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Exhibit 10.39
CREDIT AGREEMENT
among
ROCKFORD CORPORATION,
as Borrower,
THE SUBSIDIARIES AND AFFILIATES IDENTIFIED HEREIN,
as Guarantors,
THE LENDERS IDENTIFIED HEREIN,
BANK OF AMERICA, N.A.,
as Administrative Agent
and
BANK ONE, ARIZONA, N.A.,
as Documentation Agent
Dated as of June 28, 2001
Arranged by:
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager
TABLE OF CONTENTS Page
SECTION 1 DEFINITIONS 1
1.1 Definitions. 1
1.2 Computation of Time Periods. 23
1.3 Accounting Terms. 23
SECTION 2 CREDIT FACILITIES 24
2.1 Commitments. 24
2.2 Method of Borrowing. 25
2.3 Interest. 26
2.4 Repayment. 26
2.5 Notes. 26
2.6 Additional Provisions relating to Letters of Credit. 27
2.7 Additional Provisions relating to Swingline Loans. 31
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES 31
3.1 Default Rate. 31
3.2 Extension and Conversion. 32
2
3.3 Prepayments. 32
3.4 Reduction and Termination of Commitments. 33
3.5 Fees. 33
3.6 Capital Adequacy. 34
3.7 Limitation on Eurodollar Loans. 35
3.8 Illegality. 35
3.9 Requirements of Law. 35
3.10 Treatment of Affected Loans. 36
3.11 Taxes. 37
3.12 Funding Losses. 38
3.13 Pro Rata Treatment. 39
3.14 Sharing of Payments. 40
3.15 Payments, Computations, Etc. 41
3.16 Evidence of Debt. 42
SECTION 4 GUARANTY 43
4.1 The Guaranty. 43
4.2 Obligations Unconditional. 43
4.3 Reinstatement. 44
4.4 Certain Additional Waivers. 45
4.5 Remedies. 45
4.6 Rights of Contribution. 45
4.7 Guarantee of Payment; Continuing Guarantee. 46
SECTION 5 CONDITIONS 46
5.1 Closing Conditions. 46
5.2 Conditions to all Extensions of Credit. 48
SECTION 6 REPRESENTATIONS AND WARRANTIES 49
6.1 Financial Condition. 49
6.2 No Changes or Restricted Payments. 50
6.3 Organization; Existence; Compliance with Law. 50
6.4 Power; Authorization; Enforceable Obligations. 50
6.5 No Legal Bar. 51
6.6 No Material Litigation and Disputes. 51
6.7 No Defaults. 51
6.8 Ownership and Operation of Property. 51
6.9 Intellectual Property. 51
6.10 No Burdensome Restrictions. 52
6.11 Taxes. 52
6.12 ERISA. 52
6.13 Governmental Regulations, Etc. 53
6.14 Subsidiaries. 54
6.15 Purpose of Extensions of Credit. 54
6.16 Environmental Matters. 54
6.17 No Material Misstatements. 55
6.18 Labor Matters. 55
6.19 Security Documents. 56
6.20 Location of Real Property and Leased Premises. 56
6.21 Solvency. 57
6.22 No Other Broker's Fees. 57
SECTION 7 AFFIRMATIVE COVENANTS 57
7.1 Information Covenants. 57
7.2 Preservation of Existence and Franchises. 60
7.3 Books and Records. 60
7.4 Compliance with Law. 61
7.5 Payment of Taxes and Other Indebtedness. 61
7.6 Insurance. 61
7.7 Maintenance of Property. 61
7.8 Performance of Obligations. 62
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7.9 Use of Proceeds. 62
7.10 Audits/Inspections. 62
7.11 Financial Covenants. 62
7.12 Additional Guarantors. 63
7.13 Pledged Assets. 63
SECTION 8 NEGATIVE COVENANTS 64
8.1 Indebtedness. 64
8.2 Liens. 65
8.3 Nature of Business. 65
8.4 Merger and Consolidation, Dissolution and Acquisitions. 65
8.5 Asset Dispositions. 66
8.6 Investments. 66
8.7 Restricted Payments. 66
8.8 Modifications and Payments in respect of Funded Debt. 67
8.9 Transactions with Affiliates. 67
8.10 Fiscal Year; Organizational Documents. 67
8.11 Limitation on Restricted Actions. 67
8.12 Ownership of Subsidiaries; Limitations on the Borrower. 68
8.13 Sale Leasebacks. 68
8.14 No Further Negative Pledges. 68
SECTION 9 EVENTS OF DEFAULT 68
9.1 Events of Default. 68
9.2 Acceleration; Remedies. 71
SECTION 10 ADMINISTRATIVE AGENT 71
10.1 Appointment and Authorization of Administrative Agent. 71
10.2 Delegation of Duties. 72
10.3 Liability of Administrative Agent. 72
10.4 Reliance by Administrative Agent. 73
10.5 Notice of Default. 73
10.6 Credit Decision; Disclosure of Information by
Administrative Agent. 73
10.7 Indemnification of Administrative Agent. 74
10.8 Administrative Agent in its Individual Capacity. 74
10.9 Successor Administrative Agent. 75
10.10 Other Agents; Lead Managers. 75
SECTION 11 MISCELLANEOUS 75
11.1 Notices. 75
11.2 Right of Set-Off; Adjustments. 77
11.3 Successors and Assigns. 77
11.4 No Waiver; Remedies Cumulative. 79
11.5 Expenses; Indemnification. 79
11.6 Amendments, Waivers and Consents. 80
11.7 Counterparts. 82
11.8 Headings. 82
11.9 Survival. 82
11.10 Governing Law; Submission to Jurisdiction; Venue. 82
11.11 Severability. 83
11.12 Entirety. 83
11.13 Binding Effect; Termination. 83
11.14 Confidentiality. 83
11.15 Source of Funds. 84
11.16 Conflict. 85
SCHEDULES
Schedule 2.1 Lenders and Commitments
Schedule 2.2(a)(i) Form of Notice of Borrowing
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Schedule 2.2(a)(ii) Form of Notice of Request of Letter of Credit
Schedule 2.5 Form of Revolving Note
Schedule 2.6(b) Existing Letters of Credit
Schedule 3.2 Form of Notice of Extension/Conversion
Schedule 5.1(f)(v) Form of Officer's Certificate
Schedule 6.6 Litigation
Schedule 6.8 Liens
Schedule 6.9 Intellectual Property
Schedule 6.12 ERISA Matters
Schedule 6.14 Subsidiaries
Schedule 6.18 Labor Matters
Schedule 6.20(a) Locations of Owned and Leased Real Property
Schedule 6.20(b) Locations of Tangible Personal Property
Schedule 6.20(c) Locations of Chief Executive Office/Principal
Place of Business
Schedule 7.1(c) Form of Officer's Compliance Certificate
Schedule 7.1(d) Form of Borrowing Base Certificate
Schedule 7.6 Insurance
Schedule 7.12 Form of Joinder Agreement
Schedule 8.1 Indebtedness
Schedule 8.6 Investments
Schedule 11.1 Lenders' Addresses
Schedule 11.3(b) Form of Assignment and Acceptance
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of June 28, 2001 (the "Credit
Agreement"), is by and among ROCKFORD CORPORATION, an Arizona corporation (the
"Borrower"), the Subsidiaries and Affiliates of the Borrower identified as
"Guarantors" on the signature pages hereto and such other Subsidiaries and
Affiliates of the Borrower as may from time to time become Guarantors hereunder
in accordance with the provisions hereof (collectively, the "Guarantors"), the
lenders named herein and such other lenders as may become a party hereto (the
"Lenders"), BANK ONE, ARIZONA, N.A., as Documentation Agent for the Lenders (in
such capacity, the "Documentation Agent") and BANK OF AMERICA, N.A., as
Administrative Agent for the Lenders (in such capacity, the "Administrative
Agent").
W I T N E S S E T H
WHEREAS, the Credit Parties have requested that the Lenders provide a
$30 million revolving credit facility for the purposes hereinafter set forth;
and
WHEREAS, the Lenders have agreed to make the requested credit
facilities available to the Borrower on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions.
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As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquisition", by any Person, means the purchase or acquisition by such
Person of any Capital Stock of another Person other than a Credit Party or all
or any substantial portion of the Property (other than Capital Stock) of another
Person other than a Credit Party, whether or not involving a merger or
consolidation with such other Person.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Administrative Agent" shall have the meaning provided in the heading
hereof, together with any successors or assigns.
"Administrative Agent's Fee Letter" means that certain letter
agreement, dated as of May 24, 2001, between the Administrative Agent and the
Borrower, as amended, modified, restated or supplemented from time to time.
"Affiliate" means, with respect to any Person, any other Person (i)
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person or (ii) directly or indirectly owning or holding
five percent (5%) or more of the Capital Stock in such Person. For purposes of
this definition, "control" when used with respect to any Person means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent-Related Persons" means the Administrative Agent (including any
successor administrative agent), together with its Affiliates (including, in the
case of Bank of America in its capacity as the Administrative Agent, the
Arranger), and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.
"Aggregate Revolving Committed Amount" shall have the meaning provided
such term in Section 2.1(a).
"Applicable Lending Office" means, for each Lender, the office of such
Lender (or of an Affiliate of such Lender) as such Lender may from time to time
specify to the Administrative Agent and the Borrower by written notice as the
office by which its Eurodollar Loans are made and maintained.
"Applicable Percentage" means for any day, the rate per annum set forth
below opposite the applicable Consolidated Total Leverage Ratio then in effect,
it being understood that the Applicable Percentage for (i) Base Rate Loans shall
be the percentage set forth under the column "Base Rate Margin", (ii) Eurodollar
Loans shall be the percentage set forth under the column "Eurodollar Margin and
Standby Letter of Credit Fee", (iii) the Standby Letter of Credit Fee shall be
the percentage set forth under the column "Eurodollar Margin and Standby Letter
of Credit Fee", (iv) the Trade Letter of Credit Fee shall be the percentage set
forth under the column "Trade Letter of Credit Fee" and (v) the Commitment Fee
shall be the percentage set forth under the column "Commitment Fee":
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Pricing
Level
Consolidated Total Leverage Ratio
Base Rate
Margin
Eurodollar Margin and Standby Letter of Credit Fee
Trade Letter of Credit Fee
Commitment
Fee
I
( 1.0
0.00%
1.50%
0.125%
0.250%
II
( 1.5 but > 1.0
0.25%
1.75%
0.125%
0.375%
III
( 2.0 but > 1.5
0.50%
2.00%
0.125%
0.500%
IV
> 2.0
0.75%
2.25%
0.125%
0.500%
The Applicable Percentage shall be determined and adjusted on each of the
following dates (each a "Rate Determination Date") (a) five Business Days after
the date by which each annual and quarterly compliance certificates and related
financial statements and information are required in accordance with the
provisions of Sections 7.1(a), (b) and (c), as appropriate, and (b) five
Business Days after the date on which any Permitted Acquisition closes; provided
that:
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(i) the initial Applicable Percentages shall be based on pricing level
I and shall remain in effect at such pricing level (or any higher (more
expensive) pricing level as would otherwise apply) until the first Rate
Determination Date to occur in connection with the delivery of the quarterly
financial statements and appropriate compliance certificate for the fiscal
quarter ending June 30, 2001, after the Closing Date, and
(ii) notwithstanding the foregoing, in the event an annual or quarterly
compliance certificate and related financial statements and information are not
delivered timely to the Administrative Agent and the Lenders by the date
required by Section 7.1(a), (b) or (c), as appropriate, the Applicable
Percentages shall be based on pricing level IV until the date five Business Days
after the appropriate compliance certificate and related financial statements
and information are delivered, whereupon the applicable pricing level shall be
adjusted based on the information contained in such compliance certificate and
related financial statements and information.
Subject to the qualifications set forth above, each Applicable
Percentage shall be effective from a Rate Determination Date until the next Rate
Determination Date. The Administrative Agent shall determine the appropriate
Applicable Percentages in the pricing matrix promptly upon receipt of the
quarterly or annual compliance certificate and related financial information and
shall promptly notify the Borrower and the Lenders of any change thereof. Such
determinations by the Administrative Agent shall be conclusive absent manifest
error. Adjustments in the Applicable Percentages shall be effective as to
existing Extensions of Credit as well as new Extensions of Credit made
thereafter.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" means Banc of America Securities LLC, in its capacity as
sole lead arranger and sole book manager.
"Asset Disposition" shall mean and include (i) the sale, lease or other
disposition of any Property by any member of the Consolidated Group (including
the Capital Stock of a Subsidiary), but for purposes hereof shall not include,
in any event, (A) the sale of inventory in the ordinary course of business, (B)
the sale, lease or other disposition of machinery and equipment no longer used
or useful in the conduct of business and (C) a sale, lease, transfer or
disposition of Property to a Credit Party, and (ii) receipt by any member of the
Consolidated Group of any cash insurance proceeds or condemnation award payable
by reason of theft, loss, physical destruction or damage, taking or similar
event with respect to any of its Property.
"Bank of America" means Bank of America, N.A., and its successors.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
"Bankruptcy Event" means, with respect to any Person, the occurrence of
any of the following with respect to such Person: (i) a court or governmental
agency having jurisdiction in the premises shall enter a decree or order for
relief in respect of such Person in an involuntary case under any applicable
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bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its Property
or ordering the winding up or liquidation of its affairs; or (ii) there shall be
commenced against such Person an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or any
case, proceeding or other action for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its Property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or other
action shall remain undismissed, undischarged or unbonded for a period of sixty
consecutive days; or (iii) such Person shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for relief in an involuntary case
under any such law, or consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or make any
general assignment for the benefit of creditors; or (iv) such Person shall be
unable to, or shall admit in writing its inability to, pay its debts generally
as they become due.
"Base Rate" means, for any day, a fluctuating rate per annum equal to
the higher of (a) the Federal Funds Rate in effect on such day plus one-half of
one percent (0.5%) and (b) the Prime Rate in effect on such day.
"Base Rate Loan" means any Loan bearing interest at a rate determined
by reference to the Base Rate.
"Borrower" means Rockford Corporation, an Arizona corporation, its
successors and permitted assigns.
"Borrowing Base" means, as of any day, the sum of (a) eighty-five
percent (85%) of Eligible Receivables and (b) fifty percent (50%) of Eligible
Inventory, in each case as set forth in the most recent Borrowing Base
Certificate delivered to the Administrative Agent and the Lenders in accordance
with the terms of Section 7.1(d).
"Borrowing Base Certificate" shall have the meaning provided in Section
7.1(d).
