EXHIBIT 10.39
CREDIT AGREEMENT
DATED AS OF MAY 9, 2003
Among
THE FINANCIAL INSTITUTIONS NAMED HEREIN
AS THE LENDERS
AND
WACHOVIA BANK, NATIONAL ASSOCIATION
AS THE AGENT
AND AS A CO-AGENT
AND
BANK OF AMERICA, N.A.
AS THE SYNDICATION AND CO-DOCUMENTATION AGENT
AND AS A CO-AGENT
BANC OF AMERICA SECURITIES LLC
AND
WACHOVIA SECURITIES, INC.
AS CO-ARRANGERS AND CO-BOOK RUNNERS,
AND
BANK ONE, NA
AND
FLEET CAPITAL CORPORATION
AS CO-DOCUMENTATION AGENTS
AND
SALTON, INC.
AS THE PARENT
AND
EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO
AS THE BORROWERS
and
EACH OF ITS OTHER SUBSIDIARIES THAT ARE SIGNATORIES HERETO
AS GUARANTORS
TABLE OF CONTENTS
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ARTICLE 1 LOANS AND LETTERS OF CREDIT.......................................................2
1.1 Total Facility........................................................................2
1.2 Revolving Loans.......................................................................2
1.3 Letters of Credit.....................................................................5
1.4 Bank Products.........................................................................9
ARTICLE 2 INTEREST AND FEES................................................................10
2.1 Interest.............................................................................10
2.2 Continuation and Conversion Elections................................................11
2.3 Maximum Interest Rate................................................................12
2.4 Closing Fee..........................................................................12
2.5 Unused Line Fee......................................................................12
2.6 Letter of Credit Fee.................................................................13
ARTICLE 3 PAYMENTS AND PREPAYMENTS.........................................................13
3.1 Revolving Loans......................................................................13
3.2 Termination of Facility..............................................................13
3.3 LIBOR Rate Loan Prepayments..........................................................14
3.4 Payments by the Borrowers............................................................14
3.5 Payments as Revolving Loans..........................................................14
3.6 Apportionment, Application and Reversal of Payments..................................14
3.7 Indemnity for Returned Payments......................................................15
3.8 Agent's and Lenders' Books and Records; Monthly Statements...........................16
ARTICLE 4 TAXES, YIELD PROTECTION AND ILLEGALITY...........................................16
4.1 Taxes................................................................................16
4.2 Illegality...........................................................................18
4.3 Increased Costs and Reduction of Return..............................................18
4.4 Funding Losses.......................................................................19
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TABLE OF CONTENTS
(continued)
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4.5 Inability to Determine Rates.........................................................20
4.6 Certificates of Agent................................................................20
4.7 Obligation to Mitigate...............................................................20
4.8 Survival.............................................................................21
ARTICLE 5 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES................................21
5.1 Books and Records....................................................................21
5.2 Financial Information................................................................21
5.3 Notices to the Lenders...............................................................25
5.4 Collateral Reporting.................................................................28
ARTICLE 6 GENERAL WARRANTIES AND REPRESENTATIONS...........................................29
6.1 Authorization, Validity, and Enforceability of this Agreement and the Loan Documents.29
6.2 Validity and Priority of Security Interest...........................................30
6.3 Organization and Qualification.......................................................30
6.4 Corporate Name; Prior Transactions...................................................30
6.5 Subsidiaries and Affiliates..........................................................30
6.6 Financial Statements and Projections.................................................30
6.7 Capitalization.......................................................................31
6.8 Solvency.............................................................................31
6.9 Debt.................................................................................31
6.10 Distributions........................................................................31
6.11 Real Estate; Leases..................................................................31
6.12 Proprietary Rights...................................................................32
6.13 Trade Names..........................................................................32
6.14 Litigation...........................................................................32
6.15 Labor Disputes.......................................................................32
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TABLE OF CONTENTS
(continued)
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6.16 Environmental Laws...................................................................33
6.17 No Violation of Law..................................................................34
6.18 No Default...........................................................................34
6.19 ERISA Compliance.....................................................................34
6.20 Taxes................................................................................35
6.21 Regulated Entities...................................................................35
6.22 Use of Proceeds; Margin Regulations..................................................35
6.23 Copyrights, Patents, Trademarks and Licenses, etc....................................35
6.24 No Material Adverse Change...........................................................36
6.25 Full Disclosure......................................................................36
6.26 Material Agreements..................................................................36
6.27 Bank Accounts........................................................................36
6.28 Governmental Authorization...........................................................36
6.29 Tax Shelter Regulations..............................................................36
ARTICLE 7 AFFIRMATIVE AND NEGATIVE COVENANTS...............................................37
7.1 Taxes and Other Obligations..........................................................37
7.2 Legal Existence and Good Standing; Name Changes......................................37
7.3 Compliance with Law and Agreements; Maintenance of Licenses..........................38
7.4 Maintenance of Property; Inspection of Property......................................38
7.5 Insurance............................................................................38
7.6 Insurance and Condemnation Proceeds..................................................39
7.7 Environmental Laws...................................................................40
7.8 Compliance with ERISA................................................................40
7.9 Mergers, Consolidations or Sales.....................................................40
7.10 Distributions; Capital Change; Restricted Investments................................42
7.11 [Intentionally Omitted.].............................................................42
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TABLE OF CONTENTS
(continued)
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7.12 Guaranties...........................................................................42
7.13 Debt.................................................................................42
7.14 Prepayment...........................................................................43
7.15 Transactions with Affiliates.........................................................43
7.16 Investment Banking and Finder's Fees.................................................43
7.17 Business Conducted...................................................................44
7.18 Liens................................................................................44
7.19 Sale and Leaseback Transactions......................................................44
7.20 New Subsidiaries.....................................................................44
7.21 Fiscal Year..........................................................................45
7.22 Capital Expenditures.................................................................45
7.23 Fixed Charge Coverage Ratio..........................................................45
7.24 Use of Proceeds......................................................................45
7.25 Cash Management......................................................................45
7.26 Restrictions on Pricing Adjustments..................................................46
7.27 Further Assurances...................................................................46
ARTICLE 8 CONDITIONS OF LENDING............................................................46
8.1 Conditions Precedent to Making of Loans on the Closing Date..........................46
8.2 Conditions Precedent to Each Loan....................................................48
8.3 Conditions Subsequent to Each Loan...................................................49
ARTICLE 9 DEFAULT; REMEDIES................................................................50
9.1 Events of Default....................................................................50
9.2 Remedies.............................................................................53
ARTICLE 10 TERM AND TERMINATION.............................................................55
10.1 Term and Termination.................................................................55
ARTICLE 11 AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS.....................55
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TABLE OF CONTENTS
(continued)
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11.1 Amendments and Waivers...............................................................55
11.2 Assignments; Participations..........................................................57
ARTICLE 12 THE AGENT........................................................................59
12.1 Appointment and Authorization........................................................59
12.2 Delegation of Duties.................................................................60
12.3 Liability of Agent...................................................................60
12.4 Reliance by Agent....................................................................60
12.5 Notice of Default....................................................................61
12.6 Credit Decision......................................................................61
12.7 Indemnification......................................................................62
12.8 Agent in Individual Capacity.........................................................62
12.9 Successor Agent......................................................................62
12.10 Withholding Tax......................................................................63
12.11 Collateral Matters...................................................................64
12.12 Restrictions on Actions by Lenders; Sharing of Payments..............................65
12.13 Agency for Perfection................................................................66
12.14 Payments by Agent to Lenders.........................................................66
12.15 Settlement...........................................................................67
12.16 Letters of Credit; Intra-Lender Issues...............................................70
12.17 Concerning the Collateral and the Related Loan Documents.............................72
12.18 Field Audit and Examination Reports; Disclaimer by Lenders...........................73
12.19 Relation Among Lenders...............................................................73
12.20 Additional Agents....................................................................73
ARTICLE 13 MISCELLANEOUS....................................................................74
13.1 No Waivers; Cumulative Remedies......................................................74
13.2 Severability.........................................................................74
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TABLE OF CONTENTS
(continued)
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13.3 Governing Law; Choice of Forum; Service of Process...................................74
13.4 Waiver of Jury Trial.................................................................75
13.5 Survival of Representations and Warranties...........................................76
13.6 Other Security and Guaranties........................................................76
13.7 Fees and Expenses....................................................................76
13.8 Notices..............................................................................77
13.9 Waiver of Notices....................................................................78
13.10 Binding Effect.......................................................................78
13.11 Indemnity of the Agent and the Lenders by the Borrowers..............................79
13.12 Limitation of Liability..............................................................80
13.13 Final Agreement......................................................................80
13.14 Counterparts.........................................................................80
13.15 Captions.............................................................................81
13.16 Right of Setoff......................................................................81
13.17 Confidentiality......................................................................81
13.18 Conflicts with Other Loan Documents..................................................82
13.19 The Administrative Borrower..........................................................83
ARTICLE 14 JOINT AND SEVERAL OBLIGATIONS....................................................83
14.1 All Obligations to Constitute Joint and Several Obligations..........................83
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ANNEXES, EXHIBITS AND SCHEDULES
ANNEX A DEFINED TERMS
EXHIBIT A FORM OF NOTICE OF BORROWING
EXHIBIT B FORM OF NOTICE OF CONTINUATION/CONVERSION
EXHIBIT C FINANCIAL STATEMENTS
EXHIBIT D FORM OF GUARANTOR JOINDER AGREEMENT
EXHIBIT E FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
EXHIBIT F FORM OF BORROWING BASE CERTIFICATE
SCHEDULE 1.2(a) - LENDERS' COMMITMENTS (ANNEX A - DEFINED TERMS)
SCHEDULE 6.3 - ORGANIZATION AND QUALIFICATIONS
SCHEDULE 6.4 - CORPORATE NAME; PRIOR TRANSACTIONS
SCHEDULE 6.5 - SUBSIDIARIES AND AFFILIATES
SCHEDULE 6.7 - CAPITALIZATION
SCHEDULE 6.9 - DEBT
SCHEDULE 6.11 - REAL ESTATE; LEASES
SCHEDULE 6.12 - PROPRIETARY RIGHTS
SCHEDULE 6.13 - TRADE NAMES
SCHEDULE 6.14 - LITIGATION
SCHEDULE 6.15 - LABOR DISPUTES
SCHEDULE 6.16(a) - ENVIRONMENTAL LAWS AND COMPLIANCE
SCHEDULE 6.16(f) - ENVIRONMENTAL DISCLOSURE
SCHEDULE 6.26 - MATERIAL AGREEMENTS
SCHEDULE 6.27 - BANK ACCOUNTS
SCHEDULE 6.28 - AUTHORIZATIONS
SCHEDULE 7.16 - FEES/COMMISSIONS
SCHEDULE 9.1(f) - JUDGMENTS
SCHEDULE E-1 LOCATIONS OF ELIGIBLE LANDED INVENTORY
(ANNEX A DEFINED TERMS)
CREDIT AGREEMENT
This Credit Agreement, dated as of May 9, 2003 (this "Agreement"),
among the financial institutions from time to time parties hereto (such
financial institutions, together with their respective successors and assigns,
are referred to hereinafter each individually as a "Lender" and collectively as
the "Lenders"), WACHOVIA BANK, NATIONAL ASSOCIATION, with an office at 000
Xxxxxxxxx Xxxxxx, XX, Xxxxxxx, Xxxxxxx 00000-0000, as administrative agent and
collateral agent for the Lenders (the "Agent") and as a co-agent, BANK OF
AMERICA, N.A. with an office at 000 Xxxxx XxXxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000, as syndication agent and co-documentation agent for the Lenders
(in its capacity as agent, the "Documentation Agent") and as a co-agent, BANC OF
AMERICA SECURITIES LLC, as co-arranger and co-book runner and WACHOVIA
SECURITIES, INC., as co-arranger and co-book runner, BANK ONE, NA and FLEET
CAPITAL CORPORATION, each as co-documentation agents, SALTON, INC., a Delaware
corporation, with offices at 0000 Xxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxx 00000 (the
"Parent"), each of the Parent's Subsidiaries identified on the signature pages
hereof as Borrowers and each of the Parent's other Subsidiaries identified on
the signature pages hereof as Guarantors.
W I T N E S S E T H:
WHEREAS, the Borrowers have requested the Lenders to make available to
the Borrowers a revolving line of credit for loans and letters of credit in an
amount not to exceed $275,000,000, and which extension of credit the Borrowers
will use for the purposes permitted hereunder;
WHEREAS, capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed thereto in Annex A which is
attached hereto and incorporated herein; the rules of construction contained
therein shall govern the interpretation of this Agreement, and all Annexes,
Exhibits and Schedules attached hereto are incorporated herein by reference;
WHEREAS, the Lenders have agreed to make available to the Borrowers a
revolving credit facility upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Lenders, the Agent, and the
Borrowers hereby agree as follows.
ARTICLE 1
LOANS AND LETTERS OF CREDIT
1.1 Total Facility. Subject to all of the terms and conditions of this
Agreement, the Lenders agree to make available a total credit facility of up to
$275,000,000 (the "Total Facility") to the Borrowers from time to time during
the term of this Agreement. The Total Facility shall be composed of a revolving
line of credit consisting of Revolving Loans and Letters of Credit.
1.2 Revolving Loans.
(a) Amounts. Subject to the satisfaction of the conditions precedent
set forth in Article 8, each Lender severally, but not jointly, agrees, upon the
Administrative Borrower's request from time to time on any Business Day during
the period from the Closing Date to the Termination Date, to make revolving
loans (the "Revolving Loans") to the Borrowers in amounts not to exceed such
Lender's Pro Rata Share of Availability, except for Non-Ratable Loans and Agent
Advances. The Lenders, however, in their unanimous discretion, may elect to make
Revolving Loans or issue or arrange to have issued Letters of Credit in excess
of the Borrowing Base on one or more occasions, but if they do so, neither the
Agent nor the Lenders shall be deemed thereby to have changed the limits of the
Borrowing Base or to be obligated to exceed such limits on any other occasion.
If any Borrowing would exceed Availability, the Lenders may refuse to make or
may otherwise restrict the making of Revolving Loans as the Lenders determine
until such excess has been eliminated, subject to the Agent's authority, in its
sole discretion, to make Agent Advances pursuant to the terms of Section 1.2(i).
(b) Procedure for Borrowing.
(1) Each Borrowing shall be made upon the Administrative Borrower's
written notice delivered, on behalf of the Borrowers, to the Agent a notice of
borrowing in the form attached hereto as Exhibit A ("Notice of Borrowing"),
which must be received by the Agent prior to (i) 11:00 a.m. (Atlanta, Georgia
time) three (3) Business Days prior to the requested Funding Date, in the case
of LIBOR Rate Loans and (ii) 11:00 a.m. (Atlanta, Georgia time) on the requested
Funding Date, in the case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which in the case of a LIBOR
Rate Loan must equal or exceed $5,000,000 and increments of $1,000,000
in excess of such amount;
(B) the requested Funding Date, which must be a Business Day;
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(C) whether the Revolving Loans requested are to be Base Rate
Loans or LIBOR Rate Loans (and if not specified, it shall be deemed a
request for a Base Rate Loan); and
(D) the duration of the Interest Period for LIBOR Rate Loans
(and if not specified, it shall be deemed a request for an Interest
Period of one month);
provided, however, that with respect to the Borrowing to be made on the Closing
Date, such Borrowings will consist of Base Rate Loans only.
(2) In lieu of delivering a Notice of Borrowing, the Administrative
Borrower, on behalf of the Borrowers, may give the Agent telephonic notice of
such request for advances to the Designated Account on or before the deadline
set forth above; provided, that the Administrative Borrower shall promptly
deliver written confirmation of such telephonic notice to the Agent; provided,
further, that the Agent at all times shall be entitled to rely on such
telephonic notice in making such Revolving Loans, regardless of whether any
written confirmation is received.
(3) The Borrowers shall have no right to request a LIBOR Rate Loan
while a Default or Event of Default has occurred and is continuing.
(c) Reliance upon Authority. Prior to the Closing Date, the
Administrative Borrower shall deliver to the Agent, on behalf of the Borrowers,
a notice setting forth the account of the Administrative Borrower (the
"Designated Account") to which the Agent is authorized to transfer the proceeds
of the Revolving Loans requested hereunder. The Administrative Borrower may
designate a replacement account from time to time by written notice. All such
Designated Accounts must be reasonably satisfactory to the Agent. The Agent is
entitled to rely conclusively on any person's request for Revolving Loans on
behalf of the Borrowers, so long as the proceeds thereof are to be transferred
to the Designated Account. The Agent has no duty to verify the identity of any
individual representing himself or herself as a person authorized by the
Administrative Borrower to make such requests on its behalf.
(d) No Liability. The Agent shall not incur any liability to the
Borrowers as a result of acting upon any notice referred to in Sections 1.2(b)
and (c), which the Agent believes in good faith to have been given by an officer
or other person duly authorized by the Administrative Borrower to request
Revolving Loans on its behalf. The crediting of Revolving Loans to the
Designated Account conclusively establishes the joint and several obligation of
the Borrowers to repay such Revolving Loans as provided herein.
(e) Notice Irrevocable. Except as provided in Section 4.5, any Notice
of Borrowing (or telephonic notice in lieu thereof) made pursuant to Section
1.2(b) shall
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be irrevocable. The Borrowers shall be bound to borrow the funds requested
therein in accordance therewith.
(f) Agent's Election. Promptly after receipt of a Notice of Borrowing
(or telephonic notice in lieu thereof), the Agent shall elect to have the terms
of Section 1.2(g) or the terms of Section 1.2(h) apply to such requested
Borrowing. If the Agent declines in its sole discretion to make a Non-Ratable
Loan pursuant to Section 1.2(h), the terms of Section 1.2(g) shall apply to the
requested Borrowing.
(g) Making of Revolving Loans. If Agent elects to have the terms of
this Section 1.2(g) apply to a requested Borrowing, then promptly after receipt
of a Notice of Borrowing or telephonic notice in lieu thereof, the Agent shall
notify the Lenders by telecopy, telephone or e-mail of the requested Borrowing.
Each Lender shall transfer its Pro Rata Share of the requested Borrowing to the
Agent in immediately available funds, to the account from time to time
designated by the Agent not later than 12:00 noon (Atlanta, Georgia time) on the
applicable Funding Date. After the Agent's receipt of all proceeds of such
Revolving Loans, the Agent shall make the proceeds of such Revolving Loans
available to the Borrowers on the applicable Funding Date by transferring same
day funds to the account designated by the Borrower; provided, however, that the
amount of Revolving Loans so made on any date shall not exceed the Availability
on such date.
(h) Making of Non-Ratable Loans.
(A) If Agent elects to have the terms of this Section 1.2(h)
apply to a requested Borrowing, the Agent shall make a Revolving Loan
in the amount of that Borrowing available to the Borrowers on the
applicable Funding Date by transferring same day funds to
Administrative Borrower's Designated Account. Each Revolving Loan made
solely by the Agent pursuant to this Section is herein referred to as a
"Non-Ratable Loan", and such Revolving Loans are collectively referred
to as the "Non-Ratable Loans." Each Non-Ratable Loan shall be subject
to all the terms and conditions applicable to other Revolving Loans
except that all payments thereon shall be payable to the Agent solely
for its own account. The aggregate amount of Non-Ratable Loans
outstanding at any time shall not exceed $10,000,000. The Agent shall
not make any Non-Ratable Loan if (1) the Agent has received written
notice from any Lender that one or more of the applicable conditions
precedent set forth in Article 8 will not be satisfied on the requested
Funding Date for the applicable Borrowing, or (2) the requested
Borrowing would exceed Availability on that Funding Date.
(B) The Non-Ratable Loans shall be secured by the Agent's
Liens in and to the Collateral and shall constitute Base Rate Loans and
Obligations hereunder.
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(i) Agent Advances.
(A) Subject to the limitations set forth below, the
Agent is authorized by the Borrowers and the Lenders, from
time to time in the Agent's sole discretion, (A) after the
occurrence of a Default or an Event of Default, or (B) at any
time that any of the other conditions precedent set forth in
Article 8 have not been satisfied, to make Base Rate Loans to
the Borrowers on behalf of the Lenders in an aggregate amount
outstanding at any time not to exceed 10% of the Borrowing
Base, but, together with all other Revolving Loans and Letters
of Credit outstanding, not in excess of the Maximum Revolver
Amount, which the Agent, in its reasonable business judgment,
deems necessary or desirable (1) to preserve or protect the
Collateral, or any portion thereof, (2) to enhance the
likelihood of, or maximize the amount of, repayment of the
Loans and other Obligations, or (3) to pay any other amount
chargeable to the Borrowers pursuant to the terms of this
Agreement, including costs, fees and expenses as described in
Section 13.7 (any of such advances are herein referred to as
"Agent Advances"); provided, that the Majority Lenders may at
any time revoke the Agent's authorization to make Agent
Advances. Any such revocation must be in writing and shall
become effective prospectively upon the Agent's receipt
thereof.
(B) The Agent Advances shall be secured by the
Agent's Liens in and to the Collateral and shall constitute
Base Rate Loans and Obligations hereunder.
1.3 Letters of Credit.
(a) Agreement to Issue or Cause To Issue. Subject to the terms and
conditions of this Agreement, the Agent agrees (i) to cause a Letter of Credit
Issuer to issue for the account of the Borrowers one or more commercial/
documentary and standby letters of credit (each a "Letter of Credit") and/or
(ii) to provide credit support or other enhancement to a Letter of Credit Issuer
reasonably acceptable to Agent, which Letter of Credit Issuer issues a Letter of
Credit for the account of the Borrowers (any such credit support or enhancement
being herein referred to as a "Credit Support") from time to time during the
term of this Agreement.
(b) Amounts; Outside Expiration Date. The Agent shall not have any
obligation to issue or cause to be issued any Letter of Credit or to provide
Credit Support for any Letter of Credit at any time if: (i) the maximum face
amount of the requested Letter of Credit is greater than the Unused Letter of
Credit Subfacility at such time; (ii) the maximum undrawn amount of the
requested Letter of Credit and all commissions, fees, and charges due from the
Borrowers in connection with the opening thereof would exceed Availability at
such time; or (iii) such Letter of Credit has an expiration date less than
thirty (30) days prior to the Stated Termination Date or more than twelve (12)
months from the date of issuance for standby letters of credit and one hundred
eighty (180) days for documentary letters of credit. With respect to any Letter
of Credit which contains any "evergreen" or automatic renewal provision, each
Lender shall be deemed to
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have consented to any such extension or renewal unless any such Lender shall
have provided to the Agent, written notice that it declines to consent to any
such extension or renewal at least thirty (30) days prior to the date on which
the Letter of Credit Issuer is entitled to decline to extend or renew the Letter
of Credit. If all of the requirements of this Section 1.3 are met and no Default
or Event of Default has occurred and is continuing, no Lender shall decline to
consent to any such extension or renewal.
(c) Other Conditions. In addition to conditions precedent contained in
Article 8, the obligation of the Agent to issue or to cause to be issued any
Letter of Credit or to provide Credit Support for any Letter of Credit is
subject to the following conditions precedent having been satisfied in a manner
reasonably satisfactory to the Agent:
(1) The Administrative Borrower shall have delivered to the
Letter of Credit Issuer, at such times and in such manner as such
Letter of Credit Issuer may prescribe, an application in form and
substance reasonably satisfactory to such Letter of Credit
reasonably satisfactory to the Agent for the issuance of the Letter of
Credit and such other documents as may be required pursuant to the
terms thereof, and the form, terms and purpose of the proposed Letter
of Credit shall be reasonably satisfactory to the Agent and the Letter
of Credit Issuer; and
(2) As of the date of issuance, no order of any court,
arbitrator or Governmental Authority shall purport by its terms to
enjoin or restrain money center banks generally from issuing letters of
credit of the type and in the amount of the proposed Letter of Credit,
and no law, rule or regulation applicable to money center banks
generally and no request or directive (whether or not having the force
of law) from any Governmental Authority with jurisdiction over money
center banks generally shall prohibit, or request that the proposed
Letter of Credit Issuer refrain from, the issuance of letters of credit
generally or the issuance of such Letters of Credit.
(d) Issuance of Letters of Credit.
(1) Request for Issuance. The Borrowers must notify the Agent
of a requested Letter of Credit at least three (3) Business Days prior
to the proposed issuance date. Such notice, which shall be given by the
Administrative Borrower, shall be irrevocable and must specify the
original face amount of the Letter of Credit requested, the Business
Day of issuance of such requested Letter of Credit, whether such Letter
of Credit may be drawn in a single or in partial draws, the Business
Day on which the requested Letter of Credit is to expire, the purpose
for which such Letter of Credit is to be issued, and the beneficiary of
the requested Letter of Credit. The Administrative Borrower shall
attach to such notice the proposed form of the Letter of Credit.
(2) Responsibilities of the Agent; Issuance. As of the
Business Day immediately preceding the requested issuance date of the
Letter of Credit, the Agent shall determine the amount of the
applicable Unused Letter of Credit Subfacility and
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Availability. If (i) the face amount of the requested Letter of Credit
is less than the Unused Letter of Credit Subfacility and (ii) the
amount of such requested Letter of Credit and all commissions, fees,
and charges due from the Borrowers in connection with the opening
thereof would not exceed Availability, the Agent shall cause the Letter
of Credit Issuer to issue the requested Letter of Credit on the
requested issuance date so long as the other conditions hereof are met.
(3) No Extensions or Amendment. The Agent shall not be
obligated to cause the Letter of Credit Issuer to extend or amend any
Letter of Credit issued pursuant hereto unless the requirements of this
Section 1.3 are met as though a new Letter of Credit were being
requested and issued.
(e) Payments Pursuant to Letters of Credit. The Borrowers agree to
reimburse immediately the Letter of Credit Issuer for any draw under any Letter
of Credit and the Agent for the account of the Lenders upon any payment pursuant
to any Credit Support, and to pay the Letter of Credit Issuer the amount of all
other charges and fees payable to the Letter of Credit Issuer in connection with
any Letter of Credit immediately when due, irrespective of any claim, setoff,
defense or other right which the Borrowers may have at any time against the
Letter of Credit Issuer or any other Person. Each drawing under any Letter of
Credit shall constitute a request by the Borrowers to the Agent for a Borrowing
of a Base Rate Loan in the amount of such drawing. The Funding Date with respect
to such borrowing shall be the date of such drawing.
(f) Indemnification; Exoneration; Power of Attorney.
(1) Indemnification. In addition to amounts payable as
elsewhere provided in this Section 1.3, the Borrowers agree to protect,
indemnify, pay and save the Lenders and the Agent harmless from and
against any and all claims, demands, liabilities, damages, losses,
costs, charges and expenses (including reasonable attorneys' fees)
which any Lender or the Agent (other than a Lender in its capacity as
Letter of Credit Issuer) may incur or be subject to as a consequence,
direct or indirect, of the issuance of any Letter of Credit or the
provision of any Credit Support or enhancement in connection therewith,
other than as a result of the gross negligence or willful misconduct of
the Letter of Credit Issuer. The Borrowers' obligations under this
Section shall survive payment of all other Obligations.
(2) Assumption of Risk by the Borrowers. As among the
Borrowers, the Lenders, and the Agent, the Borrowers assume all risks
of the acts and omissions of, or misuse of any of the Letters of Credit
by, the respective beneficiaries of such Letters of Credit provided
that acts or omissions of the Letter of Credit Issuer or the Agent are
done in the absence of gross negligence or willful misconduct. In
furtherance and not in limitation of the foregoing, the Lenders and the
Agent shall not be responsible for: (A) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any Person in connection with the application for and
issuance of and presentation of drafts with respect to any of the
Letters of Credit, even if it should
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prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) 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, which may prove to be invalid or
ineffective for any reason; (C) the failure of the beneficiary of any
Letter of Credit to comply duly with conditions required in order to
draw upon such Letter of Credit; (D) 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; (E)
errors in interpretation of technical terms; (F) any loss or delay in
the transmission or otherwise of any document required in order to make
a drawing under any Letter of Credit or of the proceeds thereof; (G)
the misapplication by the beneficiary of any Letter of Credit of the
proceeds of any drawing under such Letter of Credit; (H) any
consequences arising from causes beyond the control of the Lenders or
the Agent, including any act or omission, whether rightful or wrongful,
of any present or future de jure or de facto Governmental Authority or
(I) any Letter of Credit Issuer's honor of a draw for which the draw or
any certificate fails to comply in any respect with the terms of any
Letter of Credit. None of the foregoing shall affect, impair or prevent
the vesting of any rights or powers of the Agent or any Lender under
this Section 1.3(f).
(3) Exoneration. Without limiting the foregoing, no action or
omission whatsoever by the Agent or any Lender (excluding any Lender in
its capacity as a Letter of Credit Issuer) shall result in any
liability of the Agent or any Lender to the Borrowers, except for
actions or omissions resulting from the gross negligence or willful
misconduct of the Agent or any Lender, or relieve any Borrower of any
of its obligations hereunder to any such Person.
(4) Rights Against Letter of Credit Issuer. Nothing contained
in this Agreement is intended to limit the Borrowers' rights, if any,
with respect to any Letter of Credit Issuer which arise as a result of
the letter of credit application and related documents executed by and
between any Borrower and any Letter of Credit Issuer.
(5) Account Party. The Borrowers hereby authorize and direct
any Letter of Credit Issuer to name any Borrower designated by the
Administrative Borrower or the Borrowers, or in the absence of such
designation, the Administrative Borrower, as the "Account Party"
therein and to deliver to the Agent all instruments, documents and
other writings and property received by such Letter of Credit Issuer
pursuant to any Letters of Credit, and to accept and rely upon the
Agent's instructions and agreements with respect to all matters arising
in connection with the Letters of Credit or the application therefor.
(g) Supporting Letter of Credit; Cash Collateral. If, notwithstanding
the provisions of Section 1.3(b) and Section 10.1, any Letter of Credit or
Credit Support is outstanding upon the termination of this Agreement, then upon
such termination the Borrowers shall deposit with the Agent, for the ratable
benefit of the Agent and the
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Lenders, with respect to each Letter of Credit or Credit Support then
outstanding, a letter of credit (a "Supporting Letter of Credit") in form and
substance satisfactory to the Agent, issued by an issuer satisfactory to the
Agent, in an amount equal to the greater of (x) one hundred five percent (105%)
of the aggregate face value of the then existing Letters of Credit, or (y) the
maximum amount for which such Letter of Credit or such Credit Support may be
drawn plus any fees and expenses associated with such Letter of Credit or such
Credit Support; provided that in the event the Borrowers demonstrate to the
reasonable satisfaction of the Agent the inability of the Borrowers, or any of
them, to obtain a Supporting Letter of Credit, then the Borrowers may deposit
with the Agent, for the ratable benefit of the Agent and the Lenders, with
respect to each Letter of Credit or Credit Support then outstanding, cash
collateral pursuant to documentation reasonably acceptable to the Agent, in an
amount equal to the greater of (x) one hundred five percent (105%) of the
aggregate face value of the then existing Letters of Credit, or (y) the maximum
amount for which such Letter of Credit or such Credit Support may be drawn plus
any fees and expenses associated with such Letter of Credit or such Credit
Support. The Agent is entitled to use such cash collateral or draw all amounts
under the Supporting Letter of Credit, as applicable, as is necessary to
reimburse the Agent and the Lenders for payments to be made by the Agent and the
Lenders under such Letter of Credit or Credit Support and any fees and expenses
associated with such Letter of Credit or Credit Support. Such cash collateral or
Supporting Letter of Credit, as applicable, shall be held by the Agent, for the
ratable benefit of the Agent and the Lenders, as security for, and to provide
for the payment of, the aggregate undrawn amount of such Letters of Credit or
such Credit Support remaining outstanding.
1.4 Bank Products. The Borrowers may request and either Bank may, in
its sole and absolute discretion, arrange for the Borrowers to obtain from the
Banks or any Bank's Affiliates Bank Products although no Borrower is required to
do so. If Bank Products are provided by an Affiliate of a Bank, the Borrowers
agree to indemnify and hold the Agent, the applicable Bank and the Lenders
harmless from any and all costs and obligations now or hereafter incurred by the
Agent, such Bank or any of the Lenders which arise from any indemnity given by
the Agent and/or the applicable Bank to any of their Affiliates related to such
Bank Products; provided, however, nothing contained herein is intended to limit
the Borrowers' rights, with respect to the Banks or any of their respective
Affiliates, if any, which arise as a result of the execution of documents by and
among the Borrowers and the Banks, or any of them, which relate to Bank
Products. The agreement contained in this Section shall survive termination of
this Agreement. The Borrowers acknowledge and agree that the obtaining of Bank
Products from any Bank or any Bank's Affiliates (a) is in the sole and absolute
discretion of such Bank or such Bank's Affiliates, and (b) is subject to all
rules and regulations of such Bank or such Bank's Affiliates.
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ARTICLE 2
INTEREST AND FEES
2.1 Interest.
(a) Interest Rates. All outstanding Obligations shall bear interest on
the unpaid principal amount thereof (including, to the extent permitted by law,
on interest thereon not paid when due) from the date made until paid in full in
cash at a rate determined by reference to the Base Rate or the LIBOR Rate plus
the Applicable Margins as set forth below, but not to exceed the Maximum Rate.
If at any time Loans are outstanding with respect to which the Administrative
Borrower, on behalf of the Borrowers, has not delivered to the Agent a notice
specifying the basis for determining the interest rate applicable thereto in
accordance herewith, those Loans shall bear interest at a rate determined by
reference to the Base Rate until notice to the contrary has been given to the
Agent in accordance with this Agreement and such notice has become effective.
Except as otherwise provided herein, the outstanding Obligations shall bear
interest as follows:
(i) For all Base Rate Loans and other Obligations (other than
LIBOR Rate Loans), at a fluctuating per annum rate equal to the Base Rate plus
the Applicable Margin; and
(ii) For all LIBOR Rate Loans, at a per annum rate equal to
the LIBOR Rate plus the Applicable Margin.
Each change in the Base Rate shall be reflected in the interest rate applicable
to Base Rate Loans as of the effective date of such change. All interest charges
shall be computed on the basis of a year of three hundred sixty (360) days and
actual days elapsed (which results in more interest being paid than if computed
on the basis of a three hundred and sixty-five (365) day year). The Borrowers
shall pay to the Agent, for the ratable benefit of Lenders, interest accrued on
all Base Rate Loans in arrears on the first day of each month hereafter and on
the Termination Date. The Borrowers shall pay to the Agent, for the ratable
benefit of Lenders, interest on all LIBOR Rate Loans in arrears on each LIBOR
Interest Payment Date.
(b) Default Rate. If any Default or Event of Default occurs and is
continuing and the Agent or the Required Lenders in their discretion so elect,
then, while any such Default or Event of Default is continuing, all of the
Obligations shall bear interest at the Default Rate applicable thereto;
provided, however, that the Obligations shall bear interest at the Default Rate
applicable thereto without notice or action by the Agent or the Required Lenders
upon a Default or Event of Default arising under Section 9.1(e) or Section
9.1(f).
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2.2 Continuation and Conversion Elections.
(a) The Borrowers may:
(i) elect, as of any Business Day, in the case of Base Rate
Loans to convert any Base Rate Loans (or any part thereof in an amount not less
than $5,000,000 or that is in an integral multiple of $1,000,000 in excess
thereof) into LIBOR Rate Loans; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any LIBOR Rate Loans having Interest Periods expiring on
such day (or any part thereof in an amount not less than $1,000,000, or that is
in an integral multiple of $1,000,000 in excess thereof); provided, that if at
any time the aggregate amount of LIBOR Rate Loans in respect of any Borrowing is
reduced, by payment, prepayment, or conversion of part thereof to be less than
$1,000,000, such LIBOR Rate Loans shall automatically convert into Base Rate
Loans; provided further that if the notice shall fail to specify the duration of
the Interest Period, such Interest Period shall be one month.
