of the books of the Company made by such accountants;
(g) as soon as practicable but, in any event, within ten (10)
Business Days after the issuance thereof, copies of such other financial
statements and reports as the Company shall send to its stockholders as
such, and copies of all regular and periodic reports which the Company may
be required to file with the Securities and Exchange Commission or any
similar or corresponding governmental commission, department or agency
substituted therefor, or any similar or corresponding Governmental
Authority;
(h) no later than thirty days prior to the end of each fiscal year
during which this Credit Agreement is in effect, a business plan for the
immediately succeeding fiscal year of the Company which includes a
projected consolidated balance sheet and statement of income for such
fiscal year, a projected consolidated statement of cash flows for such
fiscal year and projected borrowing base availability for such fiscal
year, in each case, prepared on a monthly basis for such fiscal year;
(i) promptly upon receipt thereof, copies of all notices delivered
to the Company or sent by or on behalf of the Company with respect to
Senior Note Debt, including, without limitation, any notice of default and
all reports required by and/or delivered to the holders of the Senior
Notes (the Company expressly agreeing to furnish all such notices by
telecopy);
(j) promptly and in any event within two (2) Business Days after
becoming aware of the occurrence of a Default or Event of Default, a
certificate of the chief executive officer or chief financial officer of
the Company specifying the nature thereof and the Credit Parties' proposed
response thereto, each in reasonable detail; and
(k) with reasonable promptness, such other data as the Agent or
any of the Lenders may reasonably request.
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7.2 INVENTORY.
Within thirty (30) days after the end of each month, upon the request of
the Agent from time to time, the Credit Parties will provide to the Agent
written statements listing items of Inventory in reasonable detail as requested
by the Agent. The Credit Parties conduct cycle counts of Inventory from time to
time and will conduct at least annually a physical count of any Inventory for
which perpetual inventory with cycle-counting adjustments is not maintained. The
Credit Parties will permit the Agent or its representative to observe any such
count and shall furnish a copy of such count promptly to the Agent accompanied
by a report of the value (valued at FIFO) of such Inventory; provided that the
Credit Parties will conduct such a physical count or cycle count at such other
times and as of such dates as the Agent shall reasonably request, not to exceed,
in the case of a physical count, one (1) per calendar year or, after the
occurrence and during the continuance of an Event of Default, as often as
requested by the Agent.
7.3 CORPORATE EXISTENCE.
Each Credit Party and each of its Subsidiaries (a) will maintain their
current corporate or other organizational existence, will maintain in full force
and effect all material licenses, bonds, franchise, leases, trademarks and
qualifications to do business, (b) will obtain or maintain patents, contracts
and other rights necessary or desirable to the profitable conduct of their
businesses, (c) will continue in, and limit their operations to, the same
general lines of business as that presently conducted by them and (d) will
comply with all applicable laws and regulations of any federal, state or local
Governmental Authority, except where noncompliance could not reasonably be
expected to have a Material Adverse Effect.
7.4 ERISA.
The Credit Party will deliver to the Agent, at the Credit Party' expense,
the following information at the times specified below:
(a) within ten (10) Business Days after any Credit Party or any of
its Subsidiaries or ERISA Affiliates knows or has reason to know that a
Termination Event has occurred, a written statement of the chief financial
officer of the Company describing such Termination Event and the action,
if any, which such Credit Party or other such entities have taken, are
taking or propose to take with respect thereto, and when known, any action
taken or threatened by the Internal Revenue Service, DOL or PBGC with
respect thereto;
(b) within ten (10) Business Days after any Credit Party or any of
its Subsidiaries or ERISA Affiliates knows or has reason to know that a
prohibited transaction (as defined in Section 406 of ERISA and Section
4975 of the Internal Revenue Code) has occurred, a statement of the chief
financial officer of the Company describing such transaction and the
action which such Credit Party or other such entities have taken, are
taking or propose to take with respect thereto;
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(c) within thirty (30) Business Days after the filing thereof with
the DOL, Internal Revenue Service or PBGC, copies of each annual report
(form 5500 series), including all schedules and attachments thereto, filed
with respect to each Benefit Plan;
(d) within thirty (30) Business Days after receipt by any Credit
Party or any of its Subsidiaries or ERISA Affiliates of each actuarial
report for any Benefit Plan or Multiemployer Plan and each annual report
for any Multiemployer Plan, copies of each such report;
(e) within three (3) Business Days after the filing thereof with
the Internal Revenue Service, a copy of each funding waiver request filed
with respect to any Benefit Plan and all communications received by any
Credit Party or any of its Subsidiaries or ERISA Affiliates with respect
to such request;
(f) within ten (10) Business Days upon the occurrence thereof,
notification of 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 Credit Party or any of its Subsidiaries or ERISA
Affiliates was not previously contributing;
(g) within three (3) Business Days after receipt by any Credit
Party or any of its Subsidiaries or ERISA Affiliates of the PBGC's
intention to terminate a Benefit Plan or to have a trustee appointed to
administer a Benefit Plan, copies of each such notice;
(h) within ten (10) Business Days after receipt by any Credit
Party or any of its Subsidiaries or ERISA Affiliates of any favorable or
unfavorable determination letter from the Internal Revenue Service
regarding the qualification of a Plan under Section 401(a) of the Internal
Revenue Code, copies of each such letter;
(i) within ten (10) Business Days after receipt by any Credit
Party or any of its Subsidiaries or ERISA Affiliates of a notice regarding
the imposition of withdrawal liability, copies of each such notice;
(j) within ten (10) Business Days after any Credit Party or any of
its Subsidiaries or ERISA Affiliates fail to make a required installment
or any other required payment under Section 412 of the Internal Revenue
Code on or before the due date for such installment or payment, a
notification of such failure; and
(k) within three (3) Business Days after any Credit Party or any
of its Subsidiaries or ERISA Affiliates knows (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, a written statement setting forth any such
event or information.
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For purposes of this Section 7.4, any Credit Party or any of its
Subsidiaries or ERISA Affiliates shall be deemed to know all facts known by the
administrator of any Plan of which such entity is the plan sponsor.
The Credit Parties will establish, maintain and operate all Plans to
comply in all material respects with the provisions of ERISA, the Internal
Revenue Code, and all other applicable laws, and the regulations and
interpretations thereunder other than to the extent that the Credit Parties are
in good faith contesting by appropriate proceedings the validity or implication
of any such provision, law, rule, regulation or interpretation.
7.5 PROCEEDINGS OR ADVERSE CHANGES.
The Credit Parties will as soon as possible, and in any event within five
(5) Business Days after any Credit Party learns of the following, give written
notice to the Agent of (i) any proceeding(s) being instituted or threatened to
be instituted by or against any Credit Party or any of its Subsidiaries in any
federal, state, local or foreign court or before any commission or other
regulatory body (federal, state, local or foreign) that, if adversely
determined, could reasonably be expected to have a Material Adverse Effect, and
(ii) any Material Adverse Change. Provision of such notice by the Credit Parties
will not constitute a waiver or excuse of any Default or Event of Default
occurring as a result of such changes or events.
7.6 ENVIRONMENTAL MATTERS.
Each Credit Party will conduct its business and the businesses of each of
the Subsidiaries so as to comply in all material respects with all environmental
laws, regulations, directions, ordinances, criteria and guidelines in all
jurisdictions in which any of them is or may at any time be doing business
including, without limitation, environmental land use, occupational safety or
health laws, regulations, directions, ordinances, criteria, guidelines,
requirements or permits in all jurisdictions in which any of them is or may at
any time be doing business, except to the extent that any Credit Party or any of
its Subsidiaries is contesting, in good faith by appropriate legal proceedings,
any such law, regulation, direction, ordinance, criteria, guideline, or
interpretation thereof or application thereof; provided, further, that each
Credit Party and each of the Subsidiaries will comply with the order of any
court or other governmental body of the applicable jurisdiction relating to such
laws unless such Credit Party or Subsidiary shall currently be prosecuting an
appeal or proceedings for review and shall have secured a stay of enforcement or
execution or other arrangement postponing enforcement or execution pending such
appeal or proceedings for review. If any Credit Party or any of its Subsidiaries
shall (a) receive notice that any material violation of any federal, state or
local environmental law, regulation, direction, ordinance, criteria or guideline
may have been committed or is about to be committed by such Credit Party or any
of its Subsidiaries, (b) receive notice that any administrative or judicial
complaint or order has been filed or is about to be filed against such Credit
Party or any of its Subsidiaries alleging material violations of any federal,
state or local environmental law, regulation, direction, ordinance, criteria or
guideline or requiring such Credit Party or any of its Subsidiaries to take any
action in connection with the release of toxic or hazardous substances into the
environment or (c) receive any notice from a federal, state, or local
governmental agency
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or private party alleging that such Credit Party or any of its Subsidiaries may
be liable or responsible for costs associated with a response to or cleanup of a
release of a toxic or hazardous substance into the environment or any damages
caused thereby, the Credit Parties will provide the Agent with a copy of such
notice within fifteen (15) days after the receipt thereof by the applicable
Credit Party or any of its Subsidiaries. Within fifteen (15) days after any
Credit Party learns of the enactment or promulgation of any federal, state or
local environmental law, regulation, direction, ordinance, criteria or guideline
which could reasonably have a Material Adverse Effect, such Credit Party will
provide the Agent with notice thereof. Each Credit Party will promptly take all
actions necessary to prevent the imposition of any Liens on any of its
properties arising out of or related to any environmental matters. After the
occurrence and during the continuation of an Event of Default, at the request of
the Agent from time to time, and at the sole cost and expense of the Credit
Parties, the Credit Parties will retain an environmental consulting firm,
satisfactory to the Agent in its reasonable discretion, to conduct an
environmental review and audit of the properties of the Credit Parties and their
Subsidiaries located in the United States and provide to the Agent and each
Lender a copy of any reports delivered in connection therewith.
7.7 BOOKS AND RECORDS; INSPECTION.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain books and records pertaining to the Collateral in such detail, form and
scope as is consistent with good business practice. Each Credit Party agrees
that the Agent or its agents may enter upon the premises of each Credit Party or
any of its Subsidiaries at any time and from time to time upon reasonable prior
notice, during normal business hours, and at any time at all on and after the
occurrence of an Event of Default which continues beyond the expiration of any
grace or cure period applicable thereto, and which has not otherwise been waived
by the Agent, for the purpose of (a) enabling the Agent's internal auditors or
outside third party designees to conduct field examinations at such Credit
Party's expense, (b) inspecting the Collateral, (c) inspecting and/or copying
(at such Credit Party' expense) any and all records pertaining thereto, (d)
discussing the affairs, finances and business of any Credit Party or with any
officers, employees and directors of any Credit Party with the Independent
Accountant and (e) verifying Eligible Accounts Receivable and/or Eligible
Inventory. The Lenders, in the reasonable discretion of the Agent, may accompany
the Agent at their sole expense in connection with the foregoing inspections.
The Agent expects to conduct two field examinations per year, but reserves the
right, in its sole discretion, to conduct a field examination at any time, or
with less frequency, upon reasonable notice to the Company; provided, that so
long as no Event of Default has occurred and is continuing, the Credit Parties
shall only be required to pay the fees and expenses for two such field
examinations in any single year. Each Credit Party agrees to afford the Agent
thirty (30) days prior written notice of any change in the location of any
Collateral (other than Inventory held for shipment by third Persons, Inventory
in transit, Inventory held for processing by third Persons or immaterial
quantities of assets, equipment or Inventory), its jurisdiction of organization
or the location of its chief executive office or place of business from the
locations specified in Schedule 6.7, and to execute in advance of such change,
cause to be filed and/or delivered to the Agent any financing statements or
other documents required by the Agent, all in form and substance satisfactory to
the Agent. Each Credit Party agrees to advise the Agent promptly, in sufficient
detail, of any substantial change relating to the type, quantity or quality of
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the Collateral or any event which could reasonably be expected to have a
Material Adverse Effect. Each Credit Party agrees to furnish any Lender with
such other information regarding its business affairs and financial condition as
such Lender may reasonably request from time to time.
7.8 COLLATERAL RECORDS.
Each Credit Party will, and will cause each of its Subsidiaries to,
execute and deliver to the Agent, from time to time, solely for the Agent's
convenience in maintaining a record of the Collateral, such written statements
and schedules as the Agent may reasonably require, including without limitation
those described in Section 7.1, designating, identifying or describing the
Collateral pledged to the Lenders hereunder. Any Credit Party's failure,
however, to promptly give the Agent such statements or schedules shall not
affect, diminish, modify or otherwise limit the Lenders' security interests in
the Collateral. Such Credit Party agrees to maintain such books and records
regarding Accounts and the other Collateral as the Agent may reasonably require,
and agrees that such books and records will reflect the Lenders' interest in the
Accounts and such other Collateral.