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in Dallas, Texas, Phoenix, Arizona or New York, New
York are authorized or required by law to close, except that, when used in
connection with a Eurodollar Loan, such day shall also be a day on which
dealings between banks are carried on in Dollar deposits in London, England.
"Capital Lease" means, as applied to any Person, any lease of any
Property by that Person as lessee which, in accordance with GAAP, is or should
be accounted for as a capital lease on the balance sheet of that Person.
"Capital Stock" means (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability company,
membership interests and (v) any other interest or participation that confers on
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a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is pledged
in support thereof) having maturities of not more than twelve months from the
date of acquisition, (b) Dollar denominated time deposits and certificates of
deposit of (i) any Lender, (ii) any domestic commercial bank of recognized
standing having capital and surplus in excess of $500 million or (iii) any bank
whose short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Xxxxx'x is at least P-1 or the equivalent thereof
(any such bank being an "Approved Bank"), in each case with maturities of not
more than 270 days from the date of acquisition, (c) commercial paper and
variable or fixed rate notes issued by any Approved Bank (or by the parent
company thereof) or any variable rate notes issued by, or guaranteed by, any
domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or
P-1 (or the equivalent thereof) or better by Moody's and maturing within six
months of the date of acquisition, (d) repurchase agreements entered into by any
Person with a bank or trust company (including any of the Lenders) or recognized
securities dealer having capital and surplus in excess of $500 million for
direct obligations issued by or fully guaranteed by the United States in which
such Person shall have a perfected first priority security interest (subject to
no other Liens) and having, on the date of purchase thereof, a fair market value
of at least one hundred percent (100%) of the amount of the repurchase
obligations and (e) Investments, classified in accordance with GAAP as current
assets, in money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable financial
institutions having capital of at least $500 million and the portfolios of which
are limited to Investments of the character described in the foregoing
subdivisions (a) through (d).
"Change of Control" means the occurrence of any of the following
events: (i) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership, directly or indirectly, of, or shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their acquisition of
or control over, Voting Stock of the Borrower (or other securities convertible
into such Voting Stock) representing twenty-five percent (25%) or more of the
combined voting power of all Voting Stock of the Borrower or (ii) during any
period of up to twenty-four consecutive months, commencing after the Closing
Date, individuals who at the beginning of such twenty-four month period were
directors of the Borrower (together with any new director whose election by the
Borrower's board of directors or whose nomination for election by the Borrower's
shareholders was approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the directors of the Borrower then in
office. As used herein, "beneficial ownership" shall have the meaning provided
in Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act.
"Closing Date" means the date hereof.
"Collateral" means a collective reference to the collateral that is
identified in, and at any time will be covered by, the Collateral Documents.
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"Collateral Agent" means the collateral agent under the Collateral
Documents.
"Collateral Documents" means a collective reference to the Security
Agreement, the Pledge Agreement and such other documents executed and delivered
in connection with the attachment and perfection of the Collateral Agent's
security interests and liens arising thereunder, including without limitation
UCC financing statements and patent and trademark filings.
"Commitment" means the Revolving Commitment, the LOC Commitment and the
Swingline Commitment.
"Commitment Fee" shall have the meaning provided in Section 3.5(a).
"Commitment Period" means the period from and including the Closing
Date to but not including the earlier of (i) the Termination Date or (ii) the
date on which the Commitments terminate in accordance with the provisions of
this Credit Agreement.
"Committed Amount" means any of the Revolving Committed Amount, the LOC
Committed Amount and/or the Swingline Committed Amount.
"Consolidated Adjusted EBITDAR" means, for any period for the
Consolidated Group, the sum of (i) Consolidated EBITDA, plus (ii) rent and lease
expense, minus (iii) cash taxes paid, minus (iv) Consolidated Capital
Expenditures, in each case determined on a consolidated basis in accordance with
GAAP. Except as otherwise expressly provided, the applicable period shall be the
four consecutive fiscal quarters ending as of the date of determination.
"Consolidated Capital Expenditures" means, for any period for the
Consolidated Group, without duplication, all expenditures (whether paid in cash
or other consideration) during such period that, in accordance with GAAP, are or
should be included in additions to property, plant and equipment or similar
items reflected in the consolidated statement of cash flows for such period;
provided, that Consolidated Capital Expenditures shall not include, for purposes
hereof, expenditures of proceeds of insurance settlements, condemnation awards
and other settlements in respect of lost, destroyed, damaged or condemned
assets, equipment or other property to the extent such expenditures are made to
replace or repair such lost, destroyed, damaged or condemned assets, equipment
or other property or otherwise to acquire assets or properties useful in the
business of the members of the Consolidated Group.
"Consolidated EBITDA" means, for any period for the Consolidated Group,
the sum of (i) Consolidated Net Income, plus (ii) to the extent deducted in
determining net income, (A) Consolidated Interest Expense, (B) taxes and (C)
depreciation and amortization, in each case on a consolidated basis determined
in accordance with GAAP. Except as otherwise expressly provided, the applicable
period shall be the four consecutive fiscal quarters ending as of the date of
determination.
"Consolidated Fixed Charge Coverage Ratio" means the ratio of
Consolidated Adjusted EBITDAR to Consolidated Fixed Charges.
"Consolidated Fixed Charges" means, for the Consolidated Group, the sum
of (i) the cash portion of Consolidated Interest Expense for the applicable
period ending on the date of determination, plus (ii) rent and lease expense for
the applicable period ending on the date of determination, plus (iii) current
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maturities of Consolidated Total Funded Debt determined as of the date of
determination, in each case on a consolidated basis determined in accordance
with GAAP. Except as otherwise expressly provided, the applicable period shall
be the four consecutive fiscal quarters ending as of the date of determination.
"Consolidated Group" means the Borrower and its consolidated
subsidiaries, as determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any period for the
Consolidated Group, all interest expense, including the amortization of debt
discount and premium, the interest component under Capital Leases and the
implied interest component under Securitization Transactions, in each case on a
consolidated basis determined in accordance with GAAP. Except as expressly
provided otherwise, the applicable period shall be the four consecutive fiscal
quarters ending as of the date of determination.
"Consolidated Net Income" means, for any period for the Consolidated
Group, net income (or loss) determined on a consolidated basis in accordance
with GAAP, but excluding for purposes of determining the Consolidated Total
Leverage Ratio and the Consolidated Fixed Charge Coverage Ratio, any
extraordinary gains or losses and related tax effects thereon. Except as
otherwise expressly provided, the applicable period shall be the four
consecutive fiscal quarters ending as of the date of determination.
"Consolidated Net Worth" means, as of any date, consolidated
shareholders' equity or net worth of the Consolidated Group as determined in
accordance with GAAP.
"Consolidated Subordinated Debt" means Subordinated Debt of the
Consolidated Group determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Funded Debt" means Funded Debt of the Consolidated
Group determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Leverage Ratio" means, as of the last day of each
fiscal quarter, the ratio of Consolidated Total Funded Debt on such day to
Consolidated EBITDA for the period of four consecutive fiscal quarters ending as
of such day.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 3.2 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any material agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 3.2 or Sections 3.7 through 3.12, inclusive, of a Base Rate
Loan into a Eurodollar Loan.
"Credit Documents" means, collectively, this Credit Agreement, the
Notes, the LOC Documents, the Collateral Documents, the Administrative Agent's
Fee Letter, and all other related agreements and documents issued or delivered
hereunder or thereunder or pursuant hereto or thereto.
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"Credit Party" means any of the Borrower and the Guarantors.
"Debt Transaction" means, with respect to any member of the
Consolidated Group, any sale, issuance, placement, assumption or guaranty of
Funded Debt, whether or not evidenced by promissory note or other written
evidence of indebtedness, except for Funded Debt permitted to be incurred
pursuant to Section 8.1.
"Default" means any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that (a) has failed
to make a Loan or purchase a Participation Interest required pursuant to the
terms of this Credit Agreement within one Business Day of when due, (b) other
than as set forth in (a) above, has failed to pay to the Administrative Agent or
any Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement within one Business Day of when due, unless such amount is subject to
a good faith dispute or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or with respect to which (or with respect to
any of the assets of which) a receiver, trustee or similar official has been
appointed.
"Dollars" and "$" means dollars in lawful currency of the United
States.
"Domestic Credit Party" means a Credit Party that is incorporated or
organized under the laws of any state of the United States or the District of
Columbia.
"Domestic Subsidiary" means any Subsidiary that is incorporated or
organized under the laws of any state of the United States or the District of
Columbia.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural Person)
approved by the Administrative Agent and, unless (x) such Person is taking
delivery of an assignment in connection with physical settlement of a credit
derivatives transaction or (y) an Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably withheld or
delayed).
"Eligible Inventory" means, as of any date of determination and without
duplication, eighty-five percent (85%) of the lower of the aggregate book value
or fair market value of all raw materials and finished goods inventory held for
sale or lease owned by the Credit Parties less appropriate reserves determined,
as to any inventory held for sale only, in accordance with GAAP but excluding in
any event (i) inventory which is (a) not subject to a perfected, first priority
Lien in favor of the Collateral Agent to secure the Obligations or (b) subject
to any other Lien that is not a Permitted Lien, (ii) inventory in excess of $5
million located outside of the United States, and (iii) inventory held or stored
on premises not owned or leased by a Credit Party, unless the owner or tenant of
such premises shall have given written acknowledgment of the security interest
in favor of the Lenders in form and substance satisfactory to the Administrative
Agent (subject to normal statutory mechanics and laborers liens), except for
such inventory held under existing arrangements (in which case the Credit
Parties shall use reasonable efforts to
13
secure acceptable acknowledgments), provided that where existing arrangements
are formally modified or extended, acceptable acknowledgments are obtained.
"Eligible Real Property" means, with respect to any member of the
Consolidated Group, including any Person that becomes a member of the
Consolidated Group after the Closing Date as contemplated by Section 7.12, any
real property which (i) is located in the United States or (to the extent deemed
material by the Administrative Agent or the Required Lenders in its or their
sole reasonable discretion) located outside of the United States, (ii) is owned
or (to the extent deemed material by the Administrative Agent or the Required
Lenders in its or their sole reasonable discretion) leased by such member of the
Consolidated Group and (iii) is not Excluded Property.
"Eligible Receivables" means, as of any date of determination,
ninety-five percent (95%) of the aggregate book value of all accounts, accounts
receivable, receivables, and obligations for payment created or arising from the
sale of inventory or the rendering of services in the ordinary course of
business (collectively, the "Receivables"), owned by or owing to the Credit
Parties on a consolidated basis after deducting retainage and allowances or
reserves relating thereto, as shown on the books and records of the Credit
Parties, but excluding in any event (a) Receivables owing by an account debtor
which is not solvent or is subject to any bankruptcy or insolvency proceeding of
any kind and (b) any Receivable which is (i) not subject to a perfected, first
priority Lien in favor of the Collateral Agent to secure the obligations of the
Credit Parties hereunder or (ii) subject to any other Lien that is not a
Permitted Lien.
"Environmental Laws" means any and all lawful and applicable federal,
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises, licenses,
agreements and other governmental restrictions relating to the environment or to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of Materials of Environmental Concern.
"Equity Transaction" means, with respect to any member of the
Consolidated Group, any issuance or sale of shares of its capital stock or other
equity interest, other than an issuance (i) to a member of the Consolidated
Group, (ii) in connection with a conversion of debt securities to equity, (iii)
in connection with exercise by a present or former employee, officer or director
under a stock incentive plan, stock option plan or other equity-based
compensation plan or arrangement or (iv) of Capital Stock of the Borrower in
connection with a Permitted Acquisition.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity which is under common control with
any member of the Consolidated Group within the meaning of Section 4001(a)(14)
of ERISA, or is a member of a group which includes any member of the
Consolidated Group and which is treated as a single employer under Sections
414(b) or (c) of the Internal Revenue Code.
14
"ERISA Event" means (i) with respect to any Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the meaning
of Section 4062(e) of ERISA); (ii) the withdrawal by any member of the
Consolidated Group or any ERISA Affiliate from a Multiple Employer Plan during a
plan year in which it was a substantial employer (as such term is defined in
Section 4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan;
(iii) the distribution of a notice of intent to terminate or the actual
termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA; (iv) the
institution of proceedings to terminate or the actual termination of a Plan by
the PBGC under Section 4042 of ERISA; (v) any event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; (vi) the complete or partial
withdrawal of any member of the Consolidated Group or any ERISA Affiliate from a
Multiemployer Plan; (vii) the conditions for imposition of a lien under Section
302(f) of ERISA exist with respect to any Plan; or (viii) the adoption of an
amendment to any Plan requiring the provision of security to such Plan pursuant
to Section 307 of ERISA.
"Eurodollar Loan" means any Loan that bears interest at a rate based
upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of one percent (0.0001%)) determined by the Administrative Agent
to be equal to the quotient obtained by dividing (a) the Interbank Offered Rate
for such Eurodollar Loan for such Interest Period by (b) one minus the
Eurodollar Reserve Requirement for such Eurodollar Loan for such Interest
Period.
"Eurodollar Reserve Requirement" means, at any time, the maximum rate
at which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) by member banks of the Federal Reserve System
against "Eurocurrency liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Eurodollar Reserve Requirement
shall reflect any other reserves required to be maintained by such member banks
with respect to (i) any category of liabilities which includes deposits by
reference to which the Eurodollar Rate is to be determined, or (ii) any category
of extensions of credit or other assets which include Eurodollar Loans. The
Eurodollar Rate shall be adjusted automatically on and as of the effective date
of any change in the Eurodollar Reserve Requirement.
"Event of Default" shall have the meaning provided in Section 9.1.
"Excluded Property" means, with respect to any member of the
Consolidated Group, including any Person that becomes a member of the
Consolidated Group after the Closing Date as contemplated by Section 7.12, any
Property of such member of the Consolidated Group which, subject to the terms of
Section 8.11 and Section 8.14, is subject to a Lien of the type described in
clause (viii) of the definition of "Permitted Liens" pursuant to documents which
prohibit such member of the Consolidated Group from granting any other Liens in
such Property.
"Executive Officer" of any Person means any of the chief executive
officer, chief operating officer, president, vice president, chief financial
officer or treasurer of such Person.
15
"Existing Letters of Credit" means those Letters of Credit outstanding
on the Closing Date and identified on Schedule 2.6(b).
"Extension of Credit" means, as to any Lender, the making of, or
participation in, a Loan by such Lender (including Continuations and Conversions
thereof) or the issuance or extension of, or participation in, a Letter of
Credit by such Lender.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards to the nearest 1/100 of one percent (0.0001%) 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 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 Bank of America on
such day on such transactions as determined by the Administrative Agent.