(b) The Administrative Borrower, on behalf of the Borrowers, shall
deliver a notice of continuation/conversion in the form attached hereto as
Exhibit B ("Notice of Continuation/Conversion") to the Agent not later than
11:00 a.m. (Atlanta, Georgia time) at least three (3) Business Days in advance
of the Continuation/Conversion Date, if the Loans are to be converted into or
continued as LIBOR Rate Loans and specifying:
(1) the proposed Continuation/Conversion Date;
(2) the aggregate amount of Loans to be converted or renewed;
(3) the type of Loans resulting from the proposed conversion
or continuation; and
(4) the duration of the requested Interest Period, provided,
however, the Borrowers may not select an Interest Period that ends after the
Stated Termination Date.
(c) If upon the expiration of any Interest Period applicable to LIBOR
Rate Loans, the Borrowers have failed to continue the applicable LIBOR Rate
Loans or if any Default or Event of Default has occurred and is continuing, the
Borrowers shall be deemed to have elected to convert such LIBOR Rate Loans into
Base Rate Loans effective as of the expiration date of such Interest Period.
(d) The Agent will promptly notify each Lender of its receipt of a
Notice of Continuation/Conversion. All conversions and continuations shall be
made
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ratably according to the respective outstanding principal amounts of the Loans
held by each Lender with respect to which the notice was given.
(e) There may not be more than eight (8) different LIBOR Rate Loans in
effect hereunder at any time.
2.3 Maximum Interest Rate. In no event shall any interest rate provided
for hereunder exceed the maximum rate legally chargeable by any Lender under
applicable law for such Lender with respect to loans of the type provided for
hereunder (the "Maximum Rate"). If, in any month, any interest rate, absent such
limitation, would have exceeded the Maximum Rate, then the interest rate for
that month shall be the Maximum Rate, and, if in future months, that interest
rate would otherwise be less than the Maximum Rate, then that interest rate
shall remain at the Maximum Rate until such time as the amount of interest paid
hereunder equals the amount of interest which would have been paid if the same
had not been limited by the Maximum Rate. In the event that, upon payment in
full of the Obligations, the total amount of interest paid or accrued under the
terms of this Agreement is less than the total amount of interest which would,
but for this Section 2.3, have been paid or accrued if the interest rate
otherwise set forth in this Agreement had at all times been in effect, then the
Borrowers shall, to the extent permitted by applicable law, pay the Agent, for
the account of the Lenders, an amount equal to the excess of (a) the lesser of
(i) the amount of interest which would have been charged if the Maximum Rate
had, at all times, been in effect or (ii) the amount of interest which would
have accrued had the interest rate otherwise set forth in this Agreement, at all
times, been in effect over (b) the amount of interest actually paid or accrued
under this Agreement. If a court of competent jurisdiction determines that the
Agent and/or any Lender has received interest and other charges hereunder in
excess of the Maximum Rate, such excess shall be deemed received on account of,
and shall automatically be applied to reduce, the Obligations other than
interest, in the inverse order of maturity, and if there are no Obligations
outstanding, the Agent and/or such Lender shall refund to the Borrowers such
excess.
2.4 Closing Fee. The Borrowers agree to pay the Agent on the Closing
Date certain fees (the "Closing Fees") as set forth in the fee letter dated as
of the Closing Date, among the Co-Agents and the Borrowers.
2.5 Unused Line Fee. On the first day of each month and on the
Termination Date, the Borrowers agree to pay to the Agent, for the account of
the Lenders, in accordance with their respective Pro Rata Shares, an unused line
fee (the "Unused Line Fee") equal to three-eighths of one percent (0.375%) per
annum times the amount by which the Maximum Revolver Amount exceeded the sum of
the average daily outstanding amount of Revolving Loans and the average daily
undrawn face amount of outstanding Letters of Credit, during the immediately
preceding month or shorter period if calculated for the first month hereafter or
on the Termination Date. The Unused Line Fee shall be computed on the basis of a
360-day year for the actual number of days
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elapsed. All principal payments received by the Agent shall be deemed to be
credited to the Borrowers' Loan Account immediately upon receipt for purposes of
calculating the Unused Line Fee pursuant to this Section 2.5.
2.6 Letter of Credit Fee. The Borrowers agree to pay, for each Letter
of Credit, (a) to the Agent, for the account of the Lenders, in accordance with
their respective Pro Rata Shares, a fee (the "Letter of Credit Fee") equal to a
per annum rate in the amount of the Applicable Margin for LIBOR Rate Loans then
in effect, (b) to Agent for the benefit of the Letter of Credit Issuer, a
fronting fee of one-eighth of one percent (0.125%) per annum of the undrawn face
amount of each Letter of Credit, and (c) to the Letter of Credit Issuer, such
normal and customary costs, fees and expenses incurred by the Letter of Credit
Issuer in connection with the application for, processing of, issuance of,
extension of, or amendment to any Letter of Credit. The Letter of Credit Fee
shall be payable monthly in arrears on the first day of each month following any
month in which a Letter of Credit is outstanding and on the Termination Date.
The Letter of Credit Fee shall be computed on the basis of a 360-day year for
the actual number of days elapsed.
ARTICLE 3
PAYMENTS AND PREPAYMENTS
3.1 Revolving Loans. The Borrowers shall repay the outstanding
principal balance of the Revolving Loans, plus all accrued but unpaid interest
thereon, on the Termination Date. The Borrowers may prepay Revolving Loans at
any time, and reborrow subject to the terms of this Agreement. In addition, and
without limiting the generality of the foregoing, upon demand the Borrowers
shall pay to the Agent, for account of the Lenders, the amount, without
duplication, by which the Aggregate Revolver Outstandings exceeds the lesser of
the Borrowing Base or the Maximum Revolver Amount. Any prepayment shall not
affect the obligations of any Borrower Party to continue making payments under
any swap agreement (as defined in 11 F.S.C. Section 101) or Hedge Agreement,
which shall remain in full force and effect notwithstanding such prepayment,
subject to the terms of such swap agreement.
3.2 Termination of Facility. The Borrowers may terminate this Agreement
upon at least ten (10) Business Days' notice to the Agent and the Lenders, upon
(a) the payment in full of all outstanding Revolving Loans, together with
accrued interest thereon, and (i) the cancellation and return of Letters of
Credit then outstanding or (ii) the delivery of a Supporting Letter of Credit
(or the deposit of cash collateral, if applicable) in accordance with the
provisions of Section 1.3(g), (b) the payment of the early termination fee set
forth below, as applicable, (c) the payment in full in cash of all reimbursable
expenses and other Obligations, and (d) with respect to any LIBOR Rate Loans
prepaid, payment of the amounts due under Section 4.4, if any. If this Agreement
is terminated at any time prior to the First Anniversary of the Closing Date,
whether pursuant to this Section or pursuant to Section 9.2, the Borrowers shall
pay to the Agent, for the account of the Lenders, an early termination fee in an
amount equal to one-half of
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one percent (0.50%) of the Commitments. Notwithstanding the foregoing, the Agent
and the Lenders hereby agree to waive payment of the foregoing early termination
fee if this Agreement is terminated prior to First Anniversary of the Closing
Date as a result of the refinancing of all Obligations with the proceeds of a
new credit facility in which Bank of America, N.A., Wachovia Bank, National
Association or any Affiliate of, or successor to, either of the foregoing, acts
as administrative agent, syndication agent, placement agent, manager or
book-runner.
3.3 LIBOR Rate Loan Prepayments. In connection with any prepayment, if
any LIBOR Rate Loans are prepaid prior to the expiration date of the Interest
Period applicable thereto, the Borrowers shall pay to the Lenders the amounts
described in Section 4.4.
3.4 Payments by the Borrowers.
(a) All payments to be made by the Borrowers shall be made without
set-off, recoupment or counterclaim. Except as otherwise expressly provided
herein, all payments by the Borrowers shall be made to the Agent for the account
of the Lenders, at the account designated by the Agent and shall be made in
Dollars and in immediately available funds, no later than 2:00 p.m. (Atlanta,
Georgia time) on the date specified herein. Any payment received by the Agent
after such time shall be deemed (for purposes of calculating interest only) to
have been received on the following Business Day and any applicable interest
shall continue to accrue.
(b) Subject to the provisions set forth in the definition of "Interest
Period", whenever any payment is due on a day other than a Business Day, such
payment shall be due on the following Business Day, and such extension of time
shall in such case be included in the computation of interest or fees, as the
case may be.
3.5 Payments as Revolving Loans. At the election of the Agent, all
payments of principal, interest, reimbursement obligations in connection with
Letters of Credit and Credit Support for Letters of Credit, fees, premiums,
reimbursable expenses and other sums payable hereunder may be paid from the
proceeds of Revolving Loans made hereunder. The Borrowers hereby irrevocably
authorize the Agent to charge the Loan Account for the purpose of paying all
amounts from time to time due hereunder and agree that all such amounts charged
shall constitute Revolving Loans (including Non-Ratable Loans and Agent
Advances); provided that, the Agent will endeavor to use its best efforts
(without any liability to the Agent or the Lenders for any failure to do so) to
provide the Administrative Borrower with notice in reasonable detail of such
charge.
3.6 Apportionment, Application and Reversal of Payments. Principal and
interest payments shall be apportioned ratably among the Lenders (according to
the unpaid principal balance of the Loans held by each Lender and to which such
payments relate) and payments of the fees shall, as applicable, be apportioned
ratably among the Lenders, except for fees payable solely to the Agent and the
Letter of Credit Issuer and
- 14 -
except as provided in Section 11.1(b). All payments shall be remitted to the
Agent and all such payments not relating to principal or interest of specific
Loans, or not constituting payment of specific fees, and all proceeds of
Accounts or other Collateral received by the Agent, shall be applied, ratably,
subject to the provisions of this Agreement, first, to pay any fees, indemnities
or expense reimbursements then due to the Agent or the Banks, or any of them,
from the Borrowers; second, to pay any fees or expense reimbursements then due
to the Lenders from the Borrowers; third, to pay interest due in respect of all
Loans, including Non-Ratable Loans and Agent Advances; fourth, to pay or prepay
principal of the Non-Ratable Loans and Agent Advances; fifth, to pay or prepay
principal of the Revolving Loans (other than Non-Ratable Loans and Agent
Advances) and unpaid reimbursement obligations in respect of Letters of Credit
and to pay an amount to the Agent equal to all outstanding Letter of Credit
obligations to be held as cash collateral for such Obligations; sixth, to the
payment of any other Obligation due to the Agent or any Lender by the Borrowers
(including Obligations arising from Hedge Agreements); seventh, to pay any fees
indemnities or expense reimbursements relating to Bank Products (excluding Hedge
Agreements) then due to the Banks, or any of them, from the Borrowers; and
eighth, upon request by the Borrowers, to the Borrowers. Notwithstanding
anything to the contrary contained in this Agreement, unless so directed by the
Borrowers, or unless an Event of Default has occurred and is continuing, neither
the Agent nor any Lender shall apply any payments which it receives to any LIBOR
Rate Loan, except (i) on the expiration date of the Interest Period applicable
to any such LIBOR Rate Loan, or (ii) in the event, and only to the extent, that
there are no outstanding Base Rate Loans and, in any event, the Borrowers shall
pay LIBOR breakage losses in accordance with Section 4.4. The Agent and the
Lenders shall have the continuing and exclusive right to apply and reverse and
reapply any and all such proceeds and payments to any portion of the Obligations
in accordance with this Agreement.
3.7 Indemnity for Returned Payments. If after receipt of any payment
which is applied to the payment of all or any part of the Obligations, the
Agent, any Lender, the Banks or any Affiliate of any Bank is for any reason
compelled to surrender such payment or proceeds to any Person because such
payment or application of proceeds is invalidated, declared fraudulent, set
aside, determined to be void or voidable as a preference, impermissible setoff,
or a diversion of trust funds, or for any other reason, then the Obligations or
part thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment or proceeds had not
been received by the Agent or such Lender and the Borrowers shall be liable to
pay to the Agent and the Lenders, and each Borrower hereby does indemnify the
Agent and the Lenders and hold the Agent and the Lenders harmless for, the
amount of such payment or proceeds surrendered. The provisions of this Section
3.7 shall be and remain effective notwithstanding any contrary action which may
have been taken by the Agent or any Lender in reliance upon such payment
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or application of proceeds, and any such contrary action so taken shall be
without prejudice to the Agent's and the Lenders' rights under this Agreement
and shall be deemed to have been conditioned upon such payment or application of
proceeds having become final and irrevocable. The provisions of this Section 3.7
shall survive the termination of this Agreement.
3.8 Agent's and Lenders' Books and Records; Monthly Statements. The
Agent shall record the principal amount of the Loans owing to each Lender, the
undrawn face amount of all outstanding Letters of Credit and the aggregate
amount of unpaid reimbursement obligations outstanding with respect to the
Letters of Credit from time to time on its books. In addition, each Lender may
note the date and amount of each payment or prepayment of principal of such
Lender's Loans in its books and records. Failure by the Agent or any Lender to
make such notation shall not affect the obligations of the Borrowers with
respect to the Loans or the Letters of Credit. The Borrowers agree that the
Agent's and each Lender's books and records showing the Obligations and the
transactions pursuant to this Agreement and the other Loan Documents shall be
admissible in any action or proceeding arising therefrom, and shall constitute
rebuttably presumptive proof thereof, irrespective of whether any Obligation is
also evidenced by a promissory note or other instrument. The Agent will provide
to the Administrative Borrower a monthly statement of Loans, payments, and other
transactions pursuant to this Agreement. Such statement shall be deemed correct,
accurate, and binding on the Borrowers and an account stated (except for
reversals and reapplications of payments made as provided in Section 3.6 and
corrections of errors discovered by or acknowledged and agreed to by the Agent),
unless the Administrative Borrower, on behalf of the Borrowers, notifies the
Agent in writing to the contrary within thirty (30) days after such statement is
rendered in accordance with Section 13.8. In the event a timely written notice
of objections is given by the Administrative Borrower, only the items to which
exception is expressly made will be considered to be disputed by the Borrowers.
ARTICLE 4
TAXES, YIELD PROTECTION AND ILLEGALITY
4.1 Taxes.
(a) Any and all payments by the Borrowers to each Lender or the Agent
under this Agreement and any other Loan Document and any Hedge Agreement shall
be made free and clear of, and without deduction or withholding for, any Taxes
excluding net income taxes and franchise taxes (imposed in lieu of net income
taxes) imposed on the Agent or any Lender as a result of a present or former
connection between the Agent or such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
the Agent's or such Lender's having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
other Loan Document) ("Excluded Taxes"). In addition, the Borrowers shall pay
all Other Taxes.
(b) Each Borrower agrees to indemnify and hold harmless each Lender and
the Agent for the full amount of Taxes or Other Taxes (including any Taxes or
Other
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Taxes imposed by any jurisdiction on amounts payable under this Section) paid by
any Lender or the Agent and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Payment under this indemnification shall be made within thirty (30) days after
the date such Lender or the Agent makes written demand therefor.
(c) If the Borrowers shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, then:
(i) the sum payable shall be increased as necessary so that
after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable under
this Section) such Lender or the Agent, as the case may be, receives an
amount equal to the sum it would have received had no such deductions
or withholdings been made;
(ii) the Borrowers shall make such deductions and
withholdings;
(iii) the Borrowers shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in
accordance with applicable law or, if being contested in good faith,
set up reserves determined by the Agent in its commercially reasonable
discretion to be adequate for such Taxes or Other Taxes; and
(iv) the Borrowers shall also pay to each Lender or the Agent
for the account of such Lender, at the time interest is paid, all
additional amounts which the respective Lender specifies as necessary
to preserve the after-tax yield such Lender would have received if such
Taxes or Other Taxes had not been imposed.
(d) At the Agent's request, within thirty (30) days after the date of
any payment by any Borrower of Taxes or Other Taxes, such Borrower shall furnish
the Agent the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment satisfactory to the Agent.
(e) If the Borrowers are required to pay additional amounts to any
Lender or the Agent pursuant to subsection (c) of this Section, then such Lender
shall use reasonable efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its lending office so as to eliminate any such
additional payment by the Borrowers which may thereafter accrue, if such change
in the judgment of such Lender is not otherwise disadvantageous to such Lender.
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4.2 Illegality.
(a) If any Lender determines that the introduction of any Requirement
of Law, or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable lending office to make LIBOR Rate Loans, then,
on notice thereof by that Lender to the Administrative Borrower through the
Agent, any obligation of that Lender to make LIBOR Rate Loans shall be suspended
until that Lender notifies the Agent and the Administrative Borrower that the
circumstances giving rise to such determination no longer exist.
(b) If a Lender determines that it is unlawful to maintain any LIBOR
Rate Loan, the Borrowers shall, upon receipt by the Administrative Borrower of
notice of such fact and demand from such Lender (with a copy to the Agent),
prepay in full such LIBOR Rate Loans of that Lender then outstanding, together
with interest accrued thereon and amounts required under Section 4.4, either on
the last day of the Interest Period thereof, if that Lender may lawfully
continue to maintain such LIBOR Rate Loans to such day, or immediately, if that
Lender may not lawfully continue to maintain such LIBOR Rate Loans. In the event
such Lender shall have determined that it is no longer unlawful for it to
maintain a LIBOR Rate Loan, it shall give notice to the Administrative Borrower
and the Agent as soon as reasonably practicable. If the Borrowers are required
to so prepay any LIBOR Rate Loans, then concurrently with such prepayment, the
Borrowers shall borrow from the affected Lender, in the amount of such
repayment, a Base Rate Loan. Notwithstanding anything to the contrary in this
Agreement, the Borrowers shall not be liable for any losses, or be required to
reimburse a lender as set forth in Section 4.4 to the extent a LIBOR Rate Loan
has been prepaid in accordance with this Section 4.2.
4.3 Increased Costs and Reduction of Return.
(a) If any Lender determines that due to either (i) the introduction of
or any change in the interpretation of any law or regulation or (ii) the
compliance by that Lender with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law) made
subsequent to the date hereof, there shall be any increase in the cost to such
Lender of agreeing to make or making, funding or maintaining any LIBOR Rate
Loans, then the Borrowers shall be liable for, and shall from time to time, upon
demand (with a copy of such demand to be sent to the Agent), pay to the Agent
for the account of such Lender, additional amounts as are sufficient to
compensate such Lender for such increased costs or, alternatively, in the case
where the affected Lender's increased costs are material, the Borrowers may
choose to prepay such LIBOR Rate Loan and concurrently with such prepayment, the
Borrowers shall borrow from the affected Lender a Base Rate Loan in the amount
of such repayment; provided, however, that no Lender shall be entitled to claim
any additional
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amount hereunder with respect to the period which is more than 120 days prior to
the date the Lender actually became aware of such additional amounts; provided,
further, that notwithstanding anything to the contrary in this Agreement, the
Borrowers shall not be liable for any losses, or be required to reimburse any
Lender as set forth in Section 4.4 to the extent a LIBOR Rate Loan has been
prepaid in accordance with this Section 4.3(a).
(b) If any Lender shall have determined that (i) the introduction of
any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or (iv) compliance by
such Lender or any corporation or other entity controlling such Lender with any
Capital Adequacy Regulation, affects or would affect the amount of capital
required or expected to be maintained by such Lender or any corporation or other
entity controlling such Lender and (taking into consideration such Lender's or
such corporation's or other entity's policies with respect to capital adequacy
and such Lender's desired return on capital) determines that the amount of such
capital is increased as a consequence of its Commitments, loans, credits or
obligations under this Agreement, then, upon demand of such Lender to the
Borrowers through the Agent, the Borrowers shall pay to such Lender, from time
to time as specified by such Lender, additional amounts sufficient to compensate
such Lender for such increase; provided, however, that no Lender shall be
entitled to claim any such additional amount with respect to the period which is
more than 120 days prior to the date the Lender actually became aware of such
additional amounts.
4.4 Funding Losses. The Borrowers shall reimburse each Lender and hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur as a consequence of:
(a) the failure of the Borrowers to make on a timely basis any payment
of principal of any LIBOR Rate Loan;
(b) the failure of the Borrowers to borrow or continue a LIBOR Rate
Loan or convert a Base Rate Loan into a LIBOR Rate Loan after the Administrative
Borrower has given (or is deemed to have given) a Notice of Borrowing or a
Notice of Continuation/Conversion; or
(c) the prepayment or other payment (including after acceleration
thereof) of any LIBOR Rate Loans on a day that is not the last day of the
relevant Interest Period;
including any such loss of anticipated profit and any loss or expense arising
from the liquidation or reemployment of funds obtained by it to maintain its
LIBOR Rate Loans to terminate the deposits from which such funds were obtained.
The Borrowers shall also pay any customary administrative fees charged by any
Lender in connection with the foregoing.
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4.5 Inability to Determine Rates. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the LIBOR Rate
for any requested Interest Period with respect to a proposed LIBOR Rate Loan, or
that the LIBOR Rate for any requested Interest Period with respect to a proposed
LIBOR Rate Loan does not adequately and fairly reflect the cost to the Lenders
of funding such Loan, the Agent will promptly so notify the Borrowers and each
Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR Rate
Loans hereunder shall be suspended until the Agent revokes such notice in
writing. Upon receipt of such notice, the Borrowers may revoke any Notice of
Borrowing or Notice of Continuation/Conversion then submitted by the
Administrative Borrower, on behalf of the Borrowers. If the Borrowers do not
revoke such Notice, the Lenders shall make, convert or continue the Loans, as
proposed by the Borrowers, in the amount specified in the applicable notice
submitted by the Administrative Borrower, but such Loans shall be made,
converted or continued as Base Rate Loans instead of LIBOR Rate Loans.
4.6 Certificates of Agent. If any Lender claims reimbursement or
compensation under this Article 4, Agent shall determine the amount thereof and
shall deliver to the Borrowers (with a copy to the affected Lender) a
certificate setting forth in reasonable detail the amount payable to the
affected Lender, and such certificate shall be conclusive and binding on the
Borrowers in the absence of manifest error.
4.7 Obligation to Mitigate.
(a) Subject to Section 4.7(b) below, each Lender, Letter of Credit
Issuer, the Agent and each Bank agrees that, as promptly as practicable after
the officer of such Lender, Letter of Credit Issuer, Agent or Bank responsible
for administering the Loans or Letters of Credit or such Lender, Letter of
Credit Issuer, Agent or Bank, as the case may be, becomes aware of the
occurrence of any event or the existence of a condition that would cause such
Lender, Letter of Credit Issuer or Bank to receive increased payments from the
Borrowers under Section 4.1, Section 4.2 or Section 4.3, it will, to the extent
not inconsistent with the formal internal policies of such Lender, Letter of
Credit Issuer, the Agent or such Bank and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender, Letter of Credit Issuer, the Agent or such Bank through another lending
or letter of credit office of such Lender, Letter of Credit Issuer, the Agent or
such Bank, or (ii) take such other actions as Lender, Letter of Credit Issuer,
the Agent or such Bank may deem reasonable to cause the additional amounts that
the Borrowers would be required to pay the Lender, Letter of Credit Issuer, the
Agent or such Bank under Section 4.1, Section 4.2 or Section 4.3 to be reduced.
(b) The Borrower(s) may, in their sole discretion, on ten (10) Business
Days' prior written notice to the Agent and the applicable Lender, cause a
Lender who has (i) incurred increased costs or is unable to make LIBOR Rate
Loans, or (ii) made any
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claim for taxes under Section 4.1 hereof (and such Lender shall), to assign,
pursuant to Section 11.2 hereof, all of its rights and obligations under this
Agreement to an Eligible Assignee designated by the Administrative Borrower and
acceptable to the Agent which is willing to become a Lender for a purchase price
equal to the outstanding principal amount of the Revolving Loans payable to such
Lender plus any accrued but unpaid interest on such Revolving Loans, any accrued
but unpaid fees with respect to this Agreement; provided, however, that any
expenses or other amounts which would be owing to such Lender pursuant to any
indemnification provision hereof (including, if applicable, Section 4.4 hereof)
shall be payable by the Borrowers as if the Borrowers had prepaid the Revolving
Loans of such Lender rather than such Lender having assigned its interest
hereunder. The Administrative Borrower or such Eligible Assignee shall pay the
applicable processing fee under Section 11.2 hereof.
4.8 Survival. The agreements and obligations of the Borrowers in this
Article 4 shall survive the payment of all other Obligations.
ARTICLE 5
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
5.1 Books and Records. The Borrower Parties shall maintain, at all
times, correct and complete books, records and accounts in which complete,
correct and timely entries are made of its transactions and such books, records
and accounts on a consolidated basis shall be prepared in accordance with GAAP
applied consistently with the audited Financial Statements required to be
delivered pursuant to Section 5.2(a). The Parent on a consolidated basis shall,
by means of appropriate entries, reflect in such accounts and in all Financial
Statements proper liabilities and reserves for all taxes and proper provision
for depreciation and amortization of property and bad debts, all in accordance
with GAAP. Each Borrower Party shall maintain at all times books and records
pertaining to the Collateral in such detail, form and scope as the Agent or any
Lender shall reasonably require, including, but not limited to, records of (a)
all payments received and all credits and extensions granted with respect to the
Accounts; (b) the return, rejection, repossession, stoppage in transit, loss,
damage, or destruction of any Inventory; and (c) all other dealings affecting
the Collateral.
5.2 Financial Information. The Borrower Parties shall promptly furnish
to each Lender all such financial information as the Agent shall reasonably
request. Such documents and financial information may be delivered by electronic
posting on a digital workspace provided by IntraLinks, Inc. or another digital
workspace provider reasonably acceptable to Agent and to which the Lenders have
access; provided, however, if the Borrower Parties determine such digital
posting is or has become impractical, then the Borrower Parties may deliver such
information via any means described in Section 13.8, including via electronic
mail at the e-mail address set forth therein. The Agent shall have no duty to
maintain copies of any such documents or notices. Without limiting the
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foregoing, the Administrative Borrower will furnish to each Lender, in such
detail as the Agent shall reasonably request, the following:
(a) Annual Financial Statements. As soon as available, but in any event
not later than ninety (90) days after the close of each Fiscal Year,
consolidated audited balance sheets as of the date thereof and for the Fiscal
Year then ended, and consolidated audited statements of earnings, cash flows and
stockholders' equity for the Parent for such Fiscal Year, including a footnote
containing supplemental consolidating financial information for (a) the Borrower
Parties on a consolidated basis and (b) for the Subsidiaries of Parent other
than domestic Subsidiaries (collectively, the "Foreign Subsidiaries") on a
consolidated basis. Such supplemental consolidating financial information will
include balance sheets, statements of earnings and statements of cash flows.
(b) General. The audited statements set forth above in Section 5.2(a)
shall be examined in accordance with generally accepted auditing standards by
and, in the case of such statements performed on a consolidated basis,
accompanied by a report thereon unqualified with respect to going concerns by
independent certified public accountants selected by the audit committee of the
board of directors of the Parent and reasonably satisfactory to the Agent. The
Borrower Parties hereby authorize the Agent (as directed by the Lenders) to
communicate directly with their certified public accountants and, by this
provision, authorizes those accountants to disclose to the Agent any and all
financial statements and other supporting financial documents and schedules
relating to the Borrower Parties and to discuss directly with the Agent the
finances and affairs of the Borrower Parties; provided, that together with each
of the audited Financial Statements delivered pursuant to Section 5.2(a), the
Administrative Borrower shall furnish a certificate of the independent certified
public accountants that examined such statements to the effect that they have
reviewed and are familiar with this Agreement and that, in examining such
Financial Statements, they did not become aware of any fact or condition which
then constituted a Default or Event of Default with respect to the financial
covenants set forth in Section 7.22 or Section 7.23 hereof, except for those
Defaults or Event of Defaults, if any, described in reasonable detail in such
certificate.
(c) Quarterly Financial Statements. As soon as available, but in any
event not later than forty-five (45) days after the close of each Fiscal
Quarter, consolidated audited balance sheets as of the date thereof and for the
Fiscal Year then ended, and consolidated audited statements of earnings, cash
flows and stockholders' equity for the Parent for such Fiscal Quarter, including
a footnote containing supplemental consolidating financial information for (a)
the Borrower Parties on a consolidated basis and (b) for Foreign Subsidiaries on
a consolidated basis. Such supplemental consolidating financial information will
include balance sheets, statements of earnings and statements of cash flows. The
consolidated unaudited statements referred to in the first sentence of this
Section 5.2(c), shall fully present in all material respects the consolidated
financial position and consolidated results of operations of the Parent as at
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the date thereof and for the Fiscal Quarter then ended, and, in each case, in
comparable form, figures for the corresponding period in the prior Fiscal Year
and prepared in accordance with GAAP applied consistently with the audited
Financial Statements required to be delivered pursuant to Section 5.2(a) (except
as disclosed therein). The Parent shall certify by a certificate signed by its
senior financial officer thereof that all such consolidated unaudited statements
referred to in the first sentence of this Section 5.2(c) have been prepared in
accordance with GAAP and present fairly in all material respects the Parent's
consolidated financial position as at the dates thereof and its consolidated
results of operations for the periods then ended, subject to recurring year-end
adjustments and required quarterly footnotes.
(d) Consolidated Monthly Financial Statements. As soon as available,
but in any event not later than thirty (30) days after the end of each month
occurring during each Fiscal Year (other than the third, sixth, ninth and
twelfth such month) unaudited consolidated balance sheets of the Parent as at
the end of such month, and unaudited consolidated income statements and
statements of cash flows for the Parent for such month and for the period from
the beginning of the Fiscal Year to the end of such month, fairly presenting in
all material respects the consolidated financial position and consolidated
results of operations of the Parent as at the date thereof and for such periods,
and prepared in accordance with GAAP applied consistently with the audited
Financial Statements required to be delivered pursuant to Section 5.2(a) (except
as disclosed therein). The Parent shall certify by a certificate signed by its
senior financial officer thereof that all such statements have been prepared in
accordance with GAAP and present fairly in all material respects the Parent's
consolidated financial position as at the dates thereof and its consolidated
results of operations for the periods then ended, subject to normal year-end
adjustments and the absence of footnotes.
(e) US Monthly Financial Statements. At all times during the existence
of any Increased Reporting Event, as soon as available, but in any event not
later than thirty (30) days after the end of each month occurring during each
Fiscal Year (other than the third, sixth, ninth and twelfth such month)
unaudited consolidated balance sheets of the Borrower Parties (i.e., excluding
Foreign Subsidiaries) as at the end of such month, and unaudited consolidated
income statements and statements of cash flows for the Borrower Parties i.e.
(excluding Foreign Subsidiaries) for such month and for the period from the
beginning of the Fiscal Year to the end of such month, all in reasonable detail,
fairly presenting in all material respects (subject to normal year-end audit
adjustments) the consolidated financial position and consolidated results of
operations of the Borrower Parties (i.e., excluding Foreign Subsidiaries) as at
the date thereof and for such periods, and prepared in accordance with GAAP
applied consistently with the audited Financial Statements required to be
delivered pursuant to Section 5.2(b) (except as disclosed herein). The Parent
shall certify by a certificate signed by its senior financial officer thereof
that all such statements have been prepared in accordance with GAAP and present
fairly in all material respects the Borrower Parties' financial position as at
the
- 23 -
dates thereof and their results of operations for the periods then ended,
subject to normal year-end adjustments and the absence of footnotes.
(f) With each of the annual audited Financial Statements delivered
pursuant to Section 5.2, a certificate of the senior financial officer of the
Parent setting forth in reasonable detail the calculations required to establish
that the Borrower Parties were in compliance with the covenants set forth in
Sections 7.22 and 7.23 during the period covered in such Financial Statements
and as at the end thereof. Within forty-five days after the end of each Fiscal
Quarter (after making all quarter end adjustments), a certificate of the senior
financial officer of the Parent setting forth in reasonable detail (i) the
amount of all Capital Expenditures incurred by the Borrower Parties for the
Fiscal Year to date and (ii) the calculations required to establish that the
Borrower Parties were in compliance with the covenant set forth in Section 7.22
and 7.23 during the period covered in such Financial Statements and as at the
end thereof. Within forty-five days after the end of each Fiscal Quarter, a
certificate of the chief financial officer of the Parent stating that, except as
explained in reasonable detail in such certificate, to the Knowledge of such
senior financial officer, (A) all of the representations and warranties of the
Borrower Parties contained in this Agreement and the other Loan Documents are
correct and complete in all material respects as at the date of such certificate
as if made at such time, except for those that speak as of a particular date,
(B) the Borrower Parties are, at the date of such certificate, in compliance
with all of their respective covenants and agreements in this Agreement and the
other Loan Documents, (C) no Default or Event of Default then exists or existed
during the period covered by the Financial Statements for such month, and (D)
the Management's Discussion and Analysis contained in the Form 10-Q for such
Fiscal Quarter filed with the SEC complies in all material respects with the
requirements of the SEC for that disclosure and does not contain any untrue
statement of material fact or omit to state a material fact necessary in order
to make the statements made, in the light of the circumstances under which they
were made, not misleading in any material respect. If such certificate discloses
that a representation or warranty is not correct or complete in all material
respects, or that a covenant has not been complied with, or that a Default or
Event of Default existed or exists, such certificate shall set forth what action
the Borrower Parties have taken or propose to take with respect thereto.
(g) As soon as available in any event not later than forty-five (45)
days after the end of each Fiscal Year, annual forecasts (to include forecasted
consolidated and consolidating balance sheets, income statements and cash flow
statements) for the Parent as at the end of and for each fiscal month of such
Fiscal Year.
(h) Promptly, and in any event within five (5) Business Days after
filing with the PBGC and the IRS, a copy of each annual report or other filing
filed with respect to each Plan of any Borrower Party.
(i) Promptly, and in any event within five (5) Business Days after the
filing thereof, copies of all periodic reports, if any, or other documents filed
by the Parent
- 24 -
or any of its Subsidiaries with the SEC under the Exchange Act, and all reports,
notices, or statements sent or received by the Parent or any of its Subsidiaries
to or from the holders of any equity interests of the Parent (other than routine
non-material correspondence sent by shareholders of the Parent to the Parent and
filings with the SEC by any shareholder of the Parent pursuant to Section 13(d)
or 16(a) of the Exchange Act) or any such Subsidiary or of any Debt of the
Parent or any of its Subsidiaries registered under the Securities Act of 1933,
as in effect from time to time, or to or from the trustee under any indenture
under which the same is issued.
(j) As soon as available, but in any event not later than fifteen (15)
days after any Borrower Party's receipt thereof, a copy of all management
reports and management letters prepared for such Borrower Party by any
independent certified public accountants of the Borrower Parties provided, that
the Borrower Parties shall have no liability hereunder for any failure to
deliver such management reports and management letters to the extent such
failure results solely from the refusal of such accountants to authorize the
Borrower Parties to comply with such obligation.
(k) Promptly, and in any event within two (2) Business Days after
filing with the SEC, copies of any and all proxy statements, financial
statements, and reports which the Parent makes available to its shareholders.
(l) As soon as available, but in any event (i) during the existence of
any Increased Reporting Event, not later than Tuesday each week for the prior
week and (ii) at all other times, within ten (10) days after the end of each
month (for such month), a Borrowing Base Certificate supporting information in
accordance with Section 9 of the Security Agreement.
(m) Such additional information as the Agent and/or any Lender may from
time to time reasonably request regarding the financial and business affairs of
the Parent or any Subsidiary (including, without limitation, a copy of each tax
return filed by any Borrower Party).