7.9 SECURITY INTERESTS.
Each Credit Party will defend the Collateral against all claims and
demands of all Persons at any time claiming the same or any interest therein.
Each Credit Party agrees to, and will cause the other Credit Parties to, comply
with the requirements of all state and federal laws in order to grant to the
Lenders valid and perfected first security interest in the Collateral. The Agent
is hereby authorized by each Credit Party to file any financing statements
covering the Collateral whether or not any Credit Party's signature appears
thereon. Each Credit Party agrees to do whatever the Agent may reasonably
request, from time to time, by way of: filing notices of liens, financing
statements, fixture filings and amendments, renewals and continuations thereof;
cooperating with the Agent's custodians; keeping stock records; obtaining
waivers from landlords and mortgagees and from warehousemen, fillers, processors
and packers and their respective landlords and mortgagees; paying claims, which
might if unpaid, become a Lien (other than a Permitted Lien) on the Collateral;
assigning its rights to the payment of Accounts pursuant to the Assignment of
Claims Act of 1940, as amended (31 U.S.C. Section 3727 et. seq.) (the failure of
which to so assign will permit the Agent to exclude such Accounts from the
Borrowing Base); and performing such further acts as the Agent may reasonably
require in order to effect the purposes of this Credit Agreement and the other
Credit Documents. Any and all fees, costs and expenses of whatever kind and
nature (including any Taxes, reasonable attorneys' fees or costs for insurance
of any kind), which the Agent may incur with respect to the Collateral or the
Obligations: in filing public notices; in preparing or filing documents; making
title examinations or rendering opinions; in protecting, maintaining, or
preserving the Collateral or its interest therein; in enforcing or foreclosing
the Liens hereunder, whether through judicial procedures or otherwise; or in
defending or prosecuting any actions or proceedings arising out of or relating
to its transactions with any Credit Party or any of its Subsidiaries under this
Credit Agreement or any other Credit Document, will be borne and paid by the
Credit Parties. If same are not promptly paid by the Credit Parties, the Agent
may pay same on the Credit Parties' behalf, and the amount thereof shall be an
Obligation secured hereby and due to the Agent on demand. If
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any Credit Party acquires or leases any Real Estate after the date hereof, such
Credit Party will promptly (i) submit to the Agent an updated Schedule 6.19
pursuant to Section 7.23 and (ii) with respect to all such Real Estate that is
owned, and all such Real Estate that is leased and is designated in writing by
the Agent in its sole discretion, execute and deliver to the Agent a Mortgage on
such Real Estate, and deliver to the Agent the other items of the types
described in Section 5.1(g) with respect thereto, and all provisions of this
Credit Agreement (including, without limitation, the foregoing provisions of
this Section 7.9 and all other applicable representations, warranties and
covenants) that are applicable to Real Estate or Mortgages shall apply thereto.
7.10 INSURANCE; CASUALTY LOSS.
Each Credit Party will, and will cause each of the Subsidiaries to,
maintain public liability insurance, third party property damage insurance and
replacement value insurance on the Collateral under such policies of insurance,
with such insurance companies, in such amounts and covering such risks as are at
all times satisfactory to the Agent in its reasonable discretion. All policies
covering the Collateral are to name the Credit Parties and the Agent, for the
benefit of the Lenders, as additional insureds and loss payees in case of loss,
as their interests may appear, and are to contain such other provisions as the
Agent may reasonably require to fully protect the Agent's interest in the
Collateral and to any payments to be made under such policies. True copies of
all original insurance policies or certificates of insurance evidencing such
insurance covering the Collateral are to be delivered to the Agent on or prior
to the Closing Date, premium prepaid, with the loss payable endorsement in the
Agent's favor, and shall provide for not less than thirty (30) days prior
written notice to the Agent, of the exercise of any right of cancellation. In
the event any Credit Party or any of its Subsidiaries fail to respond in a
timely and appropriate manner (as determined by the Agent in its sole
discretion) with respect to collecting under any insurance policies required to
be maintained under this Section 7.10, the Agent shall have the right, in the
name of the Agent, such Credit Party or Subsidiary, to file claims under such
insurance policies, to receive and give acquittance for any payments that may be
payable thereunder, and to execute any and all endorsements, receipts, releases,
assignments, reassignments or other documents that may be necessary to effect
the collection, compromise or settlement of any claims under any such insurance
policies. Each Credit Party will provide written notice to the Lenders of the
occurrence of any of the following events within five (5) Business Days after
the occurrence of such event: any asset or property owned or used by any Credit
Party or any of its Subsidiaries is (i) materially damaged or destroyed, or
suffers any other loss or (ii) is condemned, confiscated or otherwise taken, in
whole or in part, or the use thereof is otherwise diminished so as to render
impracticable or unreasonable the use of such asset or property for the purpose
to which such asset or property were used immediately prior to such
condemnation, confiscation or taking, by exercise of the powers of condemnation
or eminent domain or otherwise, and in either case the amount of the damage,
destruction, loss or diminution in value of the Collateral which is in excess of
$500,000 (collectively, a "Casualty Loss"). Each Credit Party will diligently
file and prosecute its claim or claims for any award or payment in connection
with a Casualty Loss. In the event of a Casualty Loss, the Credit Parties will
pay to the Agent, for the benefit of the Lenders, promptly upon receipt thereof,
any and all insurance proceeds and payments received by any Credit Party or any
of its Subsidiaries on account of damage, destruction or loss of all or any
portion of the Collateral. The Agent may, at
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its election and in its sole discretion, either (a) apply the proceeds realized
from Casualty Losses to payment of accrued and unpaid interest or outstanding
principal of the Revolving Loans or (b) pay such proceeds to the Credit Parties
to be used to repair, replace or rebuild the asset or property or portion
thereof that was the subject of the Casualty Loss. After the occurrence and
during the continuance of an Event of Default, (i) no settlement on account of
any such Casualty Loss shall be made without the consent of the Lenders and (ii)
the Agent may participate in any such proceedings and the Credit Parties will
deliver to the Agent such documents as may be requested by the Agent to permit
such participation and will consult with the Agent, its attorneys and agents in
the making and prosecution of such claim or claims. Each Credit Party hereby
irrevocably authorizes and appoints the Agent its attorney-in-fact, after the
occurrence and continuance of an Event of Default, to collect and receive for
any such award or payment and to file and prosecute such claim or claims, which
power of attorney shall be irrevocable and shall be deemed to be coupled with an
interest, and each Credit Party shall, upon demand of the Agent, make, execute
and deliver any and all assignments and other instruments sufficient for the
purpose of assigning any such award or payment to the Agent for the benefit of
the Lenders, free and clear of any encumbrances of any kind or nature
whatsoever.
7.11 TAXES.
Each Credit Party will, and will cause each of the Subsidiaries to, pay,
when due and in any event prior to delinquency, all Taxes lawfully levied or
assessed against any Credit Party, any of its Subsidiaries or any of the
Collateral; provided, however, that unless such Taxes have become a federal tax
or ERISA Lien on any of the assets of any Credit Party or any of its
Subsidiaries, no such Tax need be paid if the same is being contested in good
faith, by appropriate proceedings promptly instituted and diligently conducted
and if an adequate reserve or other appropriate provision shall have been made
therefor as required in order to be in conformity with GAAP.
7.12 COMPLIANCE WITH LAWS.
Each Credit Party will, and will cause each of the Subsidiaries to,
comply with all acts, rules, regulations, orders, directions and ordinances of
any legislative, administrative or judicial body or official applicable to the
Collateral or any part thereof, or to the operation of its business, except
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect.
7.13 USE OF PROCEEDS.
The proceeds of any advances made hereunder shall be used by the
Borrowers solely (a) to refinance existing Indebtedness of the Borrowers, (b) to
make the Closing Date Dividend, (c) to make any Permitted Periodic Dividend, and
(d) for working capital and other general corporate purposes; provided, however,
that in any event, no portion of the proceeds of any such advances shall be used
by the Borrowers for the purpose of purchasing or carrying any "margin stock"
(as defined in Regulation U of the Board of Governors of the Federal Reserve
System) or for any other purpose which violates the provisions or Regulation U
or X of said Board of
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Governors or for any other purpose in violation of any applicable statute or
regulation, or of the terms and conditions of this Credit Agreement.
7.14 FISCAL YEAR; ACCOUNTING POLICIES.
Each Credit Party agrees that it will not change its fiscal year from a
year ending December 31 unless required by law, in which case such Credit Party
will give the Agent at least thirty (30) days prior written notice thereof.
Subject to Section 1.2, each Credit Party agrees that it will not change its
accounting policies from those used to prepare the financial statements
delivered pursuant to Section 5.1(c) without the prior written consent of the
Agent.
7.15 NOTIFICATION OF CERTAIN EVENTS.
Each Credit Party agrees that it will promptly notify the Agent of the
occurrence of any of the following events:
(a) any Material Contract of any Credit Party or any of its
Subsidiaries is terminated or amended in any material respect or any new
Material Contract is entered into (in which event each Credit Party shall
provide the Agent with a copy of such Material Contract); or
(b) any of the material terms upon which suppliers to any Credit
Party or any of its Subsidiaries do business with any Credit Party or any
Subsidiary are changed or amended in any material respect; or
(c) any order, judgment or decree in excess of $1,000,000 shall
have been entered against any Credit Party or any of its Subsidiaries or
any of their respective properties or assets, or
(d) any notification of violation of any law or regulation or any
inquiry shall have been received by any Credit Party or any of its
Subsidiaries from any local, state, federal or foreign Governmental
Authority or agency.
7.16 ADDITIONAL BORROWERS AND GUARANTORS.
The Credit Parties will not form or acquire any Foreign Subsidiary. Upon
any Person becoming a direct or indirect Subsidiary of the Company, the Credit
Parties will provide the Agent with written notice thereof setting forth
information in reasonable detail describing all of the assets of such Person and
shall (a) cause any such Person that is a Domestic Subsidiary to execute and
deliver to the Agent a Joinder Agreement in substantially the form of Exhibit M,
causing such Subsidiary to become a party to (i) this Credit Agreement, as a
joint and several "Borrower", (ii) the Security Agreement, as an "Obligor"
granting a first priority Lien on its personal property, subject to Permitted
Encumbrances, (iii) the Contribution Agreement, as a "Contributing Party" and
(iv) as appropriate, the Pledge Agreement, as a "Pledgor", causing all of its
Capital Stock (or in the case of any Foreign Subsidiary directly owned by such
Domestic Subsidiary, and without waiving the requirement for the prior consent
of the Required Lenders
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for the formation or acquisition thereof, sixty-five percent (65%) of its
Capital Stock, and with respect to all other Foreign Subsidiaries, no pledge
shall be required unless required by the Agent) to be delivered to the Agent
(together with undated stock powers signed in blank and pledged to the Agent,
(b) cause any such Person that is a Domestic Subsidiary to execute and deliver
to the Agent Revolving Notes in favor of the Lenders, and, if it owns any Real
Estate, a Mortgage thereon in favor of the Agent and (c) deliver such other
documentation as the Agent may reasonably request in connection with the
foregoing, including, without limitation, appropriate UCC-1 financing
statements, Acknowledgment Agreements, certified resolutions and other
organizational and authorizing documents of such Person and favorable opinions
of counsel to such Person (which shall cover, among other things, the legality,
validity, binding effect and enforceability of the documentation referred to
above), all in form, content and scope reasonably satisfactory to the Agent;
provided, however, in lieu of the foregoing, at the option of the Agent, the
Credit Parties shall cause such Person to execute and deliver to the Agent a
joinder agreement in substantially the form of Exhibit M causing such Subsidiary
to become a party to the Guaranty Agreement, as a joint and several "Guarantor",
and each of the Contribution Agreement and the Security Documents described in
clauses (a)(ii) through (iv) above, as applicable and with the same effect set
forth above, and (3), if it owns or leases any Real Estate, a Mortgage thereon
in favor of the Agent, and to delivery such additional documentation of the
types described in clause (c) above, all as the Agent reasonably shall request.