"Fees" means all fees payable pursuant to Section 3.5.
"Foreign Subsidiary" means a Subsidiary that is not a Domestic
Subsidiary.
"Fund" means any Person (other than a natural Person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Funded Debt" means, with respect to any Person, without duplication,
(i) all obligations for borrowed money, (ii) all obligations evidenced by bonds,
debentures, notes or similar instruments, or upon which interest payments are
customarily made, (iii) all purchase money Indebtedness (including for purposes
hereof, indebtedness and obligations in respect of conditional sale or title
retention arrangements described in clause (c) of the definition of
"Indebtedness" and obligations in respect of the deferred purchase price of
property or services described in clause (d) of the definition of
"Indebtedness"), including without limitation the principal portion of all
obligations under Capital Leases, (iv) all Support Obligations with respect to
Funded Debt of another Person, (v) the maximum available amount of all standby
letters of credit or acceptances issued or created, (vi) all Funded Debt of
another Person secured by a Lien on any Property, whether or not such Funded
Debt has been assumed, provided that for purposes hereof the amount of such
Funded Debt shall be limited to the amount of such Funded Debt as to which there
is recourse or the fair market value of the property which is subject to the
Lien, if less, (vii) the outstanding attributed principal amount under any
Securitization Transaction and (viii) the principal balance outstanding under
Synthetic Leases. The Funded Debt of any Person shall include the Funded Debt of
any partnership or joint venture in which such Person is a general partner or
joint venturer, but only to the extent to which there is recourse to such Person
for the payment of such Funded Debt.
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis and subject to the terms of Section 1.3.
"Governmental Authority" means any federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
16
"Guaranteed Obligations" means, without duplication, (i) all of the
obligations of the Borrower to the Lenders (including the Issuing Lender) and
the Administrative Agent, whenever arising, under this Credit Agreement, the
Notes, the Collateral Documents or any of the other Credit Documents (including,
but not limited to, any interest accruing after the occurrence of a Bankruptcy
Event with respect to any Credit Party, regardless of whether such interest is
an allowed claim under the Bankruptcy Code) and (ii) all liabilities and
obligations, whenever arising, owing from any Credit Party to any Lender, or any
Affiliate of a Lender, arising under any Hedging Agreement relating to the
Obligations to the extent permitted hereunder.
"Guarantor" means each Person identified as a "Guarantor" on the
signature pages hereto and each other Person that may hereafter become a
Guarantor by execution of a Joinder Agreement, together with their successors
and permitted assigns.
"Hedging Agreements" means any interest rate protection agreement or
foreign currency exchange agreement.
"Indebtedness" means, with respect to any Person, without duplication,
(a) all obligations for borrowed money, (b) all obligations evidenced by bonds,
debentures, notes or similar instruments, or upon which interest payments are
customarily made, (c) all obligations under conditional sale or other title
retention agreements relating to Property purchased (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations issued or assumed as
the deferred purchase price of Property or services purchased (other than trade
debt incurred in the ordinary course of business and due within six months of
the incurrence thereof) which would appear as liabilities on a balance sheet,
(e) all obligations under take-or-pay or similar arrangements or under
commodities agreements, (f) all Indebtedness of others secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on, or payable out of the proceeds of production
from, Property owned or acquired, whether or not the obligations secured thereby
have been assumed, (g) all Support Obligations with respect to Indebtedness of
another Person, (h) the principal portion of all obligations under Capital
Leases, (i) all obligations under Hedging Agreements, (j) the maximum amount of
all standby letters of credit issued or bankers' acceptances facilities created
for the account and, without duplication, all drafts drawn thereunder (to the
extent unreimbursed), (k) all preferred Capital Stock which by the terms thereof
could be (at the request of the holders thereof or otherwise) subject to
mandatory sinking fund payments, redemption or other acceleration (other than as
a result of a Change of Control or an Asset Disposition that does not in fact
result in a redemption of such preferred Capital Stock) at any time during the
term of the Credit Agreement, (l) the principal portion of all obligations under
Synthetic Leases, (m) the Indebtedness of any partnership or unincorporated
joint venture in which such Person is a general partner or a joint venturer, (n)
with respect to any member of the Consolidated Group, the outstanding attributed
principal amount under any Securitization Transaction and (o) all contingent
obligations (including, without limitation, obligations to make earn-out
payments) incurred in connection with Permitted Acquisitions or Acquisitions
consummated prior to the Closing Date.
"Interbank Offered Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the
17
nearest 1/100 of one percent (0.0001%)) in each case determined by the
Administrative Agent to be equal to:
(a) the offered rate that appears on the Dow Xxxxx Telerate Screen Page
3750 (or any successor page) that displays an average British Bankers
Association Interest Settlement Rate for deposits in Dollars (for delivery on
the first day of the applicable Interest Period) for a term equivalent to the
applicable Interest Period at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of the applicable Interest Period; or
(b) if for any reason the foregoing rate in clause (i) is unavailable
or undeterminable, the offered rate on such other page or other service that
displays an average British Bankers Association Interest Settlement Rate for
deposits in Dollars (for delivery on the first day of the applicable Interest
Period) for a term equivalent to the applicable Interest Period at approximately
11:00 A.M. (London time) two Business Days prior to the first day of the
applicable Interest Period; or
(c) if for any reason the foregoing rates in clauses (i) and (ii) are
unavailable or undeterminable, the rate of interest at which deposits in Dollars
for delivery on the first day of the applicable Interest in same day funds in
the approximate amount of the applicable Eurodollar Loan for a term equivalent
to the applicable Interest Period would be offered by the London branch of Bank
of America to major banks in the offshore Dollar market at approximately 11:00
A.M. (London time) two Business Days prior to the first day of the applicable
Interest Period.
"Interest Payment Date" means (i) as to any Base Rate Loan and any
Swingline Loan, the last Business Day of each March, June, September and
December, and the Termination Date, and (ii) as to any Eurodollar Loan, the last
day of each Interest Period for such Loan, the date of repayment of principal of
such Loan and the Termination Date, and in addition where the applicable
Interest Period is more than three months, then also on the date three months
from the beginning of the Interest Period, and each three months thereafter. If
an Interest Payment Date falls on a date which is not a Business Day, such
Interest Payment Date shall be deemed to be the next succeeding Business Day.
"Interest Period" means (i) as to any Eurodollar Loan, a period of one,
two, three or six months duration, as the Borrower may elect, in each case
commencing on the date of the borrowing (including Conversions, Continuations
and renewals) and (ii) as to any Swingline Loan, a period of such duration as
the Borrower may request and the Swingline Lender may agree in accordance with
the provisions hereof, in each case commencing on the date of borrowing;
provided, however, (A) if any Interest Period would end on a day which is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day (except that in the case of Eurodollar Loans where the next
succeeding Business Day falls in the next succeeding calendar month, then on the
next preceding Business Day), (B) no Interest Period shall extend beyond the
Termination Date, and (C) in the case of Eurodollar Loans, where an Interest
Period begins on a day for which there is no numerically corresponding day in
the calendar month in which the Interest Period is to end, such Interest Period
shall end on the last day of such calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to time.
18
References to sections of the Internal Revenue Code shall be construed also to
refer to any successor sections.
"Investment" in any Person means (a) the acquisition (whether for cash,
property, services, assumption of Indebtedness, securities or otherwise) of
Capital Stock, bonds, notes, debentures, partnership, joint ventures or other
ownership interests or other securities of such Person, (b) any deposit with, or
advance, loan or other extension of credit to, such Person (other than deposits
made in connection with the purchase of equipment or other assets in the
ordinary course of business) or (c) any other capital contribution to or
investment in such Person, including, without limitation, any Support
Obligations (including any support for a letter of credit issued on behalf of
such Person) incurred for the benefit of such Person, but excluding any
Restricted Payment to such Person.
"Issuing Lender" means Bank of America.
"Joinder Agreement" means a joinder agreement substantially in the form
of Schedule 7.12 hereto executed and delivered by a Subsidiary in accordance
with the provisions of Section 7.12.
"Lenders" means each of the Persons identified as a "Lender" on the
signature pages hereto, and their successors and assigns.
"Letter of Credit" means any Existing Letter of Credit and any standby
or trade letter of credit issued by the Issuing Lender for the account of the
Borrower in accordance with the terms of Section 2.1(b).
"Licenses" means all licenses, permits and other grants of authority
obtained or required to be obtained from any Governmental Authorities in
connection with the management or operation of the business of the members of
the Consolidated Group or the ownership, lease, license or use of any Property
of the members of the Consolidated Group.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the Uniform Commercial Code
as adopted and in effect in the relevant jurisdiction or other similar recording
or notice statute, and any lease in the nature thereof).
"Loan" or "Loans" means the Revolving Loans and/or the Swingline Loans,
and the Base Rate Loans and Eurodollar Loans comprising such Loans.
"LOC Commitment" means, with respect to the Issuing Lender, the
commitment of the Issuing Lender to issue, and to honor payment obligations
under, Letters of Credit and, with respect to each Lender, the commitment of
such Lender to purchase participation interests in the Letters of Credit up to
such Lender's LOC Committed Amount.
"LOC Committed Amount" shall have the meaning provided in Section
2.1(b).
"LOC Documents" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
19
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and obligations of
the parties concerned or at risk or (ii) any collateral security for such
obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum amount
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (ii) the aggregate
amount of all drawings under Letters of Credit honored by the Issuing Lender but
not theretofore reimbursed.
"Material Adverse Effect" means a material adverse effect on (i) the
condition (financial or otherwise), operations, business, assets, liabilities or
prospects of the Consolidated Group taken as a whole, (ii) the ability of any
member of the Consolidated Group to perform any material obligation under any
Credit Document to which it is a party or (iii) the material rights and remedies
of the Administrative Agent and the Lenders under the Credit Documents.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Laws, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating securities.
"Multiemployer Plan" means a Plan which is a "multiemployer plan" as
defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan (other than a Multiemployer Plan)
which any member of the Consolidated Group or any ERISA Affiliate and at least
one employer other than the members of the Consolidated Group or any ERISA
Affiliate are contributing sponsors.
"Net Cash Proceeds" means the aggregate proceeds paid in cash or Cash
Equivalents received by any member of the Consolidated Group in connection with
any Asset Disposition, Equity Transaction or Debt Transaction, net of (a) direct
costs (including, without limitation, legal, accounting and investment banking
fees, and sales commissions) and (b) taxes paid or payable as a result thereof;
it being understood that "Net Cash Proceeds" shall include, without limitation,
any cash or Cash Equivalents received upon the sale or other disposition of any
non-cash consideration received by any such Consolidated Party in any Asset
Disposition, Equity Transaction or Debt Transaction.
"Note" or "Notes" means any of the Revolving Notes.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Schedule 2.2(a)(i), as required by Section 2.2(a).
"Notice of Continuation/Conversion" means the written notice of
Continuation or Conversion in substantially the form of Schedule 3.2, as
required by Section 3.2.
"Obligations" means the Revolving Loans, Swingline Loans and LOC
Obligations.
20
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the lessee at
any time) of any Property which is not a Capital Lease other than any such lease
in which that Person is the lessor.
"Other Taxes" shall have the meaning provided in Section 3.11.
"Participation Interest" means the purchase by a Lender of a
participation in LOC Obligations as provided in Section 2.6(b), in Swingline
Loans as provided in Section 2.7 and in Loans as provided in Section 3.16.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"Permitted Acquisition" means any Acquisition by a member of the
Consolidated Group, provided that (i) consideration paid is not greater than the
fair market value of the Property acquired, (ii) the Property acquired (or the
Property of the Person acquired) in such Acquisition shall be used or useful in
the same or similar line of business as the members of the Consolidated Group on
the Closing Date, (iii) all Property to be acquired in connection with such
acquisition shall be located in the United States of America, (iv) in the case
of an Acquisition of the Capital Stock of another Person, the board of directors
(or other comparable governing body) of such other Person shall have duly
approved such Acquisition, (v) no Default or Event of Default shall exist
immediately after giving effect to such Acquisition, (vi) the representations
and warranties made by the Credit Parties in any Credit Document shall be true
and correct in all material respects at and as if made as of the date of such
Acquisition (after giving effect thereto) except to the extent such
representations and warranties expressly relate to an earlier date, (vii) the
Borrower shall have delivered to the Administrative Agent a Pro Forma Compliance
Certificate demonstrating that, upon giving effect to such Acquisition on a Pro
Forma Basis, the Credit Parties would be in compliance with the financial
covenants set forth in Section 7.11, (viii) if the Acquisition involves an
interest in a partnership and a requirement that a member of the Consolidated
Group be a general partner, the general partner shall be a newly formed special
purpose Subsidiary of the Borrower, (ix) the Credit Parties shall, and shall
cause the party which is the subject of the Acquisition to, execute and deliver
such joinder and pledge agreements and take such other actions as may be
necessary for compliance with the provisions of Sections 7.12 and 7.13, and (x)
the aggregate consideration (including cash and non-cash consideration, the
maximum amount of any contingent payment (including, without limitation,
obligations to make earn-out payments) and Indebtedness assumed) paid in
connection with all Acquisitions shall not exceed $10 million in any
twelve-month period.
"Permitted Investments" means Investments which are (i) cash and Cash
Equivalents; (ii) accounts receivable created, acquired or made in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms; (iii) Investments consisting of Capital Stock, obligations,
securities or other Property received in settlement of accounts receivable
(created in the ordinary course of business) from bankrupt obligors; (iv)
Investments existing as of the Closing Date and set forth in Schedule 8.6; (v)
advances or loans to directors, officers and employees that do not exceed
$100,000 in the aggregate at any one time outstanding; (vi) advances or loans to
customers and suppliers in the ordinary course of business that do not exceed
$100,000 in the aggregate at any one time outstanding; (vii) Investments
21
existing on the Closing Date by members of the Consolidated Group in their
Subsidiaries and Affiliates, (viii) Investments by members of the Consolidated
Group in and to Domestic Credit Parties, (ix) Investments which constitute
Permitted Acquisitions and (x) Investments of a nature not contemplated in the
foregoing subsections in an amount not to exceed $500,000 in the aggregate at
any time outstanding.