5.3 Notices to the Lenders. The Administrative Borrower shall notify
the Agent and the Lenders in writing of the following matters at the following
times:
(a) Immediately after becoming aware of any Default or Event of
Default;
(b) Immediately after becoming aware of the assertion by the holder of
any capital stock of any Borrower Party or the holder of any Debt of the Parent
or any Subsidiary in an amount outstanding in excess of $1,000,000 or with
respect to any licensing agreement that a default exists with respect thereto or
that the Parent or such Subsidiary is not in compliance with the terms thereof,
or the commencement by such holder of any enforcement action because of such
asserted default or non-compliance;
- 25 -
(c) Immediately after becoming aware of any event or circumstance which
would have a Material Adverse Effect;
(d) Immediately after any settlement offer is made by the Parent or any
Subsidiary in an amount that would, if consummated, result in an Event of
Default hereunder;
(e) Immediately after becoming aware of any pending action, suit, or
proceeding, by any Person, or any pending or threatened investigation by a
Governmental Authority, which could reasonably be expected to have a Material
Adverse Effect or which involves the same matters that are the subject of class
action litigation or matters related thereto;
(f) Immediately after becoming aware of any pending strike, work
stoppage, unfair labor practice claim, or other labor dispute affecting the
Parent or any of its Subsidiaries in a manner which could reasonably be expected
to have a Material Adverse Effect;
(g) Immediately after becoming aware of any violation of any law,
statute, regulation, or ordinance of a Governmental Authority affecting the
Parent or any Subsidiary which could reasonably be expected to have a Material
Adverse Effect;
(h) Immediately after receipt of any notice of any violation by the
Parent or any of its Subsidiaries of any Environmental Law which could
reasonably be expected to have a Material Adverse Effect or that any
Governmental Authority has asserted in writing that the Parent or any Subsidiary
is not in compliance with any Environmental Law or is investigating the Parent's
or such Subsidiary's compliance therewith;
(i) Immediately after receipt of any written notice that the Parent or
any of its Subsidiaries is or may be liable to any Person as a result of the
Release or threatened Release of any Contaminant or that the Parent or any
Subsidiary is subject to investigation by any Governmental Authority evaluating
whether any remedial action is needed to respond to the Release or threatened
Release of any Contaminant which, in either case, is reasonably likely to give
rise to liability that is not covered by insurance in excess of $1,000,000;
(j) Immediately after receipt of any written notice of the imposition
of any Environmental Lien against any property to the extent the liability with
respect thereto that is not covered by insurance and is in excess of $1,000,000;
(k) Any change in the Parent's or any Subsidiary's name as it appears
in the state of its incorporation or other organization, state of incorporation
or organization, type of entity, organizational identification number, or, with
respect to any Borrower Party, locations of Collateral, or form of organization,
trade names under which
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such Person will sell Inventory or create Accounts, or to which instruments in
payment of Accounts may be made payable, in each case at least thirty (30) days
prior thereto;
(l) Within ten (10) Business Days after any Borrower Party or any ERISA
Affiliate knows, that an ERISA Event or a prohibited transaction (as defined in
Sections 406 of ERISA and 4975 of the Code) has occurred, and, when known, any
action taken or threatened by the IRS, the DOL or the PBGC with respect thereto;
(m) Upon request, or, in the event that such filing reflects a
significant change with respect to the matters covered thereby, within three (3)
Business Days after the filing thereof with the PBGC, the DOL or the IRS, as
applicable, copies of the following: (i) each annual report (form 5500 series),
including Schedule B thereto, filed with the PBGC, the DOL or the IRS with
respect to each Plan, (ii) a copy of each funding waiver request filed with the
PBGC, the DOL or the IRS with respect to any Plan and all communications
received by any Borrower Party or any ERISA Affiliate from the PBGC, the DOL or
the IRS with respect to such request, and (iii) a copy of each other filing or
notice filed with the PBGC, the DOL or the IRS, with respect to each Plan by
either a Borrower Party or any ERISA Affiliate;
(n) Within three (3) Business Days after receipt thereof by any
Borrower Party or any ERISA Affiliate, copies of the following: (i) any notices
of the PBGC's intention to terminate a Plan or to have a trustee appointed to
administer such Plan; (ii) any favorable or unfavorable determination letter
from the IRS regarding the qualification of a Plan under Section 401(a) of the
Code; or (iii) any notice from a Multi-employer Plan regarding the imposition of
withdrawal liability;
(o) Within three (3) Business Days after the occurrence thereof: (i)
any changes in the benefits of any existing Plan which increase any Borrower
Party's annual costs with respect thereto by an amount in excess of $1,000,000,
or the establishment of any new Plan or the commencement of contributions to any
Plan to which any Borrower Party or any ERISA Affiliate was not previously
contributing; or (ii) any failure by any Borrower Party or any ERISA Affiliate
to make a required installment or any other required payment under Section 412
of the Code on or before the due date for such installment or payment; or
(p) Within three (3) Business Days after any Borrower Party or any
ERISA Affiliate knows or has reason to know that any of the following events has
or will occur: (i) a Multi-employer Plan has been or will be terminated; (ii)
the administrator or plan sponsor of a Multi-employer Plan intends to terminate
a Multi-employer Plan; or (iii) the PBGC has instituted or will institute
proceedings under Section 4042 of ERISA to terminate a Multi-employer Plan.
(q) Within forty-five days of the end of each Fiscal Quarter, updated
or supplemented as of the last day of such Fiscal Quarter, Schedule 6.7,
Schedule 6.9, Schedule 6.11, Schedule 6.12, Schedule 6.13, Schedule 6.14,
Schedule 6.15, Schedule
- 27 -
6.16(a), Schedule 6.16(f), Schedule 6.26 or Schedule 6.27, or any of the
foregoing in each case as may be required to render correct the representations
and warranties contained in the applicable sections to which such schedules
relate as of the last day of such Fiscal Quarter without giving effect to any
references therein to the "Closing Date" in each case, appropriately marked to
show the changes made therein; provided that no such supplement to any such
Schedule or representation shall be deemed a waiver of any Default or Event of
Default resulting from the matters disclosed therein, except as consented to by
the Required Lenders in writing.
(r) Promptly after any Borrower Party has notified the Agent of any
intention by such Borrower Party to treat the Loans and/or Letters of Credit and
related transactions as being a "reportable transaction" (within the meaning of
Treasury Regulation Section 1.6011-4), a duly completed copy of IRS Form 8886 or
any successor form.
Each notice given under this Section shall describe the subject matter
thereof in reasonable detail, and shall set forth the action that the Parent,
any Subsidiary or any ERISA Affiliate, as applicable, has taken or proposes to
take with respect thereto.
5.4 Collateral Reporting. Each Borrower, a portion of whose assets are
included in the Borrowing Base, shall provide the Agent with the following
documents at the following times in form satisfactory to the Agent (including in
sufficient number, if applicable, for the Agent to provide a copy to those
Lenders who request a copy thereof from the Agent): (a) within ten (10) days
after the end of each month (for such month), or more frequently if reasonably
requested by the Agent, an aging of each Borrower's Accounts, together with,
within ten (10) Business Days after the end of each month (for such month), a
reconciliation to the detailed calculation of the Borrowing Base and to such
Borrower's general ledger; (b) within ten (10) days after the end of each month
(for such month), or more frequently if reasonably requested by the Agent,
Inventory reports of each Borrower by category (including Appliance, Salton at
Home, Personal Care and Wellness and In-Transit) and facility location, together
with, within ten (10) Business Days after the end of each month (for such
month), a reconciliation to the detailed calculation of the Borrowing Base and
to such Borrower's general ledger; (c) upon reasonable request, copies of
invoices in connection with each Borrower's Accounts, customer statements,
credit memos, remittance advices and reports, deposit slips, shipping and
delivery documents in connection with such Borrower's Accounts; (d) such other
reports as to the Collateral of such Borrower as the Agent shall reasonably
request from time to time; (e) on a monthly basis by the 10th day of the
following month, or more frequently if requested by the Agent, an aging of such
Borrower Party's accounts payable; and (f) with the delivery of each of the
foregoing (other than clause (c)), a certificate of the Administrative Borrower
executed by an officer thereof certifying as to the accuracy and completeness of
the foregoing. The Parent shall provide the Agent with the following documents
at the following times in form satisfactory to the Agent: (i) upon reasonable
request, a statement of the balance of each intercompany account
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(including the Intercompany Account); (ii) such other reports as to the
Collateral of each Borrower Party as the Agent shall reasonably request from
time to time; and (iii) with the delivery of each of the foregoing, upon the
request of the Agent, a certificate of the Parent executed by an officer thereof
certifying as to the accuracy and completeness of the foregoing. If any of the
Borrower Parties' records or reports of the Collateral are prepared by an
accounting service or other agent, each Borrower Party hereby authorizes such
service or agent to deliver such records, reports, and related documents to the
Agent, for distribution to the Lenders.
ARTICLE 6
GENERAL WARRANTIES AND REPRESENTATIONS
Each Borrower Party warrants and represents to the Agent and the
Lenders that, except as hereafter disclosed to and accepted by the Agent and the
Majority Lenders in writing:
6.1 Authorization, Validity, and Enforceability of this Agreement and
the Loan Documents. Each Borrower Party has the power and authority to execute,
deliver and perform this Agreement and the other Loan Documents and any Hedge
Agreements to which it is a party and to grant to the Agent Liens upon and
security interests in the Collateral with respect to which it has rights, title
or ownership and each Borrower has the authority to incur the Obligations. Each
Borrower Party has taken all necessary action (including obtaining approval of
its stockholders if necessary) to authorize its execution, delivery, and
performance of this Agreement and the other Loan Documents and any Hedge
Agreements to which it is a party. This Agreement and the other Loan Documents
and any Hedge Agreements to which it is a party have been duly executed and
delivered by each Borrower Party, and constitute the legal, valid and binding
obligations of such Borrower Party, enforceable against it in accordance with
their respective terms except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law). Each
Borrower Party's execution, delivery, and performance of this Agreement and the
other Loan Documents and Hedge Agreements to which it is a party do not and will
not conflict with, or constitute a violation or breach of, or result in the
imposition of any Lien (other than the Liens created by this Agreement and the
other Loan Documents) upon the property of the Parent or any of its
Subsidiaries, by reason of the terms of (a) any contract, mortgage, lease,
agreement, indenture, or instrument to which the Parent or such Subsidiary is a
party or which is binding upon it, (b) any Requirement of Law applicable to the
Parent or any of its Subsidiaries, or (c) the certificate or articles of
incorporation or by-laws or the limited liability company operating agreement or
limited partnership agreement of such Borrower Party.
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6.2 Validity and Priority of Security Interest. The provisions of this
Agreement and the other Loan Documents create legal and valid Liens on all the
Collateral in favor of the Agent, for the ratable benefit of the Agent and the
Lenders, and such Liens constitute perfected and continuing Liens on all the
Collateral, having priority over all other Liens on the Collateral, except for
those Liens identified in clauses (c), (d), (e), (g), (h), (i) and (j) of the
definition of Permitted Liens securing all the Obligations, and enforceable
against the Borrower Parties and all third parties.
6.3 Organization and Qualification. Each Borrower Party (a) is duly
organized or incorporated and validly existing in good standing under the laws
of the state of its organization or incorporation, (b) is qualified to do
business and is in good standing in the jurisdictions set forth on Schedule 6.3,
which are the only jurisdictions in which qualification is necessary in order
for it to own or lease its property and conduct its business, except where the
failure to so qualify would have a Material Adverse Effect and (c) has all
requisite power and authority to conduct its business and to own its property.
6.4 Corporate Name; Prior Transactions. Except as set forth on Schedule
6.4, to the Parent's Knowledge, none of the Borrower Parties has, during the
past five (5) years, been known by or used any other corporate or fictitious
name, or been a party to any merger or consolidation, or acquired all or
substantially all of the assets of any Person, or acquired any of its property
outside of the ordinary course of business.
6.5 Subsidiaries and Affiliates. Schedule 6.5 is a correct and complete
list of the name and relationship to the Parent of each and all of the
Subsidiaries and other Affiliates. Each Subsidiary is (a) duly incorporated or
organized and validly existing in good standing under the laws of its state of
incorporation or organization set forth on Schedule 6.5, and (b) qualified to do
business and in good standing in each jurisdiction, in which the failure to so
qualify or be in good standing could reasonably be expected to have a Material
Adverse Effect and (c) has all requisite power and authority to conduct its
business and own its property. The aggregate value of the assets or net worth of
Toastmaster V.I., Inc., a Virgin Islands corporation, does not exceed
$10,000.00.
6.6 Financial Statements and Projections.
(a) The Administrative Borrower has delivered to the Agent and the
Lenders the audited consolidated balance sheet and related consolidated
statements of income, retained earnings, cash flows, and changes in stockholders
equity for the Parent and its Subsidiaries as of June 29, 2002, and for the
Fiscal Year then ended, accompanied by the report thereon of the Parent's
independent certified public accountants, Deloitte & Touche. The Administrative
Borrower has also delivered to the Agent and the Lenders the unaudited
consolidated balance sheet and related unaudited consolidated statements of
income and cash flows for the Parent and its Subsidiaries as of June 29, 2002.
Such financial statements are attached hereto as Exhibit C. All such financial
statements have been prepared in accordance with GAAP and present accurately and
fairly in all material
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respects the financial position of the Parent and its consolidated Subsidiaries
as at the dates thereof and their results of operations for the periods then
ended.
(b) The Latest Projections when submitted to the Lenders as required
herein represent the Borrower Parties' good faith estimate of the future
consolidated financial performance of the Parent and its Subsidiaries for the
periods set forth therein. The Latest Projections have been prepared on the
basis of the assumptions set forth therein, which the Borrower Parties believe
are fair and reasonable in light of current and reasonably foreseeable business
conditions at the time submitted to the Lenders.
(c) The pro forma consolidated balance sheet of the Parent at December
28, 2002, attached hereto as Exhibit C, presents fairly and accurately the
Parent's consolidated financial condition as at such date after giving effect to
the transactions contemplated by this Agreement as if such transactions had
occurred on such date and the Closing Date had been such date, and has been
prepared in accordance with GAAP.
(d) The Fiscal Year of the Parent ends each year on the Saturday
closest to June 30.
6.7 Capitalization. Schedule 6.7 sets forth, as of the Closing Date, a
complete and accurate description of the authorized capital stock of each
Borrower Party and each of its directly-owned Subsidiaries, by class, and a
description of the number of shares of each class that are issued and
outstanding and the par value thereof. All such shares of capital stock are
validly issued, fully-paid and non-assessable.
6.8 Solvency. The Parent and the Subsidiaries are Solvent on a
consolidated basis prior to and after giving effect to the Borrowings to be made
on the Closing Date and the issuance of the Letters of Credit to be issued on
the Closing Date, and shall remain Solvent during the term of this Agreement.
6.9 Debt. After giving effect to the making of the Revolving Loans to
be made on the Closing Date, the Borrower Parties have no Debt, except (a) Debt
permitted under Section 7.13, and (b) Debt as of the Closing Date described on
Schedule 6.9.
6.10 Distributions. Except as permitted by Section 7.10, since June 29,
2002, no Distribution has been declared, paid, or made upon or in respect of any
capital stock or other securities of the Parent or any Subsidiary.
6.11 Real Estate; Leases. Schedule 6.11 sets forth, as of the Closing
Date, a correct and complete list of all Real Estate owned by any Borrower
Party, all leases and subleases of real property held by any Borrower Party as
lessee or sublessee, including all locations where any Borrower Party conduct
any manufacturing operations or distribution business, and all leases and
subleases of real property held by any of any Borrower Party as lessor, or
sublessor in excess of $200,000. Each of such leases and subleases is valid
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and enforceable in accordance with its terms and is in full force and effect, no
default by any of any Borrower Party under any such lease or sublease exists
and, to the Parent's Knowledge, no default by any other party under any such
lease or sublease exists. Each Borrower Party has good and marketable title in
fee simple to the Real Estate identified on Schedule 6.11 as owned by the
Borrower Party, or valid leasehold interests in all Real Estate designated
therein as "leased" by any of any Borrower Party and each Borrower Party has
good, indefeasible, and merchantable title to all of its other property
reflected on the June 29, 2002 Financial Statements delivered to the Agent and
the Lenders, except as disposed of in the ordinary course of business since the
date thereof, free of all Liens except Permitted Liens.
6.12 Proprietary Rights. Schedule 6.12 sets forth a correct and
complete list as of the Closing Date of all of any Borrower Party's Proprietary
Rights; provided that with respect to Proprietary Rights such Schedule sets
forth a correct and complete list of all of any Borrower Party's trademarks then
in use by such Borrower Party. None of such Proprietary Rights is subject to any
licensing agreement or similar arrangement except as set forth on Schedule 6.12.
To the Parent's Knowledge (including, at the time of any launch of any new
product, after review of a patent search with respect to the Proprietary Rights
related to such product or an opinion of counsel with respect thereto and
determination by any Borrower Party that there is no infringement or conflict),
none of the Proprietary Rights infringes on or conflicts with any other Person's
property, and, to the Parent's Knowledge and except as otherwise disclosed in
writing to the Agent, no other Person's property infringes on or conflicts with
the Proprietary Rights, in each case, to the extent any such infringement,
individually or in the aggregate, could reasonably be expected to result in any
loss or damage to any Borrower Party in excess of $1,000,000. The Proprietary
Rights described on Schedule 6.12 constitute all of the property of such type
necessary to the current and anticipated future conduct of each of the Borrower
Parties' business. No claim or litigation regarding any of the foregoing is
pending or, to the Parent's Knowledge, threatened, and no patent, invention,
device or application for the same is pending or, to the Parent's Knowledge,
proposed, which, in either case, could reasonably be expected to have a Material
Adverse Effect.
6.13 Trade Names. All trade names or styles as of the Closing Date
under which the Borrower Parties sell Inventory or create Accounts, or to which
instruments in payment of Accounts may be made payable, are listed on Schedule
6.13.
6.14 Litigation. Except as set forth on Schedule 6.14 as of the Closing
Date, there is no pending, or to the Parent's Knowledge threatened, action,
suit, proceeding, or counterclaim by any Person, or to the Parent's Knowledge,
investigation by any Governmental Authority, or any basis for any of the
foregoing, which could reasonably be expected to have a Material Adverse Effect.
6.15 Labor Disputes. Except as set forth on Schedule 6.15, as of the
Closing Date (a) there is no collective bargaining agreement or other labor
contract covering
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employees of any of the Borrower Parties, (b) no such collective bargaining
agreement or other labor contract is scheduled to expire during the term of this
Agreement, (c) to the Parent's Knowledge no union or other labor organization is
seeking to organize, or to be recognized as, a collective bargaining unit of
employees of any of the Borrower Parties or for any similar purpose, and (d)
there is no pending or (to the Parent's Knowledge) threatened, strike, work
stoppage, material unfair labor practice claim, or other material labor dispute
against or affecting the Parent or its Subsidiaries or their employees.
6.16 Environmental Laws. Except as otherwise disclosed in writing to
the Agent or except to the extent the failure of any of the following,
individually or in the aggregate, to be correct could reasonably be expected to
result in any uninsured claim, loss or damage to any Borrower Party in excess of
$1,000,000:
(a) Except as disclosed on Schedule 6.16(a), each of the Parent and
each Subsidiary is and has been in compliance with, in all material respects,
all Environmental Laws and neither the Parent nor any Subsidiary, nor any of its
presently owned real property or presently conducted operations, nor its
previously owned real property or prior operations, is subject to any
Environmental Claim from any Governmental Authority or private Person respecting
(i) compliance with any Environmental Law or (ii) any potential liabilities and
costs or actions arising from a Release or threatened Release of a Contaminant.
(b) Each of the Parent and each Subsidiary has obtained all permits
necessary for its current operations under Environmental Laws, and all such
permits are in good standing and each of the Parent and each Subsidiary is in
compliance with all material terms and conditions of such permits.
(c) Neither the Parent nor any Subsidiary, nor, to the Parent's
Knowledge (after appropriate due diligence), any of its predecessors in
interest, has in violation of applicable law stored, treated or disposed of any
Contaminants on any property owned by the Parent or any Subsidiary.
(d) Neither the Parent nor any Subsidiary has received any summons,
complaint, order or similar written notice or an Environmental Claim indicating
that it is not currently in compliance with or that any Governmental Authority
is investigating its compliance with, any Environmental Laws or that it is or
may be liable to any other Person as a result of a Release or threatened Release
of a Contaminant.
(e) To the Parent's Knowledge, none of the present or past operations
of the Parent and its Subsidiaries is the subject of any investigation by any
Governmental Authority evaluating whether any remedial action is needed to
respond to a Release or threatened Release of a Contaminant.
(f) Except as described on Schedule 6.16(f), there is not now, nor to
the Parent's Knowledge has there ever been, on or in the Real Estate:
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(1) any underground storage tanks or surface impoundments,
(2) any asbestos-containing material, or
(3) any polychlorinated biphenyls (PCBs) used in hydraulic
oils, electrical transformers or other equipment.
(g) Neither the Parent nor any Subsidiary has filed, or has had the
duty to file, any notice under any requirement of Environmental Law reporting a
spill or accidental and unpermitted Release or discharge of a Contaminant into
the environment.
(h) Neither the Parent nor any Subsidiary has for the past five (5)
years entered into any negotiations or settlement agreements with any Person
(including any prior owner of its Real Property) imposing obligations or
liabilities on the Parent or any Subsidiary with respect to any Environmental
Claim in response to a Release of a Contaminant.
(i) None of the products manufactured, distributed or sold by the
Parent or any Subsidiary contain asbestos containing material.
(j) No Environmental Lien has attached to the Real Estate.
6.17 No Violation of Law. Neither the Parent nor any Subsidiary is in
violation in any material respect of any material law, statute, regulation,
ordinance, judgment, order, or decree applicable to it which could reasonably be
expected to have a Materially Adverse Effect.
6.18 No Default. Neither the Parent nor any Subsidiary is in default in
any material respect with respect to any material note, indenture, loan
agreement, mortgage, lease, deed, or other agreement to which the Parent or such
Subsidiary is a party or by which it is bound.
6.19 ERISA Compliance.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other applicable federal or state
law. Each Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS and to the Parent's
Knowledge, nothing has occurred which would cause the loss of such
qualification. Each of the Parent, each Subsidiary and each ERISA Affiliate has
made all required contributions to any Plan subject to Section 412 of the Code,
and no application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code has been made with respect to any
Plan.
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(b) There are no pending or, to the Parent's Knowledge, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan which has resulted or could reasonably be expected to result
in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) none of the
Parent, any Subsidiary or any ERISA Affiliate has incurred, or reasonably
expects to incur, any material liability under Title IV of ERISA with respect to
any Pension Plan (other than premiums due and not delinquent under Section 4007
of ERISA); (iv) none of the Parent, any Subsidiary or any ERISA Affiliate has
incurred, or reasonably expects to incur, any material liability (and no event
has occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Section 4201 or 4243 of ERISA with respect to a
Multi-employer Plan; and (v) none of the Parent, any Subsidiary or any ERISA
Affiliate has engaged in a transaction that could be subject to Section 4069 or
4212(c) of ERISA.
6.20 Taxes. The Parent and the Subsidiaries have filed all federal and
other tax returns and reports required to be filed, and have paid all federal
and other taxes, assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise due and
payable unless (i) such unpaid taxes and assessments would constitute a
Permitted Lien, or (ii) such taxes are being contested in good faith and
reserves adequate in the commercially reasonable determination of the Agent have
been provided by such Person.
6.21 Regulated Entities. No Borrower Party, any Person controlling a
Borrower Party, or any other Subsidiary, is an "Investment Company" within the
meaning of the Investment Company Act of 1940. No Borrower Party or any other
Subsidiary is subject to regulation under the Public Utility Holding Company Act
of 1935, the Federal Power Act, the Interstate Commerce Act, any state public
utilities code or law, or any other federal or state statute or regulation
limiting its ability to incur indebtedness.
6.22 Use of Proceeds; Margin Regulations. The proceeds of the Loans are
to be used solely (a) on the Closing Date, to refinance Debt outstanding on the
date thereof, and (b) from and after the Closing Date, for working capital and
other lawful corporate purposes. None of the Parent or any Subsidiary is engaged
in the business of purchasing or selling Margin Stock or extending credit for
the purpose of purchasing or carrying Margin Stock.
6.23 Copyrights, Patents, Trademarks and Licenses, etc. Each Borrower
owns or is licensed or otherwise has the right to use all of the patents,
trademarks, service marks, trade names, copyrights, contractual franchises,
licenses, rights of way,
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authorizations and other rights that are reasonably necessary for the operation
of its businesses, without conflict with the rights of any other Person. To the
Parent's Knowledge, no slogan or other advertising device, product, process,
method, substance, part or other material now employed, or now contemplated to
be employed, by the Borrower Parties infringes upon any rights held by any other
Person. No claim or litigation regarding any of the foregoing is pending or (to
the Parent's Knowledge) threatened, and no patent, invention, device,
application, principle or any statute, law, rule, regulation, standard or code
is pending or, to the Parent's Knowledge, proposed, which, in either case, could
reasonably be expected to have a Material Adverse Effect.
6.24 No Material Adverse Change. No Material Adverse Effect has
occurred since the latest date of the Financial Statements delivered to the
Lenders, except as otherwise disclosed in the Parent's filings with the
Securities and Exchange Commission under the Exchange Act.
6.25 Full Disclosure. None of the representations or warranties made by
any Borrower Party in the Loan Documents or any Hedge Agreement as of the date
such representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of any Borrower Party in connection with the Loan Documents or
any Hedge Agreement (including the offering and disclosure materials delivered
by or on behalf of any Borrower Party to the Lenders prior to the Closing Date),
contains any untrue statement of a material fact or omits any material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they are made, not misleading as of
the time when made or delivered.
6.26 Material Agreements. Schedule 6.26 hereto sets forth as of the
Closing Date all agreements and contracts material to the Borrower Parties which
would be deemed a material contract as provided in Regulation S-K promulgated by
the SEC under the Securities Act of 1933.
6.27 Bank Accounts. Schedule 6.27 contains, as of the Closing Date, a
complete and accurate list of all bank accounts maintained by each Borrower
Party with any bank or other financial institution.
6.28 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or other Person is necessary or required in connection
with the execution, delivery or performance by, or enforcement against, any
Borrower Party of any Loan Document, except approvals, consents, exemptions,
authorizations, other actions, notices or filings described in Schedule 6.28,
which approvals, consents, exemptions, authorizations, other actions, notices or
filings have been made or obtained and are in full force and effect.
6.29 Tax Shelter Regulations. The Borrowers do not intend to treat the
Loans and/or Letters of Credit as being a "reportable transaction" (within the
meaning of
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Treasury Regulation Section 1.6011-4). In the event the Borrowers determine to
take any action inconsistent with such intention, each will promptly notify the
Agent thereof. If the Borrowers so notify the Agent, the Borrowers acknowledge
that one or more of the Lenders may treat its Loans and/or its interest in
Non-Ratable Loans and/or Agent Advances and/or Letters of Credit as part of a
transaction that is subject to Treasury Regulation Section 301.6112-1, and such
Lender or Lenders, as applicable, will maintain the lists and other records
required by such Treasury Regulation.
ARTICLE 7
AFFIRMATIVE AND NEGATIVE COVENANTS
Each Borrower Party covenants to the Agent and each Lender that so long
as any of the Obligations remain outstanding or this Agreement is in effect:
7.1 Taxes and Other Obligations. Each Borrower Party shall cause each
of its Subsidiaries to (a) file when due (after taking into account any
applicable exemptions) all tax returns and other reports which it is required to
file; (b) pay, or provide for the payment, when due, of all taxes, fees,
assessments and other governmental charges against it or upon its property,
income and franchises, make all required withholding and other tax deposits, and
establish adequate reserves for the payment of all such items, and provide to
the Agent and the Lenders, upon request, satisfactory evidence of its timely
compliance with the foregoing; and (c) pay when due all Debt owed by it and all
claims of materialmen, mechanics, carriers, warehousemen, landlords, processors
and other like Persons, and all other indebtedness owed by it and perform and
discharge in a timely manner all other obligations undertaken by it; provided,
however, so long as the Administrative Borrower has notified the Agent in
writing, no Borrower Party or Subsidiary need pay any tax, fee, assessment, or
governmental charge (i) it is contesting in good faith by appropriate
proceedings diligently pursued, (ii) as to which such Borrower Party has
established proper reserves as required under GAAP, and (iii) the nonpayment of
which does not result in the imposition of a Lien (other than a Permitted Lien).
7.2 Legal Existence and Good Standing; Name Changes.
(a) Each of the Parent and each Subsidiary shall (i) maintain its legal
existence, except as permitted by Section 7.9, and (ii) maintain its
qualification and good standing in all jurisdictions in which the failure to
maintain such existence and qualification or good standing could reasonably be
expected to have a Material Adverse Effect.
(b) No Borrower Party shall change its name, Federal Employment
Identification Number, organizational identification number, corporate structure
or identity, or add any new fictitious name or reincorporate or reorganize
itself under the laws of any jurisdiction other than the jurisdiction in which
it is incorporated or organized as of the date hereof.
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7.3 Compliance with Law and Agreements; Maintenance of Licenses. The
Parent shall and shall cause each Subsidiary to comply in all material respects
with all material Requirements of Law of any Governmental Authority having
jurisdiction over it or its business (including the Federal Fair Labor Standards
Act and all Environmental Laws). The Parent shall and shall cause each of its
Subsidiaries to obtain and maintain all material licenses, permits, franchises,
and governmental authorizations necessary to own its property and to conduct its
business as conducted on the Closing Date. No Borrower Party shall modify, amend
or alter (a) its certificate or articles of incorporation, or its limited
liability company operating agreement or limited partnership agreement, as
applicable, other than in a manner which does not adversely affect the rights of
the Lenders or the Agent, or (b) licensing agreements, other than in a manner
which does not adversely affect the rights of the Lenders or the Agent with
respect to the Inventory or (c) the Kmart Receivable Purchasing Agreement.
7.4 Maintenance of Property; Inspection of Property.
(a) Each Borrower Party shall maintain all of its property necessary
and useful in the conduct of its business, in good operating condition and
repair, ordinary wear and tear excepted.
(b) Each Borrower Party shall permit representatives and independent
contractors of the Co-Agents (at the expense of the Borrowers not to exceed four
(4) times per year unless an Event of Default or an Increased Reporting Event
has occurred and is continuing) to visit and inspect any of its properties, to
examine its corporate, financial and operating records, and make copies thereof
or abstracts therefrom and to discuss its affairs, finances and accounts with
its directors, officers and independent public accountants, at such reasonable
times during normal business hours and as soon as may be reasonably desired,
upon reasonable advance notice to the Administrative Borrower; provided,
however, that the Co-Agents shall conduct (i) field examinations and (ii)
appraisals, inspections and verifications of the Collateral, in each case, not
less frequently than two (2) times during any twelve month period; provided,
further, however, when an Event of Default exists, the Co-Agents or any Lender
may do any of the foregoing at the expense of the Borrowers at any time during
normal business hours and without advance notice.
7.5 Insurance.
(a) Each Borrower Party shall maintain, with financially sound and
reputable insurers having a rating of at least A- or better by Best Rating
Guide, insurance against loss or damage by fire with extended coverage; theft,
burglary, pilferage and loss in transit; products liability and third party
property damage; larceny, embezzlement or other criminal liability; business
interruption; public liability and third party property damage; and such other
hazards or of such other types as is customary for Persons engaged in the same
or similar business, as the Agent, in its reasonable discretion, or
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acting at the direction of the Required Lenders, shall specify, in amounts, and
under policies reasonably acceptable to the Agent and the Required Lenders.
(b) The Borrower Parties shall cause the Agent, for the ratable benefit
of the Agent and the Lenders, to be named as secured party or mortgagee and sole
loss payee or additional insured, in a manner acceptable to the Agent. Each
policy of insurance shall contain a clause or endorsement requiring the insurer
to give not less than thirty (30)-days' prior written notice to the Agent in the
event of cancellation of the policy for any reason whatsoever and a clause or
endorsement stating that the interest of the Agent shall not be impaired or
invalidated by any act or neglect of the Parent or any of its Subsidiaries or
the owner of any Real Estate for purposes more hazardous than are permitted by
such policy. All premiums for such insurance shall be paid by the Borrower
Parties when due, and certificates of insurance and, if requested by the Agent
or any Lender, photocopies of the policies, shall be delivered to the Agent, in
each case in sufficient quantity for distribution by the Agent to each of the
Lenders. If the Borrower Parties fail to procure such insurance or to pay the
premiums therefor when due, the Agent may, and at the direction of the Majority
Lenders shall, do so from the proceeds of Revolving Loans.
7.6 Insurance and Condemnation Proceeds. The Borrower Parties shall
promptly notify the Agent and the Lenders of any loss, damage, or destruction to
the Collateral whether or not covered by insurance. The Agent is hereby
authorized to collect all insurance and condemnation proceeds in respect of
Collateral directly and to apply or remit them as follows:
(i) With respect to insurance and condemnation proceeds
relating to Collateral other than Fixed Assets, after deducting from
such proceeds the reasonable expenses, if any, incurred by the Agent in
the collection or handling thereof, the Agent shall apply such
proceeds, ratably, to the reduction of the Obligations in the order
provided for in Section 3.8.
(ii) With respect to insurance and condemnation proceeds
relating to Collateral consisting of Fixed Assets, the Agent shall
permit or require the Borrowers to use such proceeds, or any part
thereof, to replace, repair, restore or rebuild the relevant Fixed
Assets in a diligent and expeditious manner with materials and
workmanship of substantially the same quality as existed before the
loss, damage or destruction so long as (1) no Default or Event of
Default has occurred and is continuing, (2) the aggregate proceeds do
not exceed $1,000,000 and (3) the Borrower first (i) provides the Agent
and the Required Lenders with plans and specifications for any such
repair or restoration which shall be reasonably satisfactory to the
Agent and the Required Lenders and (ii) demonstrates to the reasonable
satisfaction of the Agent and the Required Lenders that the funds
available to it will be sufficient to complete such project in the
manner provided therein. In all other circumstances, the Agent shall
apply such insurance and
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condemnation proceeds, ratably, to the reduction of the Obligations in the
order provided for in Section 3.4(b).
7.7 Environmental Laws.
(a) The Parent shall, and shall cause each of its Subsidiaries to,
conduct its business in compliance in all material respects with all material
Environmental Laws applicable to it, including those relating to the generation,
handling, use, storage, and disposal of any Contaminant. The Parent shall, and
shall cause each of its Subsidiaries to, take prompt and appropriate action to
respond to any material non-compliance with Environmental Laws and shall
regularly report to the Agent on such response.
(b) Without limiting the generality of the foregoing, the Borrower
Parties shall submit to the Agent and the Lenders annually, commencing on the
first anniversary Date and on each Anniversary Date thereafter, an update of the
status of each environmental compliance or liability issue. The Agent or any
Lender may obtain copies of technical reports prepared by the Parent and its
Subsidiaries and their communications with any Governmental Authority to
determine whether the appropriate Borrower Parties are proceeding reasonably to
correct, cure or contest in good faith any alleged non-compliance or
environmental liability.
7.8 Compliance with ERISA. Each Borrower Party shall, and shall cause
each of its ERISA Affiliates to: (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law; (b) cause each Plan which is qualified under Section
401(a) of the Code to maintain such qualification; (c) make all required
contributions to any Plan subject to Section 412 of the Code; (d) not engage in
a prohibited transaction or violation of the fiduciary responsibility rules with
respect to any Plan; and (e) not engage in a transaction that could be subject
to Section 4069 or 4212(c) of ERISA.