7.17 SCHEDULES OF ACCOUNTS AND PURCHASE ORDERS.
In furtherance of the continuing assignment and security interest in the
Accounts of each Credit Party granted pursuant to the Security Agreement, upon
the creation of Accounts, each Credit Party will execute and deliver to the
Agent in such form and manner as the Agent may require, solely for its
convenience in maintaining records of collateral, such confirmatory schedules of
Accounts, and other appropriate reports designating, identifying and describing
the Accounts as the Agent may require. In addition, upon the Agent's request,
each Credit Party will provide the Agent with copies of agreements with, or
purchase orders from, the customers of each Credit Party and its Subsidiaries,
and copies of invoices to customers, proof of shipment or delivery and such
other documentation and information relating to said Accounts and other
collateral as the Agent may require. Failure to provide the Agent with any of
the foregoing shall in no way affect, diminish, modify or otherwise limit the
security interests granted herein. Each Credit Party hereby authorizes the Agent
to regard such Credit Party's or any such Subsidiary's printed name or rubber
stamp signature on assignment schedules or invoices as the equivalent of a
manual signature by such Credit Party's or such Subsidiary's authorized officers
or agents.
7.18 COLLECTION OF ACCOUNTS.
(a) Unless an Event of Default shall have occurred and be
continuing, each Credit Party may and will enforce, collect and receive
all amounts owing on the Accounts, for the Lenders' benefit and on the
Lenders' behalf but at the Credit Parties' expense in accordance with the
provisions of Section 2.4; such privilege shall terminate automatically,
however, without notice to the Credit Parties which is hereby expressly
waived by the Credit Parties, upon the occurrence of any Event of Default
which
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continues beyond the expiration of any applicable grace or cure period,
or which has not otherwise been waived by the Required Lenders and from
and after such time, the Agent shall be entitled to enforce, collect and
receive all amounts owing on the Accounts, from the account debtors
and/or any Buying Association, and all other amounts for the Lenders'
benefit and on the Lenders' behalf (but at the Credit Parties' expense)
pursuant to cash management arrangements satisfactory to the Agent and in
accordance with the Security Agreement.
(b) Any checks, cash, notes or other instruments or property
received by any Credit Party or any of its Subsidiaries with respect to
any Accounts shall be held by such Credit Party or such Subsidiary in
trust for the benefit of the Lenders, separate from such Credit Party's
or Subsidiary's own property and funds, and immediately turned over to
the Agent with proper assignments or endorsements. No checks, drafts or
other instruments received by the Agent shall constitute final payment
unless and until such instruments have actually been collected.
7.19 NOTICE; CREDIT MEMORANDA; AND RETURNED GOODS.
Each Credit Party will notify the Agent promptly of any matters
materially affecting the value, enforceability or collectibility of any Account,
and of all material customer disputes, offsets, defenses, counterclaims, returns
and rejections, and all reclaimed or repossessed merchandise or goods, provided,
however, that such notice shall only be required as to any such matter that
affects Accounts outstanding at any one time from any account debtor, which
affected Accounts have a value greater than $500,000. Each Credit Party will
issue credit memoranda promptly (with duplicates to the Agent upon its request
for same) upon accepting returns or granting allowances, and may continue to do
so until the occurrence of an Event of Default which continues beyond the
expiration of the applicable grace or cure period, or which has not otherwise
been waived by the Required Lenders. After the occurrence and during the
continuance of an Event of Default, each Credit Party agrees that all returned,
reclaimed or repossessed merchandise or goods shall be set aside by such Credit
Party, marked with the Lenders' name and held by such Credit Party for the
Lenders' account as owner and assignee.
7.20 ACKNOWLEDGMENT AGREEMENTS.
Each Credit Party will assist the Agent in obtaining executed
Acknowledgment Agreements from each of the warehousemen, processors, packers,
fillers, landlords, mortgagees, freight forwarders, shipping agents, sales
agents, Buying Associations and other bailees with whom such Credit Party
conducts business from time to time.
7.21 TRADEMARKS.
Each Credit Party will do and cause to be done all things necessary to
preserve and keep in full force and effect all registrations of trademarks,
service marks and other marks, trade names or other trade rights.
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7.22 MAINTENANCE OF PROPERTY.
Each Credit Party will, and will cause each of its Subsidiaries to, keep
all property useful and necessary to its respective business in good working
order and condition (ordinary wear and tear excepted) in accordance with their
past operating practices and not to commit or suffer any waste with respect to
any of its properties, except for properties which either individually or in the
aggregate are not material.
7.23 REVISIONS OR UPDATES TO SCHEDULES.
If any of the information or disclosures provided on any of Schedules
6.7, 6.8, 6.9, 6.17, 6.19 or 6.32, originally attached hereto become outdated or
incorrect in any material respect, the Credit Parties shall deliver to the Agent
and the Lenders as part of the compliance certificate required pursuant to
Section 7.1(c) such revision 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 such 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 misrepresentation resulting from the
inaccuracy or incompleteness of any such Schedule(s) unless and until the
Required Lenders, in their sole and absolute discretion, shall have accepted in
writing such revisions or updates to such Schedule(s).
7.24 ANTI-TERRORISM LAWS.
None of the Credit Parties shall, nor shall any of them permit any of
their respective Subsidiaries to, (i) conduct any business or engage in any
transaction or dealing with any Blocked Person, including the making or
receiving any contribution of funds, goods or services to or for the benefit of
any Blocked Person; (ii) deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant to Executive
Order No. 13224; or (iii) engage in on conspire to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in Executive Order No. 13224 or the
USA Patriot Act. Each of the Credit Parties shall deliver to the Agent and
Lenders any certification or other evidence requested from time to time by the
Agent or any Lender, in the Agent's sole discretion, confirming such Person's
compliance with this Section.
ARTICLE VIII
FINANCIAL COVENANTS
Until termination of this Credit Agreement and the Commitments hereunder
and payment and satisfaction of all Obligations due or to become due hereunder,
each Borrower and (by execution and delivery of the Guaranty Agreement or of a
joinder thereto and incorporation by reference therein) each Guarantor agrees
that, unless the Required Lenders shall have otherwise consented in writing:
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8.1 LEVERAGE RATIO.
The Borrowers shall maintain a Leverage Ratio of no greater than 6.5 to
1.0 as of the last day of each fiscal quarter of the Borrowers, commencing with
the fiscal quarter ending September 30, 2004.
8.2 FIXED CHARGE COVERAGE RATIO.
The Borrowers shall maintain a Fixed Charge Coverage Ratio of not less
than 1.1 to 1.0 as of the last day of each fiscal quarter of the Borrowers,
commencing with the fiscal quarter ending September 30, 2004.
8.3 CAPITAL EXPENDITURES.
The Credit Parties shall not make Consolidated Capital Expenditures in an
amount in excess of (a) during the period from the Closing Date through and
including December 31, 2004, $2,000,000, (b) during fiscal year 2005, $5,500,000
and (c) during each fiscal year thereafter, $6,500,000, or such higher amount as
may be approved by the Required Lenders, such approval not to be unreasonably
withheld or delayed.
ARTICLE IX
NEGATIVE COVENANTS
Until termination of the Credit Agreement and the Commitments hereunder
and payment and satisfaction of all Obligations due or to become due hereunder,
each Borrower and (by execution and delivery of the Guaranty Agreement or of a
joinder thereto and incorporation by reference therein) each Guarantor agrees
that, unless the Required Lenders shall have otherwise consented in writing, it
will not, and will not permit any of the Subsidiaries to:
9.1 RESTRICTIONS ON LIENS.
Mortgage, assign, pledge, transfer or otherwise permit any Lien or
judgment (whether as a result of a purchase money or title retention
transaction, or other security interest, or otherwise) to exist on any of its
assets or properties, whether real, personal or mixed, whether now owned or
hereafter acquired, except for Permitted Liens.
9.2 RESTRICTIONS ON ADDITIONAL INDEBTEDNESS.
Incur or create any liability or Indebtedness other than Permitted
Indebtedness.
9.3 RESTRICTIONS ON SALE OF ASSETS.
Sell, lease, assign, transfer or otherwise dispose of any assets
(including the Capital Stock of any Subsidiary of the Company) other than (a)
sales of Inventory in the ordinary course of
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business, (b) sale-leaseback transactions permitted by Section 9.17, (c) sales
or other dispositions in the ordinary course of business of assets or properties
that are obsolete or that are no longer used or useful in the conduct of such
Credit Party's or Subsidiary's business, (d) sales in the ordinary course of
business of assets or properties (other than Inventory) used in such Credit
Party's or Subsidiary's business that are worn out or in need of replacement and
that are replaced with assets of reasonably equivalent value or utility, (e)
termination of Hedging Agreements in the ordinary course of business, (f) a sale
of the Oswego Facility or any portion thereof or the Oswego Zero Coupon Bond, or
(g) sales of Accounts to CCI Enterprises, Inc.
9.4 NO CORPORATE CHANGES.
(a) Merge or consolidate with any Person, (b) alter or modify any Credit
Party's or any of its Subsidiary's Articles or Certificate of Incorporation or
other equivalent organizational document or form of organization in any manner
adverse to the interests of the Agent or the Lenders or in any way which could
reasonably be expected to have a Material Adverse Effect, (c) without providing
thirty (30) days prior written notice to the Agent and without filing (or
confirming that the Agent has filed) such amendments to any previously filed
financing statements as the Agent may require, (i) change its state of
incorporation or formation, (ii) change its registered corporate name, (iii)
change the location of its chief executive office and principal place of
business (as well as its books and records) from the locations set forth on
Schedule 6.7, or (iv) change the location of its Collateral from the locations
set forth for such Person on Schedule 6.7, or (d) enter into or engage in any
business, operation or activity materially different from that presently being
conducted by the Credit Parties.
9.5 NO GUARANTEES.
Assume, guarantee, endorse, or otherwise become liable upon the
obligations of any other Person, including, without limitation, any Subsidiary
or Affiliate of any Credit Party, except (a) by the endorsement of negotiable
instruments in the ordinary course of business, (b) by the giving of indemnities
in connection with the sale of Inventory or other asset dispositions permitted
hereunder and (c) guarantees of Permitted Indebtedness.
9.6 NO RESTRICTED PAYMENTS.
Make a Restricted Payment, other than (a) to pay dividends from any
Subsidiary to any Credit Party, (b) to pay the Closing Date Dividend, (c) for so
long as the Company qualifies as an S Corporation within the meaning of Section
1361 of the IRC, the payment by the Company of cash distributions to its
shareholders not to exceed in the aggregate the Tax Amount for the applicable
tax year, (d) so long as (i) no Default or Event of Default has occurred and is
continuing or would result from the payment thereof and (ii) the Borrowers
provide evidence to the Agent that they will be in pro forma compliance with the
financial covenants set forth in Article VIII after giving effect thereto, the
payment of consulting fees pursuant to the Consulting Agreements in an aggregate
amount of up to $500,000 in any twelve month period, and (e) so long as (i) no
Default or Event of Default has occurred and is continuing or would result from
the payment thereof, (ii) Excess Availability after giving effect thereto would
be at least $10,000,000 and (iii) the Borrowers provide evidence to the Agent
that they will be in pro forma compliance
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with the financial covenants set forth in Article VIII after giving effect
thereto, the payment of any Permitted Periodic Dividend in any period of twelve
consecutive calendar months following the end of the Applicable Income Year.
In the event that any distributions are made to the Company's
shareholders pursuant to clause (c) immediately above, the Company shall deliver
to the Agent, as soon as practicable following the last day of each taxable year
of the Company during which any such distributions are made, a true and correct
copy of the Company's Schedule K-1 delivered to its shareholders for such
taxable year.
9.7 NO INVESTMENTS.
Make any Investment other than Permitted Investments.
9.8 NO AFFILIATE TRANSACTIONS.
Enter into any transaction with, including, without limitation, the
purchase, sale or exchange of property or the rendering of any service to any
Subsidiary or Affiliate of any Credit Party except (a) in the ordinary course of
and pursuant to the reasonable requirements of such Credit Party's business and
upon fair and reasonable terms no less favorable to such Credit Party than could
be obtained in a comparable arm's-length transaction with an unaffiliated Person
and (b) as permitted under Section 9.6; provided, that (i) in the event that
such transaction involves aggregate payments, or transfers of property or
services with a fair market value in excess of $2,000,000, the terms of such
transaction shall be approved by a majority of the members of the Board of
Directors or other managing body of the relevant Credit Parties (including a
majority of the disinterested members thereof), the approval to be evidenced by
a board (or other managing body) resolution stating that the board of directors
or other managing body has determined that such transaction complies with the
preceding provisions; and (ii) in the event that such transaction involves
aggregate payments, or transfers of property or services with a fair market
value in excess of $5,000,000, the Company shall, prior to the consummation
thereof, obtain a favorable opinion as to the fairness of such transaction to
the Company or other relevant Credit Party (if any) from a financial point of
view from an accounting firm, appraisal firm, investment banking firm or
consultant of nationally recognized standing that is, in the judgment of the
Company's board of directors, properly qualified and independent, and provide a
copy thereof to the Agent.