"Permitted Liens" means:
(i) Liens in favor of the Administrative Agent to secure the
obligations of the Credit Parties under the Credit Documents;
(ii) Liens in favor of a Lender or an Affiliate of a Lender
pursuant to a Hedging Agreement permitted hereunder, but only (A) to the extent
such Liens secure obligations under such agreements permitted under Section 8.1,
(B) to the extent such Liens are on the same collateral as to which the Lenders
hereunder also have a Lien, and (C) so long as the obligations under such
Hedging Agreement and the loans and obligations hereunder and under the other
Credit Documents shall share pari passu in the collateral subject to such Liens;
(iii) Liens (other than Liens created or imposed under ERISA)
for taxes, assessments or governmental charges or levies not yet due or Liens
for taxes being contested in good faith by appropriate proceedings for which
adequate reserves determined in accordance with GAAP have been established (and
as to which the Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof);
(iv) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens imposed by
law or pursuant to customary reservations or retentions of title arising in the
ordinary course of business, provided that such Liens secure only amounts not
yet due and payable or, if due and payable, are unfiled and no other action has
been taken to enforce the same or are being contested in good faith by
appropriate proceedings for which adequate reserves determined in accordance
with GAAP have been established (and as to which the Property subject to any
such Lien is not yet subject to foreclosure, sale or loss on account thereof);
(v) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by any member of the Consolidated Group in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, bids, leases, government
contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(vi) Liens in connection with attachments or judgments
(including judgment or appeal bonds) provided that the judgments secured shall,
within thirty days after the entry thereof, have been discharged or execution
thereof stayed pending appeal, or shall have been discharged within thirty days
after the expiration of any such stay;
(vii) easements, rights-of-way, covenants, restrictions
(including zoning restrictions), minor defects or irregularities in title and
other similar charges or encumbrances not, in any material respect, impairing
the use of the encumbered Property for its intended purposes;
22
(viii) Liens on Property of any Person securing purchase money
and sale/leaseback Indebtedness (including Capital Leases and Synthetic Leases)
of such Person to the extent permitted under Section 8.1(c), provided that any
such Lien attaches only to the Property financed or leased and such Lien
attaches concurrently with or within ninety days after the acquisition thereof;
(ix) leases or subleases granted to others not interfering in
any material respect with the business of any member of the Consolidated Group;
(x) any interest or title of a lessor under, and Liens arising
from UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, leases permitted by this
Credit Agreement;
(xi) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection with the
importation of goods;
(xii) Liens created or deemed to exist in connection with a
Securitization Transaction permitted hereunder (including any related filings of
any financing statements), but only to the extent that any such Lien relates to
the applicable Securitization Receivables actually sold, contributed, financed
or otherwise conveyed or pledged pursuant to such transaction;
(xiii) Liens deemed to exist in connection with Investments in
repurchase agreements which constitute Permitted Investments;
(xiv) normal and customary rights of setoff upon deposits of
cash in favor of banks or other depository institutions;
(xv) Liens of a collection bank arising under Section 4-210 of
the Uniform Commercial Code on items in the course of collection; and
(xvi) Liens existing as of the Closing Date and set forth on
Schedule 6.8; provided that (a) no such Lien shall at any time be extended to or
cover any Property other than the Property subject thereto on the Closing Date
and (b) the principal amount of the Indebtedness secured by such Liens shall not
be increased and shall not be extended, renewed, refunded or refinanced on terms
and conditions less favorable to the Credit Parties than for such existing
Indebtedness.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
(whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which any member of the
Consolidated Group or any ERISA Affiliate is (or, if such plan were terminated
at such time, would under Section 4069 of ERISA be deemed to be) an "employer"
within the meaning of Section 3(5) of ERISA.
"Pledge Agreement" means the pledge agreement dated as of the Closing
Date given by the Credit Parties to the Administrative Agent to secure the
obligations of the Credit Parties under the Credit Documents, as such pledge
agreement may be amended and modified from time to time.
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"Prime Rate" means, for any day, the rate per annum in effect for such
day as publicly announced from time to time by Bank of America as its "prime
rate." Such rate is a rate set by Bank of America based upon various factors
including Bank of America'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 such rate announced by Bank of America shall take effect at the opening of
business on the day specified in the public announcement of such change.
"Pro Forma Basis" means, for purposes of calculating (utilizing the
principles set forth in the second paragraph of Section 1.3) the applicable
pricing level under the definition of "Applicable Percentage" and determining
compliance with each of the financial covenants set forth in Section 7.11, that
any transaction shall be deemed to have occurred as of the first day of the
four-fiscal-quarter period ending as of the most recent fiscal-quarter end
preceding the date of such transaction with respect to which the Administrative
Agent has received the Required Financial Information. As used herein,
"transaction" shall mean (i) any merger or consolidation as referred to in
Section 8.4, (ii) any Asset Disposition as referred to in Section 8.5, (iii) any
Acquisition as referred to in the definition of "Permitted Acquisition" or (iv)
any Restricted Payment as referred to in Section 8.8. In connection with any
calculation of the financial covenants set forth in Section 7.11 upon giving
effect to a transaction on a Pro Forma Basis:
(A) for purposes of any such calculation in respect of any
Asset Disposition referred to in Section 8.5, (1) income statement items
(whether positive or negative) attributable to the Property disposed of in such
Asset Disposition shall be excluded and (2) any Indebtedness which is retired in
connection with such Asset Disposition shall be excluded and deemed to have been
retired as of the first day of the applicable period; and
(B) for purposes of any such calculation in respect of any
merger or consolidation referred to in Section 8.4 or any Acquisition referred
to in the definition of "Permitted Acquisition", (1) any Indebtedness incurred
by any member of the Consolidated Group in connection with such transaction (x)
shall be deemed to have been incurred as of the first day of the applicable
period and (y) if such Indebtedness has a floating or formula rate, shall have
an implied rate of interest for the applicable period for purposes of this
definition determined by utilizing the rate which is or would be in effect with
respect to such Indebtedness as at the relevant date of determination, and (2)
income statement items (whether positive or negative) attributable to the
Property acquired in such transaction or pursuant to the Acquisition comprising
such transaction, as applicable, shall be included beginning as of the first day
of the applicable period.
"Pro Forma Compliance Certificate" means a certificate of an Executive
Officer of the Borrower delivered to the Administrative Agent in connection with
(i) any merger or consolidation referred to in Section 8.4, (ii) any Asset
Disposition referred to in Section 8.5, (iii) any Acquisition referred to in the
definition of "Permitted Acquisition" or (iv) any Restricted Payment as referred
to in Section 8.7, as applicable, and containing reasonably detailed
calculations, upon giving effect to the applicable transaction on a Pro Forma
Basis, of the Consolidated Fixed Charge Coverage Ratio and the Consolidated
Total Leverage Ratio as of the most recent fiscal quarter end preceding the date
of the applicable transaction with respect to which the Administrative Agent
shall have received the Required Financial Information.
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"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Rate Determination Date" shall have the meaning provided in the
definition of "Applicable Percentage".
"Register" shall have the meaning provided in Section 11.3(c).
"Regulation D, O, T, U, or X" means Regulation D, O, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System as from
time to time in effect and any successor to all or a portion thereof.
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the notice requirement has been
waived by regulation.
"Required Financial Information" means the annual and quarterly
compliance certificates and related financial statements and information
required by the provisions of Sections 7.1(a), (b) and (c).
"Required Lenders" means, at any time, Lenders having at least
sixty-six and two-thirds percent (66 2/3%) of the Commitments or, if the
Commitments have been terminated, Lenders having at least sixty-six and
two-thirds percent (66 2/3%) of the aggregate principal amount of the
Obligations outstanding (taking into account in each case Participation
Interests or obligations to participate therein); provided that the Commitments
of, and outstanding principal amount of Obligations (taking into account
Participation Interests or obligations to participate therein) owing to, a
Defaulting Lender shall be excluded for purposes hereof in making a
determination of Required Lenders.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule, regulation or ordinance (including, without
limitation, Environmental Laws) or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or to which any of its material Property is subject.
"Restricted Payment" means (i) any dividend or other payment or
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any member of the Consolidated Group, now or hereafter
outstanding (including without limitation any payment in connection with any
dissolution, merger, consolidation or disposition involving any member of the
Consolidated Group), or to the holders, in their capacity as such, of any shares
of any class of Capital Stock of any member of the Consolidated Group, now or
hereafter outstanding (other than dividends or distributions payable in the same
class of Capital Stock of the applicable Person or dividends or distributions
payable to any Credit Party (directly or indirectly through Subsidiaries)), (ii)
any redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of any member of the Consolidated Group, now or hereafter outstanding, and
(iii) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Capital
Stock of any member of the Consolidated Group, now or hereafter outstanding.
"Revolving Commitment" means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans in an aggregate principal
amount up to
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such Lender's Revolving Commitment Percentage at such time of the Aggregate
Revolving Committed Amount at such time.
"Revolving Commitment Percentage" means, for each Lender, a fraction
(expressed as a percentage) the numerator of which is the Revolving Committed
Amount of such Lender at such time and the denominator of which is the Aggregate
Revolving Committed Amount at such time. The initial Revolving Commitment
Percentage of each Lender is set forth on Schedule 2.1.
"Revolving Committed Amount" means, with respect to each Lender, the
amount of such Lender's Revolving Commitment. The initial Revolving Committed
Amount of each Lender is set forth on Schedule 2.1.
"Revolving Loan" shall have the meaning provided in Section 2.1(a).
"Revolving Note" or "Revolving Notes" means the promissory notes in
favor of each of the Lenders evidencing the Revolving Loans and Swingline Loans
in substantially the form attached as Schedule 2.5, individually or
collectively, as appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time.
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw
Hill Companies, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
"Sale and Leaseback Transaction" means any arrangement pursuant to
which any member of the Consolidated Group, directly or indirectly, becomes
liable as lessee, guarantor or other surety with respect to any lease, whether
an Operating Lease or a Capital Lease, of any Property (a) which such member of
the Consolidated Group has sold or transferred (or is to sell or transfer) to,
or arranged the purchase by, a Person which is not a member of the Consolidated
Group or (b) which such member of the Consolidated Group intends to use for
substantially the same purpose as any other Property which has been sold or
transferred (or is to be sold or transferred) by such member of the Consolidated
Group to another Person which is not a member of the Consolidated Group in
connection with such lease.
"Securities Exchange Act" means the Securities Exchange Act of 1934.
"Securitization Transaction" means any financing transaction or series
of financing transactions that have been or may be entered into by a member of
the Consolidated Group pursuant to which such member of the Consolidated Group
may sell, convey or otherwise transfer to (i) a Subsidiary or affiliate (a
"Securitization Subsidiary"), or (ii) any other Person, or may grant a security
interest in, any accounts receivable, notes receivable, rights to future lease
payments or residuals or other similar rights to payment (the "Securitization
Receivables") (whether such Securitization Receivables are then existing or
arising in the future) of such member of the Consolidated Group, and any assets
related thereto, including without limitation, all security interests in
merchandise or services financed thereby, the proceeds of such Securitization
Receivables, and other assets which are customarily sold or in respect of which
security interests are customarily granted in connection with securitization
transactions involving such assets.
"Security Agreement" means the security agreement dated as of the
Closing Date given by the Credit Parties to the Administrative Agent to secure
the
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obligations of the Credit Parties under the Credit Documents, as such security
agreement may be amended and modified from time to time.
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"Standby Letter of Credit Fee" shall have the meaning provided in
Section 3.5(b)(i).
"Subordinated Debt" means any Indebtedness of a member of the
Consolidated Group which by its terms is expressly subordinated in right of
payment to the prior payment of the obligations of the Credit Parties under the
Credit Documents on terms and conditions and evidenced by documentation
satisfactory to the Administrative Agent and the Required Lenders.
"Subsidiary" means, as to any Person at any time, (a) any corporation
more than fifty percent (50%) of whose Capital Stock of any class or classes
having by the terms thereof ordinary voting power to elect a majority of the
directors of such corporation (irrespective of whether or not at such time, any
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at such time owned by such Person
directly or indirectly through Subsidiaries, and (b) any partnership,
association, joint venture or other entity of which such Person directly or
indirectly through Subsidiaries owns at such time more than fifty percent (50%)
of the Capital Stock.
"Support Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (i) to purchase any such Indebtedness or
any Property constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (iii) to lease or
purchase Property, securities or services primarily for the purpose of assuring
the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof. The amount of
any Support Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of which
such Support Obligation is made.
"Swingline Commitment" means, with respect to the Swingline Lender, the
commitment of the Swingline Lender to make Swingline Loans in an aggregate
principal amount at any time outstanding up to the Swingline Committed Amount
and, with respect to each Lender, the commitment of such Lender to purchase
participation interests in Swingline Loans up to such Lender's Revolving
Commitment Percentage.
"Swingline Committed Amount" shall have the meaning provided in Section
2.1(c).
"Swingline Lender" means Bank of America.
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"Swingline Loan" shall have the meaning provided in Section 2.1(c).
"Synthetic Lease" means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an Operating Lease under GAAP.
"Taxes" shall have the meaning provided in Section 3.11.
"Termination Date" means June 28, 2003 or such later date as to which
all of the Lenders may in their sole discretion by written consent agree.
"Trade Letter of Credit Fee" shall have the meaning provided in Section
3.5(b)(ii).
"Voting Stock" means, with respect to any Person, Capital Stock issued
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
"Wholly Owned Subsidiary" of any Person means any Subsidiary one
hundred percent (100%) of whose Voting Stock is at the time owned by such Person
directly or indirectly through other Wholly Owned Subsidiaries.
1.2 Computation of Time Periods.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding".
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section 7.1,
consistent with the annual audited financial statements referenced in Section
6.1(i)); provided, however, if (a) the Borrower shall object to determining such
compliance on such basis at the time of delivery of such financial statements
due to any change in GAAP or the rules promulgated with respect thereto or (b)
the Administrative Agent or the Required Lenders shall so object in writing
within sixty days after delivery of such financial statements, then such
calculations shall be made on a basis consistent with the most recent financial
statements delivered by the Credit Parties to the Lenders as to which no such
objection shall have been made.
Notwithstanding the above, the parties hereto acknowledge and agree
that, for purposes of all calculations made under the financial covenants set
forth in Section 7.11 (including without limitation for purposes of the
definitions of "Applicable Percentage" and "Pro Forma Basis"), (i) in connection
with any Asset
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Disposition referred to in Section 8.5, (A) income statement items (whether
positive or negative) attributable to the Property disposed of shall be excluded
to the extent relating to any period occurring prior to the date of such
transaction and (B) Indebtedness which is retired shall be excluded and deemed
to have been retired as of the first day of the applicable period and (ii) in
connection with any merger or consolidation referred to in Section 8.4 or any
Acquisition referred to in the definition of "Permitted Acquisition", (A) income
statement items attributable to the Person or Property acquired shall, to the
extent not otherwise included in such income statement items for the members of
the Consolidated Group in accordance with GAAP or in accordance with any defined
terms set forth in Section 1.1, be included to the extent relating to any period
applicable in such calculations, (B) Indebtedness of the Person or Property
acquired shall be deemed to have been incurred as of the first day of the
applicable period and (C) pro forma adjustments may be included to the extent
that such adjustments would be permitted under GAAP and give effect to items
that are (x) directly attributable to such transaction, (y) expected to have a
continuing impact on the Consolidated Group and (z) factually supportable.