7.9 Mergers, Consolidations or Sales. No Borrower Party shall enter
into any transaction of merger, reorganization, or consolidation, or transfer,
sell, assign, lease, or otherwise dispose of all or any part of its property, or
wind up, liquidate or dissolve, or agree to do any of the foregoing, except:
(a) sales of Inventory in the ordinary course of its business;
(b) (i) sales or other dispositions of Equipment of the Parent or the
Subsidiaries in the ordinary course of business that are obsolete or no longer
useable on a commercially reasonable basis by any such Person in its business,
and (ii) so long as no Default or Event of Default has occurred and is
continuing, the sale of Equipment by a Borrower to another Borrower and the sale
of Equipment by a Guarantor to another Borrower Party. All proceeds of a sale or
disposition under clause (i) or (ii) above, after payment of reasonable selling
costs, shall be deposited in a Payment Account. All
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Equipment purchased with such proceeds shall be free and clear of all Liens,
except the Agent's Liens;
(c) the merger of a Borrower into another Borrower so long as (i) no
Default or Event of Default has occurred and is continuing or would be caused
thereby, (ii) the Borrower Parties provide the Agent with 10 days prior written
notice of such merger, (iii) in the event of a merger involving the Parent, the
Parent shall be the surviving Person, and (iv) contemporaneously with such
merger, the Borrower Parties deliver to the Agent all documents reasonably
requested by the Agent to continue the Agent's Liens on the Collateral, in each
case, in form and substance satisfactory to the Agent, including, without
limitation, such pledge agreements, new stock certificates and stock powers,
financing statements or other documents as shall be reasonably requested by the
Agent;
(d) the merger of a Guarantor into another Guarantor so long as (i) no
Default or Event of Default has occurred and is continuing or would be caused
thereby, (ii) the Borrower Parties provide the Agent with 10 days prior written
notice of such merger, and (iii) contemporaneously with such merger, the
Borrower Parties deliver to the Agent all documents reasonably requested by the
Agent to continue the Agent's Liens on the Collateral, in each case, in form and
substance satisfactory to the Agent, including, without limitation, such pledge
agreements, new stock certificates and stock powers, financing statements or
other documents as shall be reasonably requested by the Agent; and
(e) the merger of a Guarantor into a Borrower so long as (i) no Default
or Event of Default has occurred and is continuing or would be caused thereby,
(ii) the applicable Borrower shall be the surviving Person, (iii) the Borrower
Parties provide the Agent with 10 days prior written notice of such merger, and
(iv) contemporaneously with such merger, the Borrower Parties deliver to the
Agent all documents reasonably requested by the Agent to continue the Agent's
Liens on the Collateral, in each case, in form and substance satisfactory to the
Agent, including, without limitation, such pledge agreements, new stock
certificates and stock powers, financing statements or other documents as shall
be reasonably requested by the Agent;
(f) Permitted Acquisitions;
(g) disposition of other assets (excluding any assets the value of
which are included in the calculation of the Borrowing Base) having a fair
market value not to exceed $2,000,000 during any Fiscal Year or $7,000,000 in
the aggregate during the term of this Agreement;
(h) disposition of Real Estate acquired in connection with the
acquisition of Toastmaster Inc. set forth on Schedule 7.9 and any of the
personal property (except Inventory) located thereon; and
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(i) disposition of Proprietary Rights to a Subsidiary of any Borrower
Party; provided, that prior to the consummation of any such disposition, the
Agent shall be satisfied in its sole discretion of the continued priority and
validity of the Agent's Lien in all such Proprietary Rights.
7.10 Distributions; Capital Change; Restricted Investments. Except for
(1) Permitted Transactions, (2) Permitted Acquisitions and, (3) so long as the
holders of any such preferred Stock do not have any redemption rights on or
prior to the date one hundred eighty (180) days following the Termination Date,
the issuance of preferred Stock, no Borrower Party shall (a) directly or
indirectly declare or make, or incur any liability to make, any Distribution,
except Distributions to a Borrower by its Subsidiaries, (b) make any change in
its capital structure which could have a Material Adverse Effect or (c) make any
Restricted Investment.
7.11 [Intentionally Omitted.]
7.12 Guaranties. No Borrower Party shall make, issue, or become liable
on any Guaranty, except (a) Guaranties of the Obligations in favor of the Agent,
(b) Guaranties by the Parent of Debt permitted by Section 7.13, trade payables
and real estate operating leases and, (c) Guaranties of Debt by Guarantors
permitted by Section 7.13(e).
7.13 Debt. No Borrower Party shall incur or maintain any Debt, other
than: (a) the Obligations (including Debt incurred pursuant to any Hedge
Agreements so long as that the aggregate outstanding notional amount of all
Hedge Agreements shall not at any time exceed an amount equal to fifty-five
percent (55%) of the Commitments (it being understood that, for purposes of this
clause (a), in calculating the aggregate outstanding notional amount of Hedge
Agreements, the notional amount of Hedge Agreements providing for swaps of
floating interest rates for fixed interest rates shall be netted against the
notional amount of Hedge Agreements providing for swaps of fixed interest rates
for floating interest rates of similar tenors); (b) Debt described on Schedule
6.9; (c) Capital Leases of Equipment and purchase money secured Debt incurred to
purchase Equipment (or any renewals or refinancing of such Debt on terms not
materially less favorable to the Borrower Parties) provided that (i) Liens
securing the same attach only to the applicable Equipment acquired by the
incurrence of such Debt, and (ii) the aggregate amount of such Debt (including
Capital Leases) outstanding does not exceed $3,000,000 at any time; (d) Debt
evidencing a refunding, renewal or extension of the Debt described on Schedule
6.9; provided that (i) the principal amount thereof is not increased, (ii) the
Liens, if any, securing such refunded, renewed or extended Debt do not attach to
any assets in addition to those assets, if any, securing the Debt to be
refunded, renewed or extended, (iii) no Person that is not an obligor or
guarantor of such Debt as of the Closing Date shall become an obligor or
guarantor thereof, and (iv) the terms of such refunding, renewal or extension
are not materially less favorable to the Borrower Parties, the Agent or the
Lenders than the original Debt; (e) the Senior Notes and any refinancings,
refundings, renewals or extensions thereof; provided that any such
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refinancing, refundings, renewals or extensions do not increase the aggregate
principal amount outstanding thereunder by more than $25,000,000 and do not
shorten the maturity of any principal amount thereof, (f) the Intercompany
Account so long as such Debt is subject to the Subordination Agreement, (g) Debt
constituting the Xxxxxxx Obligation, (h) Debt in respect of swap agreements
entered into for non-speculative purposes related to hedging interest rates,
currency values and commodities; (i) Debt arising by reason of Guaranties by a
Borrower Party permitted by Section 7.12(b); (j) Debt assumed or acquired in
connection with any Permitted Acquisition which Debt is outstanding on the date
of such Permitted Acquisition and does not, individually or in the aggregate
with respect to one or more Permitted Acquisitions, exceed $1,000,000; and (k)
Seller Subordinated Debt. The Parent shall not enter into any amendment or
modification of the documents evidencing the Debt permitted under clauses (e),
(f) or (g) above that is in any manner adverse to the Parent, any Subsidiary,
the Agent or any Lender.
7.14 Prepayment. No Borrower Party shall voluntarily prepay any Debt,
except (a) the Obligations in accordance with the terms of this Agreement or (b)
in connection with a refinancing permitted under Section 7.13(e) above including
the application of any proceeds received as a result of an equity infusion to
prepay the Debt described in Section 7.13(e).
7.15 Transactions with Affiliates. Except as set forth below and except
for mergers permitted under Section 7.9 and the Intercompany Account permitted
pursuant to Section 7.13, no Borrower Party shall sell, transfer, distribute, or
pay any money or property, including, but not limited to, any fees or expenses
of any nature (including, but not limited to, any fees or expenses for
management services), to any Affiliate, or lend or advance money or property to
any Affiliate, or invest in (by capital contribution or otherwise) or purchase
or repurchase any stock or indebtedness, or any property, of any Affiliate, or
become liable on any Guaranty of the indebtedness, dividends, or other
obligations of any Affiliate. Notwithstanding the foregoing, while no Event of
Default has occurred and is continuing, the Borrower Parties may engage in
transactions with Affiliates in the ordinary course of business consistent with
past practices, in amounts and upon terms fully disclosed to the Agent and the
Lenders, and no less favorable to the Borrower Parties than would be obtained in
a comparable arm's-length transaction with a third party who is not an
Affiliate; provided, that in any event all such transactions shall be reflected
and itemized on the Intercompany Account.
7.16 Investment Banking and Finder's Fees. Except as set forth on
Schedule 7.16, no Borrower Party shall pay or agree to pay, or reimburse any
other party with respect to, any investment banking or similar or related fee,
underwriter's fee, finder's fee, or broker's fee to any Person in connection
with this Agreement. Each Borrower Party shall defend and indemnify the Agent
and the Lenders against and hold them harmless from all claims of any Person
that the Parent or any Subsidiary is obligated to pay for any such fees, and all
costs and expenses (including attorneys' fees) incurred by the Agent and/or any
Lender in connection therewith.
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7.17 Business Conducted. No Borrower shall or shall permit any of its
Subsidiaries to engage, directly or indirectly, in any line of business other
than the businesses in which such Person is engaged on the Closing Date or which
are reasonably related thereto, including without limitation the design,
marketing and distribution of any products covered by the International
Housewares Association.
7.18 Liens. No Borrower Party shall create, incur, assume, or permit to
exist any Lien on any property, including without limitation to the Real Estate,
now owned or hereafter acquired by any of them, except Permitted Liens.
7.19 Sale and Leaseback Transactions. No Borrower Party shall, directly
or indirectly, enter into any arrangement or arrangements, with any Person
providing for the Parent or such Subsidiary to lease or rent property that the
Parent or such Subsidiary has sold or will sell or otherwise transfer to such
Person.
7.20 New Subsidiaries. No Borrower Party shall, directly or indirectly,
organize, create, acquire or permit to exist any Subsidiary other than
wholly-owned indirect foreign Subsidiaries or those listed on Schedule 6.5;
provided, however, that the Borrower Parties may create new wholly owned direct
or indirect Subsidiaries after the Closing Date so long as at the time of the
formation of any such direct or indirect Subsidiary of any Borrower Party, the
Borrower Parties, or any of them, as appropriate, shall (a) cause each new
domestic Subsidiary to provide to the Agent a joinder agreement in the form of
Exhibit D hereto (a "Guarantor Joinder Agreement"), a supplement to the
Subsidiary Guaranty, a supplement to the Security Agreement, and such other
security documents requested by the Agent in its discretion, together with
appropriate UCC-1 financing statements, all in form and substance satisfactory
to the Agent, (b) provide to the Agent a pledge agreement and appropriate
certificates and powers or UCC-1 financing statements, pledging all direct or
beneficial ownership interests in each new domestic Subsidiary, in form and
substance satisfactory to the Agent, (c) provide to Agent a pledge agreement
with respect to any foreign Subsidiaries directly owned by a Borrower Party a
pledge by such Borrower of not less than sixty-five percent (65%) of the equity
interests of such foreign Subsidiaries, and (d) to provide to the Agent all
other documentation, including one or more opinions of counsel satisfactory to
the Agent, which in its opinion is appropriate with respect to such formation
and the execution and delivery of the applicable documentation referred to
above. Upon execution and delivery of the supplements described above by each
new domestic subsidiary, such domestic Subsidiary shall become a Guarantor
hereunder with the same force and effect as if originally named as a Guarantor
herein. The execution and delivery of any Guaranty Joinder Agreement shall not
require the consent of any Borrower Party hereunder. The rights and obligations
of each Borrower Party hereunder shall remain in full force and effect
notwithstanding the addition of any Guarantor hereunder. Any document, agreement
or instrument executed or issued pursuant to this Section 7.20 shall be a "Loan
Document" for purposes of this Agreement.
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7.21 Fiscal Year. No Borrower Party shall change its Fiscal Year
without the prior written consent of the Agent.
7.22 Capital Expenditures. Commencing with the Fiscal Year ending June
30, 2003, no Borrower Party shall make or incur any Capital Expenditure if,
after giving effect thereto, the aggregate amount of all Capital Expenditures by
the Borrower Parties on a consolidated basis would exceed $10,000,000 plus, the
Carry Forward Amount, if any during any Fiscal Year.
7.23 Fixed Charge Coverage Ratio. No Borrower Party shall permit (a)
the US Fixed Charge Coverage Ratio calculated with respect to the Borrower
Parties to be less than 1.0 to 1.0 for the twelve-month period then ending (i)
during any Increased Reporting Event, as of the end of each month, and (ii) at
all other times, as of the end of each Fiscal Quarter, and (b) the Consolidated
Fixed Charge Coverage Ratio, calculated on a consolidated basis with respect to
the Parent and its Subsidiaries, as of the end of each fiscal month for the
twelve-month period then ending, to be less than 1.0 to 1.0.
7.24 Use of Proceeds. No Borrower shall, nor shall it suffer or permit
any Subsidiary to, use any portion of the Loan proceeds, directly or indirectly,
(a) on the Closing Date, for any purpose other than to refinance Debt
outstanding on the date thereof, to pay transactional fees, costs, and expenses
incurred in connection with this Agreement, the other Loan Documents, and the
transactions contemplated hereby and thereby, (b) after the Closing Date, for
any purpose inconsistent with the purposes, terms and conditions hereof or other
than for lawful and permitted purposes, (c) to purchase or carry Margin Stock,
(d) to repay or otherwise refinance indebtedness of the Borrowers or others
incurred to purchase or carry Margin Stock, (e) to extend credit for the purpose
of purchasing or carrying any Margin Stock, or (f) to acquire any security in
any transaction that is subject to Section 13 or 14 of the Exchange Act.
7.25 Cash Management. Until the Agent notifies the Borrowers to the
contrary, each Borrower shall make collection of all Accounts and other
Collateral for the Agent, shall receive all payments as the Agent's trustee, and
shall immediately deliver all payments in their original form duly endorsed in
blank into a Payment Account established for the account of such Borrower at a
Clearing Bank acceptable to the Agent, subject to a Blocked Account Agreement.
On or prior to the date hereof, the Borrowers shall establish a lock-box service
for collections of Accounts at a Clearing Bank acceptable to the Agent and
subject to a Blocked Account Agreement and other documentation acceptable to the
Agent. Each Borrower shall instruct all Account Debtors to make all payments
directly to the address established for such service. If, notwithstanding such
instructions, any Borrower receives any proceeds of Accounts, it shall receive
such payments as the Agent's trustee, and shall immediately deliver such
payments to the Agent in their original form duly endorsed in blank or deposit
them into a Payment Account, as the Agent may direct. All amounts that shall be
deposited into such Payment Account shall be under the control of the Agent and
the Agent shall be
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authorized to provide instructions to the applicable Clearing Bank with respect
thereto. Notwithstanding the foregoing, except during a Cash Sweep Period, the
Borrowers shall have the right to withdraw funds from, and otherwise exercise
authority with respect to, such Payment Account. During a Cash Sweep Period,
except as otherwise specifically provided herein, amounts deposited in such
Payment Account shall immediately be under the exclusive dominion and control of
the Agent, on behalf of itself and the Lenders, pursuant to the terms of the
applicable Blocked Account Agreement and, as provided in the applicable Blocked
Account Agreement, the Borrowers shall have no right to withdraw such amounts or
otherwise exercise authority with respect to such Payment Account without the
consent of the Required Lenders. From and after the termination of any Cash
Sweep Period, the Agent shall so notify the applicable Clearing Bank and the
Borrowers shall have the right to withdraw funds from, and exercise authority
with respect to, the applicable Payment Account.
7.26 Restrictions on Pricing Adjustments. Without immediate notice to
the Agent, no Borrower shall change or adjust (a) intercompany commissions, or
(b) transfer pricing policies or (c) standard costs of any Inventory, in each
case as in effect on the Closing Date. In response to any such notification that
would have an impact of in excess of $100,000, the Agent may create a reasonable
Reserve until the Agent shall have received the results of the next subsequent
appraisal or re-appraisal of Inventory.
7.27 Further Assurances. The Borrower Parties shall execute and
deliver, or cause to be executed and delivered, to the Agent and/or the Lenders
such documents and agreements, and shall take or cause to be taken such actions,
as the Agent or any Lender may, from time to time, reasonably request to carry
out the terms and conditions of this Agreement and the other Loan Documents and
any Hedge Agreements.
ARTICLE 8
CONDITIONS OF LENDING
8.1 Conditions Precedent to Making of Loans on the Closing Date. The
obligation of the Lenders to make the initial Revolving Loans on the Closing
Date, and the obligation of the Agent to cause the Letter of Credit Issuer to
issue any Letter of Credit on the Closing Date, are subject to the following
conditions precedent having been satisfied in a manner satisfactory to the Agent
and each Lender:
(a) This Agreement and the other Loan Documents shall have been
executed by each party thereto and the Parent and the Subsidiaries shall have
performed and complied with all covenants, agreements and conditions contained
herein and the other Loan Documents which are required to be performed or
complied with by the Borrower Parties before or on such Closing Date.
(b) Upon making the Revolving Loans (including such Revolving Loans
made to finance the Closing Fees or otherwise as reimbursement for fees, costs
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and expenses then payable under this Agreement) and with all its obligations
current, the Borrowers shall have Availability of at least $40,000,000.
(c) All representations and warranties made hereunder and in the other
Loan Documents shall be true and correct as if made on such date.
(d) No Default or Event of Default shall have occurred and be
continuing after giving effect to the Loans to be made and the Letters of Credit
to be issued on the Closing Date.
(e) The Agent and the Lenders shall have received the opinions of
counsel for the Parent and its Subsidiaries substantially in the form of Exhibit
8.1(e).
(f) The Agent shall have received:
(i) acknowledgment copies of proper financing statements, duly
filed on or before the Closing Date under the UCC of all jurisdictions
that the Agent may deem necessary or desirable in order to perfect the
Agent's Liens; and
(ii) duly executed UCC-3 Termination Statements and such other
instruments, in form and substance satisfactory to the Agent, as shall
be necessary to terminate and satisfy all Liens on the Property of the
Borrower Parties except Permitted Liens.
(g) The Borrowers shall have paid all fees and expenses of the Agent
required to be paid as of the Closing Date and the Attorney Costs incurred in
connection with any of the Loan Documents and the transactions contemplated
thereby to the extent invoiced.
(h) The Agent shall have received evidence, in form, scope, and
substance, reasonably satisfactory to the Agent, of all insurance coverage as
required by this Agreement.
(i) The Agent and the Lenders shall have had an opportunity (i) if they
so choose to examine the books of account and other records and files of the
Parent and the Subsidiaries and the opportunity to make copies thereof, and to
conduct a pre-closing audit which shall include, without limitation,
verification of Inventory, Accounts, and the Borrowing Base, and the results of
such examination and audit shall have been satisfactory to the Agent and the
Lenders in all respects, (ii) to inspect each of the locations where the
Inventory is located, the results of which shall be satisfactory to the Agent,
and (iii) to review the Borrower Parties' material contracts and licenses.
(j) All proceedings taken in connection with the execution of this
Agreement, all other Loan Documents and all documents and papers relating
thereto shall be satisfactory in form, scope, and substance to the Agent and the
Lenders.
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(k) The Agent shall have received a landlord waiver, bailee letter, or
acknowledgement agreement from any lessor, warehouseman, processor, consignee,
or other Person in possession of, having a lien upon, or having rights or
interests in the Borrowers' Inventory (unless a three-month Reserve (or a
six-month Reserve, with respect to locations of Inventory in the Commonwealth of
Virginia) shall have been taken with respect thereto).
(l) The Agent shall have a notice from the Administrative Borrower
setting forth the Designated Account.
(m) The Agent shall have received a corporate organizational chart for
the Parent and the Subsidiaries certified by the secretary of the Parent as
being correct and complete as of the Closing Date.
(n) Without limiting the generality of the items described above, the
Borrower and each Person guarantying or securing payment of the Obligations
shall have delivered or caused to be delivered to the Agent (in form and
substance reasonably satisfactory to the Agent), the financial statements and
projections, instruments, resolutions, documents, agreements, certificates,
opinions and other items set forth on the "Closing Checklist" delivered by the
Agent to the Borrowers prior to the Closing Date.
The acceptance by the Borrowers of any Loans made or Letters of Credit
issued on the Closing Date shall be deemed to be a representation and warranty
made by the Borrower Parties to the effect that all of the conditions precedent
to the making of such Loans or the issuance of such Letters of Credit have been
satisfied, with the same effect as delivery to the Agent and the Lenders of a
certificate signed by a Responsible Officer of the Administrative Borrower,
dated the Closing Date, to such effect.
Execution and delivery to the Agent by a Lender of a counterpart of
this Agreement shall be deemed confirmation by such Lender that (i) all
conditions precedent in this Section 8.1 have been fulfilled to the satisfaction
of such Lender, (ii) the decision of such Lender to execute and deliver to the
Agent an executed counterpart of this Agreement was made by such Lender
independently and without reliance on the Agent or any other Lender as to the
satisfaction of any condition precedent set forth in this Section 8.1, and (iii)
all documents sent to such Lender for approval, consent, or satisfaction were
acceptable to such Lender.
8.2 Conditions Precedent to Each Loan. The obligation of the Lenders to
make each Loan, including the initial Revolving Loans on the Closing Date, and
the obligation of the Agent to cause the Letter of Credit Issuer to issue any
Letter of Credit, shall be subject to the further conditions precedent that on
and as of the date of any such extension of credit:
(a) The following statements shall be true, and the acceptance by the
Borrowers of any extension of credit shall be deemed to be a statement to the
effect set
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forth in clauses (i), (ii) and (iii) with the same effect as the delivery to the
Agent and the Lenders of a certificate signed by a Responsible Officer of the
Administrative Borrower, dated the date of such extension of credit, stating
that:
(i) After giving effect to any updated or supplemental
Schedules delivered pursuant to Section 5.3(q), the representations and
warranties contained in this Agreement and the other Loan Documents are
correct in all material respects on and as of the date of such
extension of credit (or with respect to such updated or supplemental
Schedules, the last day of the prior Fiscal Quarter) as though made on
and as of such date, other than any such representation or warranty
which relates to a specified prior date and except to the extent the
Agent and the Lenders have been notified in writing by the Borrowers
that any representation or warranty is not correct and the Required
Lenders have explicitly waived in writing compliance with such
representation or warranty; and
(ii) No event has occurred and is continuing, or would result
from such extension of credit, which constitutes a Default or an Event
of Default.
(b) No such Borrowing shall exceed Availability, provided, however,
that the foregoing conditions precedent are not conditions to each Lender
participating in or reimbursing the Agent for such Lenders' Pro Rata Share of
any Non-Ratable Loan or Agent Advance made in accordance with the provisions of
Sections 1.2(h) and (i).
8.3 Conditions Subsequent to Each Loan. The failure of the Borrowers to
comply with any of the following by the date set forth below shall be deemed to
constitute an Event of Default:
(a) On or before June 9, 2003, the Administrative Borrower shall
deliver to the Agent one or more duly executed Foreign Pledge Agreements,
together with any applicable share certificates, transfer powers, instruments,
proofs of registration and opinions of counsel as may be requested by the Agent,
in each case in form and substance satisfactory to the Agent, with respect to
the equity interests of (i) Toastmaster de Mexico S.A. and (ii) Salton
International C.V.;
(b) On or before June 9, 2003, the Administrative Borrower shall
deliver to the Agent a duly executed Blocked Account Agreement, in each case in
form and substance satisfactory to the Agent, with respect to the following
Clearing Banks: (i) First Union National Bank, (ii) U.S. Bank, (iii) First
National Bank of Columbia, Missouri, (iv) LaSalle National Bank and (v) Silicon
Valley Bank.
(c) On or before June 9, 2003, the Administrative Borrower shall
deliver to the Agent either (i) a Subordination Agreement, duly executed by
Xxxxxx Xxxxxxx and at the request of the Agent, Xxxxxxx Xxxxxxxx and Xxx
Xxxxxxxxxx and the Borrower Parties, in form and substance satisfactory to the
Agent or (ii) evidence of the repayment in full of the Xxxxxxx Obligation and
the release by Xxxxxx Xxxxxxx and at
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the request of the Agent, Xxxxxxx Xxxxxxxx and Xxx Xxxxxxxxxx of all security
interests in any property of the Borrower Parties, in form and substance
satisfactory to the Agent;
(d) On or before June 30, 2003, the Administrative Borrower shall
certify to the Agent, to the Administrative Borrower's Knowledge, together with
evidence satisfactory to the Agent of, the ability of the Borrowers to timely
and regularly provide weekly collateral reports in form and detail substance to
the Agent and the monthly financial statements set forth in Section 5.2(g); and
(e) On or before September 1, 2003, the Administrative Borrower shall
deliver to the Agent, evidence of the transfer of the Stock of Salton/Maxim
Housewares Pty Ltd. (Australia) ("Salton Australia") by the Parent to Salton
International CV (Netherlands); provided, that no Default or Event of Default
shall be deemed to exist with respect to this Section 8.3(b) as a result of any
failure of the Administrative Borrower to deliver such evidence so long as on or
prior to such date, the Parent shall have pledged the Stock of Salton Australia
in favor of the Parent and shall have executed and delivered such other
documentation (including opinions of counsel) as the Agent shall request to
perfect its Lien on such Stock.
ARTICLE 9
DEFAULT; REMEDIES
9.1 Events of Default. It shall constitute an event of default ("Event
of Default") if any one or more of the following shall occur for any reason:
(a) any failure by the Borrowers to pay the principal of or interest or
premium on any of the Obligations or any fee or other amount owing hereunder
when due, whether upon demand or otherwise;
(b) any representation or warranty made or deemed made by any Borrower
Party in this Agreement or in any of the other Loan Documents, any Hedge
Agreement, any Financial Statement, or any certificate furnished by any Borrower
Party at any time to the Agent or any Lender shall prove to be untrue in any
material respect as of the date on which made, deemed made, or furnished;
(c) (i) any default shall occur in the observance or performance of any
of the covenants and agreements contained in Sections 5.2(l), 7.2(a), 7.5, 7.8
through 7.26, (ii) any default shall occur in the observance or performance of
any of the covenants and agreements contained in Sections 5.2 (other than 5.2(l)
or 5.3 and such default shall continue for five (5) days or more; or (iii) any
default shall occur in the observance or performance of any of the other
covenants or agreements contained in any other Section of this Agreement or any
other Loan Document, or any other agreement entered into at any time to which
any Borrower Party and the Agent or any Lender are party (including in respect
of any Bank Products) and such default shall continue for fifteen (15) days or
more;
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(d) any default shall occur with respect to any Debt (other than the
Obligations) of any Borrower Party in an outstanding principal amount which
exceeds $1,000,000 or under any agreement or instrument under or pursuant to
which any such Debt may have been issued, created, assumed, or guaranteed by any
Borrower Party and such default shall continue for more than the period of
grace, if any, therein specified, if the effect thereof (with or without the
giving of notice or further lapse of time or both) is to accelerate, or to
permit the holders of any such Debt to accelerate, the maturity of any such
Debt; or any such Debt shall be declared due and payable or be required to be
prepaid (other than by a regularly scheduled required prepayment) prior to the
stated maturity thereof;
(e) the Parent or any of its Subsidiaries shall (i) file a voluntary
petition in bankruptcy or file a voluntary petition or an answer or otherwise
commence any action or proceeding seeking reorganization, arrangement or
readjustment of its debts or for any other relief under the Bankruptcy Code, as
amended, or under any other bankruptcy or insolvency act or law, state or
federal, now or hereafter existing, or consent to, approve of, or acquiesce in,
any such petition, action or proceeding; (ii) apply for or acquiesce in the
appointment of a receiver, assignee, liquidator, sequestrator, custodian,
monitor, trustee or similar officer for it or for all or any part of its
property; (iii) make an assignment for the benefit of creditors; or (iv) be
unable generally to pay its debts as they become due;
(f) an involuntary petition shall be filed or an action or proceeding
otherwise commenced seeking reorganization, arrangement, consolidation or
readjustment of the debts of the Parent or any of its Subsidiaries or for any
other relief under the federal Bankruptcy Code, as amended, or under any other
bankruptcy or insolvency act or law, state or federal, now or hereafter existing
and such petition or proceeding shall not be dismissed within thirty (30) days
after the filing or commencement thereof or an order of relief shall be entered
with respect thereto;
(g) a receiver, assignee, liquidator, sequestrator, custodian, monitor,
trustee or similar officer for the Parent or any of its Subsidiaries or for all
or any part of its property shall be appointed or a warrant of attachment,
execution or similar process shall be issued against any part of the property of
the Parent or any of its Subsidiaries;
(h) any Borrower Party shall file a certificate of dissolution under
applicable state law or shall be liquidated, dissolved or wound-up or shall
commence, or the Parent or any of its Subsidiaries shall have commenced against
it, any action or proceeding for dissolution, winding-up or liquidation, and
such action or proceeding shall not be dismissed within thirty (30) days after
the filing or commencement thereof or an order of relief shall be entered with
respect thereto;
(i) all or any material part of the property (including Inventory) of
the Parent or any of its Subsidiaries shall be nationalized, expropriated or
condemned, recalled, seized or otherwise appropriated, or custody or control of
such property or of the
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Parent or such Subsidiary shall be assumed by any Governmental Authority or any
court of competent jurisdiction at the instance of any Governmental Authority,
except where contested in good faith by proper proceedings diligently pursued
where a stay of enforcement is in effect;
(j) (i) any Hedge Agreement shall be terminated as a result of a
default or event of default by any Borrower Party or revoked or declared void or
invalid or unenforceable or challenged by any Borrower Party or any other
obligor or (ii) any Loan Document shall be terminated, revoked or declared void
or invalid or unenforceable or challenged by any Borrower Party or any other
obligor;
(k) Except as set forth on Schedule 9.1(k), one or more judgments,
orders, decrees (including, without limitation, out of court settlements) or
arbitration or mediation awards is entered against or paid by any Borrower Party
involving in the aggregate liability (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage) as to
any single or related or unrelated series of transactions, incidents or
conditions, of $1,000,000 or more the same shall remain unsatisfied, unvacated
and unstayed pending appeal for a period of thirty (30) days after the entry
thereof;
(l) any loss, theft, damage or destruction of any item or items of
Collateral or other property of any Borrower Party occurs which could reasonably
be expected to cause a Material Adverse Effect and is not adequately covered by
insurance;
(m) there is filed against the Parent or any of its Subsidiaries any
action, suit or proceeding under any federal or state racketeering statute
(including the Racketeer Influenced and Corrupt Organization Act of 1970), which
action, suit or proceeding (i) is not dismissed within one hundred twenty (120)
days, or (ii) could reasonably be expected to result in the confiscation or
forfeiture of any material portion of the Collateral;
(n) for any reason other than the failure of the Agent to take any
action available to it to maintain perfection of the Agent's Liens, pursuant to
the Loan Documents, any Loan Document ceases to be in full force and effect or
any Lien with respect to any material portion of the Collateral intended to be
secured thereby ceases to be, or is not, valid, perfected and prior to all other
Liens (other than Permitted Liens) or is terminated, revoked or declared void;
(o) (i) an ERISA Event shall occur with respect to a Pension Plan or
Multi-employer Plan which has resulted or could reasonably be expected to result
in liability of any Borrower Party under Title IV of ERISA to the Pension Plan,
Multi-employer Plan or the PBGC in an aggregate amount, together with the amount
of any liability under clauses (ii) and (iii) of this Section 9.1(o), in excess
of $1,000,000; (ii) the aggregate amount of Unfunded Pension Liability among all
Pension Plans at any time, together with the amount of any liability under
clauses (i) and (iii) of this Section 9.1(o)
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exceeds $1,000,000; or (iii) any Borrower Party or any ERISA Affiliate shall
fail to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multi-employer Plan in an aggregate amount, together with the
amount of any liability under clauses (i) and (ii) of this Section 9.1(o), in
excess of $1,000,000;
(p) there occurs any default or event of default under the Senior
Notes, the Kmart Receivable Purchasing Agreement or with respect to Xxxxxxx
Obligation;
(q) there occurs a Change of Control; or
(r) there occurs an event having a Material Adverse Effect.
9.2 Remedies.
(a) If a Default or an Event of Default exists, the Agent may, in its
discretion, and shall, at the direction of the Required Lenders, do one or more
of the following at any time or times and in any order, without notice to or
demand on the Borrower Parties: (i) reduce the Maximum Revolver Amount, or the
advance rates against Eligible Accounts and/or Eligible Inventory used in
computing the Borrowing Base, or reduce one or more of the other elements used
in computing the Borrowing Base or increasing Reserves; (ii) restrict the amount
of or refuse to make Revolving Loans; and (iii) restrict or refuse to provide
Letters of Credit or Credit Support. If an Event of Default exists, the Agent
shall, at the direction of the Required Lenders, do one or more of the
following, in addition to the actions described in the preceding sentence, at
any time or times and in any order, without notice to or demand on the Borrower
Parties: (A) terminate the Commitments and this Agreement; (B) declare any or
all Obligations to be immediately due and payable (excluding Obligations arising
under any Hedge Agreement); provided, however, that upon the occurrence of any
Event of Default described in Sections 9.1(e), 9.1(f), 9.1(g), or 9.1(h), the
Commitments shall automatically and immediately expire and all Obligations
(excluding Obligations arising under any Hedge Agreement) shall automatically
become immediately due and payable without notice or demand of any kind; (C)
require the Borrowers to deliver to the Agent a standby letter of credit in form
and substance satisfactory to the Agent, issued by an issuer satisfactory to the
Agent in an amount equal to one hundred five percent (105%) of all outstanding
Letter of Credit obligations (or in the event the Borrowers demonstrate to the
reasonable satisfaction of the Agent the inability of the Borrowers, or any of
them, to obtain such standby letter of credit, cash collateralize one hundred
five percent (105%) of all outstanding Letter of Credit obligations); and (D)
pursue its other rights and remedies under the Loan Documents and applicable
law.
(b) If an Event of Default has occurred and is continuing: (i) the
Agent shall have for the benefit of the Lenders, in addition to all other rights
of the Agent and the Lenders, the rights and remedies of a secured party under
the Loan Documents and the UCC; (ii) the Agent may, at any time, take possession
of the Collateral and keep
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it on the Borrower Parties' premises, at no cost to the Agent or any Lender, or
remove any part of it to such other place or places as the Agent may desire, or
the Borrower Parties shall, upon the Agent's demand, at the Borrowers' cost,
assemble the Collateral and make it available to the Agent at a place reasonably
convenient to the Agent; and (iii) the Agent may sell and deliver any Collateral
at public or private sales, for cash, upon credit or otherwise, at such prices
and upon such terms as the Agent deems advisable, in its sole discretion, and
may, if the Agent deems it reasonable, postpone or adjourn any sale of the
Collateral by an announcement at the time and place of sale or of such postponed
or adjourned sale without giving a new notice of sale. Without in any way
requiring notice to be given in the following manner, the Borrower Parties agree
(on their behalf and on behalf of their Subsidiaries) that any notice by the
Agent of sale, disposition or other intended action hereunder or in connection
herewith, whether required by the UCC or otherwise, shall constitute reasonable
notice to the Parent and the Subsidiaries if such notice is mailed by registered
or certified mail, return receipt requested, postage prepaid, or is delivered
personally against receipt, at least ten (10) calendar days prior to such action
to the Administrative Borrower's address specified in or pursuant to Section
13.8. If any Collateral is sold on terms other than payment in full at the time
of sale, no credit shall be given against the Obligations until the Agent or the
Lenders receive cash payment, and if the buyer defaults in payment, the Agent
may resell the Collateral without further notice to the Parent and the
Subsidiaries. In the event the Agent seeks to take possession of all or any
portion of the Collateral by judicial process, the Borrower Parties (on their
behalf and on behalf of their Subsidiaries) irrevocably waive: (A) the posting
of any bond, surety or security with respect thereto which might otherwise be
required; (B) any demand for possession prior to the commencement of any suit or
action to recover the Collateral; and (C) any requirement that the Agent retain
possession and not dispose of any Collateral until after trial or final
judgment. The Borrower Parties agree (on their behalf and on behalf of their
Subsidiaries) that the Agent has no obligation to preserve rights to the
Collateral or marshal any Collateral for the benefit of any Person. The Agent is
hereby granted a license or other right to use, without charge, the Parent's and
the Subsidiaries' labels, patents, copyrights, names, trade secrets, trade
names, trademarks, and advertising matter, or any similar property, in
completing production of, advertising or selling any Collateral, and the
Parent's and the Subsidiaries' rights under all licenses and all franchise
agreements shall inure to the Agent's benefit for such purpose. The proceeds of
sale shall be applied first to all expenses of sale, including attorneys' fees,
and then to the Obligations. The Agent will return any excess to the Parent and
the Subsidiaries and the Parent and the Subsidiaries shall remain liable for any
deficiency.
(c) If an Event of Default has occurred and is continuing, the Borrower
Parties hereby waive to the extent permitted by law (on their behalf and on
behalf of the Subsidiaries) all rights to notice and hearing prior to the
exercise by the Agent of the Agent's rights to repossess the Collateral without
judicial process or to replevy, attach or levy upon the Collateral without
notice or hearing.