9.9 NO PROHIBITED TRANSACTIONS UNDER ERISA.
(a) Engage, or permit any ERISA Affiliate to engage, in any
prohibited transaction which could result in a civil penalty or excise
tax described in Section 406 of ERISA or Section 4975 of the Internal
Revenue Code for which a statutory or class exemption is not available or
a private exemption has not been previously obtained from the DOL;
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(b) permit to exist with respect to any Benefit Plan any
accumulated funding (as defined in Sections 302 of ERISA and 412 of the
Internal Revenue Code), whether or not waived;
(c) fail, or permit any ERISA Affiliate to fail, to pay timely
required contributions or annual installments due with respect to any
waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate to terminate, any
Benefit Plan where such event would result in any liability of the Credit
Party or any of its Subsidiaries or ERISA Affiliates under Title IV of
ERISA;
(e) fail, or permit any ERISA Affiliate to fail to make any
required contribution or payment to any Multiemployer Plan;
(f) fail, or permit any ERISA Affiliate to fail, to pay any
required installment or any other payment required under Section 412 of
the Internal Revenue Code on or before the due date for such installment
or other payment;
(g) amend, or permit any ERISA Affiliate to amend, a Benefit Plan
resulting in an increase in current liability for the plan year such that
any of the Credit Parties or any of their Subsidiaries or ERISA
Affiliates is required to provide security to such Benefit Plan under
Section 401(a)(29) of the Internal Revenue Code;
(h) withdraw, or permit any ERISA Affiliate to withdraw, from any
Multiemployer Plan where such withdrawal may result in any liability of
any such entity under Title IV of ERISA; or
(i) allow any representation made in Section 6.14 to be untrue at
any time during the term of this Credit Agreement.
9.10 NO ADDITIONAL BANK ACCOUNTS.
Open, maintain or otherwise have any checking, savings or other accounts
at any bank or other financial institution, or any other account where money is
or may be deposited or maintained with any Person, other than (a) the accounts
set forth on Schedule 6.35, each of which shall be subject to a Deposit Account
Control Agreement, except to the extent otherwise determined by the Agent, (b)
deposit accounts established after the Closing Date that are subject to a
Deposit Account Control Agreement, (c) other deposit accounts established after
the Closing Date solely as payroll and other zero balance accounts and (d) other
deposit accounts established after the Closing Date, so long as at any time the
balance in any such account does not exceed $25,000 and the aggregate balance in
all such accounts does not exceed $100,000.
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9.11 NO EXCESS CASH.
Maintain in the aggregate in all of the checking, savings or other
accounts of the Credit Parties, total cash balances and Permitted Investments in
excess of $500,000 at any time during which any Loans are outstanding hereunder.
All such accounts, other than payroll accounts, shall be under the sole dominion
and control of the Agent in accordance with the provisions of the Security
Agreement
9.12 [INTENTIONALLY OMITTED].
9.13 ISSUANCE OF STOCK.
Issue or distribute any Capital Stock or other securities for
consideration or otherwise.
9.14 AMENDMENTS OF MATERIAL CONTRACTS.
Without the prior written consent of the Agent, amend, modify, cancel or
terminate or permit the amendment, modification, cancellation or termination of
any of the Material Contracts including, without limitation any Operative
Document.
9.15 ADDITIONAL NEGATIVE PLEDGES.
Create or otherwise cause or suffer to exist or become effective, or
permit any of the Subsidiaries to create or otherwise cause or suffer to exist
or become effective, directly or indirectly, (i) any prohibition or restriction
(including any agreement to provide equal and ratable security to any other
Person in the event a Lien is granted to or for the benefit of the Agent and the
Lenders) on the creation or existence of any Lien upon the assets of any Credit
Party or any of its Subsidiaries, other than Permitted Liens, other than under
the Senior Note Debt Documents, or (ii) any Contractual Obligation which may
restrict or inhibit the Agent's rights or ability to sell or otherwise dispose
of the Collateral or any part thereof after the occurrence of an Event of
Default, other than the Senior Note Debt Documents.
9.16 OTHER INDEBTEDNESS.
Effect or permit any change in or amendment to any document or instrument
pertaining to the subordination, terms of payment or required prepayments of any
Senior Note Debt, increase the rates or amounts of interest or fees payable with
respect to any Senior Note Debt, effect or permit any change in or amendment to
any document or instrument pertaining to the covenants or events of default of
any Senior Note Debt if the effect of any such change or amendment is to make
such covenants or events of default more restrictive, give any notice of
optional redemption or optional prepayment or offer to repurchase under any such
document or instrument, or, directly or indirectly, make any payment of
principal of or interest on or in redemption, retirement or repurchase of any
Senior Note Debt, except for the scheduled payments required by the terms of the
documents and instruments evidencing Senior Note Debt and except as permitted
under Section 9.6.
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9.17 SALE AND LEASEBACK.
Enter into any arrangement, directly or indirectly, whereby any Credit
Party or any of its Subsidiaries shall sell or transfer any property owned by it
to a Person (other than the Credit Parties or any of their Subsidiaries) in
order then or thereafter to lease such property or lease other property which
such Credit Party or Subsidiary intends to use for substantially the same
purpose as the property being sold or transferred. Notwithstanding the foregoing
provisions of this Section 9.17, any Credit Party or any of its Subsidiaries may
sell or transfer any property owned by it as described in the preceding sentence
provided that the aggregate current market value of all assets so sold or
transferred (in each case determined at the time of such sale or transfer, and
taking into account all such sales or transfers under this Section 9.17 since
the Closing Date) shall not exceed $1,000,000.
9.18 LICENSES, ETC.
Enter into licenses of, or otherwise restrict the use of, any patents,
trademarks or copyrights which would prevent any Credit Party or any of its
Subsidiaries from selling, transferring, encumbering or otherwise disposing of
any such patent, trademark or copyright.
9.19 LIMITATIONS.
Create, nor will it permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause, incur, assume, suffer or permit to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any such Person to (a) pay dividends or make any other distribution
on any of such Person's Capital Stock, (b) pay any Indebtedness owed to the
Credit Parties, (c) make loans or advances to any other Credit Party or (d)
transfer any of its property to any other Credit Party, except for encumbrances
or restrictions existing under or by reason of (i) customary non-assignment
provisions in any lease governing a leasehold interest, (ii) any agreement or
other instrument of a Person existing at the time it becomes a Subsidiary of a
Credit Party; provided that such encumbrance or restriction is not applicable to
any other Person, or any property of any other Person, other than such Person
becoming a Subsidiary of a Credit Party and was not entered into in
contemplation of such Person becoming a Subsidiary of a Credit party and (iii)
this Credit Agreement and the other Credit Documents.
9.20 OPERATING LEASE OBLIGATIONS.
Enter into or permit any Subsidiary to enter into, assume or permit to
exist any obligations for the payment of rent under operating leases which in
the aggregate for all such Persons would exceed $5,000,000 in any fiscal year.
9.21 ISSUANCE OF CAPITAL STOCK.
Sell or permit any of its Subsidiaries to sell or issue any Capital Stock
having a preference over the common stock of such Person or which would result
in a Change of Control.
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9.22 HEDGE TRANSACTIONS.
Engage in any transaction involving commodity options or future contracts
or any similar speculative transactions, except for Hedging Agreements used
solely as part of the normal business operations of the Borrowers as a risk
management strategy and/or a hedge against changes resulting from market
operations in accordance with the Borrowers' customary policies and not as a
means to speculate for investment purposes.
ARTICLE X
POWERS
10.1 APPOINTMENT AS ATTORNEY-IN-FACT.
Each Credit Party hereby irrevocably authorizes and appoints the Agent,
for the benefit of the Lenders, or any Person or agent the Agent may designate,
as such Credit Party's attorney-in-fact, at such Credit Party's cost and
expense, to exercise, subject to the limitations set forth in Section 10.2, all
of the following powers, which being coupled with an interest, shall be
irrevocable until all of the Obligations to the Lenders have been paid and
satisfied in full and all of the Commitments have been terminated:
(a) To receive, take, endorse, sign, assign and deliver, all in
the name of the Agent, the Lenders or such Credit Party, as the case may
be, any and all checks, notes, drafts, and other documents or instruments
relating to the Collateral;
(b) To receive, open and dispose of all mail addressed to such
Credit Party and to notify postal authorities to change the address for
delivery thereof to such address as the Agent may designate;
(c) To request at any time from customers indebted on Accounts, in
the name of such Credit Party or a third party designee of the Agent,
information concerning the Accounts and the amounts owing thereon;
(d) To give customers indebted on Accounts notice of the Lenders'
interest therein, and/or to instruct such customers to make payment
directly to the Agent for such Credit Party's account;
(e) To take or bring, in the name of the Agent, the Lenders or
such Credit Party, all steps, actions, suits or proceedings deemed by the
Agent necessary or desirable to enforce or effect collection of the
Accounts; and
(f) To file, record and register any or all of the Lenders'
security interest in intellectual property of the Credit Parties with the
United States Patent and Trademark Office or the United States Copyright
Office.
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10.2 LIMITATION ON EXERCISE OF POWER.
Notwithstanding anything hereinabove to the contrary, the powers set
forth in subparagraphs (b), (d) and (e) above may only be exercised by the Agent
on and after the occurrence of an Event of Default which has not otherwise been
waived by the Agent. The powers set forth in subparagraphs (a), (c) and (f)
above may be exercised by the Agent at any time.
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES
11.1 EVENTS OF DEFAULT.
The occurrence of any of the following events shall constitute an "Event
of Default" hereunder:
(a) failure of any Borrower to pay (i) any interest or Fees
hereunder when due, in each case whether at stated maturity, by
acceleration, or otherwise, (ii) any principal of the Revolving Loans or
the Letter of Credit Obligations when due, whether at stated maturity, by
acceleration or otherwise or (iii) any expenses hereunder within three
(3) Business Days after receipt by the Borrowers from the Agent or any
applicable Lender of notice that such expenses are payable;
(b) any representation or warranty, contained in this Credit
Agreement, the other Credit Documents or any other agreement, document,
instrument or certificate among any Credit Party, the Agent and the
Lenders or executed by any Credit Party in favor of the Agent or the
Lenders shall prove untrue in any material respect on or as of the date
it was made or was deemed to have been made;
(c) failure of any Credit Party to perform, comply with or observe
any term, covenant or agreement applicable to it contained in Section
7.1(j), Section 7.3, Section 7.5, Section 7.7, Article VIII or Article
IX;
(d) failure of any Credit Party (i) to deliver the Borrowing Base
Certificate within five Business Days of the day required by Section
7.1(e), or (ii) to comply with any other covenant contained in this
Credit Agreement, the other Credit Documents or any other agreement,
document, instrument or certificate among any Credit Party, the Agent and
the Lenders or executed by any Credit Party in favor of the Agent or the
Lenders and, in the event such breach or failure to comply is capable of
cure, such breach or failure to comply is not cured within fifteen (15)
days of its occurrence;
(e) dissolution, liquidation, winding up or cessation of the
business of any Credit Party or any of its Subsidiaries, or the failure
of any Credit Party or any of its Subsidiaries to meet its debts
generally as they mature, or the calling of a meeting of any
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Credit Party's or any of its Subsidiaries' creditors for purposes of
compromising any Credit Party's or any of its Subsidiaries' debts, or the
failure by any Credit Party or any of its Subsidiaries generally, or the
admission by any Credit Party or any of its Subsidiaries of its
inability, to pay its debts as they become due (unless such debts are the
subject of a bona fide dispute);
(f) the commencement by or against any Credit Party or any of its
Subsidiaries of any bankruptcy, insolvency, arrangement, reorganization,
receivership or similar case or proceeding with respect to it under any
federal or state law and, in the event any such proceeding is commenced
against any Credit Party or any of its Subsidiaries, such proceeding is
not dismissed within sixty (60) days or an order for relief is entered at
any time;
(g) the occurrence of a Change of Control or a "Change of
Control", as such term is defined in the Senior Note Indenture;
(h) any Credit Party or any of its Subsidiaries shall fail to make
any payment in respect of Indebtedness outstanding (other than the Loans)
in an aggregate principal amount of $500,000 or more when due or within
any applicable grace period; or
(i) the occurrence of a default or event of default (in each case
which shall continue beyond the expiration of any applicable grace
periods) under, or the occurrence of any event that results in or would
permit (i) the acceleration of the maturity of any note, agreement or
instrument (including, without limitation, as a result of any required
mandatory prepayment or "put" right thereunder) evidencing (A) any Senior
Note Debt or (B) any other Indebtedness of any Credit Party or any of its
Subsidiaries and the aggregate principal amount of all such other
Indebtedness with respect to which a default or an event of default has
occurred, or the maturity of which is accelerated or permitted to be
accelerated (including, without limitation, as a result of any required
mandatory prepayment or "put" right thereunder), exceeds $500,000, or
(ii) the early termination of any Lender Hedging Agreement;
(j) any covenant, agreement or obligation of any party contained
in or evidenced by any of the Credit Documents shall cease to be
enforceable in accordance with its terms, or any party (other than the
Agent or the Lenders) to any Credit Document shall deny or disaffirm its
obligations under any of the Credit Documents, or any Credit Document
shall be canceled, terminated, revoked or rescinded without the express
prior written consent of the Agent, or any action or proceeding shall
have been commenced by any Person (other than the Agent or any Lender)
seeking to cancel, revoke, rescind or disaffirm the obligations of any
party to any Credit Document, or any court or other Governmental
Authority shall issue a judgment, order, decree or ruling to the effect
that any of the obligations of any party to any Credit Document are
illegal, invalid or unenforceable;
(k) one or more judgments or decrees shall be entered against one
or more of the Credit Parties or any of their Subsidiaries involving a
liability of $1,000,000 or more in the
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aggregate (to the extent not paid or covered by insurance (i) provided by
a carrier who has acknowledged coverage and has the ability to perform or
(ii) as determined by the Agent in its reasonable discretion) and any
such judgments or decrees shall not have been vacated, discharged or
stayed or bonded pending appeal within thirty (30) days from the entry
thereof;
(l) any Termination Event with respect to a Benefit Plan shall
have occurred and be continuing thirty (30) days after notice thereof
shall have been given to the Company by the Agent or any Lender, and the
then current value of such Benefit Plan's benefits guaranteed under Title
IV of ERISA exceeds the then current value of such Benefit Plan's assets
allocable to such benefits by more than $500,000 (or in the case of a
Termination Event involving the withdrawal of a substantial employer, the
withdrawing employer's proportionate share of such excess exceeds such
amount);
(m) any default or termination shall have occurred under any
Material Contract, including, without limitation, any Operative Document,
to which any Credit Party is a party, which default or termination could
reasonably be expected to have a Material Adverse Effect; or
(n) any other Credit Document shall fail to be in full force and
effect or to give the Agent and/or the Lenders the security interests,
liens, rights, powers and privileges purported to be created thereby
(except as such documents may be terminated or no longer in force and
effect in accordance with the terms thereof, other than those indemnities
and provisions which by their terms shall survive).