SECTION 2
CREDIT FACILITIES
2.1 Commitments.
(a) Revolving Commitment. During the Commitment Period, subject to the
terms and conditions hereof, each Lender severally agrees to make revolving
credit loans (the "Revolving Loans") to the Borrower in Dollars from time to
time in the amount of such Lender's Revolving Commitment Percentage of such
Revolving Loans for the purposes hereinafter set forth; provided that (i) with
regard to the Lenders collectively, the aggregate principal amount of
Obligations outstanding at any time shall not exceed the lesser of (A) THIRTY
MILLION DOLLARS ($30,000,000) (as such amount may be reduced from time to time
in accordance with the provisions hereof, the "Aggregate Revolving Committed
Amount") or (B) the Borrowing Base, and (ii) with regard to each Lender
individually, such Lender's Revolving Commitment Percentage of Obligations
outstanding at any time shall not exceed the lesser of (A) such Lender's
Revolving Committed Amount or (B) an amount equal to such Lender's Revolving
Commitment Percentage of the Borrowing Base. Revolving Loans may consist of Base
Rate Loans or Eurodollar Loans, or a combination thereof, as the Borrower may
request, and may be repaid and reborrowed in accordance with the provisions
hereof.
(b) Letter of Credit Commitment. During the Commitment Period, in
reliance upon the agreements of the Lenders set forth in Section 2.6 and subject
to the terms and conditions hereof and of the LOC Documents, if any, and such
other terms and conditions which the Issuing Lender may reasonably require, the
Issuing Lender shall issue, and the Lenders shall participate in, such Letters
of Credit in Dollars as the Borrower may request for its own account or for the
account of another Credit Party as provided herein, in a form acceptable to the
Issuing Lender, for the purposes hereinafter set forth; provided that (i) the
aggregate amount of LOC Obligations shall not at any time exceed FIVE MILLION
DOLLARS ($5,000,000) (as such amount may be reduced from time to time in
accordance with the provisions hereof, the "LOC Committed Amount"), (ii) with
regard to the Lenders collectively, the aggregate principal amount of
Obligations outstanding at any time shall not exceed the lesser of (A) the
Aggregate Revolving Committed Amount or (B) the Borrowing Base, (and iii) with
29
regard to each Lender individually, such Lender's Revolving Commitment
Percentage of Obligations outstanding at any time shall not exceed the lesser of
(A) such Lender's Revolving Committed Amount or (B) an amount equal to such
Lender's Revolving Commitment Percentage of the Borrowing Base. Letters of
Credit shall not have an original expiry date more than one year from the date
of issuance or extension. No Letter of Credit shall have an expiry date, whether
as originally issued or by extension, extending beyond the Termination Date.
Each Letter of Credit shall comply with the related LOC Documents. The issuance
date of each Letter of Credit shall be a Business Day.
(c) Swingline Commitment. During the Commitment Period, subject to the
terms and conditions hereof, the Swingline Lender agrees to make certain
revolving credit loans (the "Swingline Loans") to the Borrower in Dollars from
time to time for the purposes hereinafter set forth; provided that (i) the
aggregate principal amount of Swingline Loans shall not at any time exceed FIVE
MILLION DOLLARS ($5,000,000) (as such amount may be reduced from time to time in
accordance with the provisions hereof, the "Swingline Committed Amount"), and
(ii) with regard to the Lenders collectively, the aggregate principal amount of
Obligations outstanding at any time shall not exceed the lesser of (A) the
Aggregate Revolving Committed Amount or (B) the Borrowing Base. Swingline Loans
shall consist of Base Rate Loans and may be repaid and reborrowed in accordance
with the provisions hereof.
2.2 Method of Borrowing.
(a) Notice of Request for Extensions of Credit. The Borrower shall
request an Extension of Credit by written notice (or telephonic notice promptly
confirmed in writing) as follows:
(i) Revolving Loans. In the case of Revolving Loans, to the
Administrative Agent not later than 11:00 A.M. (Dallas, Texas time) on the
Business Day prior to the date of the requested borrowing in the case of Base
Rate Loans, and on the third Business Day prior to the date of the requested
borrowing in the case of Eurodollar Loans. Each such request for borrowing shall
be irrevocable and shall specify (A) that a Revolving Loan is requested, (B) the
date of the requested borrowing (which shall be a Business Day), (C) the
aggregate principal amount to be borrowed, and (D) whether the borrowing shall
be comprised of Base Rate Loans, Eurodollar Loans or a combination thereof, and
if Eurodollar Loans are requested, the Interest Period(s) therefor. A form of
Notice of Borrowing is attached as Schedule 2.2(a)(i). The Administrative Agent
shall give notice to each Lender promptly upon receipt of each Notice of
Borrowing pursuant to this Section 2.2(a)(i), the contents thereof and each
Lender's share of any borrowing to be made pursuant thereto.
(ii) Letters of Credit. In the case of Letters of Credit, to
the Issuing Lender with a copy to the Administrative Agent not later than 11:00
A.M. (Dallas, Texas time) on the third Business Day prior to the date of the
requested issuance or extension (or such shorter period as may be agreed by the
Issuing Lender). Each such request for issuance or extension of a Letter of
Credit shall be irrevocable and shall specify, among other things, (A) that a
Letter of Credit is requested, (B) the date of the requested issuance or
extension, (C) the type, amount, expiry date and terms on which the Letter of
Credit is to be issued or extended, and (D) the beneficiary. A form of Notice of
Request for Letter of Credit is attached as Schedule 2.2(a)(ii).
(iii) Swingline Loans. In the case of Swingline Loans, to the
Swingline Lender with a copy to the Administrative Agent not later than 11:00
A.M.
30
(Dallas, Texas time) on the Business Day of the requested borrowing. Each such
request for borrowing shall be irrevocable and shall specify (A) that a
Swingline Loan is requested, (B) the date of the requested borrowing (which
shall be a Business Day), (C) the aggregate principal amount to be borrowed, and
(D) the maturity requested therefor. A form of Notice of Borrowing is attached
as Schedule 2.2(a)(iii). Notwithstanding the foregoing, however, in the event
that an "auto borrow" or "zero balance" or similar arrangement shall then be in
place with the Swingline Lender, the Borrower shall request Swingline Loans
pursuant to such alternative notice arrangements, if any, provided thereunder or
in connection therewith. Each Swingline Loan shall have a maturity date as the
Borrower may request and the Swingline Lender may agree.
(b) Minimum Amounts. Each Revolving Loan advance shall be (i) in the
case of Eurodollar Loans, in a minimum principal amount of $1 million and
integral multiples of $100,000 in excess thereof and (ii) in the case of Base
Rate Loans, $1 million (or, if less, the remaining Aggregate Revolving Committed
Amount) and integral multiples of $100,000 in excess thereof. Each Swingline
Loan advance shall be in a minimum principal amount of $100,000 (or the
remaining amount of the Swingline Committed Amount, if less); provided that in
the event that an "auto borrow" or "zero balance" or similar arrangement shall
then be in place with the Swingline Lender, each Swingline Loans advance shall
be in such minimum amounts, if any, provided by such agreement.
(c) Information Not Provided. If in connection with any such request
for a Revolving Loan, the Borrower shall fail to specify (i) an applicable
Interest Period in the case of a Eurodollar Loan, the Borrower shall be deemed
to have requested an Interest Period of one month, or (ii) the type of loan
requested, the Borrower shall be deemed to have requested a Base Rate Loan.
(d) Maximum Number of Eurodollar Loans. In connection with any request
for a Revolving Loan, Revolving Loans may be comprised of no more than five
Eurodollar Loans outstanding at any time. For purposes hereof, Eurodollar Loans
with separate or different Interest Periods will be considered as separate
Eurodollar Loans even if their Interest Periods expire on the same date.
2.3 Interest.
Subject to Section 3.1, the Loans shall bear interest at a per annum
rate, payable in arrears on each applicable Interest Payment Date (or at such
other times as may be specified herein), as follows:
(a) Base Rate Loans. During such periods as the Loans shall be
comprised of Base Rate Loans, the Adjusted Base Rate; and
(b) Eurodollar Loans. During such periods as the Loans shall be
comprised of Eurodollar Loans, the Adjusted Eurodollar Rate.
2.4 Repayment.
(a) Revolving Loans. The principal amount of all Revolving Loans shall
be due and payable in full on the Termination Date.
(b) Swingline Loans. The principal amount of all Swingline Loans shall
be due and payable in full on the earlier of (i) the maturity date agreed to by
the Swingline Lender and the Borrower with respect to such Swingline Loan, or
(ii) the Termination Date.
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2.5 Notes.
The Revolving Loans and Swingline Loans shall be evidenced by the
Revolving Notes.
2.6 Additional Provisions relating to Letters of Credit.
(a) Reports. The Issuing Lender will provide to the Administrative
Agent at least monthly, and more frequently upon request, a detailed summary
report on its Letters of Credit and the activity thereon, in form and substance
acceptable to the Administrative Agent. In addition, the Issuing Lender will
provide to the Administrative Agent for dissemination to the Lenders at least
quarterly, and more frequently upon request, a detailed summary report on its
Letters of Credit and the activity thereon, including, among other things, the
Credit Party for whose account the Letter of Credit is issued, the beneficiary,
the face amount, and the expiry date. The Issuing Lender will provide copies of
the Letters of Credit to the Administrative Agent and the Lenders promptly upon
request.
(b) Participation. Each Lender, with respect to the Existing Letters of
Credit, hereby purchases a participation interest in Existing Letters of Credit,
and with respect to Letters of Credit issued on or after the Closing Date, upon
issuance of a Letter of Credit, shall be deemed to have purchased without
recourse a risk participation from the Issuing Lender in such Letter of Credit
and the obligations arising thereunder, in each case in an amount equal to its
pro rata share of the obligations under such Letter of Credit (based on the
respective Revolving Commitment Percentages of the Lenders) and shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and be obligated to pay to the Issuing Lender therefor and discharge
when due, its pro rata share of the obligations arising under such Letter of
Credit. Without limiting the scope and nature of each Lender's participation in
any Letter of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any such Letter of Credit, each Lender
shall pay to the Issuing Lender its pro rata share of such unreimbursed drawing
in same day funds on the day of notification by the Issuing Lender of an
unreimbursed drawing pursuant to the provisions of subsection (d) hereof. The
obligation of each Lender to so reimburse the Issuing Lender shall be absolute
and unconditional and shall not be affected by the occurrence of a Default, an
Event of Default or any other occurrence or event. Any such reimbursement shall
not relieve or otherwise impair the obligation of the Borrower to reimburse the
Issuing Lender under any Letter of Credit, together with interest as hereinafter
provided.
(c) Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower. Unless the
Borrower shall immediately notify the Issuing Lender that the Borrower intends
to otherwise reimburse the Issuing Lender for such drawing, the Borrower shall
be deemed to have requested that the Lenders make a Revolving Loan in the amount
of the drawing as provided in subsection (d) hereof on the related Letter of
Credit, the proceeds of which will be used to satisfy the related reimbursement
obligations. The Borrower promises to reimburse the Issuing Lender on the day of
drawing under any Letter of Credit (either with the proceeds of a Revolving Loan
obtained hereunder or otherwise) in same day funds. If the Borrower shall fail
to reimburse the Issuing Lender as provided hereinabove, the unreimbursed amount
of such drawing shall bear interest at a per annum rate equal to the Adjusted
Base Rate plus two percent (2%). The Borrower's reimbursement obligations
hereunder shall be absolute and unconditional under all
32
circumstances irrespective of any rights of setoff, counterclaim or defense to
payment the Borrower may claim or have against the Issuing Lender, the
Administrative Agent, the Lenders, the beneficiary of the Letter of Credit drawn
upon or any other Person, including without limitation any defense based on any
failure of the Borrower or any other Credit Party to receive consideration or
the legality, validity, regularity or unenforceability of the Letter of Credit.
The Issuing Lender will promptly notify the other Lenders of the amount of any
unreimbursed drawing and each Lender shall promptly pay to the Administrative
Agent for the account of the Issuing Lender in Dollars and in immediately
available funds, the amount of such Lender's Revolving Commitment Percentage of
such unreimbursed drawing. Such payment shall be made on the day such notice is
received by such Lender from the Issuing Lender if such notice is received at or
before 2:00 P.M. (Dallas, Texas time) otherwise such payment shall be made at or
before 12:00 Noon (Dallas, Texas time) on the Business Day next succeeding the
day such notice is received. If such Lender does not pay such amount to the
Issuing Lender in full upon such request, such Lender shall, on demand, pay to
the Administrative Agent for the account of the Issuing Lender interest on the
unpaid amount during the period from the date of such drawing until such Lender
pays such amount to the Issuing Lender in full at a rate per annum equal to, if
paid within two Business Days of the date that such Lender is required to make
payments of such amount pursuant to the preceding sentence, the Federal Funds
Rate and thereafter at a rate equal to the Base Rate. Each Lender's obligation
to make such payment to the Issuing Lender, and the right of the Issuing Lender
to receive the same, shall be absolute and unconditional, shall not be affected
by any circumstance whatsoever and without regard to the termination of this
Credit Agreement or the Commitments hereunder, the existence of a Default or
Event of Default or the acceleration of the obligations of the Borrower
hereunder and shall be made without any offset, abatement, withholding or
reduction whatsoever. Simultaneously with the making of each such payment by a
Lender to the Issuing Lender, such Lender shall, automatically and without any
further action on the part of the Issuing Lender or such Lender, acquire a
participation in an amount equal to such payment (excluding the portion of such
payment constituting interest owing to the Issuing Lender) in the related
unreimbursed drawing portion of the LOC Obligation and in the interest thereon
and in the related LOC Documents, and shall have a claim against the Borrower
with respect thereto.