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ARTICLE 10
TERM AND TERMINATION
10.1 Term and Termination. The term of this Agreement shall end on the
Stated Termination Date unless sooner terminated in accordance with the terms
hereof. The Agent upon direction from the Required Lenders may terminate this
Agreement without notice upon the occurrence of an Event of Default. Upon the
effective date of termination of this Agreement for any reason whatsoever, all
Obligations (including all unpaid principal, accrued and unpaid interest and any
early termination or prepayment fees or penalties) shall become immediately due
and payable and the Borrowers shall immediately arrange for (a) the cancellation
and return of Letters of Credit then outstanding or (b) the delivery of a
Supporting Letter of Credit (or the deposit of cash collateral, if applicable)
in accordance with the provisions of Section 1.3(g). Notwithstanding the
termination of this Agreement, until all Obligations are indefeasibly paid and
performed in full in cash, the Borrower Parties shall remain bound by the terms
of this Agreement and shall not be relieved of any of their respective
Obligations hereunder or under any other Loan Document, or any Hedge Agreement
and the Agent and the Lenders shall retain all their rights and remedies
hereunder (including the Agent's Liens in and all rights and remedies with
respect to all then existing and after-acquired or after-arising Collateral).
ARTICLE 11
AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
11.1 Amendments and Waivers.
(a) No amendment or waiver of any provision of this Agreement or any
other Loan Document, and no consent with respect to any departure by the
Borrower Parties therefrom, shall be effective unless the same shall be in
writing and signed by the Required Lenders (or by the Agent at the written
request of the Required Lenders) and the Borrower Parties party thereto and then
any such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
waiver, amendment, or consent shall, unless in writing and signed by all the
Lenders and the Borrower Parties party thereto and acknowledged by the Agent, do
any of the following:
(i) increase or extend the Commitment of any Lender (it being
understood and agreed that a waiver of any Default or Event of Default
or a modification of any of the defined terms contained herein (other
than those defined terms specifically addressed in this Section 11.1)
shall not constitute a change in the terms of any Commitment of any
Lender);
(ii) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or
other amounts due to the Lenders (or any of them) hereunder or under
any other Loan Document;
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(iii) reduce the principal of, or the rate of interest
specified herein on any Loan, or any fees or other amounts payable
hereunder or under any other Loan Document;
(iv) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for
the Lenders or any of them to take any action hereunder;
(v) increase any of the percentages set forth in the
definition of the Borrowing Base;
(vi) amend this Section or any provision of this Agreement
providing for consent or other action by all Lenders;
(vii) release any Guaranties of the Obligations or release
Collateral other than as permitted by Section 12.11;
(viii) change the definitions of "Availability," "Bank
Products," "Banks," "Co-Agents," "Letter of Credit Issuer," "Majority
Lenders" or "Required Lenders"; or
(ix) increase the Maximum Revolver Amount and Letter of Credit
Subfacility;
provided, however, the Agent may, in its sole discretion and notwithstanding the
limitations contained in clauses (v) and (ix) above and any other terms of this
Agreement, make Agent Advances in accordance with Section 1.2(i) and, provided
further, that no amendment, waiver or consent shall, unless in writing and
signed by the Agent, affect the rights or duties of the Agent under this
Agreement or any other Loan Document and provided further, that Schedule 1.2
hereto (Commitments) may be amended from time to time by Agent alone to reflect
assignments of Commitments in accordance herewith.
(b) If any fees are paid to the Lenders as consideration for
amendments, waivers or consents with respect to this Agreement, at Agent's
election, such fees may be paid only to those Lenders that agree to such
amendments, waivers or consents within the time specified for submission
thereof.
(c) If, in connection with any proposed amendment, waiver or consent (a
"Proposed Change"):
(i) requiring the consent of all Lenders, the consent
of Required Lenders is obtained, but the consent of other
Lenders is not obtained (any such Lender whose consent is not
obtained as described in this clause (i) and in clause (ii)
below being referred to as a "Non Consenting Lender "), or
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(ii) requiring the consent of Required Lenders, the
consent of Majority Lenders is obtained,
then, so long as the Agent is not a Non-Consenting Lender, at the Borrowers'
request, the Agent or an Eligible Assignee shall have the right (but not the
obligation) with the Agent's approval, to purchase from the Non-Consenting
Lenders, and the Non-Consenting Lenders agree that they shall sell, all the
Non-Consenting Lenders' Commitments for an amount equal to the principal
balances thereof and all accrued interest and fees with respect thereto through
the date of sale pursuant to Assignment and Acceptance Agreement(s), without
premium or discount.
11.2 Assignments; Participations.
(a) Any Lender may, with the written consent of the Agent and so long
as no Default or Event of Default then exists, the Administrative Borrower
(which consents shall not be unreasonably withheld, conditioned or delayed),
assign and delegate to one or more Eligible Assignees (provided that no consent
of the Agent shall be required in connection with any assignment and delegation
by a Lender to an Affiliate of such Lender) (each an "Assignee") all, or any
ratable part of all, of the Loans, the Commitments and the other rights and
obligations of such Lender hereunder, in a minimum amount of $5,000,000
(provided that, unless an assignor Lender has assigned and delegated all of its
Loans and Commitments, no such assignment and/or delegation shall be permitted
unless, after giving effect thereto, such assignor Lender retains a Commitment
in a minimum amount of $5,000,000); provided, however, that the Borrower Parties
and the Agent may continue to deal solely and directly with such Lender in
connection with the interest so assigned to an Assignee until (i) written notice
of such assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the
Administrative Borrower and the Agent by such Lender and the Assignee; (ii) such
Lender and its Assignee shall have delivered to the Administrative Borrower and
the Agent an Assignment and Acceptance in the form of Exhibit E ("Assignment and
Acceptance") and (iii) the assignor Lender or Assignee has paid to the Agent a
processing fee in the amount of $3,500; provided, however, that no such
processing fee shall be due in connection with any assignment by a Lender to an
Affiliate of such Lender.
(b) From and after the date that the Agent notifies the assignor Lender
that it has received an executed Assignment and Acceptance and payment of the
above-referenced processing fee, (i) the Assignee thereunder shall be a party
hereto and, to the extent that rights and obligations, including, but not
limited to, the obligation to participate in Letters of Credit and Credit
Support have been assigned to it pursuant to such Assignment and Acceptance,
shall have the rights and obligations of a Lender under the Loan Documents, and
(ii) the assignor Lender shall, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
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its obligations under this 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 Agreement, such Lender shall cease to be a party
hereto).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto or the attachment, perfection, or priority of any Lien granted
by the Parent and any Subsidiary to the Agent or any Lender in the Collateral;
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Parent and the
Subsidiaries or the performance or observance by the Parent and the
Subsidiaries, as applicable, of any of their obligations under this Agreement or
any other Loan Document furnished pursuant hereto; (iii) such Assignee confirms
that it has received a copy of this Agreement, together with 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 Agent, 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 Agreement; (v) such Assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers, including the discretionary rights and
incidental power, 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 Agreement are required to be performed by
it as a Lender.
(d) Immediately upon satisfaction of the requirements of Section
11.2(a), this Agreement shall be deemed to be amended to the extent, but only to
the extent, necessary to reflect the addition of the Assignee and the resulting
adjustment of the Commitments arising therefrom. The Commitment allocated to
each Assignee shall reduce such Commitments of the assigning Lender pro tanto.
(e) Any Lender may at any time sell to one or more commercial banks,
financial institutions, or other Persons not Affiliates of any Borrower Party (a
"Participant") participating interests in any Loans, the Commitment of that
Lender and the other interests of that Lender (the "originating Lender")
hereunder and under the other Loan Documents; provided, however, that (i) the
originating Lender's obligations under this Agreement shall remain unchanged,
(ii) the originating Lender shall remain solely responsible for the performance
of such obligations, (iii) the Borrower Parties and
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the Agent shall continue to deal solely and directly with the originating Lender
in connection with the originating Lender's rights and obligations under this
Agreement and the other Loan Documents, and (iv) no Lender shall transfer or
grant any participating interest under which the Participant has rights to
approve any amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document except the matters set forth in Section
11.1(a) (i), (ii) and (iii), and all amounts payable by the Borrowers hereunder
shall be determined as if such Lender had not sold such participation; except
that, if amounts outstanding under this Agreement are due and unpaid, or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
and subject to the same limitation as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement.
(f) Notwithstanding any other provision in this Agreement, any Lender
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement in favor of any Federal Reserve
Bank in accordance with Regulation A of the Federal Reserve Board or United
States Treasury Regulation 31 C.F.R. Section 203.14, and such Federal Reserve
Bank may enforce such pledge or security interest in any manner permitted under
applicable law.
ARTICLE 12
THE AGENT
12.1 Appointment and Authorization. Each Lender hereby designates and
appoints the Agent as its agent under this Agreement and the other Loan
Documents and each Lender hereby irrevocably authorizes the Agent to take such
action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. The Agent agrees
to act as such on the express conditions contained in this Article 12. The
provisions of this Article 12 are solely for the benefit of the Agent and the
Lenders and, no Borrower Party shall have any rights as a third party
beneficiary of any of the provisions contained herein, nor shall anything
contained in this Article 12 limit any rights set forth elsewhere in this
Agreement the Borrower Parties have or may have against the Agent, any Bank, any
Lender, any Letter of Credit Issuer or any other Agent-Related Person.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or
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other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties. Except as expressly otherwise provided in this
Agreement, the Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights or taking or
refraining from taking any actions which the Agent is expressly entitled to take
or assert under this Agreement and the other Loan Documents, including (a) the
determination of the applicability of ineligibility criteria with respect to the
calculation of the Borrowing Base, (b) the making of Agent Advances pursuant to
Section 1.2(i), and (c) the exercise of remedies pursuant to Section 9.2, and
any action so taken or not taken shall be deemed consented to by the Lenders.
12.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
12.3 Liability of Agent. None of the Agent Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by any Borrower Party, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of any Borrower Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent Related Person shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Parent or any of the Parent's Subsidiaries or Affiliates.
12.4 Reliance by Agent. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Borrower Parties), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such
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advice or concurrence of the Required Lenders as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the Required
Lenders (or all Lenders if so required by Section 11.1) and such request and any
action taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.
12.5 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default, unless the Agent
shall have received written notice from a Lender or the Borrowers referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default." The Agent will notify the Lenders of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Required Lenders in
accordance with Section 9; provided, however, that unless and until the Agent
has received any such request, 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.
12.6 Credit Decision. Each Lender acknowledges that none of the Agent
Related Persons has made any representation or warranty to it, and that no act
by the Agent hereinafter taken, including any review of the affairs of Borrower
Parties and their Affiliates, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of
Borrower Parties and their Affiliates, and all applicable bank regulatory laws
relating to the transactions contemplated hereby, and made its own decision to
enter into this Agreement and to extend credit to the Borrowers. Each Lender
also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of Borrower Parties. Except for
notices, reports and other documents expressly herein required to be furnished
to the Lenders by the Agent, the Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of Borrower Parties which may come into the possession of any
of the Agent Related Persons.
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12.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the Agent
Related Persons (to the extent not reimbursed by or on behalf of the Borrowers
and without limiting the obligation of the Borrowers to do so), in accordance
with their Pro Rata Shares, from and against any and all Indemnified Liabilities
as such term is defined in Section 13.11; provided, however, that no Lender
shall be liable for the payment to the Agent Related Persons of any portion of
such Indemnified Liabilities resulting solely from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender shall reimburse the Agent upon demand for its Pro Rata Share of any costs
or out of pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Borrowers. The undertaking
in this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of the Agent.
12.8 Agent in Individual Capacity. The Agent and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Parent and its
Subsidiaries and Affiliates as though the Agent were not the Agent hereunder and
without notice to or consent of the Lenders. The Agent or its Affiliates may
receive information regarding the Borrowers, their Affiliates and Account
Debtors (including information that may be subject to confidentiality
obligations in favor of the Borrowers or such Affiliates) and acknowledge that
the Agent and the Bank shall be under no obligation to provide such information
to them. With respect to its Loans, the Agent shall have the same rights and
powers under this Agreement as any other Lender and may exercise the same as
though it were not the Agent, and the terms "Lender" and "Lenders" include the
Agent in its individual capacity.
12.9 Successor Agent. The Agent may resign as Agent upon at least
thirty (30) days' prior notice to the Lenders and the Borrowers, such
resignation to be effective upon the acceptance of a successor agent to its
appointment as Agent. In the event the Agent sells all of its Commitment and
Revolving Loans as part of a sale, transfer or other disposition by the Agent of
substantially all of its loan portfolio, the Agent shall resign as Agent and
such purchaser or transferee shall become the successor Agent hereunder. Subject
to the foregoing, if the Agent resigns under this Agreement, the Required
Lenders shall appoint from among the Lenders a successor agent for the Lenders.
If no successor agent is appointed prior to the effective date of the
resignation of the Agent, the Agent may appoint, after consulting with the
Lenders and the Borrowers, a successor agent from among the Lenders. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of
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the retiring Agent and the term "Agent" shall mean such successor agent and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article 12 shall continue to inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
12.10 Withholding Tax.
(a) If any Lender is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Lender claims exemption from, or a
reduction of, U. S. withholding tax under Sections 1441 or 1442 of the Code,
such Lender agrees with and in favor of the Agent, to deliver to the Agent:
(i) if such Lender claims an exemption from, or a reduction
of, withholding tax under a United States of America tax treaty,
properly completed IRS Forms W-8BEN and W-8ECI before the payment of
any interest in the first calendar year and before the payment of any
interest in each third succeeding calendar year during which interest
may be paid under this Agreement;
(ii) if such Lender claims that interest paid under this
Agreement is exempt from United States of America withholding tax
because it is effectively connected with a United States of America
trade or business of such Lender, two properly completed and executed
copies of IRS Form W-8ECI before the payment of any interest is due in
the first taxable year of such Lender and in each succeeding taxable
year of such Lender during which interest may be paid under this
Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States of America as a condition to
exemption from, or reduction of, United States of America withholding
tax.
Such Lender agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Lender claims exemption from, or reduction of, withholding
tax under a United States of America tax treaty by providing IRS Form FW-8BEN
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations owing to such Lender, such Lender
agrees to notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Borrowers to such Lender. To the extent
of such percentage amount, the Agent will treat such Lender's IRS Form W-8BEN as
no longer valid.
(c) If any Lender claiming exemption from United States of America
withholding tax by filing IRS Form W-8ECI with the Agent sells, assigns, grants
a participation in, or otherwise transfers all or part of the Obligations owing
to such
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Lender, such Lender agrees to undertake sole responsibility for complying with
the withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United States
of America or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify the Agent of a change in circumstances which rendered
the exemption from, or reduction of, withholding tax ineffective, or for any
other reason) such Lender shall indemnify the Agent fully for all amounts paid,
directly or indirectly, by the Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this Section, together with all costs and expenses
(including Attorney Costs). The obligation of the Lenders under this subsection
shall survive the payment of all Obligations and the resignation or replacement
of the Agent.
12.11 Collateral Matters.
(a) The Lenders hereby irrevocably authorize the Agent, at its option
and in its sole discretion, to release any Agent's Liens upon any Collateral,
other than any cash collateral or Supporting Letter of Credit provided by
Borrowers pursuant to Section 1.3(g) (i) upon the termination of the Commitments
and payment and satisfaction in full by Borrowers of all Loans and reimbursement
obligations in respect of Letters of Credit and Credit Support, and the
termination of all outstanding Letters of Credit (whether or not any of such
obligations are due), unless such Letters of Credit are cash collateralized or
supported by a Supporting Letter of Credit pursuant to Section 1.3(g) and all
other Obligations; (ii) constituting property being sold or disposed of if the
Borrowers certify to the Agent that the sale or disposition is made in
compliance with Section 7.9 (and the Agent may rely conclusively on any such
certificate, without further inquiry); (iii) constituting property in which the
Borrower Parties owned no interest at the time the Lien was granted or at any
time thereafter; or (iv) constituting property leased to the Borrower Parties
under a lease which has expired or been terminated in a transaction permitted
under this Agreement. Except as provided above, the Agent will not release any
of the Agent's Liens without the prior written
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authorization of all Lenders; provided that the Agent may, in its discretion,
release the Agent's Liens on Collateral valued in the aggregate not in excess of
$500,000 during each Fiscal Year without the prior written authorization of the
Lenders and the Agent may release the Agent's Liens on Collateral valued in the
aggregate not in excess of $1,000,000 during each Fiscal Year with the prior
written authorization of Required Lenders. Upon request by the Agent or the
Borrowers at any time, the Lenders will confirm in writing the Agent's authority
to release any Agent's Liens upon particular types or items of Collateral
pursuant to this Section 12.11.
(b) Upon receipt by the Agent of any authorization required pursuant to
Section 12.11(a) from the Lenders of the Agent's authority to release any
Agent's Liens upon particular types or items of Collateral, and upon at least
five (5) Business Days' prior written request by the Borrowers, 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 Agent's Liens upon such
Collateral; provided, however, that (i) the Agent shall not be required to
execute any such document on terms which, in the Agent's opinion, would expose
the Agent to liability or create any obligation or entail any consequence other
than the release of such Liens without recourse or warranty, and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or
any Liens (other than those expressly being released) upon (or obligations of
the Borrower Parties in respect of) all interests retained by any Borrower
Party, including the proceeds of any sale, all of which shall continue to
constitute part of the Collateral.
(c) The Agent shall have no obligation whatsoever to any of the Lenders
to assure that the Collateral exists or is owned by the Borrower Parties or is
cared for, protected or insured or has been encumbered, or that the Agent's
Liens have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority, or to exercise
at all or in any particular manner or under any duty of care, disclosure or
fidelity, or to continue exercising, any of the rights, authorities and powers
granted or available to the Agent pursuant to any of the Loan 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 interest in the
Collateral in its capacity as one of the Lenders and that the Agent shall have
no other duty or liability whatsoever to any Lender as to any of the foregoing.
12.12 Restrictions on Actions by Lenders; Sharing of Payments.
(a) Each of the Lenders agrees that it shall not, without the express
consent of Required Lenders, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of all Lenders, set-off against the
Obligations, any amounts owing by such Lender to the Borrowers or any accounts
of the Borrower Parties now or hereafter maintained with such Lender. Each of
the Lenders further agrees that it shall not, unless specifically requested to
do so by the Agent, take or cause to be taken any other action to enforce its
rights under this Agreement or against the Borrower Parties, including the
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commencement of any legal or equitable proceedings, to foreclose any Lien on, or
otherwise enforce any security interest in, any of the Collateral.
(b) If at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations of the Borrowers to such Lender arising under,
or relating to, this Agreement or the other Loan Documents, except for any such
proceeds or payments received by such Lender from the Agent pursuant to the
terms of this Agreement, or (ii) payments from the Agent in excess of such
Lender's ratable portion of all such distributions by the Agent, such Lender
shall promptly (A) turn the same over to the Agent, in kind, and with such
endorsements as may be required to negotiate the same to the Agent, or in same
day funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (B) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other Lenders so that
such excess payment received shall be applied ratably as among the Lenders in
accordance with their Pro Rata Shares; provided, however, that if all or part of
such excess payment received by the purchasing party is thereafter recovered
from it, those purchases of participations shall be rescinded in whole or in
part, as applicable, and the applicable portion of the purchase price paid
therefor shall be returned to such purchasing party, but without interest except
to the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
12.13 Agency for Perfection. Each Lender hereby appoints each other
Lender as agent for the purpose of perfecting the Lenders' security interest in
assets which, in accordance with Article 9 of the UCC can be perfected only by
possession as of the Closing Date. Should any Lender (other than the Agent)
obtain possession of any such Collateral, such Lender shall notify the Agent
thereof, and, promptly upon the Agent's request therefor shall deliver such
Collateral to the Agent or in accordance with the Agent's instructions.
12.14 Payments by Agent to Lenders. All payments to be made by the
Agent to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds to each Lender pursuant to wire transfer
instructions delivered in writing to the Agent on or prior to the Closing Date
(or if such Lender is an Assignee, on the applicable Assignment and Acceptance),
or pursuant to such other wire transfer instructions as each party may designate
for itself by written notice to the Agent. Concurrently with each such payment,
the Agent shall identify whether such payment (or any portion thereof)
represents principal, premium or interest on the Revolving Loans or otherwise.
Unless the Agent receives notice from the Borrowers prior to the date on which
any payment is due to the Lenders that the Borrowers will not make such payment
in full as and when required, the Agent may assume that the Borrowers have made
such payment in full to the Agent on such date in immediately available funds
and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each
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Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent the Borrowers have not made such payment in full to the Agent,
each Lender shall repay to the Agent on demand such amount distributed to such
Lender, together with interest thereon at the Federal Funds Rate for each day
from the date such amount is distributed to such Lender until the date repaid.
12.15 Settlement.
(a) (i) Each Lender's funded portion of the Revolving Loans is
intended by the Lenders to be equal at all times to such Lender's Pro Rata Share
of the outstanding Revolving Loans. Notwithstanding such agreement, the Agent,
the Banks, and the other Lenders agree (which agreement shall not be for the
benefit of or enforceable by the Borrowers) that in order to facilitate the
administration of this Agreement and the other Loan Documents, settlement among
them as to the Revolving Loans, the Non-Ratable Loans and the Agent Advances
shall take place on a periodic basis in accordance with the following
provisions:
(ii) The Agent shall request settlement ("Settlement") with
the Lenders on at least a weekly basis, or on a more frequent basis at Agent's
election, (A) on behalf of the Bank, with respect to each outstanding
Non-Ratable Loan, (B) for itself, with respect to each Agent Advance, and (C)
with respect to collections received, in each case, by notifying the Lenders of
such requested Settlement by telecopy, telephone or other similar form of
transmission, of such requested Settlement, no later than 11:00 a.m. (Atlanta,
Georgia time) on the date of such requested Settlement (the "Settlement Date").
Each Lender (other than the Agent, in the case of Non-Ratable Loans and the
Agent in the case of Agent Advances) shall transfer the amount of such Lender's
Pro Rata Share of the outstanding principal amount of the Non-Ratable Loans and
Agent Advances with respect to each Settlement to the Agent, to Agent's account,
not later than 3:00 p.m. (Atlanta, Georgia time), on the Settlement Date
applicable thereto. Settlements may occur during the continuation of a Default
or an Event of Default and whether or not the applicable conditions precedent
set forth in Article 8 have then been satisfied. Such amounts made available to
the Agent shall be applied against the amounts of the applicable Non-Ratable
Loan or Agent Advance and, together with the portion of such Non-Ratable Loan or
Agent Advance representing the Agent's Pro Rata Share thereof, shall constitute
Revolving Loans of such Lenders. If any such amount is not transferred to the
Agent by any Lender on the Settlement Date applicable thereto, the Agent shall
be entitled to recover such amount on demand from such Lender together with
interest thereon at the Federal Funds Rate for the first three (3) days from and
after the Settlement Date and thereafter at the Interest Rate then applicable to
the Revolving Loans (A) for itself, with respect to each outstanding Non-Ratable
Loan, and (B) for itself, with respect to each Agent Advance.
(iii) Notwithstanding the foregoing, not more than one (1)
Business Day after demand is made by the Agent (whether before or after the
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occurrence of a Default or an Event of Default and regardless of whether the
Agent has requested a Settlement with respect to a Non-Ratable Loan or Agent
Advance), each other Lender (A) shall irrevocably and unconditionally purchase
and receive from the Agent without recourse or warranty, an undivided interest
and participation in such Non-Ratable Loan or Agent Advance equal to such
Lender's Pro Rata Share of such Non-Ratable Loan or Agent Advance and (B) if
Settlement has not previously occurred with respect to such Non-Ratable Loans or
Agent Advances, upon demand by Bank or Agent, as applicable, shall pay to the
Agent as the purchase price of such participation an amount equal to one-hundred
percent (100%) of such Lender's Pro Rata Share of such Non-Ratable Loans or
Agent Advances. If such amount is not in fact made available to the Agent by any
Lender, the Agent shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Federal Funds Rate for the first
three (3) days from and after such demand and thereafter at the Interest Rate
then applicable to Base Rate Loans.
(iv) From and after the date, if any, on which any Lender
purchases an undivided interest and participation in any Non-Ratable Loan or
Agent Advance pursuant to clause (iii) above, the Agent shall promptly
distribute to such Lender, such Lender's Pro Rata Share of all payments of
principal and interest and all proceeds of Collateral received by the Agent in
respect of such Non-Ratable Loan or Agent Advance.
(v) Between Settlement Dates, the Agent, to the extent no
Agent Advances are outstanding, may pay to itself any payments received by the
Agent, which in accordance with the terms of this Agreement would be applied to
the reduction of the Revolving Loans, for application to the Agent's Revolving
Loans including Non-Ratable Loans. If, as of any Settlement Date, collections
received since the then immediately preceding Settlement Date have been applied
to the Agent's Revolving Loans (other than to Non-Ratable Loans or Agent
Advances in which such Lender has not yet funded its purchase of a participation
pursuant to clause (iii) above), as provided for in the previous sentence, the
Agent shall pay to itself for the accounts of the Lenders, to be applied to the
outstanding Revolving Loans of such Lenders, an amount such that each Lender
shall, upon receipt of such amount, have, as of such Settlement Date, its Pro
Rata Share of the Revolving Loans. During the period between Settlement Dates,
the Agent with respect to Non-Ratable Loans, the Agent with respect to Agent
Advances, and each Lender with respect to the Revolving Loans other than
Non-Ratable Loans and Agent Advances, shall be entitled to interest at the
applicable rate or rates payable under this Agreement on the actual average
daily amount of funds employed by the Agent and the other Lenders.
(vi) Unless the Agent has received written notice from a
Lender to the contrary, the Agent may assume that the applicable conditions
precedent set forth in Article 8 have been satisfied and the requested Borrowing
will not exceed Availability on any Funding Date for a Revolving Loan or
Non-Ratable Loan.
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(b) Lenders' Failure to Perform. All Revolving Loans (other than
Non-Ratable Loans and Agent Advances) shall be made by the Lenders
simultaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Revolving Loans hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligation to make any Revolving Loans
hereunder, (ii) no failure by any Lender to perform its obligation to make any
Revolving Loans hereunder shall excuse any other Lender from its obligation to
make any Revolving Loans hereunder, and (iii) the obligations of each Lender
hereunder shall be several, not joint and several.
(c) Defaulting Lenders. Unless the Agent receives notice from a Lender
on or prior to the Closing Date or, with respect to any Borrowing after the
Closing Date, at least one (1) Business Day prior to the date of such Borrowing,
that such Lender will not make available as and when required hereunder to the
Agent that Lender's Pro Rata Share of a Borrowing, the Agent may assume that
each Lender has made such amount available to the Agent in immediately available
funds on the Funding Date. Furthermore, the Agent may, in reliance upon such
assumption, make available to the Borrowers on such date a corresponding amount.
If any Lender has not transferred its full Pro Rata Share to the Agent in
immediately available funds and the Agent has transferred corresponding amount
to the Borrowers on the Business Day following such Funding Date that Lender
shall make such amount available to the Agent, together with interest at the
Federal Funds Rate, for that day. A notice by the Agent submitted to any Lender
with respect to amounts owing shall be conclusive, absent manifest error. If
each Lender's full Pro Rata Share is transferred to the Agent as required, the
amount transferred to the Agent shall constitute that Lender's Revolving Loan
for all purposes of this Agreement. If that amount is not transferred to the
Agent on the Business Day following the Funding Date, the Agent will notify the
Borrowers of such failure to fund and, upon demand by the Agent, the Borrowers
shall pay such amount to the Agent for the Agent's account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the Interest Rate applicable at the time to the
Revolving Loans comprising that particular Borrowing. The failure of any Lender
to make any Revolving Loan on any Funding Date (any such Lender, prior to the
cure of such failure, being hereinafter referred to as a "Defaulting Lender")
shall not relieve any other Lender of its obligation hereunder to make a
Revolving Loan on that Funding Date. No Lender shall be responsible for any
other Lender's failure to advance such other Lenders' Pro Rata Share of any
Borrowing.
(d) Retention of Defaulting Lender's Payments. The Agent shall not be
obligated to transfer to a Defaulting Lender any payments made by Borrowers to
the Agent for the Defaulting Lender's benefit; nor shall a Defaulting Lender be
entitled to the sharing of any payments hereunder. Amounts payable to a
Defaulting Lender shall instead be paid to or retained by the Agent. In its
discretion, the Agent may loan to the Borrowers the amount of all such payments
received or retained by it for the account of
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such Defaulting Lender. Any amounts so loaned to the Borrowers shall bear
interest at the rate applicable to Base Rate Loans and for all other purposes of
this Agreement shall be treated as if they were Revolving Loans, provided,
however, that for purposes of voting or consenting to matters with respect to
the Loan Documents and determining Pro Rata Shares, such Defaulting Lender shall
be deemed not to be a "Lender". Until a Defaulting Lender cures its failure to
fund its Pro Rata Share of any Borrowing (A) such Defaulting Lender shall not be
entitled to any portion of the Unused Line Fee and (B) the Unused Line Fee shall
accrue in favor of the Lenders which have funded their respective Pro Rata
Shares of such requested Borrowing and shall be allocated among such performing
Lenders ratably based upon their relative Commitments. This Section shall remain
effective with respect to such Lender until such time as the Defaulting Lender
shall no longer be in default of any of its obligations under this Agreement.
The terms of this Section shall not be construed to increase or otherwise affect
the Commitment of any Lender, or relieve or excuse the performance by the
Borrowers of their duties and obligations hereunder.
(e) Removal of Defaulting Lender. At the Borrowers' request, the Agent
or an Eligible Assignee reasonably acceptable to the Agent and the Borrowers
shall have the right (but not the obligation) to purchase from any Defaulting
Lender, and each Defaulting Lender shall, upon such request, sell and assign to
the Agent or such Eligible Assignee, all of the Defaulting Lender's outstanding
Commitments hereunder. Such sale shall be consummated promptly after Agent has
arranged for a purchase by Agent or an Eligible Assignee pursuant to an
Assignment and Acceptance, and at a price equal to the outstanding principal
balance of the Defaulting Lender's Loans, plus accrued interest and fees,
without premium or discount.
12.16 Letters of Credit; Intra-Lender Issues.
(a) Notice of Letter of Credit Balance. On each Settlement Date, the
Agent shall notify each Lender of the issuance of all Letters of Credit since
the prior Settlement Date.
(b) Participations in Letters of Credit.
(i) Purchase of Participations. Immediately upon issuance of
any Letter of Credit in accordance with Section 1.3(d), each Lender
shall be deemed to have irrevocably and unconditionally purchased and
received without recourse or warranty, an undivided interest and
participation equal to such Lender's Pro Rata Share of the face amount
of such Letter of Credit or the Credit Support provided through the
Agent to the Letter of Credit Issuer, if not a Bank, in connection with
the issuance of such Letter of Credit (including all obligations of the
Borrowers with respect thereto, and any security therefor or guaranty
pertaining thereto).
(ii) Sharing of Reimbursement Obligation Payments. Whenever
the Agent receives a payment from the Borrowers on account of
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reimbursement obligations in respect of a Letter of Credit or Credit
Support as to which the Agent has previously received for the account
of the Letter of Credit Issuer thereof payment from a Lender, the Agent
shall promptly pay to such Lender such Lender's Pro Rata Share of such
payment from the Borrowers. Each such payment shall be made by the
Agent on the next Settlement Date.
(iii) Documentation. Upon the request of any Lender, the Agent
shall furnish to such Lender copies of any Letter of Credit, Credit
Support for any Letter of Credit, reimbursement agreements executed in
connection therewith, applications for any Letter of Credit, and such
other documentation as may reasonably be requested by such Lender.
(iv) Obligations Irrevocable. The obligations of each Lender
to make payments to the Agent with respect to any Letter of Credit or
with respect to their participation therein or with respect to any
Credit Support for any Letter of Credit or with respect to the
Revolving Loans made as a result of a drawing under a Letter of Credit
and the obligations of the Borrowers for whose account the Letter of
Credit or Credit Support was issued to make payments to the Agent, for
the account of the Lenders, shall be irrevocable and shall not be
subject to any qualification or exception whatsoever, including any of
the following circumstances:
(1) any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(2) the existence of any claim, setoff, defense or other right
which the Borrowers may have at any time against a beneficiary named in
a Letter of Credit or any transferee of any Letter of Credit (or any
Person for whom any such transferee may be acting), any Lender, the
Agent, the issuer of such Letter of Credit, or any other Person,
whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transactions between the Borrowers or any
other Person and the beneficiary named in any Letter of Credit);
(3) any draft, certificate or any other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(4) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents;
(5) the occurrence of any Default or Event of Default; or
(6) the failure of the Borrowers to satisfy the applicable
conditions precedent set forth in Article 8.
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(c) Recovery or Avoidance of Payments; Refund of Payments In Error. In
the event any payment by or on behalf of the Borrowers received by the Agent
with respect to any Letter of Credit or Credit Support provided for any Letter
of Credit and distributed by the Agent to the Lenders on account of their
respective participations therein is thereafter set aside, avoided or recovered
from the Agent in connection with any receivership, liquidation or bankruptcy
proceeding, the Lenders shall, upon demand by the Agent, pay to the Agent their
respective Pro Rata Shares of such amount set aside, avoided or recovered,
together with interest at the rate required to be paid by the Agent upon the
amount required to be repaid by it. Unless the Agent receives notice from the
Borrowers prior to the date on which any payment is due to the Lenders that the
Borrowers will not make such payment in full as and when required, the Agent may
assume that the Borrowers have made such payment in full to the Agent on such
date in immediately available funds and the Agent may (but shall not be so
required), in reliance upon such assumption, distribute to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent the Borrowers have not made such payment in full to the Agent, each
Lender shall repay to the Agent on demand such amount distributed to such
Lender, together with interest thereon at the Federal Funds Rate for each day
from the date such amount is distributed to such Lender until the date repaid.
(d) Indemnification by Lenders. To the extent not reimbursed by the
Borrowers and without limiting the obligations of the Borrowers hereunder, the
Lenders agree to indemnify the Letter of Credit Issuer ratably in accordance
with their respective Pro Rata Shares, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including attorneys' fees) or disbursements of any kind and nature whatsoever
that may be imposed on, incurred by or asserted against the Letter of Credit
Issuer in any way relating to or arising out of any Letter of Credit or the
transactions contemplated thereby or any action taken or omitted by the Letter
of Credit Issuer under any Letter of Credit or any Loan Document in connection
therewith; provided that no Lender shall be liable for any of the foregoing to
the extent it arises from the gross negligence or willful misconduct of the
Person to be indemnified. Without limitation of the foregoing, each Lender
agrees to reimburse the Letter of Credit Issuer promptly upon demand for its Pro
Rata Share of any costs or expenses payable by the Borrowers to the Letter of
Credit Issuer, to the extent that the Letter of Credit Issuer is not promptly
reimbursed for such costs and expenses by the Borrowers. The agreement contained
in this Section shall survive payment in full of all other Obligations.
12.17 Concerning the Collateral and the Related Loan Documents. Each
Lender authorizes and directs the Agent to enter into the other Loan Documents,
for the ratable benefit and obligation of the Agent and the Lenders. Each Lender
agrees that any action taken by the Agent, Majority Lenders or Required Lenders,
as applicable, in accordance with the terms of this Agreement or the other Loan
Documents, and the exercise by the Agent, the Majority Lenders, or the Required
Lenders, as applicable, of their respective powers set forth therein or herein,
together with such other powers that are reasonably
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incidental thereto, shall be binding upon all of the Lenders. The Lenders
acknowledge that the Revolving Loans, Agent Advances, Non-Ratable Loans, Hedge
Agreements, Bank Products and all interest, fees and expenses hereunder
constitute one Debt, secured pari passu by all of the Collateral.
12.18 Field Audit and Examination Reports; Disclaimer by Lenders. By
signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or examination
report (each a "Report" and collectively, "Reports") prepared by or on behalf of
the Agent;
(b) expressly agrees and acknowledges that neither any Bank nor the
Agent (i) makes any representation or warranty as to the accuracy of any Report,
or (ii) shall be liable for any information contained in any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent or any Bank or other party
performing any audit or examination will inspect only specific information
regarding the Borrower Parties and will rely significantly upon the Borrower
Parties' books and records, as well as on representations of the Borrower
Parties' personnel;
(d) agrees to keep all Reports confidential and strictly for its
internal use, and not to distribute except to its participants, or use any
Report in any other manner; and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold the Agent and any
such other Lender preparing a Report harmless from any action the indemnifying
Lender may take or conclusion the indemnifying Lender may reach or draw from any
Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to the Borrowers, or the indemnifying
Lender's participation in, or the indemnifying Lender's purchase of, a loan or
loans of the Borrowers; and (ii) to pay and protect, and indemnify, defend and
hold the Agent and any such other Lender preparing a Report harmless from and
against, the claims, actions, proceedings, damages, costs, expenses and other
amounts (including Attorney Costs) incurred by the Agent and any such other
Lender preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.