11.2 ACCELERATION.
Upon the occurrence and during the continuance of an Event of Default,
and at any time thereafter, at the direction of the Required Lenders, the Agent
shall, upon the written, telecopied or telex request of the Required Lenders,
and by delivery of written notice to the Credit Parties from the Agent, take any
or all of the following actions, without prejudice to the rights of the Agent,
any Lender or the holder of any Note to enforce its claims against any Borrower:
(a) declare all Obligations (other than those arising in connection with a
Lender Hedging Agreement) to be immediately due and payable (except with respect
to any Event of Default set forth in Section 11.1(e) or (f) in which case all
Obligations (other than those arising in connection with a Lender Hedging
Agreement) shall automatically become immediately due and payable without the
necessity of any notice or other demand) without presentment, demand, protest or
any other action or obligation of the Agent or any Lender, (b) immediately
terminate this Credit Agreement and the Commitments hereunder; and (c) enforce
any and all rights and interests created and existing under the Credit Documents
or arising under applicable law, including, without limitation, all rights and
remedies existing under the Security Documents and all rights of setoff. The
enumeration of the foregoing rights is not intended to be exhaustive and the
exercise of any right shall not preclude the exercise of any other rights, all
of which shall be cumulative.
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In addition, upon demand by the Agent or the Required Lenders upon the
occurrence of any Event of Default, and at any time thereafter unless and until
such Event of Default has been waived by the requisite Lenders (in accordance
with the voting requirements of Section 14.10), the Borrowers shall deposit with
the Agent for the benefit of the Lenders with respect to each Letter of Credit
then outstanding, promptly upon such demand, cash or Cash Equivalents in an
amount equal to the greatest amount for which such Letter of Credit may be
drawn. Such deposit shall be held by the Agent for the benefit of the Issuing
Bank and the other Lenders as security for, and to provide for the payment of,
outstanding Letters of Credit.
ARTICLE XII
TERMINATION
(a) Except as otherwise provided in Article XI, the Revolving Loan
Commitments made hereunder shall terminate on the Maturity Date and all then
outstanding Loans shall be immediately due and payable in full and all
outstanding Letters of Credit shall immediately terminate. Unless sooner
demanded, all Obligations shall become due and payable as of any termination
hereunder or under Article XI and, pending a final accounting, the Agent may
withhold any balances in the Borrowers' Loan accounts, in an amount sufficient,
in the Agent's sole discretion, to cover all of the Obligations, whether
absolute or contingent, unless supplied with a satisfactory indemnity to cover
all of such Obligations. All of the Agent's and the Lenders' rights, liens and
security interests shall continue after any termination until termination in
accordance with the provisions of this Section.
(b) This Credit Agreement, together with all other Credit Documents,
shall continue in full force and effect until each of the following events
(collectively, the "Credit and Collateral Termination Events") has occurred: (i)
all of the Obligations have been fully and finally paid and performed (other
than inchoate indemnity obligations), (ii) all Letters of Credit have expired or
terminated, (iii) all Lender Hedging Agreements have expired or terminated (or
other arrangements relating thereto have been made in a writing signed by all
Persons party to such Lender Hedging Agreements and the Agent), (iv) all
agreements relating to Cash Management Products have expired or terminated (or
other arrangements relating thereto have been made in a writing signed by all
Persons party to such agreements and the Agent), and (v) all Commitments have
been terminated and no Person or Governmental Authority shall have any right to
request any return or reimbursement of funds from the Agent or the Lenders in
connection with any of the foregoing.
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ARTICLE XIII
THE AGENT
13.1 APPOINTMENT OF AGENT.
(a) Each Lender hereby designates Wachovia as Agent to act as
herein specified. Each Lender hereby irrevocably authorizes, and each
holder of any Note or participation in any Letter of Credit by the
acceptance of a Note or participation shall be deemed irrevocably to
authorize, the Agent to take such action on its behalf under the
provisions of this Credit Agreement and the Notes and any other
instruments and agreements referred to herein and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof and
such other powers as are reasonably incidental thereto. The Agent shall
hold all Collateral and all payments of principal, interest, Fees,
charges and expenses received pursuant to this Credit Agreement or any
other Credit Document for the ratable benefit of the Lenders. The Agent
may perform any of its duties hereunder by or through its agents or
employees.
(b) The provisions of this Article XIII are solely for the benefit
of the Agent and the Lenders, and none of the Credit Parties shall have
any rights as a third party beneficiary of any of the provisions hereof
(other than Section 13.9). In performing its functions and duties under
this Credit Agreement, the Agent shall act solely as agent of the Lenders
and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for any
Borrower.
13.2 NATURE OF DUTIES OF AGENT.
The Agent shall have no duties or responsibilities except those expressly
set forth in this Credit Agreement. Neither the Agent nor any of its officers,
directors, employees or agents shall be liable for any action taken or omitted
by it as such hereunder or in connection herewith, unless caused by its or their
gross negligence or willful misconduct. The duties of the Agent shall be
mechanical and administrative in nature; the Agent shall not have by reason of
this Credit Agreement a fiduciary relationship in respect of any Lender; and
nothing in this Credit Agreement, expressed or implied, is intended to or shall
be so construed as to impose upon the Agent any obligations in respect of this
Credit Agreement except as expressly set forth herein.
13.3 LACK OF RELIANCE ON AGENT.
(a) Independently and without reliance upon the Agent, each
Lender, to the extent it deems appropriate, has made and shall continue
to make (i) its own independent investigation of the financial or other
condition and affairs of each Credit Party in connection with the taking
or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of each Credit Party, and, except as
expressly provided in this Credit Agreement, the Agent shall have no duty
or responsibility, either initially or on a continuing basis, to provide
any Lender with any credit or other
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information with respect thereto, whether coming into its possession
before the making of the Revolving Loans or at any time or times
thereafter.
(b) The Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein
or in any document, certificate or other writing delivered in connection
herewith or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, priority or sufficiency of this Credit
Agreement, the Notes or any other Credit Document or the financial or
other condition of any Credit Party. The Agent shall not be required to
make any inquiry concerning either the performance or observance of any
of the terms, provisions or conditions of this Credit Agreement, the
Notes or any other Credit Document, or the financial condition of any
Credit Party, or the existence or possible existence of any Default or
Event of Default, unless specifically requested to do so in writing by
any Lender.
13.4 CERTAIN RIGHTS OF THE AGENT.
The Agent shall have the right to request instructions from the Required
Lenders or, as required, each of the Lenders. If the Agent shall request
instructions from the Required Lenders or each of the Lenders, as the case may
be, with respect to any act or action (including the failure to act) in
connection with this Credit Agreement, the Agent shall be entitled to refrain
from such act or taking such action unless and until the Agent shall have
received instructions from the Required Lenders or each of the Lenders, as the
case may be, and the Agent shall not incur liability to any Person by reason of
so refraining. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Lenders or each of the Lenders, as the case may be.
13.5 RELIANCE BY AGENT.
The 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, radiogram, order or other
documentary, teletransmission or telephone message believed by it in good faith
to be genuine and correct and to have been signed, sent or made by the proper
person. The Agent may consult with legal counsel (including counsel for the
Credit Parties with respect to matters concerning the Credit Parties),
independent public accountants and other experts selected by it with reasonable
care and shall not be liable for any action taken or omitted to be taken by it
in good faith in accordance with the advice of such counsel, accountants or
experts.
13.6 INDEMNIFICATION OF AGENT.
To the extent the Agent is not reimbursed and indemnified by the Credit
Parties, each Lender will reimburse and indemnify the Agent, in proportion to
its respective Commitment, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in
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performing its duties hereunder, in any way relating to or arising out of this
Credit Agreement or any other Credit Documents, provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's gross negligence or willful misconduct.
13.7 THE AGENT IN ITS INDIVIDUAL CAPACITY.
With respect to its obligation to lend under this Credit Agreement, the
Loans made by it and the Notes issued to it, its participation in Letters of
Credit issued hereunder, and all of its rights and obligations as a Lender
hereunder and under the other Credit Documents, the Agent shall have the same
rights and powers hereunder as any other Lender or holder of a Note or
participation interests and may exercise the same as though it was not
performing the duties specified herein; and the terms "Lenders", "Required
Lenders", "holders of Notes", or any similar terms shall, unless the context
clearly otherwise indicates, include the Agent in its individual capacity. The
Agent may accept deposits from, lend money to, acquire equity interests in, and
generally engage in any kind of banking, trust, financial advisory or other
business with the Credit Parties or any Affiliate of the Credit Parties as if it
were not performing the duties specified herein, and may accept fees and other
consideration from the Credit Parties for services in connection with this
Credit Agreement and otherwise without having to account for the same with the
Lenders.
13.8 HOLDERS OF NOTES.
The Agent may deem and treat the payee of any Note as the owner thereof
for all purposes hereof unless and until a written notice of the assignment or
transfer thereof shall have been filed with the Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note, shall be conclusive and binding
on any subsequent holder, transferee or assignee of such Note or of any Note or
Notes issued in exchange therefor.
13.9 SUCCESSOR AGENT.
The Agent may at any time give notice of its resignation to the Lenders,
the Issuing Bank and the Borrowers. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with the
Borrowers, to appoint a successor, which shall be a bank with an office in the
United States, or an Affiliate of any such bank with an office in the United
States. If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation, then the retiring Agent may on
behalf of the Lenders and the Issuing Lender, appoint a successor Agent meeting
the qualifications set forth above; provided that if the Agent shall notify the
Borrowers and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Agent shall be discharged from
its duties and obligations hereunder and under the other Credit Documents
(except that in the case of any collateral security held by the Agent on behalf
of the Lenders or the Issuing Bank under any of the Credit Documents, the
retiring Agent shall continue to hold such collateral security until such time
as a successor Agent is appointed)
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and (2) all payments, communications and determinations provided to be made by,
to or through the Agent shall instead be made by or to each Lender and the
Issuing Bank directly, until such time as the Required Lenders appoint a
successor Agent as provided for above in this Section. Upon the acceptance of a
successor's appointment as Agent hereunder, such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Agent, and the retiring Agent shall be discharged from all
of its duties and obligations hereunder or under the other Credit Documents (if
not already discharged therefrom as provided above in this Section). The fees
payable by the Borrowers to a successor Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrowers and such
successor. After the retiring Agent's resignation hereunder and under the other
Credit Documents, the provisions of this Article and Section 14.8 shall continue
in effect for the benefit of such retiring Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Agent was acting as Agent. Any
resignation by Wachovia as Agent pursuant to this Section shall also constitute
its resignation as Issuing Bank. Upon the acceptance of a successor's
appointment as Agent hereunder, (a) such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring
Issuing Bank, (b) the retiring Issuing Bank shall be discharged from all of
their respective duties and obligations hereunder or under the other Credit
Documents, and (c) the successor Issuing Lender shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or make other arrangement satisfactory to the retiring Issuing Lender
to effectively assume the obligations of the retiring Issuing Lender with
respect to such Letters of Credit.