(d) Repayment with Revolving Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan advance
to reimburse a drawing under a Letter of Credit, the Administrative Agent shall
give notice to the Lenders that a Revolving Loan has been requested or deemed
requested by the Borrower to be made in connection with a drawing under a Letter
of Credit, in which case a Revolving Loan advance comprised of Base Rate Loans
(or Eurodollar Loans to the extent the Borrower has complied with the procedures
of Section 2.2(a)(i) with respect thereto) shall be promptly made to the
Borrower by all Lenders (notwithstanding any termination of the Commitments
pursuant to Section 9.2) pro rata based on the respective Revolving Commitment
Percentages of the Lenders (determined before giving effect to any termination
of the Commitments pursuant to Section 9.2) and the proceeds thereof shall be
paid directly to the Issuing Lender for application to the respective LOC
Obligations. Each such Lender hereby irrevocably agrees to make its Revolving
Commitment Percentage of each such Revolving Loan promptly upon any such request
or deemed request in the amount, in the manner and on the date specified in the
preceding sentence notwithstanding (i) the amount of such borrowing may not
comply with the minimum amount for advances of Revolving Loans otherwise
required hereunder, (ii) whether any conditions specified in Section 5.2 are
then satisfied, (iii) whether a Default or an Event of Default then exists, (iv)
33
failure for any such request or deemed request for Revolving Loan to be made by
the time otherwise required hereunder, (v) whether the date of such borrowing is
a date on which Revolving Loans are otherwise permitted to be made hereunder or
(vi) any termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Loan
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower or any Credit Party), then each
such Lender hereby agrees that it shall forthwith purchase (as of the date such
borrowing would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase) from the
Issuing Lender such participation in the outstanding LOC Obligations as shall be
necessary to cause each such Lender to share in such LOC Obligations ratably
(based upon the respective Commitment Percentages of the Lenders (determined
before giving effect to any termination of the Commitments pursuant to Section
9.2)), provided that in the event such payment is not made on the day of
drawing, such Lender shall pay in addition to the Issuing Lender interest on the
amount of its unfunded Participation Interest at a rate equal to, if paid within
two Business Days of the date of drawing, the Federal Funds Rate, and thereafter
at the Base Rate.
(e) Designation of other Credit Parties as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit Agreement,
including without limitation Section 2.2(a)(ii) hereof, a Letter of Credit
issued hereunder may contain a statement to the effect that such Letter of
Credit is issued for the account of a Credit Party other than the Borrower,
provided that notwithstanding such statement, the Borrower shall be the actual
account party for all purposes of this Credit Agreement for such Letter of
Credit and such statement shall not affect the Borrower's reimbursement
obligations hereunder with respect to such Letter of Credit.
(f) Renewal, Extension. The renewal or extension of any Letter of
Credit shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(g) Applicability of ISP98 and UCP. Unless otherwise expressly agreed
by the Issuing Lender and the Borrower when a Letter of Credit is issued, (i)
the rules of the "International Standby Practices 1998" published by the
Institute of International Banking Law & Practice (or such later version thereof
as may be in effect at the time of issuance) shall apply to each standby Letter
of Credit, and (ii) the rules of the Uniform Customs and Practice for
Documentary Credits, as most recently published by the International Chamber of
Commerce (the "ICC") at the time of issuance (including the ICC decision
published by the Commission on Banking Technique and Practice on April 6, 1998
regarding the European single currency (euro)) shall apply to each commercial
Letter of Credit.
(h) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under this Section
2.6, the Borrower hereby agrees to protect, indemnify, pay and save the Issuing
Lender and the Lenders harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees and the allocated cost of internal counsel) that the Issuing
Lender or any Lender may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit or (B) the failure of the
Issuing Lender to honor a drawing under a Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present or future de jure
34
or de facto government or governmental authority (all such acts or omissions,
herein called "Government Acts").
(ii) As between the Borrower and the Issuing Lender, the
Borrower shall assume all risks of the acts, omissions or misuse of any Letter
of Credit by the beneficiary thereof. The Issuing Lender shall not be
responsible: (A) for the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged; (B) for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, that may prove
to be invalid or ineffective for any reason; (C) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (D) for
any loss or delay in the transmission or otherwise of any document required in
order to make a drawing under a Letter of Credit or of the proceeds thereof; and
(E) for any consequences arising from causes beyond the control of the Issuing
Lender, including, without limitation, any Government Acts. None of the above
shall affect, impair, or prevent the vesting of the Issuing Lender's rights or
powers hereunder.
(iii) In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken or omitted by
the Issuing Lender, under or in connection with any Letter of Credit or the
related certificates, if taken or omitted in good faith, shall not put such
Issuing Lender under any resulting liability to the Borrower or any other Credit
Party. It is the intention of the parties that this Credit Agreement shall be
construed and applied to protect and indemnify the Issuing Lender against any
and all risks involved in the issuance of the Letters of Credit, all of which
risks are hereby assumed by the Borrower (on behalf of itself and each of the
other Credit Parties), including, without limitation, any and all Government
Acts. The Issuing Lender shall not, in any way, be liable for any failure by the
Issuing Lender or anyone else to pay any drawing under any Letter of Credit as a
result of any Government Acts or any other cause beyond the control of the
Issuing Lender.
(iv) Nothing in this subsection (h) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (d) above. The
obligations of the Borrower under this subsection (h) shall survive the
termination of this Credit Agreement. No act or omissions of any current or
prior beneficiary of a Letter of Credit shall in any way affect or impair the
rights of the Issuing Lender to enforce any right, power or benefit under this
Credit Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (h), the Borrower shall have no obligation to indemnify the Issuing
Lender in respect of any liability incurred by the Issuing Lender (A) arising
solely out of the gross negligence or willful misconduct of the Issuing Lender,
as determined by a court of competent jurisdiction, or (B) caused by the Issuing
Lender's failure to pay under any Letter of Credit after presentation to it of a
request strictly complying with the terms and conditions of such Letter of
Credit, as determined by a court of competent jurisdiction, unless such payment
is prohibited by any law, regulation, court order or decree.
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(i) Responsibility of Issuing Lender. It is expressly understood and
agreed that the obligations of the Issuing Lender hereunder to the Lenders are
only those expressly set forth in this Credit Agreement and that the Issuing
Lender shall be entitled to assume that the conditions precedent set forth in
Section 5.2 have been satisfied unless it shall have acquired actual knowledge
that any such condition precedent has not been satisfied; provided, however,
that nothing set forth in this Section 2.6 shall be deemed to prejudice the
right of any Lender to recover from the Issuing Lender any amounts made
available by such Lender to the Issuing Lender pursuant to this Section 2.6 in
the event that it is determined by a court of competent jurisdiction that the
payment with respect to a Letter of Credit constituted gross negligence or
willful misconduct on the part of the Issuing Lender.
(j) Limitation on Obligation of the Issuing Lender. Notwithstanding
anything contained herein to the contrary, the Issuing Lender shall not be under
any obligation to issue, renew or extend any Letter of Credit if (i) any order,
judgment or decree of any Governmental Authority or arbitrator shall by its
terms purport to enjoin or restrain the Issuing Lender from issuing a Letter of
Credit, or any applicable law, rule or regulation or any request or directive
(whether or not having the force of law) from any governmental with jurisdiction
over the Issuing Lender shall prohibit, or request that the Issuing Lender
refrain from, the issuance of letters of credit generally or any such Letter of
Credit in particular, or shall impose upon the Issuing Lender with respect to
any such Letter of Credit any restriction, reserve or capital requirement (for
which the Issuing Lender is not otherwise compensated hereunder) not in effect
on the Closing Date, or shall impose upon the Issuing Lender any unreimbursed
loss, costs or expense which was not applicable on the Closing Date and which
the Issuing Lender should deem material to it in good faith, or (ii) the
issuance, renewal or extension would violate or otherwise contravene its
internal policy.
(k) Conflict with LOC Documents. In the event of any conflict between
this Credit Agreement and any LOC Document (including any letter of credit
application), this Credit Agreement shall control.
2.7 Additional Provisions relating to Swingline Loans.
The Swingline Lender may, at any time, in its sole discretion, by
written notice to the Borrower and the Lenders, demand repayment of its
Swingline Loans by way of a Revolving Loan advance, in which case the Borrower
shall be deemed to have requested a Revolving Loan advance comprised solely of
Base Rate Loans in the amount of such Swingline Loans; provided, however, that
any such demand shall be deemed to have been given one Business Day prior to the
Termination Date and on the date of the occurrence of any Event of Default
described in Section 9.1 and upon acceleration of the indebtedness hereunder and
the exercise of remedies in accordance with the provisions of Section 9.2. Each
Lender hereby irrevocably agrees to make its Revolving Commitment Percentage of
each such Revolving Loan in the amount, in the manner and on the date specified
in the preceding sentence notwithstanding (a) the amount of such borrowing may
not comply with the minimum amount for advances of Revolving Loans otherwise
required hereunder, (b) whether any conditions specified in Section 5.2 are then
satisfied, (c) whether a Default or an Event of Default then exists, (d) failure
of any such request or deemed request for Revolving Loan to be made by the time
otherwise required hereunder, (e) whether the date of such borrowing is a date
on which Revolving Loans are otherwise permitted to be made hereunder or (f) any
termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Loan
36
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower or any other Credit Party), then
each Lender hereby agrees that it shall forthwith purchase (as of the date such
borrowing would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase) from the
Swingline Lender such Participation Interests in the outstanding Swingline Loans
as shall be necessary to cause each such Lender to share in such Swingline Loans
ratably based upon its Revolving Commitment Percentage (determined before giving
effect to any termination of the Commitments pursuant to Section 3.4), provided
that (i) all interest payable on the Swingline Loans shall be for the account of
the Swingline Lender until the date as of which the respective Participation
Interest is funded and (ii) at the time any purchase of Participation Interests
pursuant to this sentence is actually made, the purchasing Lender shall be
required to pay to the Swingline Lender, to the extent not paid to the Swingline
Lender by the Borrower in accordance with the terms of Section 2.4(b), interest
on the principal amount of Participation Interests purchased for each day from
and including the day upon which such borrowing would otherwise have occurred to
but excluding the date of payment for such Participation Interests, at the rate
equal to the Federal Funds Rate.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default Rate.
Upon the occurrence, and during the continuance, of an Event of
Default, (i) the principal of and, to the extent permitted by law, interest on
the Loans and any other amounts owing hereunder or under the other Credit
Documents shall bear interest, payable on demand, at a per annum rate two
percent (2%) greater than the rate which would otherwise be applicable (or if no
rate is applicable, whether in respect of interest, fees or other amounts, then
the Adjusted Base Rate plus two percent (2%)) and (ii) the Standby Letter of
Credit Fee and the Trade Letter of Credit Fee shall accrue at a per annum rate
two percent (2%) greater than the rate which would otherwise be applicable.
3.2 Extension and Conversion.
The Borrower shall have the option, on any Business Day, to extend
existing Loans into a subsequent permissible Interest Period or to convert Loans
into Loans of another interest rate type; provided, however, that (i) except as
provided in Section 3.8, Eurodollar Loans may be converted into Base Rate Loans
or extended as Eurodollar Loans for new Interest Periods only on the last day of
the Interest Period applicable thereto, (ii) Eurodollar Loans may be extended,
and Base Rate Loans may be converted into Eurodollar Loans, only if the
conditions precedent set forth in Section 5.2 are satisfied on the date of
Continuation or Conversion, (iii) Loans extended as, or converted into,
Eurodollar Loans shall be subject to the terms of the definition of "Interest
Period" and shall be in such minimum amounts as provided in Section 2.2(b), and
(iv) any request for Continuation or Conversion of a Eurodollar Loan which shall
fail to specify an Interest Period shall be deemed to be a request for an
Interest Period of one month. Each such Continuation or Conversion shall be
effected by the Borrower by giving a Notice of Extension/Conversion (or
telephonic notice promptly confirmed in writing) to the office of the
Administrative Agent specified in Section 11.1, or at such other office as the
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Administrative Agent may designate in writing, prior to 11:00 A.M. (Dallas,
Texas time), on the Business Day of, in the case of the Conversion of a
Eurodollar Loan into a Base Rate Loan, and on the third Business Day prior to,
in the case of the Continuation of a Eurodollar Loan as, or Conversion of a Base
Rate Loan into, a Eurodollar Loan, the date of the proposed Continuation or
Conversion, specifying the date of the proposed Continuation or Conversion, the
Loans to be so extended or converted, the types of Loans into which such Loans
are to be converted and, if appropriate, the applicable Interest Periods with
respect thereto. Each request for Continuation or Conversion shall be
irrevocable and shall constitute a representation and warranty by the Borrower
of the matters specified in Section 5.2. In the event the Borrower fails to
request Continuation or Conversion of any Eurodollar Loan in accordance with
this Section, or any such Conversion or Continuation is not permitted or
required by this Section, then such Eurodollar Loan shall be automatically
converted into a Base Rate Loan at the end of the Interest Period applicable
thereto. The Administrative Agent shall give each Lender notice as promptly as
practicable of any such proposed Continuation or Conversion affecting any
Revolving Loan.
3.3 Prepayments.
(a) Voluntary Prepayments. The Loans may be repaid in whole or in part
without premium or penalty; provided that (i) Eurodollar Loans may be prepaid
only upon three Business Days prior written notice to the Administrative Agent
and must be accompanied by payment of any amounts owing under Section 3.12, and
(ii) partial prepayments shall be minimum principal amounts of $500,000 in the
case of Eurodollar Loans, and $500,000, in the case of Base Rate Loans, and in
integral multiples of $100,000 in excess thereof.
(b) Mandatory Prepayments.
(i) Committed Amounts. If at any time (i) the aggregate
principal amount of Obligations shall exceed the lesser of (A) the Aggregate
Revolving Committed Amount or (B) the Borrowing Base, (ii) the aggregate amount
of LOC Obligations shall exceed the LOC Committed Amount or (iii) the aggregate
principal amount of Swingline Loans shall exceed the Swingline Committed Amount,
the Borrower shall immediately make payment on the Revolving Loans, on the
Swingline Loans and/or to a cash collateral account in respect of the LOC
Obligations, in an amount sufficient to eliminate the difference.
(ii) Asset Dispositions. The Obligations shall be immediately
prepaid as hereafter provided in an amount equal to one hundred percent (100%)
of the Net Cash Proceeds received from any Asset Disposition to the extent (A)
such Net Cash Proceeds are not reinvested in the same or similar property or
assets within twelve months of the date of such Asset Disposition, and (B) the
aggregate amount of such Net Cash Proceeds not reinvested in accordance with the
foregoing clause (A) shall exceed $1 million in any fiscal year.
(iii) Debt Transactions. The Obligations shall be immediately
prepaid as hereafter provided in an amount equal to one hundred percent (100%)
of the Net Cash Proceeds received from any Debt Transaction.