12.19 Relation Among Lenders. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Agent) authorized to act
for, any other Lender.
12.20 Additional Agents. None of the Lenders or other entities
identified on the facing page of or elsewhere in this Agreement as a "Book
Manager", "Co-Lead
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Arranger", "Syndication Agent" or "Documentation Agent" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement or any
other Loan Document other than those applicable to all Lenders as such. Without
limiting the foregoing, none of the Lenders so identified shall have or be
deemed to have any fiduciary relationship with any other 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 Agreement or any
other Loan Document or in taking or not taking action hereunder or thereunder.
ARTICLE 13
MISCELLANEOUS
13.1 No Waivers; Cumulative Remedies. No failure by the Agent or any
Lender to exercise any right, remedy, or option under this Agreement or any
present or future supplement thereto, or in any other agreement between or among
the Borrower Parties and the Agent and/or any Lender, or delay by the Agent or
any Lender in exercising the same, will operate as a waiver thereof. No waiver
by the Agent or any Lender will be effective unless it is in writing, and then
only to the extent specifically stated. No waiver by the Agent or the Lenders on
any occasion shall affect or diminish the Agent's and each Lender's rights
thereafter to require strict performance by the Borrower Parties of any
provision of this Agreement. The Agent and the Lenders may proceed directly to
collect the Obligations without any prior recourse to the Collateral. The
Agent's and each Lender's rights under this Agreement will be cumulative and not
exclusive of any other right or remedy which the Agent or any Lender may have.
13.2 Severability. The illegality or unenforceability of any provision
of this Agreement or any Loan Document or any instrument or agreement required
hereunder shall not in any way affect or impair the legality or enforceability
of the remaining provisions of this Agreement or any instrument or agreement
required hereunder.
13.3 Governing Law; Choice of Forum; Service of Process.
(a) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES
OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (AS
OPPOSED TO THE CONFLICT OF LAWS PROVISIONS PROVIDED THAT PERFECTION ISSUES WITH
RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT
OF LAW RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF THE STATE OF NEW YORK;
PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT OR ANY HEDGE AGREEMENT MAY BE BROUGHT IN THE COURTS OF
THE STATE OF NEW YORK OR OF THE UNITED STATES LOCATED IN XXX XXXX XXXX, XXX
- 00 -
XXXX; AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF EACH BORROWER
PARTY, THE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF EACH
BORROWER PARTY, THE AGENT EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. NOTWITHSTANDING THE FOREGOING: (1) THE AGENT AND THE LENDERS
SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER
PARTIES OR THEIR PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE AGENT OR
THE LENDERS DEEM NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL
OR OTHER SECURITY FOR THE OBLIGATIONS AND (2) EACH OF THE PARTIES HERETO
ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY
PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE
JURISDICTIONS.
(c) EACH BORROWER PARTY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY
REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE ADMINISTRATIVE
BORROWER AT ITS ADDRESS SET FORTH IN SECTION 13.8 AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED
IN THE U.S. MAILS POSTAGE PREPAID. NOTHING CONTAINED HEREIN SHALL AFFECT THE
RIGHT OF AGENT OR THE LENDERS TO SERVE LEGAL PROCESS BY ANY OTHER MANNER
PERMITTED BY LAW.
13.4 Waiver of Jury Trial. THE BORROWER PARTIES, THE LENDERS AND THE
AGENT EACH IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, ANY HEDGE AGREEMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF
ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY
AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER PARTIES, THE LENDERS AND THE
AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER
AGREE THAT
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THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION
AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN
PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS, ANY HEDGE AGREEMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
13.5 Survival of Representations and Warranties. All of the Borrower
Parties' representations and warranties contained in this Agreement shall
survive the execution, delivery, and acceptance thereof by the parties,
notwithstanding any investigation by the Agent or the Lenders or their
respective agents.
13.6 Other Security and Guaranties. The Agent, may, without notice or
demand and without affecting the Borrower Parties' obligations hereunder, from
time to time: (a) take from any Person and hold collateral (other than the
Collateral) for the payment of all or any part of the Obligations and exchange,
enforce or release such collateral or any part thereof; and (b) accept and hold
any endorsement or guaranty of payment of all or any part of the Obligations and
release or substitute any such endorser or guarantor, or any Person who has
given any Lien in any other collateral as security for the payment of all or any
part of the Obligations, or any other Person in any way obligated to pay all or
any part of the Obligations.
13.7 Fees and Expenses. The Borrowers agree to pay to the Co-Agents,
for their respective benefit, on demand, all costs and expenses that such
Co-Agent pays or incurs in connection with the negotiation, preparation,
syndication, consummation, administration, enforcement, and termination of this
Agreement or any of the other Loan Documents or Hedge Agreements, including: (a)
Attorney Costs; (b) costs and expenses (including attorneys' and paralegals'
fees and disbursements) for any amendment, supplement, waiver, consent, or
subsequent closing in connection with the Loan Documents or Hedge Agreements and
the transactions contemplated thereby; (c) costs and expenses of lien and title
searches and title insurance; (d) taxes, fees and other charges for recording
any mortgages, filing financing statements and continuations, and other actions
to perfect, protect, and continue the Agent's Liens (including costs and
expenses paid or incurred by the Agent in connection with the consummation of
Agreement); (e) sums paid or incurred to pay any amount or take any action
required of the Borrower Parties under the Loan Documents or Hedge Agreements
that the Borrower Parties fail to pay or take; (f) costs of appraisals,
inspections, and verifications of the Collateral and other due diligence,
including travel, lodging, and meals for inspections of the Collateral and the
Borrower Parties' operations by the Agent plus the Agent's then
generally-applicable and customary charge for field examinations and audits or
any reappraisals following notice by the Administrative Borrower pursuant to
Section 7.26 and the preparation of reports thereof (such charge is currently
$775 per day (or portion
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thereof) for each Person retained or employed by the Agent with respect to each
field examination or audit); provided, however, absent the existence of an
Increased Reporting Event, Default or an Event of Default, the obligations of
the Borrowers to reimburse the Agent for the costs of appraisals of Inventory
(other than for field examinations and audits) shall be limited to not more than
one (1) such appraisal in any six (6) month period, and (g) costs and expenses
of forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining Payment Accounts and lock boxes, and costs and
expenses of preserving and protecting the Collateral. In addition, the Borrowers
agree to pay costs and expenses incurred by the Agent (including Attorneys'
Costs) to the Agent, for its benefit, on demand, and to the other Lenders for
their benefit, on demand, and all reasonable fees, expenses and disbursements
incurred by such other Lenders, in each case, paid or incurred to obtain payment
of the Obligations, enforce the Agent's Liens, sell or otherwise realize upon
the Collateral, and otherwise enforce the provisions of the Loan Documents or
Hedge Agreements, or to defend any claims made or threatened against the Agent
or any Lender arising out of the transactions contemplated hereby (including
preparations for and consultations concerning any such matters). The foregoing
shall not be construed to limit any other provisions of the Loan Documents or
Hedge Agreements regarding costs and expenses to be paid by the Borrowers. All
of the foregoing costs and expenses shall be charged to the Borrowers' Loan
Account as Revolving Loans as described in Section 3.5.
13.8 Notices. Except as otherwise provided herein, all notices, demands
and requests that any party is required or elects to give to any other shall be
in writing, or by a telecommunications device capable of creating a written
record, and any such notice shall become effective (a) upon personal delivery
thereof, including, but not limited to, delivery by overnight mail and courier
service, (b) four (4) days after it shall have been mailed by United States
mail, first class, certified or registered, with postage prepaid, or (c) in the
case of notice by such a telecommunications device, when properly transmitted
and confirmed, in each case addressed to the party to be notified as follows:
If to the Agent or to the Bank:
Wachovia Bank, National Association
000 Xxxxxxxxx Xxxxxx, X.X.
Mail Code 8056
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Asset Based Lending
Telecopy No.: (000) 000-0000
Email: xxxx.xxxxxx@xxxxxxxx.xxx
with copies to:
Xxxx Xxxxxxxx, Xxxxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
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Attention: Xxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
Email: xxxxxxxxxx@xxxxxxxxxxxx.xxx
If to the Borrower Parties, or any of them:
Salton, Inc.
0000 Xxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
Email: xxxxxxx@xxxxxxxxx.xxx
with copies to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
Email: xxxxxxxxxxx@xxxxxxxxxxxx.xxx
If to a Lender, to such Lender at such address as shall be set forth on
its signature page hereof,
in each case above, or to such other address as each party may designate for
itself by like notice. Failure or delay in delivering copies of any notice,
demand, request, consent, approval, declaration or other communication to the
persons designated above to receive copies shall not adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration or
other communication.
13.9 Waiver of Notices. Unless otherwise expressly provided herein, the
Borrower Parties waive presentment, and notice of demand or dishonor and protest
as to any instrument, notice of intent to accelerate the Obligations and notice
of acceleration of the Obligations, as well as any and all other notices to
which it might otherwise be entitled. No notice to or demand on the Borrower
Parties which the Agent or any Lender may elect to give shall entitle the
Borrower Parties, or any of them, to any or further notice or demand in the
same, similar or other circumstances.
13.10 Binding Effect. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective representatives, successors, and
assigns of the parties hereto; provided, however, that no interest herein may be
assigned by the Borrower Parties without prior written consent of the Agent and
each Lender. The rights and benefits of the Agent and the Lenders hereunder
shall, if such Persons so agree, inure to any party acquiring any interest in
the Obligations or any part thereof.
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13.11 Indemnity of the Agent and the Lenders by the Borrowers.
(a) Each Borrower agrees to defend, indemnify and hold the
Agent-Related Persons, and each Lender and each of its respective officers,
directors, employees, counsel, representatives, agents and attorneys in fact
(each, an "Indemnified Person") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses and disbursements (including Attorney Costs) of any
kind or nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Agent or replacement of any Lender) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement
or any document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of this Agreement, any other
Loan Document, or any Hedge Agreements, or the Loans or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); provided, the Borrowers
shall have no obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities resulting from the gross negligence or willful
misconduct of such Indemnified Person. The agreements in this Section shall
survive payment of all other Obligations.
(b) Each Borrower agrees to indemnify, defend and hold harmless the
Agent and the Lenders from any loss or liability directly or indirectly arising
out of the use, generation, manufacture, production, storage, release,
threatened release, discharge, disposal or presence of a hazardous substance
relating to the Borrowers' operations, business or property. This indemnity will
apply whether the hazardous substance is on, under or about the Borrower's
property or operations or property leased to the Borrowers. The indemnity
includes but is not limited to Attorneys Costs. The indemnity extends to the
Agent and the Lenders, their parents, affiliates, subsidiaries and all of their
directors, officers, employees, agents, successors, attorneys and assigns.
"Hazardous substances" means any substance, material or waste that is or becomes
designated or regulated as "toxic," "hazardous," "pollutant," or "contaminant"
or a similar designation or regulation under any federal, state or local law
(whether under common law, statute, regulation or otherwise) or judicial or
administrative interpretation of such, including petroleum or natural gas. This
indemnity will survive repayment of all other Obligations.
(c) It is understood that the handling of the Loan Account and
Collateral of the Borrowers in a combined fashion, as more fully set forth
herein, is done solely as an accommodation to the Borrowers in order to utilize
the collective borrowing powers of the Borrowers in the most efficient and
economical manner and at their request, and that neither the Agent nor any
Lender shall incur liability to any Borrower as a result hereof. Each Borrower
expects to derive benefit, directly or indirectly, from the
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handling of the Loan Account and the Collateral in a combined fashion since the
successful operation of each Borrower is dependent on the continued successful
performance of the integrated group. To induce the Agent and the Lenders to do
so, and in consideration thereof, each Borrower hereby jointly and severally
agrees to indemnify and hold harmless the Agent and the Lenders against any and
all liability, expense, loss or claim of damage or injury, made against the
Agent or the Lenders by any Borrower or by any third party whosoever, arising
from or incurred by reason of (i) the handling of the Loan Account and
Collateral of the Borrowers as herein provided, (ii) the Agent's or any Lender's
relying on any instructions of the Administrative Borrower, or (iii) any other
action taken by the Agent or any Lender hereunder or under the other Loan
Documents.
13.12 Limitation of Liability. NO CLAIM MAY BE MADE BY EACH OF ANY
BORROWER PARTY, ANY LENDER OR OTHER PERSON AGAINST THE AGENT, ANY LENDER, OR THE
AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL, REPRESENTATIVES, AGENTS OR
ATTORNEYS-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER
THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY HEDGE AGREEMENT, OR ANY ACT,
OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, AND EACH BORROWER PARTY AND
EACH LENDER HEREBY WAIVES, RELEASES AND AGREES NOT TO XXX UPON ANY CLAIM FOR
SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO
EXIST IN ITS FAVOR.
13.13 Final Agreement. This Agreement and the other Loan Documents are
intended by the Borrower Parties, the Agent and the Lenders to be the final,
complete, and exclusive expression of the agreement between them. This Agreement
supersedes any and all prior oral or written agreements relating to the subject
matter hereof. No modification, rescission, waiver, release, or amendment of any
provision of this Agreement or any other Loan Document shall be made, except by
a written agreement signed by the Borrower Parties party thereto and a duly
authorized officer of each of the Agent and the requisite Lenders.
13.14 Counterparts. This Agreement may be executed in any number of
counterparts, and by the Agent, each Lender, and each Borrower Party in separate
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement; signature pages may be detached
from multiple separate counterparts and attached to a single counterpart so that
all signature pages are physically attached to the same document.
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13.15 Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.
13.16 Right of Setoff. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Borrowers, any such notice being waived by the
Borrowers to the fullest extent permitted by law, to set-off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender or any
Affiliate of such Lender to or for the credit or the account of the Borrowers
against any and all Obligations owing to such Lender, now or hereafter existing,
irrespective of whether or not the Agent or such Lender shall have made demand
under this Agreement or any Loan Document and although such Obligations may be
contingent or unmatured. Each Lender agrees promptly to notify the Borrowers and
the Agent after any such set-off and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL
EXERCISE ANY RIGHT OF SET-OFF, BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT
ACCOUNT OR PROPERTY OF ANY BORROWER HELD OR MAINTAINED BY SUCH LENDER WITHOUT
THE PRIOR WRITTEN UNANIMOUS CONSENT OF THE LENDERS.
13.17 Confidentiality.
(a) The Borrower Parties hereby consent that the Agent and each Lender
may issue and disseminate to the public general information describing the
credit accommodation entered into pursuant to this Agreement, including the name
and address of the Borrower Parties and a general description of the Borrower
Parties' businesses and may use the Borrower Parties' name in advertising and
other promotional material.
(b) Each Lender severally agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" or "secret" by the Borrowers Parties
and provided to the Agent or such Lender by or on behalf of the Borrower
Parties, under this Agreement or any other Loan Document, except to the extent
that such information (i) was or becomes generally available to the public other
than as a result of disclosure by the Agent or such Lender, or (ii) was or
becomes available on a nonconfidential basis from a source other than the
Borrower Parties, provided that such source is not bound by a confidentiality
agreement with the Borrower Parties known to the Agent or such Lender; provided,
however, that the Agent and any Lender may disclose such information (1) at the
request or pursuant to any requirement of any Governmental Authority to which
the Agent or such Lender is subject or in connection with an examination of the
Agent or such Lender by any such Governmental Authority; (2) pursuant to
subpoena or other court process;
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(3) when required to do so in accordance with the provisions of any applicable
Requirement of Law; (4) to the extent reasonably required in connection with any
litigation or proceeding (including, but not limited to, any bankruptcy
proceeding) to which the Agent, any Lender or their respective Affiliates may be
party; (5) to the extent reasonably required in connection with the exercise of
any remedy hereunder or under any other Loan Document; (6) to the Agent's or
such Lender's independent auditors, accountants, attorneys and other
professional advisors; (7) to any prospective Participant or Assignee under any
Assignment and Acceptance, actual or potential, provided that such prospective
Participant or Assignee agrees to keep such information confidential to the same
extent required of the Agent and the Lenders hereunder; (8) as expressly
permitted under the terms of any other document or agreement regarding
confidentiality to which the Borrower Parties are party or is deemed party with
the Agent or such Lender, (9) to its Affiliates and (10) for the purpose of
defending itself, reducing its liability, or protecting or exercising any of its
claims, rights, remedies or interests under or in connection with any Loan
Document or any Hedge Agreement. Notwithstanding anything herein to the
contrary, the information subject to this Section 13.17(b) shall not include,
and the Agent and each Lender may disclose without limitation of any kind, any
information with respect to the "tax treatment" and "tax structure" (in each
case, within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to the Agent or such Lender
relating to such tax treatment and tax structure; provided that with respect to
any document or similar item that in either case contains information concerning
the tax treatment or tax structure of the transactions as well as other
information, this sentence shall only apply to such portions of the document or
similar items that relate to the tax treatment or tax structure of the Loans,
Letters of Credit and transactions contemplated thereby.
(c) Each Lender acknowledges that, under certain circumstances the
United States securities laws may prohibit a person who has received material,
non-public information from an issuer from purchasing or selling securities of
such issuer or from communicating such information to any other Person under
circumstances in which it is reasonably foreseeable that such other Person is
likely to purchase or sell such securities. Each Lender further acknowledges
that certain Confidential Information could be considered material non-public
information and agrees that it will not, and it will use reasonable efforts to
ensure that its employees will not, trade in the securities of the Parent on the
basis of such information or communicate such information to any other Person
under circumstances in which it is reasonably foreseeable that such other Person
is likely to purchase or sell such securities.
(d) This Section 13.17 shall survive the termination of this Agreement.
13.18 Conflicts with Other Loan Documents. Unless otherwise expressly
provided in this Agreement (or in another Loan Document by specific reference to
the applicable provision contained in this Agreement), if any provision
contained in this
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Agreement conflicts with any provision of any other Loan Document, the provision
contained in this Agreement shall govern and control.
13.19 The Administrative Borrower. Each Borrower hereby irrevocably
appoints Salton, Inc. as the borrowing agent and attorney-in-fact for all
Borrowers (the "Administrative Borrower"), which appointment shall remain in
full force and effect unless and until the Agent shall have received prior
written notice signed by each Borrower that such appointment has been revoked
and that another Borrower has been appointed the Administrative Borrower. Each
Borrower hereby irrevocably appoints and authorizes the Administrative Borrower
(i) to provide the Agent with all notices with respect to Revolving Loans and
Letters of Credit obtained for the benefit of any Borrower and all other notices
and instructions under this Agreement and (ii) to take such action as the
Administrative Borrower deems appropriate on its behalf to obtain Revolving
Loans and Letters of Credit and to exercise such other powers as are reasonably
incidental thereto to carry out the purposes of this Agreement.
ARTICLE 14
JOINT AND SEVERAL OBLIGATIONS
14.1 All Obligations to Constitute Joint and Several Obligations.
(a) All Obligations shall constitute joint and several obligations of
the Borrowers and shall be secured by the Agent's Lien upon all of the
Collateral, and by all other security interests and Liens heretofore, now or at
any time hereafter granted by each Borrower to the Agent, the Letter of Credit
Issuer and the Lenders, to the extent provided in the Loan Documents under which
such Lien arises. Each Borrower expressly represents and acknowledges that it is
part of a common enterprise with the other Borrowers and that any financial
accommodations by the Agent, the Letter of Credit Issuer and the Lenders to any
other Borrower hereunder and under the other Loan Documents are and will be of
direct and indirect interest, benefit and advantage to all Borrowers. Each
Borrower acknowledges that any Notice of Borrowing, Notice of
Continuation/Conversion or other notice or request given by the Administrative
Borrower (including the Administrative Borrower) to the Agent, Letter of Credit
Issuer or any Lender shall bind all Borrowers, and that any notice given by the
Agent or any Lender to any Borrower shall be effective with respect to all
Borrowers. Each Borrower acknowledges and agrees that each Borrower shall be
liable, on a joint and several basis, for all of the Loans and other
Obligations, regardless of which Borrower actually may have received the
proceeds of any of the Loans or other extensions of credit or have had Letters
of Credit issued hereunder or the amount of such Loans received, Letters of
Credit issued or the manner in which the Agent, the Letter of Credit Issuer or
any of the Lenders accounts among the Borrowers for such Loans, Letters of
Credit or other extensions of credit on its books and records, and further
acknowledges and agrees that Loans to any Borrower inure to the mutual benefit
of all of the Borrowers and that the Agent, the Letter of Credit Issuer and the
Lenders are relying on the joint and several liability of the Borrowers in
extending the Loans and other financial accommodations
- 83 -
hereunder. Each Borrower shall be entitled to subrogation and contribution
rights from and against the other Borrowers to the extent any Borrower is
required to pay to the Lenders or the Letter of Credit Issuer any amount in
excess of the Loans advanced directly to, or other Obligations incurred directly
by, such Borrower or as otherwise available under Applicable Law; provided,
however, that such subrogation and contribution rights are and shall be subject
to the terms and conditions of this Section 14.1.
(b) It is the intent of the Borrowers, the Agent, and the Lenders and
any other Person holding any of the Obligations that each Borrower's maximum
obligations hereunder (such Borrower's "Maximum Borrower Liability") in any case
or proceeding referred to below (but only in such a case or proceeding) shall
not be in excess of:
(i) in a case or proceeding commenced by or against such
Borrower under the Bankruptcy Code on or within one (1) year from the
date on which any of the Obligations of such Borrower are incurred, the
maximum amount that would not otherwise cause the Obligations of such
Borrower hereunder (or any other Obligations of such Borrower to the
Agent, the Letter of Credit Issuer, the Lenders and any other Person
holding any of the Obligations) to be avoidable or unenforceable
against such Borrower under (A) Section 548 of the Bankruptcy Code or
(B) any state fraudulent transfer or fraudulent conveyance act or
statute applied in such case or proceeding by virtue of Section 544 of
the Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against such
Borrower under the Bankruptcy Code subsequent to one (1) year from the
date on which any of the Obligations of such Borrower are incurred, the
maximum amount that would not otherwise cause the Obligations of such
Borrower hereunder (or any other Obligations of such Borrower to the
Agent, the Letter of Credit Issuer, the Lenders and any other Person
holding any of the Obligations) to be avoidable or unenforceable
against such Borrower under any state fraudulent transfer or fraudulent
conveyance act or statute applied in any such case or proceeding by
virtue of Section 544 of the Bankruptcy Code; or
(iii) in a case or proceeding commenced by or against such
Borrower under any law, statute or regulation other than the Bankruptcy
Code relating to dissolution, liquidation, conservatorship, bankruptcy,
moratorium, readjustment of debt, compromise, rearrangement,
receivership, insolvency, reorganization or similar debtor relief from
time to time in effect affecting the rights of creditors generally
(collectively, "Other Debtor Relief Law"), the maximum amount that
would not otherwise cause the Obligations of such Borrower hereunder
(or any other Obligations of such Borrower to the Agent, the Letter of
Credit Issuer and the Lenders and any other Person holding any
- 84 -
of the Obligations) to be avoidable or unenforceable against such
Borrower under such Other Debtor Relief Law, including, without
limitation, any state fraudulent transfer or fraudulent conveyance act
or statute applied in any such case or proceeding. (The substantive
state or federal laws under which the possible avoidance or
unenforceability of the Obligations of any Borrower hereunder (or any
other Obligations of such Borrower to the Agent, the Letter of Credit
Issuer, the Lenders and any other Person holding any of the
Obligations) shall be determined in any such case or proceeding shall
hereinafter be referred to as the "Avoidance Provisions").
Notwithstanding the foregoing, no provision of this Section 14.1(b) shall limit
any Borrower's liability for loans advanced directly or indirectly to it under
this Agreement.
(c) To the extent set forth in Section 14.1(b) hereof, but only to the
extent that the Obligations of any Borrower hereunder, or the transfers made by
such Borrower under any Loan Document, would otherwise be subject to avoidance
under any Avoidance Provisions if such Borrower is not deemed to have received
valuable consideration, fair value, fair consideration or reasonably equivalent
value for such transfers or obligations, or if such transfers or obligations of
any Borrower hereunder would render such Borrower insolvent, or leave such
Borrower with an unreasonably small capital or unreasonably small assets to
conduct its business, or cause such Borrower to have incurred debts (or to have
intended to have incurred debts) beyond its ability to pay such debts as they
mature, in each case as of the time any of the obligations of such Borrower are
deemed to have been incurred and transfers made under such Avoidance Provisions,
then the obligations of such Borrower hereunder shall be reduced to that amount
which, after giving effect thereto, would not cause the Obligations of such
Borrower hereunder (or any other Obligations of such Borrower to the Agent, the
Letter of Credit Issuer, the Lenders or any other Person holding any of the
Obligations), as so reduced, to be subject to avoidance under such Avoidance
Provisions. This Section 14.1(c) is intended solely to preserve the rights
hereunder of the Agent, the Letter of Credit Issuer, the Lenders and any other
Person holding any of the Obligations to the maximum extent that would not cause
the obligations of the Borrowers hereunder to be subject to avoidance under any
Avoidance Provisions, and none of the Borrowers nor any other Person shall have
any right, defense, offset, or claim under this Section 14.1(c) as against the
Agent, the Letter of Credit Issuer, the Lenders or any other Person holding any
of the Obligations that would not otherwise be available to such Person under
the Avoidance Provisions.
(d) Each Borrower agrees that the Obligations may at any time and from
time to time exceed the Maximum Borrower Liability of such Borrower, and may
exceed the aggregate Maximum Borrower Liability of all Borrowers hereunder,
without impairing this Agreement or any provision contained herein or affecting
the rights and remedies of the Lenders, the Letter of Credit Issuer or the Agent
hereunder.
- 85 -
(e) In the event any Borrower (a "Funding Borrower") shall make any
payment or payments under this Agreement or shall suffer any loss as a result of
any realization upon any collateral granted by it to secure its obligations
hereunder, each other Borrower (each, a "Contributing Borrower") shall
contribute to such Funding Borrower an amount equal to such payment or payments
made, or losses suffered, by such Funding Borrower determined as of the date on
which such payment or loss was made multiplied by the ratio of (i) the Maximum
Borrower Liability of such Contributing Borrower (without giving effect to any
right to receive any contribution or other obligation to make any contribution
hereunder), to (ii) the aggregate Maximum Borrower Liability of all Borrowers
(including the Funding Borrowers) hereunder (without giving effect to any right
to receive, or obligation to make, any contribution hereunder). Nothing in this
Section 14.1(e) shall affect any Borrower's joint and several liability to the
Agent, the Letter of Credit Issuer and the Lenders for the entire amount of its
Obligations. Each Borrower covenants and agrees that its right to receive any
contribution hereunder from a Contributing Borrower shall be subordinate and
junior in right of payment to all obligations of the Borrowers to the Agent, the
Letter of Credit Issuer and the Lenders hereunder.
(f) No Borrower will exercise any rights that it may acquire by way of
subrogation hereunder or under any other Loan Document or at law by any payment
made hereunder or otherwise, nor shall any Borrower seek or be entitled to seek
any contribution or reimbursement from any other Borrower in respect of payments
made by such Borrower hereunder or under any other Loan Document, until all
amounts owing to the Agent, the Letter of Credit Issuer and the Lenders on
account of the Obligations are paid in full in cash (or, with respect to Letters
of Credit, are either cash collateralized or supported by a Letter of Credit in
accordance with the provisions of Section 1.3(g) of this Agreement) and the
Commitments are terminated. If any amounts shall be paid to any Borrower on
account of such subrogation or contribution rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be held by such
Borrower in trust for the Agent, the Letter of Credit Issuer and the Lenders,
segregated from other funds of such Borrower, and shall, forthwith upon receipt
by such Borrower, be turned over to the Agent in the exact form received by such
Borrower (duly endorsed by such Borrower to the Agent, if required), to be
applied against the Obligations, whether matured or unmatured, as provided for
herein.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 86 -
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
BORROWERS:
SALTON, INC., a Delaware corporation
By:
--------------------------------------
Title:
-----------------------------------
TOASTMASTER INC., a Missouri corporation
By:
--------------------------------------
Title:
-----------------------------------
SALTON TOASTMASTER LOGISTICS LLC,
a Delaware limited liability company
By:
--------------------------------------
Title:
-----------------------------------
GUARANTORS:
HOME CREATIONS DIRECT, LTD.,
a Delaware corporation
By:
--------------------------------------
Title:
-----------------------------------
SONEX INTERNATIONAL CORPORATION,
a Delaware corporation
By:
--------------------------------------
Title:
-----------------------------------
ICEBOX, LLC, an Illinois limited
liability company
By:
--------------------------------------
Title:
-----------------------------------
CREDIT AGREEMENT S-1
FAMILY PRODUCTS INC.,
a Delaware corporation
By:
--------------------------------------
Title:
-----------------------------------
SALTON HOLDINGS, INC.,
a Delaware corporation
By:
--------------------------------------
Title:
-----------------------------------
CREDIT AGREEMENT S-2
AGENT AND LENDERS:
WACHOVIA BANK, NATIONAL ASSOCIATION
as the Agent, the Collateral
Agent, a Co-Agent, a Bank,
a Letter of Credit Issuer
and a Lender
By:
--------------------------------------
Its:
-------------------------------------
CREDIT AGREEMENT X-0
XXXX XX XXXXXXX, X. A., as a Co-
Agent, the Documentation Agent, the
Syndication Agent, a Letter of Credit
Issuer, a Bank and a Lender
By:
--------------------------------------
Its:
-------------------------------------
Address for Notices:
Bank of America, N.A.
000 X. XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
Telecopy: (000) 000-0000
Email: xxxxxx.x.xxxxxxxxxx@xxxxxxxxxxxxx.xxx
CREDIT AGREEMENT S-4
BANK ONE, NA, as a Co-Documentation
Agent and as a Lender
By:
--------------------------------------
Its:
-------------------------------------
Address for Notices:
Bank One, NA
000 X. XxXxxxx Xxxxxx
Mail Code ILI-1458
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
Email: xxxxx_x_xxxxxx@xxxxxxx.xxx
CREDIT AGREEMENT S-5
FLEET CAPITAL CORPORATION, as
Co-Documentation Agent and as a Lender
By:
--------------------------------------
Its:
-------------------------------------
Address for Notices:
Fleet Capital Corporation
Xxx Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy: (000) 000-0000
Email: xxxxxx_xxxxx@xxxxxxxxxxxx.xxx
CREDIT AGREEMENT S-6
THE CIT GROUP/COMMERCIAL
SERVICES, INC., as a Lender
By:
--------------------------------------
Its:
-------------------------------------
Address for Notices:
The CIT Group/Commercial Services, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Email: xxxxxxxx.xxxxxxx@xxx.xxx
CREDIT AGREEMENT S-7
PNC BANK, NATIONAL ASSOCIATION, as
a Lender
By:
--------------------------------------
Its:
-------------------------------------
Address for Notices:
PNC Bank National Association
0 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telecopy: (000) 000-0000
Email: xxxxx.xxxxxxxx@xxxxxxxxxxxxxxxxx.xxx
CREDIT AGREEMENT S-8
U.S. BANK NATIONAL ASSOCIATION,
as a Lender
By:
--------------------------------------
Its:
-------------------------------------
Address for Notices:
U.S. Bank National Association
0xx Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Mail Code: XX-X0-00 XX
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telecopy: (000) 000-0000
Email: xxxxxx.xxxxxxxx@xxxxxx.xxx
CREDIT AGREEMENT S-9
COMERICA BANK, as a Lender
By:
--------------------------------------
Its:
-------------------------------------
Address for Notices:
Comerica Bank
000 Xxxxxxxx Xxxxxx
XX 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Email: xxxxxxx_xxxxxxx@xxxxxxxx.xxx
CREDIT AGREEMENT S-10
XXXXXX COMMERCIAL PAPER INC., as a Lender
By:
--------------------------------------
Its:
-------------------------------------
Address for Notices:
Xxxxxx Commercial Paper, Inc.
000 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Telecopy: (000) 000-0000
Email: xxxxxx@xxxxxx.xxx
CREDIT AGREEMENT S-11
BANKNORTH, N.A., as a Lender
By:
--------------------------------------
Its:
-------------------------------------
Address for Notices:
Banknorth, N.A.
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Telecopy: (000) 000-0000
Email: xxxxxxxxx@xxxxxxxxx.xxx
CREDIT AGREEMENT S-12
CREDIT SUISSE FIRST BOSTON,
ACTING THROUGH ITS CAYMAN ISLANDS BRANCH,
as a Lender
By:
--------------------------------------
Its:
-------------------------------------
By:
--------------------------------------
Its:
-------------------------------------
Address for Notices:
Credit Suisse First Xxxxxx
Xxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx Xxxxxxxxx
Telecopy: (000) 000-0000
Email: xxxxxx.xxxxxxxxx@xxxx.xxx
CREDIT AGREEMENT S-13
HSBC BANK USA, as a Lender
By:
--------------------------------------
Its:
-------------------------------------
Address for Notices:
HSBC Bank USA
000 0xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
Email: xxxxxxxx.x.xxxxxxx@xx.xxxx.xxx
CREDIT AGREEMENT S-14
FIRST NATIONAL BANK AND TRUST COMPANY,
as a Lender
By:
--------------------------------------
Its:
-------------------------------------
Address for Notices:
First National Bank and Trust Company
000 X. Xxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopy: (000) 000-0000
Email: xxxxxxxx@xxx-xxxxxxxx.xxx
CREDIT AGREEMENT S-15
ANNEX A
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have the following
respective meanings (unless otherwise defined therein), and all section
references in the following definitions shall refer to sections of the
Agreement:
"Account Debtor" means each Person obligated in any way on or in
connection with an Account, Chattel Paper or General Intangibles (including a
payment intangible).
"Accounts" means all of each Borrower's now owned or hereafter acquired
or arising accounts, as defined in the UCC, including any rights to payment for
the sale or lease of goods or rendition of services, whether or not they have
been earned by performance and all health care receivables.
"ACH Transactions" means any cash management or related services
including the automatic clearing house transfer of funds by any Bank for the
account of any Borrower pursuant to agreement or overdrafts.
"Administrative Borrower" has the meaning specified in Section 13.19.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person or which owns, directly or indirectly, five percent (5%) or
more of the outstanding equity interest of such Person. A Person shall be deemed
to control another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership of voting
securities, by contract, or otherwise.
"Agent" means Wachovia Bank, National Association, solely in its
capacity as agent for the Lenders, and any successor agent.
"Agent Advances" has the meaning specified in Section 1.2(i).
"Agent's Liens" means the Liens in the Collateral granted to the Agent,
for the benefit of the Lenders, Banks and the Agent pursuant to this Agreement
and the other Loan Documents.
"Agent-Related Persons" means the Agent, together with its Affiliates,
and the officers, directors, employees, counsel, representatives, agents and
attorneys-in-fact of the Agent and such Affiliates.
"Aggregate Revolver Outstandings" means, at any date of determination:
the sum of (a) the unpaid balance of Revolving Loans, (b) the aggregate amount
of Pending Revolving Loans, (c) one hundred percent (100%) of the aggregate
undrawn face amount of all outstanding Letters of Credit, and (d) the aggregate
amount of any unpaid reimbursement obligations in respect of Letters of Credit.
"Agreement" means the Credit Agreement to which this Annex A is
attached, as from time to time amended, restated, supplemented or otherwise
modified.
"Anniversary Date" means each anniversary of the Closing Date.
"Applicable Margin" means
(i) with respect to Base Rate Loans and all other Obligations
(other than LIBOR Rate Loans), 0.0%; and
(ii) with respect to LIBOR Rate Loans, 2.25%.