13.10 COLLATERAL MATTERS.
(a) Each Lender authorizes and directs the Agent to enter into the
Security Documents for the benefit of the Lenders. Each Lender authorizes
and directs the Agent to make such changes to the form Acknowledgment
Agreement attached hereto as Exhibit A as the Agent deems necessary in
order to obtain any Acknowledgment Agreement from any landlord,
warehouseman, filler, packer or processor of any Credit Party. Each
Lender also authorizes and directs the Agent to review and approve all
agreements regarding the Lockboxes and the Lockbox Accounts (including
the Lockbox Accounts Agreements) on such terms as the Agent deems
necessary. Each Lender hereby agrees, and each holder of any Note by the
acceptance thereof will be deemed to agree, that, except as otherwise set
forth herein, any action taken by the Required Lenders or each of the
Lenders, as applicable, in accordance with the provisions of this Credit
Agreement or the Security Documents, and the exercise by the Required
Lenders or each of the Lenders, as applicable, of the powers set forth
herein or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all of the
Lenders. The Agent is hereby authorized on behalf of all of the Lenders,
without the necessity of any notice to or further consent from any
Lender, from time to time prior to an Event of Default, to take any
action with respect to any Collateral or Security Document which may be
necessary or appropriate to perfect and maintain perfected the security
interest in and liens upon the Collateral granted pursuant to the
Security Documents. The rights, remedies, powers and privileges conferred
upon the Agent hereunder and under the other Credit Documents may be
exercised by the Agent
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without the necessity of the joinder of any other parties unless
otherwise required by applicable law.
(b) The Lenders hereby authorize the Agent, at its option and in
its discretion, to release any Lien granted to or held by the Agent upon
any Collateral (i) upon termination of the Commitments and payment in
cash and satisfaction of all of the Obligations (including the Letter of
Credit Obligations) at any time arising under or in respect of this
Credit Agreement or the other Credit Documents, or any Lender Hedging
Agreements or the transactions contemplated hereby or thereby, (ii)
constituting property being sold or disposed of upon receipt of the
proceeds of such sale by the Agent if the applicable Credit Party
certifies to the Agent that the sale or disposition is made in compliance
with Section 9.3 (and the Agent may rely conclusively on any such
certificate, without further inquiry) or (iii) if approved, authorized or
ratified in writing by the Required Lenders, unless such release is
required to be approved by all of the Lenders hereunder. Upon request by
the Agent at any time, the Lenders will confirm in writing the Agent's
authority to release particular types or items of Collateral pursuant to
this Section 13.10(b).
(c) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Credit Agreement, or consented to
in writing by the Required Lenders or all of the Lenders, as applicable,
and upon at least five (5) Business Days' prior written request by the
applicable Credit Party, the Agent shall (and is hereby irrevocably
authorized by the Lenders to) execute such documents as may be necessary
to evidence the release of the Liens granted to the Agent for the benefit
of the Lenders herein or pursuant hereto upon the Collateral that was
sold or transferred; provided that (i) the Agent shall not be required to
execute any such document on terms which, in the Agent's opinion, would
expose the Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or
warranty and (ii) such release shall not in any manner discharge, affect
or impair the Obligations or any Liens upon (or obligations of such
Credit Party or any of its Subsidiaries in respect of) all interests
retained by such Credit Party or Subsidiary, including (without
limitation) the proceeds of the sale, all of which shall continue to
constitute part of the Collateral. In the event of any sale or transfer
of Collateral, or any foreclosure with respect to any of the Collateral,
the Agent shall be authorized to deduct all of the expenses reasonably
incurred by the Agent from the proceeds of any such sale, transfer or
foreclosure.
(d) The Agent shall have no obligation whatsoever to the Lenders
or to any other Person to assure that the Collateral exists or is owned
by the Credit Parties or any Subsidiary or is cared for, protected or
insured or that the liens granted to the Agent herein or pursuant hereto
have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority, or to
exercise or to continue exercising at all or in any manner or under any
duty of care, disclosure or fidelity any of the rights, authorities and
powers granted or available to the Agent in this Section 13.10 or in any
of the Security Documents, it being understood and agreed that in respect
of the Collateral, or any act, omission or event related thereto, the
Agent may act in any manner it may deem appropriate, in its sole
discretion, given the Agent's own
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interest in the Collateral as one of the Lenders and that the Agent shall
have no duty or liability whatsoever to the Lenders, except for its gross
negligence or willful misconduct.
(e) The Agent shall promptly, upon receipt thereof, forward to
each Lender copies of the results of any field examinations by the Agent
with respect to any Credit Party and any appraisals obtained by the Agent
with respect to any of the Collateral. The Agent shall have no liability
to any Lender for any errors in or omissions from any field examination
or other examination of any Credit Party or the Collateral, or in any
such appraisal, unless such error or omission was the direct result of
the Agent's gross negligence or willful misconduct.
13.11 ACTIONS WITH RESPECT TO DEFAULTS.
In addition to the Agent's right to take actions on its own accord as
permitted under this Credit Agreement, the Agent shall take such action with
respect to a Default or Event of Default as shall be directed by the Required
Lenders or all of the Lenders, as the case may be; provided that, until the
Agent shall have received such directions, the 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 as it shall deem advisable and in the best
interests of the Lenders, including, without limitation, actions permitted by
clause (c) of Section 11.2.
13.12 DELIVERY OF INFORMATION.
The Agent shall not be required to deliver to any Lender originals or
copies of any documents, instruments, notices, communications or other
information received by the Agent from the Credit Parties or any of their
Subsidiaries, the Required Lenders, any Lender or any other Person under or in
connection with this Credit Agreement or any other Credit Document except (a) as
specifically provided in this Credit Agreement or any other Credit Document and
(b) as specifically requested from time to time in writing by any Lender with
respect to a specific document instrument, notice or other written communication
received by and in the possession of the Agent at the time of receipt of such
request and then only in accordance with such specific request. The Agent agrees
to furnish to the Lenders copies of the notices given to the Agent pursuant to
Section 7.5, the second sentence of Section 7.6, Section 7.15 and Section 7.16.
13.13 NO RELIANCE ON ADMINISTRATIVE AGENT'S CUSTOMER IDENTIFICATION
PROGRAM.
Each Lender acknowledges and agrees that neither such Lender, nor any of
its affiliates, Participants or Assignees, may rely on Agent to carry out such
Lender's, Affiliate's, participant's or assignee's customer identification
program, or other obligations required or imposed under or pursuant to the USA
Patriot Act or the regulations thereunder, including the regulations contained
in 31 CFR 103.121 (as hereafter amended or replaced, the "CIP Regulations"), or
any other Anti-Terrorism Law, including any programs involving any of the
following items relating to or in connection with the Borrowers, their
Affiliates or its agents, the Credit Documents or the transactions hereunder:
(1) any identity verification procedures, (2) any record keeping, (3) any
comparisons with government lists, (4) any customer notices or (5) any other
procedures required under the CIP Regulations or such other laws.
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13.14 USA PATRIOT ACT.
Each Lender or assignee or participant of a Lender that is not organized
under the laws of the United States of America or a state thereof (and is not
excepted from the certification requirement contained in Section 313 of the USA
Patriot Act and the applicable regulations because it is both (i) an affiliate
of a depository institution or foreign bank that maintains a physical presence
in the United States or foreign country, and (ii) subject to supervision by a
banking authority regulating such affiliated depository institution or foreign
bank) shall deliver to Administrative Agent the certification, or, if
applicable, recertification, certifying that such Lender is not a "shell" and
certifying to other matters as required by Section 313 of the USA Patriot Act
and the applicable regulations: (1) within ten (10) days after the Closing Date
and (2) at such other times as are required under the USA Patriot Act.
13.15 OTHER AGENTS.
None of the Lenders or other Persons identified on the facing page or
signature pages of this Agreement as a "syndication agent," "documentation
agent," "book manager," "book runner," "lead manager," "arranger," "lead
arranger" or "co-arranger" shall have any right (except as expressly set forth
herein), power, obligation, liability, responsibility or duty under this
Agreement other than, in the case of such Lenders, those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders or other
Persons so identified shall have or be deemed to have any fiduciary relationship
with any Lender. Each Lender acknowledges that it has not relied, and will not
rely, on any of the Lenders or other Persons so identified in deciding to enter
into this Credit Agreement or in taking or not taking action hereunder.
ARTICLE XIV
MISCELLANEOUS
14.1 WAIVERS.
Each Borrower hereby waives due diligence, demand, presentment and
protest and any notices thereof as well as notice of nonpayment. No delay or
omission of the Agent or the Lenders to exercise any right or remedy hereunder,
whether before or after the happening of any Event of Default, shall impair any
such right or shall operate as a waiver thereof or as a waiver of any such Event
of Default. No single or partial exercise by the Agent or the Lenders of any
right or remedy shall preclude any other or further exercise thereof, or
preclude any other right or remedy.
14.2 JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER AND (BY
EXECUTION AND DELIVERY OF THE GUARANTY AGREEMENT OR OF A JOINDER THERETO AND
INCORPORATION BY REFERENCE THEREIN) EACH
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GUARANTOR, AND THE AGENT AND THE LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS CREDIT AGREEMENT, THE
CREDIT DOCUMENTS OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR
THERETO.
14.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. Any legal action or proceeding with respect to
this Credit Agreement or any other Credit Document shall be brought in
the courts of the State of New York in New York County or of the United
States for the Southern District of New York, and, by execution and
delivery of this Credit Agreement, each of the Borrowers, and by
execution and delivery of the Guaranty Agreement or of a joinder thereto
and incorporation by reference therein each of the Guarantors, hereby
irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the nonexclusive jurisdiction of such courts, and
agrees to be bound by the other provisions set forth in this Section
14.3. Each of the Credit Parties further irrevocably consents to the
service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address set out for notices
pursuant to Section 14.5, such service to become effective three (3) days
after such mailing. Nothing herein shall affect the right of the Agent or
any Lender to serve process in any other manner permitted by law or to
commence legal proceedings or to otherwise proceed against any Credit
Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
14.4 [INTENTIONALLY OMITTED].
14.5 NOTICES.
Except as otherwise expressly provided herein, all notices, requests and
other communications shall have been duly given and shall be effective (a) when
delivered by hand, (b) when transmitted via telecopy (or other facsimile
device), (c) the Business Day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (d)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties at
the following address or telecopy numbers in the case of the Company, the other
Credit Parties, the Administrative Agent and the Issuing Bank, and as set forth
on Schedule 14.5 in the case of the Lenders, or at such
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other address as such party may specify by written notice to the other parties
hereto; provided, however, that if any notice is delivered on a day other than a
Business Day, or after 5:00 P.M. on any Business Day, then such notice shall not
be effective until the next Business Day.
The Company
and the other
Credit Parties: ▇▇▇▇▇▇▇ Cable, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Executive VP & CFO
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent
and the Issuing Bank: Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇/▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇▇
NC047928202
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
provided, that notices given by the Company pursuant to Section 2.1, Section
2.10 or Article III hereof shall be effective only upon receipt thereof by the
Administrative Agent or the Issuing Lender, as applicable.
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14.6 ASSIGNABILITY.
(a) No Borrower shall have the right to assign this Credit
Agreement or any interest therein except with the prior written consent
of the Lenders.
(b) Notwithstanding subsection (c) of this Section 14.6, nothing
herein shall restrict, prevent or prohibit any Lender from (i) pledging
its Loans hereunder to a Federal Reserve Bank in support of borrowings
made by such Lender from such Federal Reserve Bank or (ii) granting
assignments or participations in such Lender's Loans and/or Commitments
hereunder to any Approved Assignee in accordance with the terms hereof.
Any Lender may make, carry or transfer Loans at, to or for the account
of, any of its branch offices or the office of an affiliate of such
Lender except to the extent such transfer would result in increased costs
to the Borrowers.