(c) Application. Voluntary prepayments shall be applied as specified by
the applicable Borrower or, if not so specified, first to Base Rate Loans, then
to Eurodollar Loans in direct order of Interest Period maturities and then to a
cash collateral account to secure LOC Obligations. Mandatory prepayments shall
be applied first to Base Rate Loans, then to Eurodollar Loans in direct order of
38
Interest Period maturities and then to a cash collateral account to secure LOC
Obligations (with a corresponding reduction in the Aggregate Revolving Committed
Amount in an aggregate amount of prepayments required in respect of Asset
Dispositions and Debt Transactions under clauses (ii) and (iii) of Section
3.3(b) hereof.
3.4 Reduction and Termination of Commitments.
(a) Voluntary Reduction of Commitments. The Commitments may be
terminated or permanently reduced in whole or in part by the Borrower upon three
Business Days prior written notice to the Administrative Agent; provided that
(i) after giving effect to any voluntary reduction the aggregate amount of
Obligations shall not exceed the Aggregate Revolving Committed Amount, as
reduced, and (ii) partial reductions shall be in a minimum principal amount of
$1 million, and in integral multiples of $100,000 in excess thereof.
(b) Mandatory Reduction of Commitments. The Aggregate Revolving
Committed Amount automatically shall be permanently reduced from time to time in
an amount equal to the amount of any prepayment required by Section 3.3(b)(iii).
(c) Termination of Commitments. The Commitments shall terminate on the
Termination Date.
3.5 Fees.
(a) Commitment Fee. In consideration of the Revolving Commitments, the
Borrower agrees to pay to the Administrative Agent for the ratable benefit of
the Lenders a commitment fee (the "Commitment Fee") equal to the Applicable
Percentage per annum on the average daily unused amount of the Aggregate
Revolving Committed Amount for the applicable period. The Commitment Fee shall
be payable quarterly in arrears on the last Business Day of each March, June,
September and December for the immediately preceding quarter (or a portion
thereof). For purposes of computation of the Commitment Fee, (i) Swingline Loans
shall not be counted toward or considered usage of the Aggregate Revolving
Committed Amount and (ii) LOC Obligations shall be counted toward and considered
usage of the Aggregate Revolving Committed Amount.
(b) Letter of Credit Fees.
(i) Standby Letter of Credit Issuance Fee. In consideration of
the issuance of standby Letters of Credit, the Borrower promises to pay to the
Administrative Agent for the account of each Lender a fee (the "Standby Letter
of Credit Fee") on such Lender's Revolving Commitment Percentage of the average
daily maximum amount available to be drawn under each such standby Letter of
Credit computed at a per annum rate for each day from the date of issuance to
the date of expiration equal to the Applicable Percentage. The Standby Letter of
Credit Fee shall be payable quarterly in arrears on the last Business Day of
each March, June, September and December for the immediately preceding quarter
(or a portion thereof).
(ii) Trade Letter of Credit Issuance Fee. In consideration of
the issuance of trade Letters of Credit, the Borrower promises to pay to the
Administrative Agent for the account of each Lender a fee (the "Trade Letter of
Credit Fee") on the issuance of each trade Letter of Credit equal to the
Applicable Percentage of the maximum amount available to be drawn under each
such trade Letter of Credit, but not less than $100 in each instance. The Trade
Letter of Credit Fee shall be payable to the Administrative Agent on the date of
39
issuance and then, in turn, by the Administrative Agent to the Lenders quarterly
in arrears on the last Business Day of each March, June, September and December
for the immediately preceding quarter (or a portion thereof) and on the
Termination Date.
(iii) Issuing Lender Fees. In addition to the Standby Letter
of Credit Fee and the Trade Letter of Credit Fee, the Borrower promises to pay
to the Issuing Lender without sharing by the other Lenders (i) a standby Letter
of Credit fronting fee (the "Standby Issuing Lender Fee") of one-eighth of one
percent (0.125%) on the average daily maximum amount available to be drawn under
each standby Letter of Credit computed at a per annum rate for each day from the
date of issuance to the date of expiration, (ii) a trade Letter of Credit
fronting fee (the "Trade Issuing Lender Fee") of one-eighth of one percent
(0.125%) of the maximum amount available to be drawn under each trade Letter of
Credit, and (iii) the customary charges from time to time of the Issuing Lender
with respect to the issuance, amendment, transfer, administration, cancellation
and conversion of, and drawings under, the Letters of Credit. The Standby
Issuing Lender Fee shall be payable quarterly in arrears on the last Business
Day of each March, June, September and December for the immediately preceding
quarter (or portion thereof) and on the Termination Date. The Trade Issuing
Lender Fee shall be payable on the date of issuance of each trade Letter of
Credit.
(c) Administrative Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, the fees referred to in the
Administrative Agent's Fee Letter.
3.6 Capital Adequacy.
If any Lender has determined, after the date hereof, that the adoption
or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's (including, for purposes hereof, the parent company of
such Lender) capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy), then,
upon notice from such Lender to the Borrower, the Borrower shall be obligated to
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction. Each determination by any such Lender of amounts
owing under this Section shall, absent manifest error, be conclusive and binding
on the parties hereto.
3.7 Limitation on Eurodollar Loans.
If on or prior to the first day of any Interest Period for any
Eurodollar Loan:
(a) the Administrative Agent determines (which determination
shall be conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
40
(b) the Required Lenders determine (which determination shall
be conclusive) and notify the Administrative Agent that the Eurodollar Rate will
not adequately and fairly reflect the cost to the Lenders of funding Eurodollar
Loans for such Interest Period;
then the Administrative Agent shall give the Borrower prompt notice thereof, and
so long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Eurodollar Loans, Continue Eurodollar Loans, or to
Convert Base Rate Loans into Eurodollar Loans with respect to the affected
currency.
3.8 Illegality.
Notwithstanding any other provision of this Credit Agreement, in the
event that it becomes unlawful for any Lender (or its Applicable Lending Office)
to make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable).
3.9 Requirements of Law.
If, after the date hereof, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:
(a) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any Eurodollar Loans,
its Notes, or its obligation to make Eurodollar Loans, or change the basis of
taxation of any amounts payable to such Lender (or its Applicable Lending
Office) under this Credit Agreement or its Notes in respect of any Eurodollar
Loans (other than taxes imposed on the overall net income of such Lender by the
jurisdiction in which such Lender has its principal office or such Applicable
Lending Office);
(b) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the Eurodollar
Reserve Requirement utilized in the determination of the Eurodollar Rate)
relating to any extensions of credit or other assets of, or any deposits with or
other liabilities or commitments of, such Lender (or its Applicable Lending
Office), including the Commitment of such Lender hereunder; or
(c) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting this Credit
Agreement or its Notes or any of such extensions of credit or liabilities or
commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
41
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.9, the Borrower may, by notice to such Lender
(with a copy to the Administrative Agent), suspend the obligation of such Lender
to make or Continue Eurodollar Loans, or to Convert Base Rate Loans into
Eurodollar Loans, until the event or condition giving rise to such request
ceases to be in effect (in which case the provisions of Section 3.10 shall be
applicable); provided that such suspension shall not affect the right of such
Lender to receive the compensation so requested. Each Lender shall promptly
notify the Borrower and the Administrative Agent of any event of which it has
knowledge, occurring after the date hereof, which will entitle such Lender to
compensation pursuant to this Section 3.9 and will designate a different
Applicable Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Lender,
be otherwise disadvantageous to it. Any Lender claiming compensation under this
Section 3.9 shall furnish to the Borrower and the Administrative Agent a
statement setting forth the additional amount or amounts to be paid to it
hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
3.10 Treatment of Affected Loans.
If the obligation of any Lender to make any Eurodollar Loan or to
Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of then
current Interest Period(s) for such Eurodollar Loans (or, in the case of a
Conversion required by Section 3.8 hereof, on such earlier date as such Lender
may specify to the Borrower with a copy to the Administrative Agent) and, unless
and until such Lender gives notice as provided below that the circumstances
specified in Section 3.8 or 3.9 hereof that gave rise to such Conversion no
longer exist:
(a) to the extent that such Lender's Eurodollar Loans have
been so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Eurodollar Loans shall be applied instead
to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by
such Lender as Eurodollar Loans shall be made or Continued instead as Base Rate
Loans, and all Base Rate Loans of such Lender that would otherwise be Converted
into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 3.8 or 3.9 hereof that gave
rise to the Conversion of such Lender's Eurodollar Loans pursuant to this
Section 3.10 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding Eurodollar Loans and by
such Lender are held pro rata (as to principal amounts, interest rate basis, and
Interest Periods) in accordance with their respective Commitments.
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3.11 Taxes.
(a) Any and all payments by any Credit Party to or for the account of
any Lender or the Administrative Agent hereunder or under any other Credit
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Administrative Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Lender (or its Applicable Lending Office) or the Administrative Agent (as the
case may be) is organized or any political subdivision thereof (all such
non-excluded taxes, duties, levies, imposts, deductions, charges, withholdings,
and liabilities being hereinafter referred to as "Taxes"). If any Credit Party
shall be required by law to deduct or withhold any Taxes from or in respect of
any sum payable under this Credit Agreement or any other Credit Document to any
Lender or the Administrative Agent, (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 3.11) such Lender or the Administrative Agent receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) such Credit Party shall make such deductions and withholdings, (iii) such
Credit Party shall pay the full amount deducted or withheld to the relevant
taxation authority or other authority in accordance with applicable law, and
(iv) such Credit Party shall furnish to the Administrative Agent, at its address
referred to in Section 11.1, the original or a certified copy of a receipt
evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this Credit
Agreement or any other Credit Document or from the execution or delivery of, or
otherwise with respect to, this Credit Agreement or any other Credit Document
(hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 3.11) paid by such Lender or such
Administrative Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect thereto.
(d) Each Lender that is not a United States person under Section
7701(a)(30) of the Internal Revenue Code, on or prior to the date of its
execution and delivery of this Credit Agreement in the case of each Lender
listed on the signature pages hereof and on or prior to the date on which it
becomes a Lender in the case of each other Lender, and from time to time
thereafter if requested in writing by the Borrower or the Administrative Agent
(but only so long as such Lender remains lawfully able to do so), shall provide
the Borrower and the Administrative Agent with (i) Internal Revenue Service Form
W-8 BEN or W-8 ECI, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a party which reduces
to zero the rate of withholding tax on payments of interest or certifying that
the income receivable pursuant to this Credit Agreement is effectively connected
with the conduct of a trade or business in the United States, (ii) Internal
Revenue Service Form W-8 or W-9, as appropriate, or any successor form
43
prescribed by the Internal Revenue Service, and/or (iii) any other form or
certificate required by any taxing authority (including any certificate required
by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying that
such Lender is entitled to an exemption from tax on payments pursuant to this
Credit Agreement or any of the other Credit Documents.
(e) For any period with respect to which a Lender has failed to provide
the Borrower and the Administrative Agent with the appropriate form pursuant to
Section 3.11(d) (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to indemnification
under Section 3.11(a) or 3.11(b) with respect to Taxes imposed by the United
States; provided, however, that should a Lender, which is otherwise exempt from
or subject to a reduced rate of withholding tax, become subject to Taxes because
of its failure to deliver a form required hereunder, the Borrower shall take
such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
(f) If any Credit Party is required to pay additional amounts to or for
the account of any Lender pursuant to this Section 3.11, then such Lender will
agree to use reasonable efforts to change the jurisdiction of its Applicable
Lending Office so as to eliminate or reduce any such additional payment which
may thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.
(g) Within thirty days after the date of any payment of Taxes, the
applicable Credit Party shall furnish to the Administrative Agent the original
or a certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit Parties
contained in this Section 3.11 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.
3.12 Funding Losses.
Upon demand of any Lender (with a copy to the Administrative Agent) from time to
time, the Borrower shall promptly compensate such Lender for and hold such
Lender harmless from any loss, cost or expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or
(b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing. For purposes of calculating amounts
payable by the Borrower to the Lenders under this Section 3.12, each Lender
shall be deemed to have funded each Eurodollar Loan made by it at the Interbank
44
Offered Rate for such Loan by a matching deposit or other borrowing in the
applicable offshore Dollar interbank market for a comparable amount and for a
comparable period, whether or not such Eurodollar Loan was in fact so funded.
3.13 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Loans. Each Revolving Loan advance, each payment or prepayment of
principal of any Revolving Loan (other than Swingline Loans) or reimbursement
obligations arising from drawings under Letters of Credit, each payment of
interest on any Revolving Loan, and each payment of interest thereon, each
payment of the Commitment Fee, each payment of the Letter of Credit Fee, each
reduction of Aggregate Revolving Committed Amount, and each conversion or
extension of Revolving Loan shall be allocated pro rata among the Lenders
according to the respective Revolving Commitment Percentages of the Lenders.
(b) Advances.
(i) No Lender shall be responsible for the failure or delay by any
other Lender in its obligation to make its ratable share of a borrowing
hereunder; provided, however, that the failure of any Lender to fulfill its
obligations hereunder shall not relieve any other Lender of its obligations
hereunder.
(ii) Unless the Borrower or any Lender has notified the Administrative
Agent prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:
(A) if the Borrower failed to make such payment, each Lender
shall forthwith on demand repay to the Administrative Agent the portion of such
assumed payment that was made available to such Lender in immediately available
funds, together with interest thereon in respect of each day from and including
the date such amount was made available by the Administrative Agent to such
Lender to the date such amount is repaid to the Administrative Agent in
immediately available funds, at the Federal Funds Rate from time to time in
effect; and
(B) if any Lender failed to make such payment, such Lender
shall forthwith on demand pay to the Administrative Agent the amount thereof in
immediately available funds, together with interest thereon for the period from
the date such amount was made available by the Administrative Agent to the
Borrower to the date such amount is recovered by the Administrative Agent (the
"Compensation Period") at a rate per annum equal to the Federal Funds Rate from
time to time in effect. If such Lender does not pay such amount forthwith upon
the Administrative Agent's demand therefor, the Administrative Agent may make a
demand therefor upon the Borrower, and the Borrower shall pay such amount to the
Administrative Agent, together with interest thereon for the Compensation Period
at a rate per annum equal to the rate of interest applicable to the applicable
Borrowing.
Nothing herein shall be deemed to relieve any Lender from its obligation to
fulfill its Commitment or to prejudice any rights that the Administrative Agent
or the Borrower may have against any Lender as a result of any default by such
45
Lender hereunder. A notice of the Administrative Agent to any Lender with
respect to any amount owing under this subsection (d) shall be conclusive,
absent manifest error.