The Applicable Margins shall be adjusted (up or down) prospectively on
a quarterly basis as determined by the Parent's consolidated financial
performance, commencing with the first day of the first calendar month that
occurs more than 5 days after delivery of the Borrower's quarterly Financial
Statements to Lenders for the fiscal quarter ending June 30, 2004. Adjustments
in Applicable Margins shall be determined by reference to the following grids:
IF CONSOLIDATED FIXED CHARGE COVERAGE RATIO IS: LEVEL OF APPLICABLE MARGINS:
----------------------------------------------- ----------------------------
> 1.60 to 1.00 Level I
--------------------------------------------------------------- ---------------------------------
> 1.40 to 1.00, but less than or equal to 1.60 to 1.00 Level II
--------------------------------------------------------------- ---------------------------------
> 1.20 to 1.00, but less than or equal to 1.40 to 1.00 Level III
--------------------------------------------------------------- ---------------------------------
less than or equal to 1.20 to 1.00 Level IV
--------------------------------------------------------------- ---------------------------------
APPLICABLE MARGINS
------------------------------------------------------------------
XXXXX X XXXXX XX XXXXX XXX XXXXX XX
---------------- ---------------- --------------- ----------------
Base Rate Revolving Loans 0% 0% 0.25% 0.50%
------------------------------ ---------------- ---------------- --------------- ----------------
LIBOR Revolving Loans 2.00% 2.25% 2.50% 2.75%
------------------------------ ---------------- ---------------- --------------- ----------------
Applicable L/C Margin 2.00% 2.25% 2.50% 2.75%
------------------------------ ---------------- ---------------- --------------- ----------------
All adjustments in the Applicable Margins after June 30, 2004 shall be
implemented quarterly on a prospective basis, for each calendar month commencing
at least 5 days after the date of delivery to the Lenders of quarterly unaudited
or annual audited (as applicable) Financial Statements evidencing the need for
an adjustment. Concurrently with the delivery of those Financial Statements, the
Administrative Borrower shall deliver to the Agent and the Lenders a
certificate, signed by its chief financial officer, setting forth in reasonable
detail the basis for the continuance of, or any change in, the Applicable
Margins. Failure to timely deliver such Financial Statements shall, in addition
to any other remedy provided for in this Agreement, result in an increase in the
Applicable Margins to the highest level set forth in the foregoing grid, until
the first day of the first calendar month following the delivery of those
Financial Statements demonstrating that such an increase is not required. If a
Default or Event of Default has occurred and is continuing at the time any
reduction in the Applicable Margins is to be implemented, no reduction may occur
until the first day of the first calendar month following the date on which such
Default or Event of Default is waived or cured.
"Approved Freight Handler" means any freight forwarder, customs broker,
customs agent or similar Person acceptable to the Agent in its sole discretion
utilized by Borrowers from time to time in connection with its importation of
Inventory that has delivered a Lien Acknowledgment Agreement in favor of the
Agent in form and substance satisfactory to the Agent, so long as such Lien
Acknowledgement Agreement remains in full force and effect and the Agent has not
received any notice of termination with respect thereto.
"Assignee" has the meaning specified in Section 11.2(a).
"Assignment and Acceptance" has the meaning specified in Section
11.2(a).
"Attorney Costs" means and includes all reasonable fees, expenses and
disbursements of any law firm or other counsel engaged by the Agent or the
Documentation Agent, and the reasonably allocated costs and expenses of internal
legal services of the Agent or the Documentation Agent.
"Availability" means, at any time (a) the lesser of (i) the Maximum
Revolver Amount or (ii) the Borrowing Base, minus (b) Reserves other than
Reserves deducted in the calculation of the Borrowing Base, minus (c) in each
case, the Aggregate Revolver Outstandings plus (d) sixty-five percent (65%) of
the aggregate undrawn face amount of all outstanding commercial Letters of
Credit issued for the purpose of purchasing Eligible In-Transit Inventory not
included in the calculation of the Borrowing Base.
"Avoidance Provisions" has the meaning specified in Section
14.1(b)(iii).
"Banks" means, collectively, Wachovia Bank, National Association, a
national banking association, Bank of America, N.A., a national banking
association, or any successor entity thereto and "Bank" means any of the
foregoing.
"Bank Products" means any one or more of the following types of
services or facilities extended to the Borrowers, or any of them, by any Bank or
any affiliate of any Bank in reliance on such Bank's agreement to indemnify such
affiliate or such Bank; (i) credit cards; (ii) ACH Transactions; (iii) cash
management, including controlled disbursement services; and (iv) Hedge
Agreements.
"Bank Product Reserves" means all reserves which the Agent, as directed
by either Bank, from time to time establishes in its reasonable discretion for
the Bank Products then provided or outstanding.
"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C.
Section 101 et seq.), as in effect from time to time.
"Base Rate" means, for any day, the rate of interest in effect for such
day as publicly announced from time to time by the Agent in Charlotte, North
Carolina as its "prime rate" (the "prime rate" being a rate set by the Agent
(which is not necessarily the lowest of such rates) based upon various factors
including the Agent's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate). Any change in the prime
rate announced by the Agent shall take effect at the opening of business on the
day specified in the public announcement of such change. Each Interest Rate
based upon the Base Rate shall be adjusted simultaneously with any change in the
Base Rate.
"Base Rate Loan" means a Revolving Loan during any period in which it
bears interest based on the Base Rate.
"Blocked Account Agreement" means any agreement among a Borrower, the
Agent and a Clearing Bank, in form and substance reasonably satisfactory to the
Agent, concerning the collection of payments which represent the proceeds of
Accounts or of any other Collateral.
"Borrower Parties" means the Parent, the Borrowers and the Guarantors,
and "Borrower Party" shall mean any one of the foregoing Borrower Parties.
"Borrowers" means the Parent, Toastmaster, Inc. and Salton Toastmaster
Logistics LLC and "Borrower" shall mean any one of the foregoing Borrowers.
"Borrowing" means a borrowing hereunder consisting of Revolving Loans
made on the same day by the Lenders to the Borrowers or by the Agent in the case
of a Borrowing funded by Non-Ratable Loans or by the Agent in the case of a
Borrowing consisting of an Agent Advance, or the issuance of Letters of Credit
hereunder.
"Borrowing Base" means, at any time, an amount equal to
(a) the sum of:
(A) eighty-five percent (85%) of the Net Amount of Eligible
Accounts, plus,
(B) the lesser of (I) seventy percent (70%) of the value of
the Eligible Landed Inventory and (II) eighty-five percent (85%) of the
Net Liquidation Value of Eligible Landed Inventory; plus,
(C) the lesser of (I) sixty-five percent (65%) of the book
value of Eligible In-Transit Inventory valued at the lower of cost
(determined on a first-in, first-out basis) or market and, (II)
eighty-five percent (85%) of the Net Liquidation Value of Eligible
In-Transit Inventory; provided, however, that in no event shall the
amount available under this clause (C) exceed thirty percent (30%) of
the value of all Eligible Inventory, minus
(b) Reserves.
"Borrowing Base Certificate" means a certificate by a Responsible
Officer of the Administrative Borrower, substantially in the form of Exhibit F
(or another form acceptable to the Agent) setting forth the calculation of the
Borrowing Base, including a calculation of each component thereof, all in such
detail as shall be reasonably satisfactory to the Agent. All calculations of the
Borrowing Base in connection with the preparation of any Borrowing Base
Certificate shall originally be made by the Borrowers and certified to the
Agent; provided, that the Agent shall have the right to review and adjust, in
the exercise of its reasonable credit judgment, any such calculation (1) to
reflect
its reasonable estimate of declines in value of any of the Collateral described
therein, and (2) to the extent that such calculation is not in accordance with
this Agreement.
"Business Day" means (a) any day that is not a Saturday, Sunday, or a
day on which banks in Atlanta, Georgia, Chicago, Illinois or Charlotte, North
Carolina are required or permitted to be closed, and (b) with respect to all
notices, determinations, fundings and payments in connection with the LIBOR Rate
or LIBOR Rate Loans, any day that is a Business Day pursuant to clause (a) above
and that is also a day on which trading in Dollars is carried on by and between
banks in the London interbank market.
"Capital Adequacy Regulation" means any guideline, request or directive
of any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
"Capital Expenditures" means all payments due (whether or not paid
during any fiscal period) in respect of the cost of any Fixed Asset or
improvement, or replacement, substitution, or addition thereto, which has a
useful life of more than one year, including, without limitation, those costs
arising in connection with the direct or indirect acquisition of such asset by
way of increased product or service charges or in connection with a Capital
Lease.
"Capital Lease" means any lease of property by the Parent or a
Subsidiary which, in accordance with GAAP, should be reflected as a capital
lease on the consolidated balance sheet of the Parent.
"Carry Forward Amount" means to the extent positive, for any Fiscal
Year, a carry forward amount, not to exceed $5,000,000 equal to (a) $10,000,000
minus (b) the aggregate amount of Capital Expenditures made pursuant to Section
7.22 in the immediately preceding Fiscal Year.
"Cash Sweep Period" means the period of time from and after any Cash
Sweep Trigger Date and continuing though the earlier of (a) the date two (2)
Business Days following the occurrence of any Cash Sweep Termination Date or (b)
the date the Commitments are terminated and the Obligations are paid in full.
"Cash Sweep Termination Date" means any date on which the Borrowers
shall deliver evidence to the Agent, in form and substance satisfactory to the
Agent, that Availability (without giving effect to the Xxxxxxx Obligation
Reserve), for the 365 consecutive calendar days then most recently ending, was
not less than (a) $45,000,000 at all times during the months of January,
February, March, April, May and June and (b) $35,000,000 at all times during the
months of July, August, September, October, November and December.
"Cash Sweep Trigger Date" means any date (a) that the Borrowers fail to
maintain Availability (without giving effect to the Xxxxxxx Obligation Reserve)
of not less than (i) $35,000,000 at all times during the months of January,
February, March, April, May and June of each year, and (ii) $25,000,000 at all
times during the months of July, August, September, October, November and
December of each year, or (b) at the discretion of the Agent or at the direction
of the Required Lenders, following the occurrence of any Event of Default.
Notwithstanding the foregoing, no more frequently than two (2) times in any
calendar year, no Cash Sweep Trigger Date shall be deemed to have occurred so
long as within five (5) days from the occurrence of any Cash Sweep Trigger Date
(a "Cure Period"), the Borrowers shall deliver evidence to the Agent, in form
and substance satisfactory to the Agent, that Availability (without giving
effect to the Xxxxxxx Obligation Reserve), as of the last day during the Cure
Period is not less than (a) $35,000,000 if such days occur during the months of
January, February, March, April, May and June and (b) $25,000,000 if such days
occur during the months of July, August, September, October, November and
December; provided, that no Default or Event of Default shall exist or be
continuing on such date.
"Change of Control" shall mean (i) directly or indirectly a sale,
transfer, or other conveyance of all or substantially all of the assets of the
Parent in one transaction or a series of transactions, (ii) any "person" or
"group" (as such terms are used for purposes of Sections 13(d) and 14(d) of the
Exchange Act, whether or not applicable), other than the shareholders of the
Parent as of the Closing Date (or any Person or group of Persons that, as of the
Agreement Date, are Affiliates of such shareholders), is or becomes the
"beneficial owner" (as that term is used in Rules 13d-3 and 13d-5 under the
Exchange Act, whether or not applicable, except that a Person shall be deemed to
have "beneficial ownership" of all shares that any such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than thirty-five percent (35%) of the
aggregate number of votes of all classes of capital stock of the Parent that
ordinarily have voting power for the election of directors of the Parent, (iii)
during any period of twenty-four (24) consecutive months, individuals who at the
beginning of such period constituted the board of directors of the Parent,
together with any new directors whose election by such board or whose nomination
for election by the shareholders of the Parent was approved by a vote of a
majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
board of directors of the Parent then in office or (iv) the Parent shall cease
to own, directly or indirectly, one hundred percent (100%) of the Stock of any
Subsidiary, except as otherwise permitted by Section 7.9.
"Chattel Paper" means all of the Parent's and each Subsidiary's now
owned or hereafter acquired chattel paper, as defined in the UCC, including
electronic chattel paper and tangible chattel paper.
"Clearing Bank" means any banking institution (including any Bank) with
whom a Payment Account has been established pursuant to a Blocked Account
Agreement.
"Closing Date" means the date of this Agreement.
"Closing Fees" has the meaning specified in Section 2.4.
"Co-Agents" means, collectively, Wachovia Bank, National Association
and Bank of America, N.A. and "Co-Agent" means either of the foregoing or any
successor entity thereto.
"Code" means the Internal Revenue Code of 1986, as in effect from time
to time.
"Collateral" means all of each Borrower Party's Accounts, Inventory,
Chattel Paper, Documents, Investment Property, Deposit Accounts, Equipment and
General Intangibles, and all other assets of any Person from time to time
subject to the Agent's Liens securing payment or performance of the Obligations,
but excluding up to 35% of the equity interests of any Borrower Party in any
Foreign Subsidiary.
"Commitment" means, at any time with respect to a Lender, the principal
amount set forth (a) beside such Lender's name under the heading "Commitment" on
Schedule 1.2(a) attached to the Agreement, or (b) on the signature page of the
Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 11.2, as such Commitment
may be adjusted from time to time in accordance with the provisions of Section
11.2, and "Commitments" means, collectively, the aggregate amount of the
commitments of all of the Lenders, as such obligations may be reduced from time
to time pursuant to the terms hereof.
"Consolidated Adjusted Net Earnings from Operations" means, with
respect to any fiscal period of the Parent, the Parent's net income on a
consolidated basis after provision for income taxes for such fiscal period, as
determined in accordance with GAAP and reported on the Financial Statements for
such period, excluding any and all of the following included in such net income:
(a) gain or loss arising from the sale of any capital assets; (b) gain arising
from any write-up in the book value of any asset or loss arising from any
write-down in the book value of any asset other than an asset the value of which
is included in the calculation of the Borrowing Base; (c) earnings or losses of
any Person, substantially all the assets or Stock of which have been acquired by
the Parent or any of its Subsidiaries in any manner, to the extent realized by
such other Person prior to the date of acquisition; (d) earnings or losses of
any Person in which the Parent or any of its Subsidiaries has a minority
ownership interest unless (and only to the extent) such earnings or losses shall
actually have been received by the Parent or any of its Subsidiaries in the form
of cash distributions; (e) earnings or losses of any Person to which assets of
the Parent or any of its Subsidiaries shall have been sold, transferred or
disposed of, or into which the Parent or any of its Subsidiaries shall have been
merged, or which has been a party with the Parent or any of its Subsidiaries to
any consolidation or
other form of reorganization, prior to the date of such transaction; (f) gain
arising from the acquisition of debt or equity securities of the Parent or any
of its Subsidiaries or from cancellation or forgiveness of Consolidated Debt;
and (g) gain and non-cash loss arising from extraordinary items or from any
other non-recurring transaction, as determined in accordance with GAAP.
"Consolidated Debt" means, without duplication, all indebtedness for
borrowed money or the deferred purchase price of property, to any Person, of any
kind or nature, now or hereafter owing, arising, due or payable, howsoever
evidenced, created, incurred, acquired or owing, whether primary, secondary,
direct, contingent, fixed or otherwise, excluding trade payables, but including
(a) all Obligations; (b) all obligations or liabilities created or arising under
any Capital Lease or conditional sale or other title retention agreement with
respect to property used or acquired by any Borrower Party, even if the rights
and remedies of the lessor, seller or lender thereunder are limited to
repossession of such property; provided, however, that all such obligations and
liabilities which are limited in recourse to such property shall be included in
Debt only to the extent of the book value of such property as would be shown on
a balance sheet of the Borrower Parties prepared in accordance with GAAP; (c)
all obligations and liabilities under Guaranties, (d) the present value
(discounted at the Base Rate) of lease payments due under synthetic leases, and
(e) earn-outs or other contingent payments incurred in connection with any
acquisition to the extent such earn-outs or payments are not reflected as
expenses on the income statements of such Person; provided, further, however,
that in no event shall the term Consolidated Debt include the capital stock
surplus, retained earnings, minority interests in the common stock of
Subsidiaries, lease obligations (other than pursuant to (b) or (d) above),
reserves for deferred income taxes and investment credits, or other deferred
credits or reserves.
"Consolidated EBITDA" means, with respect to any fiscal period of the
Parent, Consolidated Adjusted Net Earnings from Operations, plus, to the extent
deducted in the determination of Consolidated Adjusted Net Earnings from
Operations for that fiscal period, interest expenses, Federal, state, local and
foreign income taxes, depreciation and amortization (including, without
limitation, amortization of restricted stock, stock appreciation rights and
similar equity instruments).
"Consolidated Fixed Charge Coverage Ratio" means, as of any date of
determination, with respect to any fiscal period of the Parent, on a
consolidated basis, the ratio of (a) the sum of (i) Consolidated EBITDA minus
(ii) Capital Expenditures (excluding Capital Expenditures funded with
Consolidated Debt other than Revolving Loans, but including, without
duplication, principal payments with respect to such Consolidated Debt) to (b)
Consolidated Fixed Charges.
"Consolidated Fixed Charges" means, with respect to any fiscal period
of the Parent on a consolidated basis, without duplication, cash interest
expense, principal payments of Consolidated Debt (excluding any historical or
future cash payments made
with respect to the refinancing of principal of Consolidated Debt, the Xxxxxxx
Obligation and the repayment of the Xxxxxx Credit Facility Agreement), all
Distributions paid, all cash Investments, all Specified Transactions, and
Federal, state, local and foreign income taxes paid in cash.
"Contaminant" means any material defined as waste, pollutant, hazardous
substance, toxic substance, hazardous waste or special waste under Environmental
Laws, including without limitation, petroleum or petroleum-derived substance or
waste, asbestos in any form or condition, polychlorinated biphenyls ("PCBs"), or
any constituent of any such substance or waste.
"Continuation/Conversion Date" means the date on which a Loan is
converted into or continued as a LIBOR Rate Loan.
"Contributing Borrower" has the meaning specified in Section 14.1(e).
"Copyright Security Agreement" means Copyright Security Agreement,
executed and delivered by the Borrowers to the Agent, for the benefit of the
Agent and the Lenders, to evidence and perfect the Agent's security interest in
the Borrowers' present and future copyrights and related licenses and rights.
"Credit Support" has the meaning specified in Section 1.3(a).
"Debt" means, without duplication, all indebtedness for borrowed money
or the deferred purchase price of property, to any Person, of any kind or
nature, now or hereafter owing, arising, due or payable, howsoever evidenced,
created, incurred, acquired or owing, whether primary, secondary, direct,
contingent, fixed or otherwise, excluding trade payables, but including (a) all
Obligations; (b) all obligations or liabilities created or arising under any
Capital Lease or conditional sale or other title retention agreement with
respect to property used or acquired by any Borrower Party, even if the rights
and remedies of the lessor, seller or lender thereunder are limited to
repossession of such property; provided, however, that all such obligations and
liabilities which are limited in recourse to such property shall be included in
Debt only to the extent of the book value of such property as would be shown on
a balance sheet of the Borrower Parties prepared in accordance with GAAP; (c)
all obligations and liabilities under Guaranties;(d) the present value
(discounted at the Base Rate) of lease payments due under synthetic leases, and
(e) earn-outs or other contingent payments incurred in connection with any
acquisition to the extent such earn-outs or payments are not reflected as
expenses on the income statements of such Person; provided, further, however,
that in no event shall the term Debt include the capital stock surplus, retained
earnings, minority interests in the common stock of Subsidiaries, lease
obligations (other than pursuant to (b) or (d) above), reserves for deferred
income taxes and investment credits, or other deferred credits or reserves.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured, waived, or otherwise
remedied during such time) constitute an Event of Default.
"Default Rate" means a fluctuating per annum interest rate at all times
equal to the sum of (a) the otherwise applicable Interest Rate plus (b) two
percent (2%) per annum. Each Default Rate shall be adjusted simultaneously with
any change in the applicable Interest Rate. In addition, the Default Rate shall
result in an increase in the Letter of Credit Fee by two (2) percentage points
per annum.
"Defaulting Lender" has the meaning specified in Section 12.15(c).
"Deposit Accounts" means all "deposit accounts" as such term is defined
in the UCC, now or hereafter held in the name of any Borrower Party, including,
without limitation, any checking or other demand deposit account, time, savings,
passbook or similar account maintained with a bank.
"Designated Account" has the meaning specified in Section 1.2(c).
"Distribution" means, in respect of any corporation: (a) the payment or
making of any dividend or other distribution of property in respect of capital
stock (excluding any options or warrants for, or other rights with respect to,
such stock) of such corporation, other than distributions in capital stock (or
any options or warrants for such stock) of the same class; or (b) the redemption
or other acquisition by such corporation of any capital stock (or any options or
warrants for such stock) of such corporation.
"Documents" means all "documents" as such term is defined in the UCC,
including bills of lading, warehouse receipts or other documents of title, now
owned or hereafter acquired by any Borrower Party.
"DOL" means the United States Department of Labor or any successor
department or agency.
"Dollar" and "$" means dollars in the lawful currency of the United
States. Unless otherwise specified, all payments under the Agreements shall be
made in Dollars.
"EBITDA" means, with respect to any fiscal period of the Borrowers, US
Adjusted Net Earnings from Operations, plus, to the extent deducted in the
determination of US Adjusted Net Earnings from Operations for that fiscal
period, interest expenses, Federal, state, local and foreign income taxes,
depreciation and amortization (including, without limitation, amortization of
restricted stock, stock appreciation rights and similar equity instruments).
"Eligible Accounts" means the Accounts which the Agent or the Required
Lenders in the exercise of reasonable commercial discretion determine to be
Eligible
Accounts. Without limiting such discretion of the Agent or the Required Lenders
to establish other criteria of ineligibility, Eligible Accounts shall not,
unless the Agent or the Required Lenders elect, include any Account:
(a) with respect to which more than one hundred twenty (120) days have
elapsed since the date of the original invoice or which is more than sixty (60)
days past due; provided, however, that "Eligible Accounts" may include up to
$10,000,000 in aggregate invoice amount of (i) Accounts with respect to which
not more than one hundred eighty (180) days have elapsed since the date of the
original invoice and which is more than thirty (30) days past due;
(b) with respect to which any of the representations, warranties,
covenants, and agreements contained in the Security Agreement are incorrect or
have been breached;
(c) with respect to which Account (or any other Account due from such
Account Debtor), in whole or in part, a check, promissory note, draft, trade
acceptance or other instrument for the payment of money has been received,
presented for payment and returned uncollected for any reason;
(d) which represents a progress billing (as hereinafter defined) or as
to which any Borrower has extended the time for payment without the consent of
the Agent; for the purposes hereof, "progress billing" means any invoice for
goods sold or leased or services rendered under a contract or agreement pursuant
to which the Account Debtor's obligation to pay such invoice is conditioned upon
such Borrower's completion of any further performance under the contract or
agreement;
(e) with respect to which any one or more of the following events has
occurred to the Account Debtor on such Account: death or judicial declaration of
incompetency of an Account Debtor who is an individual; the filing by or against
the Account Debtor of a request or petition for liquidation, reorganization,
arrangement, adjustment of debts, adjudication as a bankrupt, winding-up, or
other relief under the bankruptcy, insolvency, or similar laws of the United
States, any state or territory thereof, or any foreign jurisdiction, now or
hereafter in effect; the making of any general assignment by the Account Debtor
for the benefit of creditors; the appointment of a receiver or trustee for the
Account Debtor or for any of the assets of the Account Debtor, including,
without limitation, the appointment of or taking possession by a "custodian," as
defined in the Bankruptcy Code; the institution by or against the Account Debtor
of any other type of insolvency proceeding (under the bankruptcy laws of the
United States or otherwise) or of any formal or informal proceeding for the
dissolution or liquidation of, settlement of claims against, or winding up of
affairs of, the Account Debtor; the sale, assignment, or transfer of all or any
material part of the assets of the Account Debtor; the nonpayment generally by
the Account Debtor of its debts as they become due; or the cessation of the
business of the Account Debtor as a going concern;
(f) if fifty percent (50%) or more of the aggregate Dollar amount of
outstanding Accounts owed (excluding chargebacks and deductions) at such time by
the Account Debtor thereon is classified as ineligible under clause (a) above;
(g) owed by an Account Debtor which: (i) does not maintain its
executive office in the United States of America or Canada (provided, that, at
any time promptly upon the Agent's request, the Borrowers shall execute and
deliver, or cause to be executed and delivered, such other agreements, documents
and instruments as may be required by the Agent to perfect the security
interests of the Agent in those Accounts of an Account Debtor with its executive
office or principal place of business in Canada in accordance with the
applicable laws of the applicable Province of Canada in which such executive
office or principal place of business is located and take or cause to be taken
such other and further actions as the Agent may request to enable the Agent as
secured party with respect thereto to collect such Accounts under the applicable
Federal or Provincial laws of Canada); or (ii) is not organized under the laws
of the United States of America or Canada or any state or province thereof; or
(iii) is the government of any foreign country or sovereign state, or of any
state, province, municipality, or other political subdivision thereof, or of any
department, agency, public corporation, or other instrumentality thereof; except
to the extent that such Account is secured or payable by a letter of credit
satisfactory to the Agent in its discretion;
(h) owed by an Account Debtor which is an Affiliate or employee of any
Borrower;
(i) except as provided in clause (k) below, with respect to which
either the perfection, enforceability, or validity of the Agent's Liens in such
Account, or the Agent's right or ability to obtain direct payment to the Agent
of the proceeds of such Account, is governed by any federal, state, or local
statutory requirements other than those of the UCC or the applicable Federal or
Provincial laws of Canada;
(j) owed by an Account Debtor to which the Parent, any Borrower or any
other Subsidiary is indebted in any way, or which is subject to any right of
setoff or recoupment by the Account Debtor, unless the Account Debtor has
entered into an agreement acceptable to the Agent to waive setoff rights; or if
the Account Debtor thereon has disputed liability or made any claim with respect
to any other Account due from such Account Debtor; but in each such case only to
the extent of such indebtedness, setoff, recoupment, dispute, or claim;
(k) owed by the government of the United States, or any department,
agency, public corporation, or other instrumentality thereof, unless the Federal
Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3727 et seq.),
and any other steps necessary to perfect the Agent's Liens therein, have been
complied with to the Agent's satisfaction with respect to such Account;
(l) owed by any state, municipality, or other political subdivision of
the United States of America, or any department, agency, public corporation, or
other instrumentality thereof and as to which the Agent determines that its Lien
therein is not or cannot be perfected;
(m) which represents a sale on a xxxx-and-hold, guaranteed sale, sale
and return, sale on approval, consignment, or other repurchase or return basis;
(n) which is evidenced by a promissory note or other instrument or by
chattel paper;
(o) if the Agent believes, in the exercise of its reasonable judgment,
that the prospect of collection of such Account is impaired or that the Account
may not be paid by reason of the Account Debtor's financial inability to pay;
(p) with respect to which the Account Debtor is located in any state
requiring the filing of a Notice of Business Activities Report or similar report
in order to permit any Borrower to seek judicial enforcement in such State of
payment of such Account, unless such Borrower has qualified to do business in
such state or has filed a Notice of Business Activities Report or equivalent
report for the then current year;
(q) which arises out of a sale not made in the ordinary course of a
Borrower's business;
(r) with respect to which the goods giving rise to such Account have
not been shipped and delivered to and accepted by the Account Debtor or the
services giving rise to such Account have not been performed by the Borrowers,
and, if applicable, accepted by the Account Debtor, or the Account Debtor
revokes its acceptance of such goods or services;
(s) with respect to which the Account Debtor is Kmart Corporation,
unless the applicable Borrower Party shall deliver to the Agent documentation
(including, in the form of an intercreditor agreement or letter agreement), in
form and substance reasonably satisfactory to the Agent, of the priority of the
Agent's Lien on such Account or the acknowledgment of any transferee of such
Account of the Agent's Lien on the proceeds thereof;
(t) owed by (i) any Account Debtor that is Sears, Target, Federated, or
Wal-Mart which is obligated to the Borrowers respecting Accounts the aggregate
unpaid balance of which exceeds thirty percent (30%) of the aggregate unpaid
balance of all Accounts owed to the Borrowers at such time by all of the
Borrowers' Account Debtors, but only to the extent of such excess, or (ii) any
other Account Debtor which is obligated to the Borrowers respecting Accounts the
aggregate unpaid balance of which exceeds twenty percent (20%) of the aggregate
unpaid balance of all Accounts owed to the
Borrowers at such time by all of the Borrowers' Account Debtors, but only to the
extent of such excess; or
(u) which is not subject to a first priority and perfected security
interest in favor of the Agent for the benefit of the Lenders.
If any Account at any time ceases to be an Eligible Account, then such
Account shall promptly be excluded from the calculation of Eligible Accounts.
Notwithstanding the foregoing, none of the Accounts described in clauses (a)
through (p) above shall be excluded from Eligible Accounts if the payments of
such Accounts are (i) covered by insurance policies or (ii) secured or payable
by a letter of credit, in each case, as is reasonably satisfactory to the Agent.
"Eligible Assignee" means (a) a commercial bank, commercial finance
company or other asset based lender, having total assets in excess of
$1,000,000,000; (b) any Lender listed on the signature page of this Agreement;
(c) any Affiliate of any Lender; and (d) if an Event of Default has occurred and
is continuing, any Person reasonably acceptable to the Agent.
"Eligible In-Transit Inventory" means those items of Inventory that do
not qualify as Eligible Landed Inventory solely because they are not in a
location set forth on Schedule E-1 or in transit among such locations, but as to
which (a) such Inventory currently is in transit (whether by vessel, air, or
land) from a location outside of the continental United States to a location set
forth on Schedule E-1 that is the subject of a landlord waiver or bailee letter,
in form and substance satisfactory to the Agent, in favor of the Agent, (b)
title to such Inventory has passed to a Borrower, (c) such Inventory is insured
against types of loss, damage, hazards, and risks, and in amounts, satisfactory
to the Agent in its sole discretion, (d) from and after the date sixty (60) days
following the Closing Date with respect to Inventory in-transit as of the
Closing Date and from and after the Closing Date with respect to all other
Inventory, such Inventory is the subject of a non-negotiable xxxx of lading or,
to the extent not the subject of a xxxx of lading, a non-negotiable cargo
receipt, in each case that (x) is consigned to the Agent (either directly or by
means of endorsements) and such xxxx of lading or cargo receipt shall reflect
"[Name of Borrower], subject to the security interest of Wachovia Bank, National
Association, as agent, 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000"
thereon, (y) was issued by the carrier respecting the subject Inventory, and (z)
is in the physical possession of an Approved Freight Handler, and (e) the
applicable Borrower has provided a certificate to the Agent that certifies (1)
that, to the Knowledge of the Administrative Borrower, such Inventory meets all
of the Borrowers' representations and warranties contained in the Loan Documents
concerning Eligible Inventory and (2) that it knows of no reason why such
Inventory would not be accepted by the applicable Borrower.
"Eligible Inventory" means Eligible Landed Inventory and Eligible
In-Transit Inventory.
"Eligible Landed Inventory" means Inventory valued at the lower of cost
(on a first-in, first-out basis), or market, which the Agent or the Required
Lenders, in its or their reasonable discretion, determine to be Eligible Landed
Inventory. Without limiting such discretion of the Agent or the Required Lenders
to establish other criteria of ineligibility, Eligible Landed Inventory shall
not, unless the Agent or the Required Lenders elect, include any Inventory:
(a) that is not owned by a Borrower;
(b) that is not subject to the Agent's Liens, which are perfected as to
such Inventory, or that are subject to any other Lien whatsoever (other than the
Liens described in clause (d) of the definition of Permitted Liens provided that
such Permitted Liens (i) are junior in priority to the Agent's Liens or subject
to Reserves and (ii) do not impair directly or indirectly the ability of the
Agent to realize on or obtain the full benefit of the Collateral);
(c) that does not consist of finished goods or raw materials;
(d) that consists of work-in-process, chemicals, samples, prototypes,
supplies, or packing and shipping materials;
(e) (i) that is not in good condition, is unmerchantable, or does not
meet all standards imposed by any Governmental Authority, having regulatory
authority over such goods, their use or sale or (ii) that is subject to ongoing
patent infringement litigation;
(f) that is not currently either usable or salable, at prices
approximating at least cost, in the normal course of a Borrower's business, or
that is slow moving or stale;
(g) that is obsolete or returned or repossessed or used goods taken in
trade (other than returned goods that are readily saleable and without defects);
(h) that is located outside the United States of America or Canada (or
that is in-transit from vendors or suppliers or to buyers);
(i) that is located in a public warehouse or in possession of a bailee
or in a facility leased by a Borrower, if the warehouseman, or the bailee, or
the lessor has not delivered to the Agent, if requested by the Agent, a
subordination agreement in form and substance satisfactory to the Agent or if a
Reserve for rents or storage charges has not been established for Inventory at
that location;
(j) from and after the date sixty (60) days after the Closing Date,
that contains or bears any Proprietary Rights licensed to a Borrower by any
Person, if the Agent is not satisfied that it may sell or otherwise dispose of
such Inventory in accordance with the terms of the Security Agreement and
Section 9.2 without infringing the rights of the
licensor of such Proprietary Rights or violating any contract with such licensor
(and without payment of any royalties other than any royalties due with respect
to the sale or disposition of such Inventory pursuant to the existing license
agreement), and, as to which the applicable Borrower has not delivered to the
Agent a consent or sublicense agreement from such licensor in form and substance
acceptable to the Agent if requested; provided, that, "Eligible Inventory" shall
not at any time include any Inventory bearing any Proprietary Rights with
respect to Warner Brothers unless the applicable Borrower has delivered to the
Agent a consent or sublicense agreement from such licensor in form and substance
acceptable to the Agent;
(k) that is not reflected in the details of a current perpetual
inventory report;
(l) that is Inventory placed on consignment;
(m) that is Inventory subject to positive purchase price variance, but
only to the extent of such variance;
(n) that is Inventory that is subject to a xxxx-and-hold sale; or
(o) that is Inventory that is to be returned to the vendor.
If any Inventory at any time ceases to be Eligible Landed Inventory,
such Inventory shall promptly be excluded from the calculation of Eligible
Landed Inventory.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for a Release.
"Environmental Laws" means all federal, state or local, or foreign
Governmental Authority, laws, statutes, common law duties, rules, regulations,
ordinances and codes, together with all administrative orders, directed duties,
licenses, authorizations and permits of, and agreements with, any Governmental
Authority, in each case relating to environmental, health, safety and land use
matters.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (a) any liability under Environmental Laws, or (b) damages arising
from, or costs incurred by such Governmental Authority in response to, a Release
or threatened Release of a Contaminant into the environment.
"Equipment" means all of any Borrower Party's now owned and hereafter
acquired machinery, equipment, furniture, furnishings, fixtures, and other
tangible personal property (other than consumer goods, farm products or
Inventory), including embedded software, motor vehicles with respect to which a
certificate of title has been issued, aircraft, dies, tools, jigs, molds and
office equipment, as well as all of such types of property leased by any
Borrower Party and all of any Borrower Party's rights and
interests with respect thereto under such leases (including, without limitation,
options to purchase); together with all present and future additions and
accessions thereto, replacements therefor, component and auxiliary parts and
supplies used or to be used in connection therewith, and all substitutes for any
of the foregoing, and all manuals, drawings, instructions, warranties and rights
with respect thereto; wherever any of the foregoing is located.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder, as in effect from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with any Borrower Party within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan, (b) a withdrawal by any Borrower Party or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which it was
a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA, (c) a complete or partial withdrawal by the any Borrower Party
or any ERISA Affiliate from a Multi-employer Plan or notification that a
Multi-employer Plan is in reorganization, (d) the filing of a notice of intent
to terminate, the treatment of a Plan amendment as a termination under Section
4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multi-employer Plan, (e) the occurrence of an event
or condition which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multi-employer Plan, or (f) the imposition of
any liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon any Borrower Party or any ERISA
Affiliate.
"Event of Default" has the meaning specified in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder, as in effect from time to time.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to the Bank on such day on such transactions as determined
by the Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"Fee Letter" means that certain fee letter dated as of the Closing Date
among the Borrowers, the Documentation Agent and the Agent.