(c) Any Lender may, in the ordinary course of its lending business
and in accordance with applicable law, at any time, assign to any
Approved Assignee and, with the consent of the Agent and, in the absence
of an Event of Default, the Company (such consents not to be unreasonably
withheld or delayed) but without the consent of any other Lender, assign
to one or more other Eligible Assignees all or a portion of its rights
and obligations under this Credit Agreement and the Notes; provided,
however, that (i) any such assignment of a portion must be for a constant
and non-varying portion of its Loans and Commitments, (ii) for each such
assignment, the parties thereto shall execute and deliver to the Agent,
for its acceptance and recording in the Register (as defined below), an
Assignment and Acceptance, together with any Note or Notes subject to
such assignment and a processing and recordation fee of $3,500 to be paid
by the assignee, (iii) no such assignment shall be for less than
$5,000,000 or, if less, the entire remaining Commitments of such Lender
of the Commitments and (iv) if such assignee is a Foreign Lender, all of
the requirements of Section 2.7(b) shall have been satisfied as a
condition to such assignment; and provided, further, that any assignment
to an Approved Assignee shall not be subject to the minimum assignment
amounts specified herein. Upon such execution and delivery of the
Assignment and Acceptance to the Agent, from and after the effective date
of such Assignment and Acceptance, (x) the assignee thereunder shall be a
party hereto, and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, such
assignee shall have the rights and obligations of a Lender hereunder and
(y) the assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (other than any rights
it may have pursuant to Section 14.8 which will survive) and be released
from its obligations under this Credit Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Credit Agreement,
such Lender shall cease to be a party hereto).
(d) By executing and delivering an Assignment and Acceptance, the
assignee thereunder confirms and agrees as follows: (i) other than as
provided in such Assignment and Acceptance, the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or
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in connection with this Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this
Credit Agreement, the Notes or any other instrument or document furnished
pursuant hereto, (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Credit Parties or the performance or observance by the
Credit Parties of any of its obligations under this Credit Agreement or
any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto, (iii) such assignee confirms that
it has received a copy of this Credit Agreement, together with copies of
the financial statements referred to in Section 7.1 and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance, (iv) such assignee will, independently and without reliance
upon the Agents, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Credit Agreement, (v) such assignee appoints and authorizes
the Agents to take such action as agent on its behalf and to exercise
such powers under this Credit Agreement and the other Credit Documents as
are delegated to the Agents by the terms hereof, together with such
powers as are reasonably incidental thereto and (vi) such assignee agrees
that it will perform in accordance with their terms all of the
obligations which by the terms of this Credit Agreement are required to
be performed by it as a Lender.
(e) The Agent shall maintain at its address referred to in Section
14.5 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of
the Lenders and the Commitments of, and principal amount of the Loans
owing to, each Lender from time to time (the "Register"). The entries in
the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrowers, the Agents and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Credit Agreement. The Register and copies of
each Assignment and Acceptance shall be available for inspection by the
Borrowers or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender, together with any Note or Notes subject to such
assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit
B, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to
the Borrowers. Within ten (10) Business Days after its receipt of such
notice, if requested by the assignee, the Borrowers shall execute and
deliver to the Agent in exchange for any surrendered Note or Notes (which
the assigning Lender agrees to promptly deliver to the Company) a new
Note or Notes to the order of the assignee in an amount equal to the
Commitment or Commitments assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment or
Commitments hereunder and if requested by it, a new Note or Notes to the
order of the assigning Lender in an amount equal to the Commitment or
Commitments retained by it hereunder. Any such new Note or Notes shall
re-evidence the indebtedness outstanding
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under any old Notes or Notes and shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note
or Notes, shall be dated the Closing Date and shall otherwise be in
substantially the form of the Note or Notes subject to such assignments.
(g) Each Lender may sell participations (without the consent of
the Agent, the Borrowers or any other Lender) to one or more parties in
or to all or a portion of its rights and obligations under this Credit
Agreement (including, without limitation, all or a portion of its
Commitments, the Loans owing to it and any Note or Notes held by it);
provided that (i) such Lender's obligations under this Credit Agreement
(including, without limitation, its Commitments to the Borrowers
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note
for all purposes of this Credit Agreement, (iv) the Borrowers, the Agent,
and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under
this Credit Agreement and (v) such Lender shall not transfer, grant,
assign or sell any participation under which the participant shall have
rights to approve any amendment or waiver of this Credit Agreement except
to the extent such amendment or waiver would (A) extend the final
maturity date or the date for the payments of any installment of fees or
principal or interest of any Loans or Letter of Credit reimbursement
obligations in which such participant is participating, (B) reduce the
amount of any installment of principal of the Loans or Letter of Credit
reimbursement obligations in which such participant is participating, (C)
except as otherwise expressly provided in this Credit Agreement, reduce
the interest rate applicable to the Loans or Letter of Credit
reimbursement obligations in which such participant is participating, or
(D) except as otherwise expressly provided in this Credit Agreement,
reduce any Fees payable hereunder.
(h) Each Lender agrees that, without the prior written consent of
the Borrowers and the Agents, it will not make any assignment or sell a
participation hereunder in any manner or under any circumstances that
would require registration or qualification of, or filings in respect of,
any Loan, Note or other Obligation under the securities laws of the
United States of America or of any jurisdiction.
(i) In connection with the efforts of any Lender to assign its
rights or obligations or to participate interests, such Lender may
disclose any information in its possession regarding the Borrowers or any
of their Subsidiaries.
14.7 INFORMATION.
Each Lending Party agrees to keep confidential any information furnished
or made available to it by the Borrowers pursuant to this Credit Agreement that
is marked confidential; provided that nothing herein shall prevent any Lending
Party from disclosing such information (a) to any other Lending Party or any
affiliate of any Lending Party, or any officer, director, employee, agent, or
advisor of any Lending Party or affiliate of any Lending Party, (b) to any other
Person if reasonably incidental to the administration of the credit facility
provided herein,
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(c) as required by any law, rule, or regulation, (d) upon the order of any court
or administrative agency, (e) upon the request or demand of any regulatory
agency or authority; provided, however, that, to the extent permitted by law,
the affected Lending Party shall provide prior written notice to the affected
Borrower of any such request or demand, (f) that is or becomes available to the
public or that is or becomes available to any Lending Party other than as a
result of a disclosure by any Lending Party prohibited by this Credit Agreement,
(g) in connection with any litigation to which such Lending Party or any of its
affiliates may be a party, whether to defend itself, reduce its liability,
protect or exercise any of its claims, rights, remedies or interests under or in
connection with the Credit Documents or any Lender Hedging Agreement, or
otherwise, (h) to the extent necessary in connection with the exercise of any
remedy under this Credit Agreement or any other Credit Document, (i) subject to
provisions substantially similar to those contained in this Section 14.7, to any
actual or proposed participant or assignee and (j) to Gold Sheets and other
similar bank trade publications; such information to consist of deal terms and
other information customarily found in such publications. Each Borrower hereby
authorizes the Administrative Agent to use the name, logos and other insignia of
such Borrower and the amount of the credit facility provided hereunder in any
"tombstone" or comparable advertising, on its website or in other marketing
materials of the Administrative Agent.
14.8 PAYMENT OF EXPENSES; INDEMNIFICATION.
The Borrowers agree to pay all out-of-pocket costs and expenses
(including reasonable legal fees and expenses) of (i) the Agent in connection
with (A) the syndication, negotiation, preparation, execution, delivery,
administration and monitoring of this Credit Agreement and the other Credit
Documents and the documents and instruments referred to therein or executed in
connection therewith, including evaluating the compliance by the Credit Parties
with law and the provisions of such documents (including, without limitation,
the reasonable fees and expenses of special counsel to the Agent and the fees
and expenses of counsel for the Agent in connection with collateral issues and
all due diligence, appraisal, field exam, environmental audit and other similar
costs (including ongoing per diem and out of pocket expenses related to field
exams and appraisals)), and (B) any amendment, waiver or consent relating hereto
and thereto including, without limitation, any such amendments, waivers or
consents resulting from or related to any work-out, re-negotiation or
restructure relating to the performance by any of the Credit Parties under this
Credit Agreement or any other Credit Documents and (ii) the Agent and the
Lenders in connection with (A) enforcement of the Credit Documents and the
documents and instruments referred to therein or executed in connection
therewith, including but not limited to, any work-out, re-negotiation or
restructure relating to the performance by any of the Credit Parties under this
Credit Agreement or any other Credit Documents, including, without limitation,
in connection with any such enforcement, the reasonable fees and disbursements
of counsel for the Agent and each of the Lenders (including the allocated costs
of internal counsel), and the reasonable fees and expenses of a financial
consultant engaged by the Agent or its counsel in connection with the foregoing,
and (B) any investigation (including, without limitation, background checks)
performed to determine whether any Credit Party, or any officer, director
shareholder or Affiliate of a Credit Party has violated any Anti-Terrorism Law
or other similar law. The Borrowers shall indemnify, defend and hold harmless
the Agent, the Issuing Bank and each of the Lenders and their respective
directors, officers, agents, employees and counsel from and against (x) any and
all losses, claims, damages, liabilities, deficiencies, judgments or
110
expenses incurred by any of them (except to the extent that it is finally
judicially determined to have resulted from their own gross negligence or
willful misconduct) arising out of or by reason of any litigation,
investigation, claim or proceeding which arises out of or is in any way related
to (i) this Credit Agreement, any Letter of Credit or any other Credit Documents
or the transactions contemplated hereby or thereby, (ii) any actual or proposed
use by any Borrower of the proceeds of the Loans or (iii) the Agent's, the
Issuing Bank's or the Lenders' entering into this Credit Agreement, the other
Credit Documents or any other agreements and documents relating hereto,
including, without limitation, amounts paid in settlement, court costs and the
reasonable fees and disbursements of counsel incurred in connection with any
such litigation, investigation, claim or proceeding or any advice rendered in
connection with any of the foregoing and (y) any such losses, claims, damages,
liabilities, deficiencies, judgments or expenses incurred by any of them (except
to the extent that it is finally judicially determined to have resulted from
their own gross negligence or willful misconduct) in connection with any
remedial or other action taken by any Borrower or any of the Lenders in
connection with compliance by any Borrower or any of its Subsidiaries, or any of
their respective properties, with any federal, state or local environmental
laws, acts, rules, regulations, orders, directions, ordinances, criteria or
guidelines. If and to the extent that the obligations of any Borrower hereunder
are unenforceable for any reason, such Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of such obligations which
is permissible under applicable law. The Borrowers' obligations under this
Section 14.8 shall survive any termination of this Credit Agreement and the
other Credit Documents and the payment in full of the Obligations, and are in
addition to, and not in substitution of, any other of their Obligations set
forth in this Credit Agreement. In addition, the Borrowers shall, upon demand,
pay to the Agent and any Lender all costs and expenses (including the reasonable
fees and disbursements of counsel and other professionals) paid or incurred by
the Agent, the Issuing Bank or such Lender in (A) enforcing or defending its
rights under or in respect of this Credit Agreement, the other Credit Documents
or any other document or instrument now or hereafter executed and delivered in
connection herewith, (B) in collecting the Loans, (C) in foreclosing or
otherwise collecting upon the Collateral or any part thereof and (D) obtaining
any legal, accounting or other advice in connection with any of the foregoing.
14.9 ENTIRE AGREEMENT, SUCCESSORS AND ASSIGNS.
This Credit Agreement along with the other Credit Documents and the Fee
Letter constitutes the entire agreement among the Credit Parties, the Agent and
the Lenders, supersedes any prior agreements among them, and shall bind and
benefit the Credit Parties and the Lenders and their respective successors and
permitted assigns.
14.10 AMENDMENTS, ETC.
Neither the amendment or waiver of any provision of this Credit Agreement
or any other Credit Document, nor the consent to any departure by any Credit
Party therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders, or if the Lenders shall not be
parties thereto, by the parties thereto and consented to by the Required Lenders
and (so long as no Event of Default has occurred and is continuing) the Company,
and each such amendment, waiver or consent shall be effective only in the
specific instance and for
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the specific purpose for which given; provided that no amendment, waiver or
consent shall unless in writing and signed by all the Lenders (and in the case
of clause (e) below, with respect to Section 2.9, and clause (f) below, any
provider of a Lender Hedging Agreement), do any of the following:
(a) increase the Commitments of the Lenders or subject the Lenders
to any additional obligations;
(b) except as otherwise expressly provided in this Credit
Agreement, reduce the principal of, or interest on, any Note or any
Letter of Credit reimbursement obligations or any fees hereunder;
(c) postpone any date fixed for any payment or mandatory
prepayment in respect of principal of, or interest on, any Note or any
Letter of Credit reimbursement obligations or any fees hereunder;
(d) change the percentage of the Commitments, or any minimum
requirement necessary for the Lenders or the Required Lenders to take any
action hereunder;
(e) amend or waive Section 2.1(d)(vii), Section 2.8, Section 2.9
or this Section 14.10, or change the definition of Required Lenders;
(f) except as otherwise expressly provided in this Credit
Agreement, and other than in connection with the financing, refinancing,
sale or other disposition of any asset of the Credit Parties permitted
under this Credit Agreement, release any Liens in favor of the Lenders on
all or substantially all of the Collateral;
(g) except as expressly permitted hereunder, modify the definition
of Borrowing Base or any defined term or component set forth in the
definition thereof such that more credit would be available to the
Borrowers; provided, that (i) the foregoing shall not limit the
adjustment by the Agent of any reserve implemented by the Agent and (ii)
the foregoing shall not prevent the Agent from restoring any component of
the Borrowing Base which had been lowered by the Agent back to the value
of such component in effect on the Closing Date or to an intermediate
value; or
(h) agree to subordinate the priority of Liens on the Collateral
in favor of the Agent, for the benefit of the Lenders, in favor of any
other creditor of the Credit Parties and;
provided, further, that no amendment, waiver or consent affecting the rights or
duties of the Agent or the Issuing Bank under any Credit Document shall in any
event be effective, unless in writing and signed by the Agent and/or the Issuing
Bank, as applicable, in addition to the Lenders required hereinabove to take
such action.
Notwithstanding any of the foregoing to the contrary, the consent of the
Borrowers shall not be required for any amendment, modification or waiver of the
provisions of Article XIII
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(other than the provisions of Section 13.9). In addition, the Borrowers and the
Lenders hereby authorize the Agent to modify this Credit Agreement by
unilaterally amending or supplementing Schedule 1.1A from time to time in the
manner requested by the Borrowers, the Agent or any Lender in order to reflect
any assignments or transfers of the Loans as provided for hereunder; provided,
however, that the Agent shall promptly deliver a copy of any such modification
to the Borrowers and each Lender.
14.11 NONLIABILITY OF AGENT AND LENDERS.
The relationship between any Borrower on the one hand and the Lenders and
the Agent on the other hand shall be solely that of borrower and lender. Neither
the Agent nor any Lender shall have any fiduciary responsibilities to any
Borrower. Neither the Agent nor any Lender undertakes any responsibility to any
Borrower to review or inform such Borrower of any matter in connection with any
phase of such Borrower's business or operations.
14.12 INDEPENDENT NATURE OF LENDERS' RIGHTS.
The amounts payable at any time hereunder to each Lender on account of
such Lender's Loans and under any Note or Notes held by it shall be a separate
and independent debt.
14.13 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts and
by the different parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
14.14 EFFECTIVENESS.
This Credit Agreement shall become effective at such time when all of the
conditions set forth in Section 5.1 have been satisfied or waived by the Lenders
and it shall have been executed by each Borrower and the Agent, and the Agent
shall have received copies hereof (telefaxed or otherwise) which, when taken
together, bear the signatures of each Lender, and thereafter this Credit
Agreement shall be binding upon and inure to the benefit of each Credit Party,
the Agent and each Lender and their respective successors and assigns.
14.15 SEVERABILITY.
In case any provision in or obligation under this Credit Agreement or any
Notes or the other Credit Documents shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
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14.16 HEADINGS DESCRIPTIVE.
The headings of the several sections and subsections of this Credit
Agreement, and the Table of Contents, are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Credit Agreement.
14.17 MAXIMUM RATE.
Notwithstanding anything to the contrary contained elsewhere in this
Credit Agreement or in any other Credit Document, the Borrowers, the Agent and
the Lenders hereby agree that all agreements among them under this Credit
Agreement and the other Credit Documents, whether now existing or hereafter
arising and whether written or oral, are expressly limited so that in no
contingency or event whatsoever shall the amount paid, or agreed to be paid, to
the Agent or any Lender for the use, forbearance, or detention of the money
loaned to any Borrower and evidenced hereby or thereby or for the performance or
payment of any covenant or obligation contained herein or therein, exceed the
Highest Lawful Rate. If due to any circumstance whatsoever, fulfillment of any
provisions of this Credit Agreement or any of the other Credit Documents at the
time performance of such provision shall be due shall exceed the Highest Lawful
Rate, then, automatically, the obligation to be fulfilled shall be modified or
reduced to the extent necessary to limit such interest to the Highest Lawful
Rate, and if from any such circumstance any Lender should ever receive anything
of value deemed interest by applicable law which would exceed the Highest Lawful
Rate, such excessive interest shall be applied to the reduction of the principal
amount then outstanding hereunder or on account of any other then outstanding
Obligations and not to the payment of interest, or if such excessive interest
exceeds the principal unpaid balance then outstanding hereunder and such other
then outstanding Obligations, such excess shall be refunded to the applicable
Borrower. All sums paid or agreed to be paid to the Agent or any Lender for the
use, forbearance, or detention of the Obligations and other indebtedness of the
Borrowers to the Agent or any Lender shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of such indebtedness until payment in full so that the actual rate of
interest on account of all such indebtedness does not exceed the Highest Lawful
Rate throughout the entire term of such indebtedness. The terms and provisions
of this Section shall control every other provision of this Credit Agreement and
all agreements among the Borrowers, the Agent and the Lenders.
14.18 RIGHT OF SETOFF.
In addition to and not in limitation of all rights of offset that any
Lender or other holder of a Note may have under applicable law, each Lender
shall, if any Event of Default has occurred and is continuing and whether or not
such Lender or such holder has made any demand or the Obligations of any
Borrower are matured, have the right to appropriate and apply to the payment of
the Obligations of such Borrower all deposits (general or special, time or
demand, provisional or final) then or thereafter held by and other indebtedness
or property then or thereafter owing by such Lender or other holder, including,
without limitation, any and all amounts in the Cash Concentration Account. Any
amount received as a result of the exercise of such rights shall be reallocated
among the Lenders as set forth in Section 3.8.
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14.19 CONCERNING JOINT AND SEVERAL LIABILITY OF THE BORROWERS.
(a) Each of the Borrowers is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided
by the Lenders under this Credit Agreement, for the mutual benefit,
directly and indirectly, of each of the Borrowers and in consideration of
the undertakings of each of the Borrowers to accept joint and several
liability for the obligations of each of them.
(b) Each of the Borrowers jointly and severally hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers with
respect to the payment and performance of all of the Obligations, it
being the intention of the parties hereto that all the Obligations shall
be the joint and several obligations of each of the Borrowers without
preferences or distinction among them.
(c) If and to the extent that any of the Borrowers shall fail to
make any payment with respect to any of the Obligations as and when due
or to perform any of the Obligations in accordance with the terms
thereof, then in each such event, the other Borrowers will make such
payment with respect to, or perform, such Obligation.
(d) The obligations of each Borrower under the provisions of this
Section 14.19 constitute full recourse obligations of such Borrower,
enforceable against it to the full extent of its properties and assets,
irrespective of the validity, regularity or enforceability of this Credit
Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided herein, each Borrower
hereby waives notice of acceptance of its joint and several liability,
notice of any Loan made under this Credit Agreement, notice of occurrence
of any Event of Default, or of any demand for any payment under this
Credit Agreement, notice of any action at any time taken or omitted by
any Lender under or in respect of any of the Obligations, any requirement
of diligence and, generally, all demands, notices and other formalities
of every kind in connection with this Credit Agreement. Each Borrower
hereby assents to, and waives notice of, any extension or postponement of
the time for the payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or
acquiescence by any Lender at any time or times in respect of any default
by any Borrower in the performance or satisfaction of any term, covenant,
condition or provision of this Credit Agreement, any and all other
indulgences whatsoever by any Lender in respect of any of the
Obligations, and the taking, addition, substitution or release, in whole
or in part, at any time or times, of any security for any of the
Obligations or in part, at any time or times, of any security for any of
the Obligations or the addition, substitution or release, in whole or in
part, of any Borrower. Without limiting the generality of the foregoing,
each Borrower assents to any other action or delay in acting or failure
to act on the part of any Lender, including, without limitation, any
failure strictly or diligently to assert any right or to pursue any
remedy or to comply fully with the applicable laws or regulations
thereunder which might, but for the provisions of this Section 14.19,
afford grounds for terminating, discharging or relieving
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such Borrower, in whole or in part, from any of its obligations under
this Section 14.19, it being the intention of each Borrower that, so long
as any of the Obligations remain unsatisfied, the obligations of such
Borrower under this Section 14.19 shall not be discharged except by
performance and then only to the extent of such performance. The
Obligations of each Borrower under this Section 14.19 shall not be
diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with
respect to any Borrower or any Lender. The joint and several liability of
the Borrowers hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of
any Borrower or any Lender.
(f) The provisions of this Section 14.19 are made for the benefit
of the Lenders and their respective successors and assigns, and may be
enforced by any such Person from time to time against any of the
Borrowers as often as occasion therefor may arise and without requirement
on the part of any Lender first to marshal any of its claims or to
exercise any of its rights against any of the other Borrowers or to
exhaust any remedies available to it against any of the other Borrowers
or to resort to any other source or means of obtaining payment of any of
the Obligations or to elect any other remedy. The provisions of this
Section 14.19 shall remain in effect until all the Obligations shall have
been paid in full or otherwise fully satisfied. If at any time, any
payment, or any part thereof, made in respect of any of the Obligations,
is rescinded or must otherwise be restored or returned by any Lender upon
the insolvency, bankruptcy or reorganization of any of the Borrowers, or
otherwise, the provisions of this Section 14.19 will forthwith be
reinstated in effect, as though such payment had not been made.
(g) Notwithstanding any provision to the contrary contained herein
or in any other of the Credit Documents, to the extent the joint
obligations of a Borrower shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of
any applicable state or federal law relating to fraudulent conveyances or
transfers) then the obligations of each Borrower hereunder shall be
limited to the maximum amount that is permissible under applicable law
(whether federal or state and including, without limitation, the
Bankruptcy Code), after taking into account, among other things, such
Borrower's right of contribution and indemnification from each other
Credit Party under applicable law or the Contribution Agreement.
14.20 DELEGATION OF AUTHORITY.
Each Subsidiary Borrower and (by execution and delivery of the Guaranty
Agreement or of a joinder thereto and incorporation by reference therein) each
Guarantor hereby authorizes and appoints the Company and each of the Responsible
Officers of the Company, to be its attorneys ("its Attorneys") and in its name
and on its behalf and as its act and deed or otherwise to execute and deliver
all documents and carry out all such acts as are necessary or appropriate in
connection with borrowing Loans and the making of other extensions of credit
hereunder, the granting and perfection of security interests under the Security
Documents, and complying with the terms and provisions hereof and the other
Credit Documents. This delegation of authority
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and appointment shall be valid for the duration of the term of this Credit
Agreement; provided, however, that such delegation of authority and appointment
shall terminate automatically without any further act with respect to any
Responsible Officer if such Responsible Officer is no longer an employee of the
Company. Each Subsidiary Borrower and (by execution and delivery of the Guaranty
Agreement or of a joinder thereto and incorporation by reference therein) each
Guarantor hereby undertakes to ratify everything which any of its Attorneys
shall do in furtherance of this delegation of authority and appointment.
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IN WITNESS WHEREOF the parties hereto have caused this Credit Agreement
to be executed and delivered by their proper and duly authorized officers as of
the date set forth above.
BORROWERS: ▇▇▇▇▇▇▇ CABLE, INC.,
a Delaware corporation
By: /s/ G. ▇▇▇▇ ▇▇▇▇▇▇
-----------------------
Name: G. ▇▇▇▇ ▇▇▇▇▇▇
Title: CEO and President
OSWEGO WIRE INCORPORATED.,
a Texas corporation
By: /s/ G. ▇▇▇▇ ▇▇▇▇▇▇
-----------------------
Name: G. ▇▇▇▇ ▇▇▇▇▇▇
Title: CEO
CCI ENTERPRISES, INC.,
a Delaware corporation
By: /s/ G. ▇▇▇▇ ▇▇▇▇▇▇
----------------------
Name: G. ▇▇▇▇ ▇▇▇▇▇▇
Title: President
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AGENT AND LENDERS WACHOVIA BANK,
NATIONAL ASSOCIATION,
as Administrative Agent and as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Director
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NATIONAL CITY BUSINESS CREDIT, INC.,
as Syndication Agent and as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
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ING CAPITAL LLC,
as Syndication Agent and as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
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PNC BANK, NATIONAL ASSOCIATION,
as Documentation Agent and as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
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ASSOCIATED BANK,
NATIONAL ASSOCIATION,
as Documentation Agent and as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
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