"Financial Statements" means, according to the context in which it is
used, the financial statements referred to in Sections 5.2 and 6.6 or any other
financial statements required to be given to the Lenders pursuant to this
Agreement.
"Fiscal Month" means any fiscal month of any Fiscal Year.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the Parent's fiscal year for financial accounting
purposes which ends each year on the Saturday closest to June 30. The current
Fiscal Year of the Parent will end on June 28, 2003.
"Fixed Assets" means the Equipment and Real Estate of the Borrowers.
"Foreign Pledge Agreements" means, collectively those certain pledge
agreements among the Borrower Parties, or any of them, and the Agent for the
benefit of the Agent and the other Lenders pursuant to which one or more
Borrower Parties may pledge up to and including sixty-five percent (65%) of the
equity interests of directly-owned Foreign Subsidiaries.
"Foreign Subsidiaries" has the meaning specified in Section 5.2(a).
"Xxxxxxx Obligation" means the remaining obligation due July 2003 from
the Parent in favor of Xxxxxx Xxxxxxx, Xxx Xxxxxxxxxx and Xxxxxxx Xxxxxxxx,
pursuant to the Agreement, each dated as of July 1, 1999 between the Parent and
each of Xxxxxx Xxxxxxx, Xxx Xxxxxxxxxx and Xxxxxxx Xxxxxxxx.
"Xxxxxxx Obligation Reserve" means a reserve of up to $22,750,000 or
such lesser amount, if any, of the Xxxxxxx Obligation.
"Funding Borrower" has the meaning specified in Section 14.1(e).
"Funding Date" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles and practices set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
United States accounting profession), which are applicable to the circumstances
as of the Closing Date.
"General Intangibles" means all of the Parent's and each Subsidiary's
now owned or hereafter acquired general intangibles, choses in action and causes
of action and all other intangible personal property of the Parent and each
Subsidiary of every kind and nature (other than Accounts), including, without
limitation, all contract rights (excluding contract rights in Hedge Agreements),
payment intangibles, Proprietary Rights, corporate or other business records,
inventions, designs, blueprints, plans, specifications, patents, patent
applications, trademarks, service marks, trade names, trade secrets, goodwill,
copyrights, computer software, customer lists, registrations, licenses,
franchises, tax refund claims, any funds which may become due to the Parent or
any Subsidiary in connection with the termination of any Plan or other employee
benefit plan or any rights thereto and any other amounts payable to the Parent
or any Subsidiary from any Plan or other employee benefit plan, rights and
claims against carriers and shippers, rights to indemnification, business
interruption insurance and proceeds thereof, property, casualty or any similar
type of insurance and any proceeds thereof, proceeds of insurance covering the
lives of key employees on which the Parent or any Subsidiary is beneficiary,
rights to receive dividends, distributions, cash, Instruments and other property
in respect of or in exchange for pledged equity interests or Investment Property
and any letter of credit, guarantee, claim, security interest or other security
held by or granted to the Parent or any Subsidiary.
"Good-Faith Protest" means the right of a Borrower Party to protest any
Lien described in clause (d) of the definition of Permitted Liens, provided that
(a) a reserve acceptable to the Agent in its commercially reasonable discretion
with respect to such obligation is established, (b) any such protest is
instituted promptly and prosecuted diligently by such Borrower Party in good
faith, and (c) the Agent is satisfied that, while any such protest is pending,
there will be no impairment of the enforceability, validity, or priority of any
of the Agent's Liens.
"Goods" means all "goods" as defined in the UCC, now owned or hereafter
acquired by any Borrower Party, wherever located, including embedded Software to
the extent included in "goods" as defined in the UCC.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other
entity owned or controlled, through stock or capital ownership or otherwise, by
any of the foregoing.
"Guarantors" means the Parent and those Subsidiaries signatory to the
Subsidiary Guaranty from time to time.
"Guaranty" means, with respect to any Person, all obligations of such
Person which in any manner directly or indirectly guarantee or assure, or in
effect guarantee or assure, the payment or performance of any indebtedness,
dividend or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including any such obligations
incurred through an agreement, contingent or otherwise: (a) to purchase the
guaranteed obligations or any property constituting security therefor; (b) to
advance or supply funds for the purchase or payment of the guaranteed
obligations or to maintain a working capital or other balance sheet condition;
or (c) to lease property or to purchase any debt or equity securities or other
property or services.
"Hedge Agreement" means any and all transactions, agreements or
documents now existing or hereafter entered into between or among any Borrower
and any Lender which provides for an interest rate, credit, commodity or equity
swap, cap, floor, collar, forward foreign exchange transaction, currency swap,
cross currency rate swap, currency option, or any combination of, or option with
respect to, these or similar transactions, for the purpose of hedging the
Borrower Parties' exposure to fluctuations in interest or exchange rates, loan,
credit exchange, security or currency valuations or commodity prices.
"Increased Reporting Event" means the failure of the Borrowers to
maintain Availability (without giving effect to the Xxxxxxx Obligation Reserve)
of not less than (a) $50,000,000 at all times during the months of January,
February, March, April, May and June of each year, and (b) $25,000,000 at all
times during the months of July, August, September, October, November and
December of each year.
"Insolvency Proceeding" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other state
or federal bankruptcy or insolvency law, assignment for the benefit of
creditors, formal or informal moratoria, composition, extension generally with
creditors or proceedings seeking reorganization, arrangement or other similar
relief.
"Instruments" means all "instruments" as such term is defined in the
UCC, now owned or hereafter acquired by any Borrower Party.
"Intercompany Account" means the net aggregate month-end sum of the
following accounts: (a) "Notes Receivable-Salton CV"; plus (b) "Interest
Receivable- Salton CV"; plus (c) "Xxxxxxx Royalty Receivable" minus (d) "Interco
Payable-Salton Hong Kong"; minus (e) Other Payables -Salton UK; plus (f) Interco
receivable-
Toastmaster de Mexico plus (g) all other accounts receivable maintained by
Borrowers with Foreign Subsidiaries minus (h) all other accounts payable
maintained by Borrowers with Foreign Subsidiaries.
"Interest Period" means, as to any LIBOR Rate Loan, the period
commencing on the Funding Date of such Loan or on the Continuation/Conversion
Date on which the Loan is converted into or continued as a LIBOR Rate Loan, and
ending on the date one, two, three or six months thereafter as selected by the
Administrative Borrower in its Notice of Borrowing, or Notice of
Continuation/Conversion, provided that:
(a) if any Interest Period would otherwise end on a day that is not a
Business Day, that Interest Period shall be extended to the following Business
Day unless the result of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest Period shall end on
the preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Rate 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 calendar month at the end of
such Interest Period; and
(c) no Interest Period shall extend beyond the Stated Termination Date.
"Interest Rate" means each or any of the interest rates, including the
Default Rate, set forth in Section 2.1.
"Inventory" means all of any Borrower Party's right, title and interest
with respect to "inventory," as such term is defined in the UCC, wherever
located, and in any event including now owned and hereafter acquired inventory,
goods and merchandise, wherever located, to be furnished under any contract of
service or held for sale or lease, all returned goods, raw materials,
work-in-process, finished goods (including embedded Software), other materials
and supplies of any kind, nature or description which are used or consumed in
any Borrower Party's business or used in connection with the packing, shipping,
advertising, selling or finishing of such goods, merchandise, and all documents
of title or other Documents representing them.
"Investment" means, as to any Borrower Party, any acquisition of
property by such Borrower Party in exchange for cash or other property, whether
in the form of an acquisition of stock, debt, or other indebtedness or
obligation, or the purchase or acquisition of any other property, or a loan,
advance, capital contribution, or subscription.
"Investment Property" means all of any Borrower Party's right, title
and interest in and to any and all: (a) securities, whether certificated or
uncertificated; (b) securities entitlements; (c) securities accounts; (d)
commodity contracts; or (e) commodity accounts.
"IRS" means the Internal Revenue Service and any Governmental Authority
succeeding to any of its principal functions under the Code.
"Kmart Receivable Purchasing Agreement" means that certain Amended and
Restated Single Customer Credit-Approved Receivables Purchasing Agreement, dated
as of May 9, 2003 between Salton Toastmaster Logistics LLC and The CIT
Group/Commercial Services, Inc.
"Knowledge" means, with respect to the Parent or the Administrative
Borrower, as applicable, the best knowledge of the senior executive officers of
the Parent or the Administrative Borrower, as applicable.
"Latest Projections" means: (a) on the Closing Date and thereafter
until the Agent receives new projections pursuant to Section 5.2(j), the
projections of the Parent's and the Subsidiaries' financial condition, results
of operations, and cash flows, for the period commencing on the Closing Date and
ending on June 30, 2007 and delivered to the Agent prior to the Closing Date;
and (b) thereafter, the projections most recently received by the Agent pursuant
to Section 5.2(j).
"Xxxxxx Credit Facility" means the Third Amended and Restated Credit
Agreement dated as of September 26,2000 among Salton, Inc., as Borrower, Xxxxxx
Commercial Paper Inc., as Administrative Agent, and the other Signatories
thereto, as amended from time to time through the Closing Date.
"Lender" and "Lenders" have the meanings specified in the introductory
paragraph hereof and shall include the Agent to the extent of any Agent Advance
outstanding and the Agent to the extent of any Non-Ratable Loan outstanding;
provided that no such Agent Advance or Non-Ratable Loan shall be taken into
account in determining any Lender's Pro Rata Share.
"Letter of Credit" has the meaning specified in Section 1.3(a).
"Letter of Credit Fee" has the meaning specified in Section 2.6.
"Letter of Credit Issuer" means any Bank or any affiliate of any Bank
that issues any Letter of Credit pursuant to this Agreement.
"Letter-of-Credit Rights" means "letter-of-credit rights" as such term
is defined in the UCC, now owned or hereafter acquired by the Parent or any
Subsidiary, including rights to payment or performance under a letter of credit,
whether or not the Parent or a Subsidiary, as beneficiary, has demanded or is
entitled to demand payment or performance.
"Letter of Credit Subfacility" means $10,000,000.
"LIBOR Interest Payment Date" means, with respect to a LIBOR Rate Loan,
the Termination Date and the last day of each Interest Period applicable to such
Loan or, with respect to each Interest Period of greater than three months in
duration, the last day of the third month of such Interest Period and the last
day of such Interest Period.
"LIBOR Rate" means, for any Interest Period, with respect to LIBOR Rate
Loans, the rate of interest per annum determined pursuant to the following
formula as follows:
LIBOR Rate = Offshore Base Rate
-----------------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Offshore Base Rate" means for the Interest Period of
such LIBOR Rate Loan, the rate per annum determined on the
basis of the offered rate for deposits in Dollars of amounts
equal or comparable to the principal amount of such LIBOR Rate
Loan offered for a term comparable to such Interest Period,
which rates appear on the Telerate Page 3750 effective as of
11:00 a.m., London time, two (2) Business Days prior to the
first day of such Interest Period, provided that if no such
offered rates appear on such page, the Offshore Rate for such
Interest Period will be the arithmetic average (rounded
upward, if necessary, to the next higher 1/100th of 1%) of
rates quoted by not less than two (2) major banks in New York
City, selected by the Agent, at approximately 10:00 a.m.
(Atlanta, Georgia) time, two (2) Business Days prior to the
first day of such Interest Period, for deposits in Dollars
offered by leading European banks for a period comparable to
such Interest Period in an amount comparable to the principal
amount of such LIBOR Rate Loan; provided, further, that if no
such offered rates appear on such page and any Hedge Agreement
is in effect on such date, the Offshore Rate for such Interest
Period will be the sum of (a) the applicable floating rate
payable by the applicable Co-Agent with respect to the
applicable Hedge Agreement (without regard to any applicable
margins added thereto under the terms of such Hedge Agreement)
plus (b) the Applicable Margin then in effect, plus (c) the
Default Rate, if then in effect.
and
"Eurodollar Reserve Percentage" means, for any day
during any Interest Period, the reserve percentage (expressed
as a decimal, rounded upward to the next 1/100th of 1%) in
effect on such day applicable to member banks under
regulations issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding
(currently referred to
as "Eurocurrency liabilities"). The Offshore Rate for each
outstanding LIBOR Rate Loan shall be adjusted automatically as
of the effective date of any change in the Eurodollar Reserve
Percentage.
"LIBOR Rate Loan" means a Revolving Loan during any period in which it
bears interest based on the LIBOR Rate.
"Lien" means: (a) any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute, or contract, and including a
security interest, charge, claim, or lien arising from a mortgage, deed of
trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement,
agreement, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes; (b) to the extent not included
under the preceding clause (a), any reservation, exception, encroachment,
easement, right-of-way, covenant, condition, restriction, lease or other title
exception or encumbrance affecting property; and (c) any contingent or other
agreement to provide any of the foregoing.
"Lien Acknowledgement Agreement" means an agreement between an Approved
Freight Handler and the Agent, in form and substance satisfactory to the Agent,
pursuant to which, among other things, the Approved Freight Handler acknowledges
the Lien of the Agent in the Collateral in the possession of the Approved
Freight Handler and any documents evidencing same.
"Loan Account" means the loan account of the Borrowers, which account
shall be maintained by the Agent.
"Loan Documents" means this Agreement, the Patent and Trademark
Security Agreement, the Copyright Security Agreement, Security Agreement, the
Subsidiary Guaranty, the Pledge Agreement, the Foreign Pledge Agreements, the
Fee Letter, the Subordination Agreement, any Lien Acknowledgement Agreement and
any other agreements, instruments, and documents heretofore, now or hereafter
evidencing, securing, guaranteeing or otherwise relating to the Obligations, the
Collateral, or any other aspect of the transactions contemplated by this
Agreement, in each case as amended, restated, supplemented or otherwise modified
from time to time. No Hedge Agreement shall be deemed to constitute a Loan
Document.
"Loans" means, collectively, all loans and advances provided for in
Article 1.
"Majority Lenders" means at any date of determination Lenders whose Pro
Rata Shares aggregate more than fifty percent (50%).
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of the Borrower Parties on a consolidated
basis or of the Collateral (b) a material impairment of the ability of the
Borrower Parties, taken as a whole, to perform under any Loan Document or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against any Borrower Party of any Loan Document to which it is a
party.
"Maximum Borrower Liability" has the meaning specified in Section
14.1(b).
"Maximum Rate" has the meaning specified in Section 2.3.
"Maximum Revolver Amount" means $275,000,000.
"Multi-employer Plan" means a "multi-employer plan" as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding six (6) years contributed to by any Borrower Party
or any ERISA Affiliate.
"Net Amount of Eligible Accounts" means, at any time, the gross amount
of Eligible Accounts less sales, excise or similar taxes, and less returns,
discounts, claims, credits, allowances, accrued rebates, offsets, deductions,
counterclaims, disputes and other defenses of any nature at any time issued,
owing, granted, outstanding, available or claimed.
"Net Liquidation Value of Inventory" means the recovery value of the
Borrowers' Eligible Landed Inventory that is estimated to be recoverable in an
orderly liquidation of such Eligible Landed Inventory net of estimated
liquidation expenses, such amounts to be determined from time to time by a
qualified appraisal company selected by the Co-Agents in their reasonable
discretion.
"Non-Ratable Loan" and "Non-Ratable Loans" have the meanings specified
in Section 1.2(h).
"Notice of Borrowing" has the meaning specified in Section 1.2(b).
"Notice of Continuation/Conversion" has the meaning specified in
Section 2.2(b).
"Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Borrowers to
the Agent and/or any Lender, arising under or pursuant to this Agreement or any
of the other Loan Documents or any Hedge Agreement, whether or not evidenced by
any note, or other instrument or document, whether arising from an extension of
credit, opening of a letter of credit, acceptance, loan, guaranty,
indemnification or otherwise, whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary, as principal or
guarantor, and including all principal, interest, charges, expenses, fees,
attorneys' fees, filing fees and any other sums chargeable to any Borrower
hereunder or under any of the other Loan Documents. "Obligations" includes,
without limitation, (a) all debts, liabilities, and obligations now or hereafter
arising from or in connection with the Letters of Credit and (b) all debts,
liabilities and obligations now or hereafter arising from or in connection with
Bank Products.
"Other Debtor Relief Law" has the meaning specified in Section
14.1(b)(iii).
"Other Taxes" means any present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies which arise from
any payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any other Loan Documents.
"Parent" has the meaning specified in the preamble of this Agreement.
"Participant" means any Person who shall have been granted the right by
any Lender to participate in the financing provided by such Lender under this
Agreement, and who shall have entered into a participation agreement in form and
substance satisfactory to such Lender.
"Patent and Trademark Security Agreement" means any Patent Security
Agreement and the Trademark Security Agreement executed and delivered by certain
of the Borrower Parties to the Agent to evidence and perfect the Agent's
security interest in such Borrower Parties' present and future patents,
trademarks, and related licenses and rights, for the benefit of the Agent and
the Lenders.
"Payment Account" means each bank account, including, without
limitation, each lockbox account to which the proceeds of Accounts and other
Collateral are deposited or credited, and which is maintained in the name of a
Borrower Party or, at any time after Agent has taken full dominion over the
Payment Accounts, on terms acceptable to the Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.
"Pending Revolving Loans" means, at any time, the aggregate principal
amount of all Revolving Loans requested in any Notice of Borrowing received by
the Agent which have not yet been advanced.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which the Parent or any Subsidiary sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a Multi-employer Plan has made contributions at
any time during the immediately preceding five (5) plan years.
"Permitted Acquisition" means any acquisition by any Borrower Party of
any intellectual property or all or substantially all of the assets or Stock of
a Person so long as (a) no Default or Event of Default exists or would be caused
thereby and (b) the Administrative Borrower delivers evidence to the Agent that
Availability for each of the ninety (90) days most recently ending was not (and
after giving effect to such transaction would not have been) (i) less than (1)
$40,000,000 for any day from and after January 1 though June 30 of any year and
(2) $30,000,000 for any day from and after July 1 through December 31 of any
year, Permitted Acquisitions which do not exceed $5,000,000 with respect to any
individual acquisition and (ii) less than (1) $55,000,000 for any day from and
after January 1 though June 30 of any year and (2) $40,000,000 for any day from
and after July 1 through December 31 of any year, Permitted Acquisitions which
exceed $5,000,000 with respect to any individual acquisition; provided, however,
that no assets so acquired shall be included in the Borrowing Base without the
prior written consent of the Agent and completion of a field examination of such
assets by the Agent; and "Permitted Acquisitions" means each Permitted
Acquisition.
"Permitted Liens" means:
(a) (i) Liens for Taxes not delinquent or (ii) statutory Liens for
Taxes in an amount not to exceed $500,000 (or such greater amount as shall be
covered by a bond) provided that the payment of such taxes which are due and
payable is being contested in good faith and by appropriate proceedings
diligently pursued and as to which adequate financial reserves have been
established on the Parent's and the Subsidiaries' books and records and a stay
of enforcement of any such Lien is in effect;
(b) the Agent's Liens;
(c) Liens incurred or deposits made in the ordinary course of business
in connection with, or to secure payment of, obligations under worker's
compensation, unemployment insurance, social security and other similar laws, or
to secure the performance of bids, tenders or contracts (other than for the
repayment of Debt) or to secure indemnity, performance or other similar bonds
for the performance of bids, tenders or contracts (other than for the repayment
of Debt) or to secure statutory obligations (other than liens arising under
ERISA or Environmental Liens) or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds;
(d) Liens securing the claims or demands of materialmen, mechanics,
carriers, repairmen, warehousemen, landlords and other like Persons, so long as
(i) such Liens are subject to a Good-Faith Protest or (ii) with respect to such
Liens arising from the nonpayment of such claims or demand when due, such claims
or demands do not exceed $200,000 in the aggregate (or such greater amount as
shall be covered by a bond);
(e) Liens constituting encumbrances in the nature of reservations,
exceptions, encroachments, easements, rights of way, covenants running with the
land, and other similar title exceptions or encumbrances affecting any Real
Estate; provided that they do
not in the aggregate materially detract from the value of the Real Estate or
materially interfere with its use in the ordinary conduct of any Borrower
Party's business;
(f) Liens arising from judgments and attachments in connection with
court proceedings provided that the attachment or enforcement of such Liens
would not result in an Event of Default hereunder and such Liens are being
contested in good faith by appropriate proceedings, adequate reserves have been
set aside and no material Property is subject to a material risk of loss or
forfeiture and the claims in respect of such Liens are fully covered by
insurance (subject to ordinary and customary deductibles) and a stay of
execution pending appeal or proceeding for review is in effect;
(g) Liens securing Capital Leases and purchase money Debt permitted in
Section 7.13;
(h) any Liens on Property of a Person acquired in any Permitted
Acquisition otherwise permitted hereunder; provided that such Liens (i) attach
to assets valued individually or in the aggregate not in excess of $1,000,000
and (b) are existing on the date of such Permitted Acquisition and do not relate
to any other then-existing or after-acquired assets of a Borrower Party
following such Permitted Acquisition.
(i) the Liens on certain intellectual property of the Parent granted to
secure the Xxxxxxx Obligation; and
(j) Liens, if any, in effect as of the Closing Date securing Debt
described in Schedule 6.9.
"Permitted Transaction" means any one or more of the following
transactions of a Borrower Party, on the condition that the Administrative
Borrower delivers evidence to the Agent that no Default or Event of Default then
exists and that the Availability (after giving effect to such transaction) for
each of the ninety (90) days most recently ending would not be less than (a)
$55,000,000 for any day from and after January 1 through June 30 of any year and
(b) $40,000,000 for any day from and after July 1 through December 31 of any
year,
(i) dividends on capital stock of Parent not to exceed
$3,000,000 in the aggregate during any Fiscal Year;
(ii) the redemption or other acquisitions by Parent of any of
its bonds or capital stock (or any options or warrants for such stock);
and "Permitted Transactions" means each Permitted Transaction.
"Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, Governmental Authority, or any other entity.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which a Borrower Party sponsors or maintains or to which a Borrower Party
makes, is making, or is obligated to make contributions and includes any Pension
Plan.
"Pledge Agreement" means the Pledge Agreement of even date herewith
among certain of the Borrower Parties party thereto and the Agent for the
benefit of the Agent and the other Lenders.
"Proprietary Rights" means all of any Borrower Party's now owned and
hereafter arising or acquired: licenses, franchises, permits, patents, patent
rights, copyrights, works which are the subject matter of copyrights,
trademarks, service marks, trade names, trade styles, patent applications,
copyright applications, trademark and service xxxx applications, and all
licenses and rights related to any of the foregoing, including those patents,
trademarks, service marks, trade names and copyrights set forth on Schedule 6.12
hereto, and all other rights under any of the foregoing, all extensions,
renewals, reissues, divisions, continuations, and continuations-in-part of any
of the foregoing, and all rights to xxx for past, present and future
infringement of any of the foregoing.
"Pro Rata Share" means, with respect to a Lender, a fraction (expressed
as a percentage), the numerator of which is the amount of such Lender's
Commitment and the denominator of which is the sum of the amounts of all of the
Lenders' Commitments, or if no Commitments are outstanding, a fraction
(expressed as a percentage), the numerator of which is the amount of Obligations
owed to such Lender and the denominator of which is the aggregate amount of the
Obligations owed to the Lenders, in each case giving effect to a Lender's
participation in Non-Ratable Loans and Agent Advances.
"Real Estate" means all of any Borrower Party's now or hereafter owned
or leased estates in real property, including, without limitation, all fees,
leaseholds and future interests, together with all of such Borrower Party's now
or hereafter owned or leased interests in the improvements thereon, the fixtures
attached thereto and the easements appurtenant thereto.
"Release" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into or out of any Real
Estate or other property, including the movement of Contaminants through or in
the air, soil, surface water, groundwater or Real Estate or other property.
"Reportable Event" means any of the events set forth in Section 4043(b)
of ERISA or the regulations thereunder, other than any such event for which the
thirty (30) day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
"Required Lenders" means at any time Lenders whose Pro Rata Shares
aggregate more than sixty-six and two-thirds percent (66-2/3%).
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Reserves" means reserves that limit, without duplication, the
availability of credit hereunder, consisting of reserves against Availability,
Eligible Accounts or Eligible Inventory, including, without limitation, the
Xxxxxxx Obligation Reserve and at any time any payment of Debt (excluding the
Obligations) is due and payable from (or in the case of the Senior Notes,
subject to mandatory redemption by) any Borrower Party during the ninety (90)
day period subsequent to such date of determination, the Short-Term Obligations
Reserve and such other reserves established by the Agent from time to time in
the Agent's reasonable credit judgment. In addition, and without limiting the
generality of the foregoing, the following reserves shall also be deemed to be a
reasonable exercise of the Agent's credit judgment: (a) Bank Product Reserves,
(b) a reserve for accrued, unpaid interest on the Obligations, (c) reserves for
three months rent at leased locations where Collateral that is included in the
Borrowing Base is located unless a landlord agreement with respect to such
location reasonably acceptable to the Agent has been delivered to the Agent, (d)
reserves for Inventory shrinkage, (e) reserves for customs charges and freight,
(f) reserves for dilution with respect to Accounts, (g) reserves for
warehousemen's or bailees' charges, (h) reserves for accrued rebates or returns
of Inventory, (i) reserves for any other matter that has a negative impact on
the value of the Borrowers' Collateral, including royalty obligations, (j)
reserves with respect to certain Inventory designated as "Rejuvenique" and (k)
at any time from and after receipt by the Agent of notice pursuant to Section
7.26 until the date of the Agent shall have received the results of the next
subsequent appraisal or re-appraisal of Inventory, a reserve to reflect changes
or adjustments to intercompany commissions, transfer pricing policies or
standard cost of Inventory to the extent such changes or adjustments,
individually or in the aggregate, would have an impact of in excess of $100,000.
"Responsible Officer" means the corporate comptroller, vice president
of finance, chief financial officer or the president of the Administrative
Borrower, any other officer having substantially the same authority and
responsibility.
"Restricted Investment" means, as to any Borrower Party, any
Investment, except the following: (a) acquisitions of Equipment to be used in
the business of such Borrower Party so long as the acquisition costs thereof
constitute Capital Expenditures permitted hereunder; (b) acquisitions of
Inventory in the ordinary course of business of such Borrower Party; (c)
acquisitions of current assets acquired in the ordinary course of business of
the Parent; (d) direct obligations of the United States of America, or any
agency thereof, or obligations guaranteed by the United States of America,
provided that such obligations mature within one year from the date of
acquisition thereof; (e) acquisitions of certificates of deposit maturing within
one year from the date of acquisition, bankers' acceptances, Eurodollar bank
deposits, or overnight bank deposits,
in each case issued by, created by, or with a bank or trust company organized
under the laws of the United States of America or any state thereof having
capital and surplus aggregating at least $1,000,000,000; (f) acquisitions of
commercial paper given a rating of "A2" or better by Standard & Poor's
Corporation or "P2" or better by Xxxxx'x Investors Service, Inc. and maturing
not more than 90 days from the date of creation thereof; (g) Hedge Agreements
and (h) Permitted Acquisitions.
"Revolving Loans" has the meaning specified in Section 1.2 and includes
each Agent Advance and Non-Ratable Loan.
"SEC" means the United States Securities and Exchange Commission and
any successor thereto.
"Security Agreement" means the Security Agreement of even date herewith
among the Borrower Parties and the Agent for the benefit of the Agent and other
Lenders.
"Seller Subordinated Debt" means Debt of the Borrower Parties incurred
in connection with any Permitted Acquisition and initially owing to the seller
in such Permitted Acquisition; provided, that (a) such Debt shall be
subordinated, pursuant to subordination provisions acceptable to the Agent in
its sole discretion and such provisions shall be no less favorable to the
Lenders than the subordination provisions of any existing subordinated debt, to
the obligations of the Borrowers under this Agreement and the other Loan
Documents, (b) such Debt shall mature no less than one hundred eighty (180) days
after the Termination Date and shall have covenants no more restrictive than
those set forth herein and (c) after giving effect to the incurrence of such
Debt, no Default or Event of Default shall be in existence.
"Senior Notes" means, collectively, those (a) 10 3/4% Senior
Subordinated Notes Due 2005, issued by the Parent, pursuant to that certain
Indenture, dated as of December 16, 1998 in favor of Xxxxx Fargo Bank Minnesota,
N.A., as Trustee and (b) 12 1/4% Senior Subordinated Notes Due 2008, issued by
the Parent, pursuant to that certain Indenture, dated as of April 23, 2001 in
favor of Xxxxx Fargo Bank Minnesota, N.A., as Trustee, as amended, restated,
supplemented or otherwise modified from time to time.
"Settlement" and "Settlement Date" have the meanings specified in
Section 12.15(a)(ii).
"Short Term Obligations Reserve" means as of any date of determination,
a reserve established by the Agent in its discretion in an amount equal to the
lesser of (a) $50,000,000 or (b) the aggregate sum of all payments on Debt
(excluding the Obligations) due and payable from (or in the case of the Senior
Notes, subject to mandatory redemption by) any Borrower Party at any time during
the ninety (90) day period subsequent to such date of determination.
"Software" means all "software" as such term is defined in the UCC, now
owned or hereafter acquired by any Borrower Party, other than software embedded
in any category of Goods, including all computer programs and all supporting
information provided in connection with a transaction related to any program.
"Solvent" means, when used with respect to any Person, that at the time
of determination:
(a) the assets of such Person, at a fair valuation, are in excess of
the total amount of its debts (including contingent liabilities); and
(b) the present fair saleable value of its assets is greater than its
probable liability on its existing debts as such debts become absolute and
matured; and
(c) it is then able and expects to be able to pay its debts (including
contingent debts and other commitments) as they mature; and
(d) it has capital sufficient to carry on its business as conducted and
as proposed to be conducted.
For purposes of determining whether a Person is Solvent, the amount of
any contingent liability shall be computed as the amount that, in light of all
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
"Specified Transaction" means any one or more of the following
transactions of a Borrower Party, (a) dividends on capital stock of Parent and
(b) the redemption or other acquisitions by Parent of any of its bonds or
capital stock (or any options or warrants for such stock); and "Specified
Transactions" means each Specified Transaction.
"Stated Termination Date" means April 30, 2007.
"Stock" means all shares, options, warrants, interests, participations,
or other equivalents (regardless of how designated) of or in a Person, whether
voting or nonvoting, including common stock, preferred stock, or any other
"equity security" (as such term is defined in Rule 3a11-1 of the General Rules
and Regulations promulgated by the SEC under the Exchange Act).
"Subordination Agreement" means that certain Subordination Agreement in
favor of the Agent pursuant to which the Parent or any of the Parent's
Subsidiaries subordinate any Debt owing in favor of such Person by the Parent or
such Subsidiary.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than fifty percent (50%) of the voting stock or other equity
interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the Person, or
one or more of the Subsidiaries of the Person, or a combination thereof. Unless
the context otherwise clearly requires, references herein to a "Subsidiary"
refer to a Subsidiary of the Parent, including, without limitation, each
Borrower.
"Subsidiary Guaranty" means the Subsidiary Guaranty dated as of the
date hereof, executed and delivered by the Guarantors for the benefit of the
Agent and the Lenders to guarantee the Obligations of the Borrowers under this
Agreement.
"Supporting Letter of Credit" has the meaning specified in Section
1.3(g).
"Supporting Obligations" means all "supporting obligations" as such
term is defined in the UCC, including letters of credit and guaranties issued in
support of Accounts, Chattel Paper, Documents, General Intangibles, Instruments,
or Investment Property.
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, such taxes (including
income taxes or franchise taxes) as are imposed on or measured by the Agent's or
each Lender's net income in any the jurisdiction (whether federal, state or
local and including any political subdivision thereof) under the laws of which
such Lender or the Agent, as the case may be, is organized or maintains a
lending office.
"Termination Date" means the earliest to occur of (i) the Stated
Termination Date, (ii) the date the Total Facility is terminated either by the
Borrowers pursuant to Section 3.2 or by the Required Lenders pursuant to Section
9.2, and (iii) the date this Agreement is otherwise terminated for any reason
whatsoever pursuant to the terms of this Agreement.
"Total Facility" has the meaning specified in Section 1.1.
"UCC" means the Uniform Commercial Code, as in effect from time to
time, of the State of Georgia or of any other state the laws of which are
required as a result thereof to be applied in connection with the issue of
perfection of security interests; provided, that to the extent that the UCC is
used to define any term herein or in any other documents and such term is
defined differently in different Articles or Divisions of the UCC, the
definition of such term contained in Article or Division 9 shall govern.
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
"Unused Letter of Credit Subfacility" means an amount equal to
$10,000,000 minus the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit plus, without duplication, (b) the aggregate unpaid
reimbursement obligations with respect to all Letters of Credit.
"Unused Line Fee" has the meaning specified in Section 2.5.
"US Adjusted Net Earnings from Operations" means, with respect to any
fiscal period of the Borrowers, the Borrowers' net income on a consolidated
basis after provision for income taxes for such fiscal period, as determined in
accordance with GAAP and reported on the Financial Statements for such period,
excluding any and all of the following included in such net income: (a) gain or
loss arising from the sale of any capital assets; (b) gain arising from any
write-up in the book value of any asset or loss arising from any write-down in
the book value of any asset other than an asset the value of which is included
in the calculation of the Borrowing Base; (c) earnings or losses of any Person,
substantially all the assets or Stock of which have been acquired by the
Borrowers in any manner, to the extent realized by such other Person prior to
the date of acquisition; (d) earnings or losses of any Person in which any
Borrower has a minority ownership interest unless (and only to the extent) such
earnings or losses shall actually have been received by such Borrower in the
form of cash distributions; (e) earnings or losses of any Person to which assets
of any Borrower shall have been sold, transferred or disposed of, or into which
any Borrower shall have been merged, or which has been a party with any Borrower
to any consolidation or other form of reorganization, prior to the date of such
transaction; (f) gain arising from the acquisition of debt or equity securities
of any Borrower or from cancellation or forgiveness of Debt; and (g) gain and
non-cash losses arising from extraordinary items or from any other non-recurring
transaction, as determined in accordance with GAAP.
"US Fixed Charge Coverage Ratio" means, as of any date of
determination, with respect to any fiscal period of the Borrowers, the ratio of
(a) the sum of (i) EBITDA minus (ii) Capital Expenditures (excluding Capital
Expenditures funded with Debt other than Revolving Loans but including, without
duplication, principal payments with respect to such Debt) plus (or minus, if a
negative amount) (iii) the amount of fluctuations in the balance of the
Intercompany Account, to (b) US Fixed Charges.
"US Fixed Charges" means, with respect to any fiscal period of the
Parent on a consolidated basis, without duplication, cash interest expense,
principal payments of Debt (excluding any historical or future cash payments
made with respect to the refinancing of principal, the Xxxxxxx Obligation and
the repayment of the Xxxxxx Credit Facility), all Distributions paid, all cash
Investments, all Specified Transactions, and Federal, state, local and foreign
income taxes paid in cash.
Accounting Terms. Any accounting term used in the Agreement shall have,
unless otherwise specifically provided herein, the meaning customarily given in
accordance with GAAP, and all financial computations in the Agreement shall be
computed, unless otherwise specifically provided therein, in accordance with
GAAP as consistently applied and using the same method for inventory valuation
as used in the preparation of the Financial Statements.
Interpretive Provisions. (a) The meanings of defined terms are equally
applicable to the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar words refer
to the Agreement as a whole and not to any particular provision of the
Agreement; and Subsection, Section, Schedule and Exhibit references are to the
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including," the words "to" and "until" each mean "to but excluding" and
the word "through" means "to and including."
(iv) The word "or" is not exclusive.
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including the Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of the Agreement and other Loan Documents
are for convenience of reference only and shall not affect the interpretation of
the Agreement.
(f) The Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(g) For purposes of Section 9.1, a breach of a financial covenant
contained in Sections 7.22 and 7.23 shall be deemed to have occurred as of any
date of determination
thereof by the Agent or as of the last day of any specified measuring period,
regardless of when the Financial Statements reflecting such breach are delivered
to the Agent.
(h) The Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Borrower
Parties and the other parties, and are the products of all parties. Accordingly,
they shall not be construed against the Lenders or the Agent merely because of
the Agent's or Lenders' involvement in their preparation.