3.14 Sharing of Payments.
(a) Lenders. The Lenders agree that, in the event that any Lender shall
obtain payment in respect of any Revolving Loan, LOC Obligation or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of the Bankruptcy Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall promptly purchase from the other
Lenders a participation in such Revolving Loan, LOC Obligation and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all the Lenders share such payment in
accordance with the respective Revolving Commitment Percentages of the Lenders,
as provided for in this Credit Agreement. The Lenders further agree that if
payment to any such Lender obtained by such Lender through the exercise of a
right of setoff, banker's lien, counterclaim or other event as aforesaid shall
be rescinded or must otherwise be restored, each Lender which shall have shared
the benefit of such payment shall, by repurchase of a participation theretofore
sold, return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each such Lender whose payment shall
have been rescinded or otherwise restored. The Borrower agrees that any Lender
so purchasing such a participation may, to the fullest extent permitted by law,
exercise all rights of payment, including setoff, banker's lien or counterclaim,
with respect to such participation as fully as if such Lender were a holder of
such Revolving Loan, LOC Obligation or other obligation in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section 3.14 applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders under this Section 3.14 to share in the benefits of any recovery
on such secured claim.
(b) Lenders and Administrative Agent. Except as otherwise expressly
provided in this Credit Agreement, if any Lender or the Administrative Agent
shall fail to remit to the Administrative Agent or any other Lender an amount
payable by such Lender or the Administrative Agent to the Administrative Agent
or such other Lender pursuant to this Credit Agreement on the date when such
amount is due, such payments shall be made together with interest thereon for
each date from the date such amount is due until the date such amount is paid to
the Administrative Agent or such other Lender at a rate per annum equal to the
Federal Funds Rate.
3.15 Payments, Computations, Etc.
(a) Generally. Except as otherwise specifically provided herein, all
payments shall be made to the Administrative Agent in Dollars in immediately
available funds, and shall be made without condition or deduction for any
counterclaim, defense, recoupment or setoff, at the Administrative Agent's
office specified in Section 11.1 not later than 2:00 P.M. (Dallas, Texas time).
Payments received after such time shall be deemed to have been received on the
next succeeding Business Day. The Administrative Agent may (but shall not be
46
obligated to) debit the amount of any such payment which is not made by such
time to any ordinary deposit account of the Borrower maintained with such
Administrative Agent (with notice to the Borrower). The Borrower shall, at the
time it makes any payment under this Credit Agreement, specify to the
Administrative Agent the Loans, LOC Obligations, Fees, interest or other amounts
payable by the Borrower hereunder to which such payment is to be applied (and in
the event that it fails so to specify, or if such application would be
inconsistent with the terms hereof, the Administrative Agent shall distribute
such payment to the Lenders in such manner as the Administrative Agent may
determine to be appropriate in respect of obligations owing by the Borrower
hereunder, subject to the terms of Section 3.14(a) and Section 3.15(b)). The
Administrative Agent will distribute such payments to the Lenders if any such
payment is received prior to 12:00 Noon (Dallas, Texas time or London time, as
appropriate) on a Business Day in like funds as received prior to the end of
such Business Day and otherwise such Administrative Agent will distribute such
payment to the Lenders entitled thereto on the next succeeding Business Day.
Whenever any payment hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day (subject to accrual of interest and Fees for the period of such
extension). Except as expressly provided otherwise herein, all computations of
interest and fees shall be made on the basis of the actual number of days
elapsed over a year of 360 days, except with respect to computation of interest
on Base Rate Loans determined by reference to the Prime Rate which shall be
calculated based on a year of 365 or 366 days, as appropriate. Interest shall
accrue from and include the date of borrowing, but exclude the date of payment.
(b) Allocation of Payments After Event of Default. Notwithstanding any
other provisions of this Credit Agreement to the contrary, after the occurrence
and during the continuance of an Event of Default, all amounts collected or
received on or in respect of the Obligations (or other amounts owing under the
Credit Documents in connection therewith) shall be paid over or delivered as
follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees and the
allocated cost of internal counsel) of the Collateral Agent incurred in
connection with the execution of its duties as collateral agent in exercising or
attempting to exercise rights and remedies in respect of the collateral and all
protective advances made with respect thereto;
SECOND, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees and the
allocated cost of internal counsel) of the Administrative Agent in connection
with enforcing the rights and remedies of the Lenders under the Credit Documents
and any protective advances made with respect thereto;
THIRD, to payment of any fees owed to the Administrative
Agent;
FOURTH, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation, reasonable attorneys' fees and the
allocated cost of internal counsel) of each of the Lenders hereunder in
connection with enforcing its rights under the Credit Documents or otherwise
with respect to the Obligations owing to such Lender;
FIFTH, to the payment of all accrued interest and fees on or
in respect of the Obligations;
47
SIXTH, to the payment of the outstanding principal amount of
the Obligations (including the payment or cash collateralization of the
outstanding LOC Obligations);
SEVENTH, to all other Obligations and other obligations which
shall have become due and payable under the Credit Documents otherwise and not
repaid pursuant to clauses "FIRST" through "SIXTH" above; and
EIGHTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to the next
succeeding category; and (ii) except as otherwise provided, the Lenders shall
receive amounts ratably in accordance with their respective pro rata share
(based on the proportion that then outstanding Obligations held by such Lenders
bears to the aggregate amount of Obligations then outstanding) of amounts
available to be applied pursuant to clauses "FOURTH", "FIFTH", "SIXTH" and
"SEVENTH" above; and (iii) to the extent that any amounts available for
distribution pursuant to clause "SIXTH" above are attributable to the issued but
undrawn amount of outstanding Letters of Credit, such amounts shall be held by
the Administrative Agent in a cash collateral account and applied (A) first, to
reimburse the Issuing Lender for any drawings under such Letters of Credit and
(B) then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "FIFTH" and "SIXTH" above in the
manner provided in this Section 3.15(b).
3.16 Evidence of Debt.
(a) Each Lender shall maintain an account or accounts evidencing each
Revolving Loan made by such Lender to the Borrower from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time under this Credit Agreement. Each Lender will make reasonable efforts to
maintain the accuracy of its account or accounts and to promptly update its
account or accounts from time to time, as necessary.
(b) The Administrative Agent shall maintain the Register pursuant to
Section 11.3(c)(i), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (A) the amount, type and Interest
Period of each such Revolving Loan hereunder, (B) the amount of any principal or
interest due and payable or to become due and payable to each Lender hereunder
and (C) the amount of any sum received by the Administrative Agent hereunder
from or for the account of the Borrower and each Lender's share thereof. The
Administrative Agent will make reasonable efforts to maintain the accuracy of
the subaccounts referred to in the preceding sentence and to promptly update
such subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if consistent
with the entries of the Administrative Agent, subsection (a)) shall be prima
facie evidence of the existence and amounts of the obligations of the Credit
Parties therein recorded; provided, however, that the failure of any Lender or
the Administrative Agent to maintain any such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner affect
the obligation of the Credit Parties to repay the Obligations and other amounts
owing hereunder to such Lender.
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SECTION 4
GUARANTY
4.1 The Guaranty.
(a) Each of the Guarantors hereby jointly and severally guarantees to
the Administrative Agent and to each of the holders of Guaranteed Obligations,
as hereinafter provided, as primary obligor and not as surety, the prompt
payment of the Guaranteed Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof.
The Guarantors hereby further agree that if any of the Guaranteed Obligations
are not paid in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or
otherwise), the Guarantors will, jointly and severally, promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) in accordance with the terms of such extension or renewal.
(b) Notwithstanding any provision to the contrary contained herein or
in any other of the Credit Documents or Hedging Agreements, to the extent the
obligations of a Guarantor shall be adjudicated to be invalid or unenforceable
for any reason (including, without limitation, because of any applicable state,
provincial or federal law relating to fraudulent conveyances or transfers or the
granting of financial assistance) then the obligations of each Guarantor under
this Credit Agreement and the other Credit Documents shall be limited to the
maximum amount that is permissible under applicable law (whether federal, state
or provincial and including, without limitation, the Bankruptcy Code). In such
case or otherwise at the request of the Administrative Agent, each Credit Party
shall take such action and shall execute and deliver all such further documents
required by the Administrative Agent to cause the obligations of such Guarantor
to be enforceable to the extent required by this Agreement.
4.2 Obligations Unconditional.
The obligations of the Guarantors under Section 4.1 are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor for amounts paid under this Section 4 until
such time as the holders of the Guaranteed Obligations have been paid in full in
respect of all Guaranteed Obligations, all Commitments under this Credit
Agreement have been terminated and no Person or Governmental Authority shall
have any right to request any return or reimbursement of funds from the Lenders
in connection with monies received under the Credit Documents or Hedging
49
Agreements between any member of the Consolidated Group and any Lender, or any
Affiliate of a Lender. Without limiting the generality of the foregoing, it is
agreed that, to the fullest extent permitted by law, the occurrence of any one
or more of the following shall not alter or impair the liability of any
Guarantor hereunder which shall remain absolute and unconditional as described
above:
(a) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;
(b) any of the acts mentioned in any of the provisions of any
of the Credit Documents, any Hedging Agreement between any member of the
Consolidated Group and any Lender or any Affiliate of a Lender, or any other
agreement or instrument referred to in the Credit Documents or such Hedging
Agreements shall be done or omitted;
(c) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the Credit
Documents, any Hedging Agreement between any member of the Consolidated Group
and any Lender or any Affiliate of a Lender, or any other agreement or
instrument referred to in the Credit Documents or such Hedging Agreements shall
be waived or any other guarantee of any of the Guaranteed Obligations or any
security therefor shall be released, impaired or exchanged in whole or in part
or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Administrative
Agent or any Lender or Lenders as security for any of the Guaranteed Obligations
shall fail to attach or be perfected; or
(e) any of the Guaranteed Obligations shall be determined to
be void or voidable (including, without limitation, for the benefit of any
creditor of any Guarantor) or shall be subordinated to the claims of any Person
(including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Administrative Agent or any Lender
exhaust any right, power or remedy or proceed against any Person under any of
the Credit Documents, any Hedging Agreement between any member of the
Consolidated Group and any Lender, or any Affiliate of a Lender, or any other
agreement or instrument referred to in the Credit Documents or such Hedging
Agreements, or against any other Person under any other guarantee of, or
security for, any of the Guaranteed Obligations.
4.3 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Guaranteed Obligations is rescinded
or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, reasonable fees and expenses of
50
counsel) incurred by the Administrative Agent or such Lender in connection with
such rescission or restoration, including any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
4.4 Certain Additional Waivers.
Each Guarantor agrees that such Guarantor shall have no right of
recourse to security for the Guaranteed Obligations, except through the exercise
of rights of subrogation pursuant to Section 4.2 and through the exercise of
rights of contribution pursuant to Section 4.6.
4.5 Remedies.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, the Guaranteed Obligations may be declared to be
forthwith due and payable as provided in Section 9.2 (and shall be deemed to
have become automatically due and payable in the circumstances provided in said
Section 9.2) for purposes of Section 4.1 notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing the Guaranteed
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Guaranteed Obligations
being deemed to have become automatically due and payable), the Guaranteed
Obligations (whether or not due and payable by any other Person) shall forthwith
become due and payable by the Guarantors for purposes of Section 4.1. The
Guarantors acknowledge and agree that their obligations hereunder are secured in
accordance with the terms of the Collateral Documents and that the Lenders may
exercise their remedies thereunder in accordance with the terms thereof.
4.6 Rights of Contribution.
The Guarantors hereby agree, as among themselves, that if any Guarantor
shall become an Excess Funding Guarantor (as defined below), each other
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the
succeeding provisions of this Section 4.6), pay to such Excess Funding Guarantor
an amount equal to such Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Guarantor) of such Excess Payment
(as defined below). The payment obligation of any Guarantor to any Excess
Funding Guarantor under this Section 4.6 shall be subordinate and subject in
right of payment to the prior payment in full of the obligations of such
Guarantor under the other provisions of this Section 4, and such Excess Funding
Guarantor shall not exercise any right or remedy with respect to such excess
until payment and satisfaction in full of all of such obligations. For purposes
hereof, (a) "Excess Funding Guarantor" shall mean, in respect of any obligations
arising under the other provisions of this Section 4 (hereafter, the "Guarantied
Obligations"), a Guarantor that has paid an amount in excess of its Pro Rata
Share of the Guarantied Obligations; (b) "Excess Payment" shall mean, in respect
of any Guarantied Obligations, the amount paid by an Excess Funding Guarantor in
excess of its Pro Rata Share of such Guarantied Obligations; and (c) "Pro Rata
Share", for the purposes of this Section 4.6, shall mean, for any Guarantor, the
ratio (expressed as a percentage) of (i) the amount by which the aggregate
present fair saleable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
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obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair saleable value of all assets and other properties of the
Borrower and all of the Guarantors exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Borrower and the Guarantors
hereunder) of the Borrower and all of the Guarantors, all as of the Closing Date
(if any Guarantor becomes a party hereto subsequent to the Closing Date, then
for the purposes of this Section 4.6 such subsequent Guarantor shall be deemed
to have been a Guarantor as of the Closing Date and the information pertaining
to, and only pertaining to, such Guarantor as of the date such Guarantor became
a Guarantor shall be deemed true as of the Closing Date).
4.7 Guarantee of Payment; Continuing Guarantee.
The guarantee in this Section 4 is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Guaranteed
Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement and
to make the initial Extensions of Credit shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) Executed Credit Documents. Receipt by the Administrative Agent of:
(i) multiple counterparts of this Credit Agreement, (ii) a Revolving Note for
each Lender (iii) a Swingline Note for the Swingline Lender and (iv) multiple
counterparts of the Collateral Documents, in each case executed by a duly
authorized officer of each party thereto and in each case conforming to the
requirements of this Credit Agreement.
(b) Legal Opinions. Receipt by the Administrative Agent of multiple
counterparts of opinions of counsel for the Credit Parties relating to the
Credit Documents and the transactions contemplated therein, in form and
substance satisfactory to the Administrative Agent and the Lenders, and
including, among other things, opinions regarding enforceability of the Credit
Documents and the perfection of the security interests created thereby.
(c) Financial Information. Receipt by the Lenders of such financial
information regarding the members of the Consolidated Group as may be requested
by, and in each case in form and substance satisfactory to, the Administrative
Agent and the Lenders.
(d) Personal Property Collateral. Receipt by the Administrative Agent
of the following:
(i) UCC Financing Statements. Duly executed UCC financing
statements for each jurisdiction as is necessary or appropriate, in the
Administrative Agent's discretion, to perfect the security interests in the
Collateral.
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(ii) Certificated Interests. Original certificates evidencing
the Capital Stock which is the subject of the Pledge Agreement, together with
undated stock transfer powers executed in blank.
(iii) Intellectual Property. Such patent, trademark and
copyright notices and filings as necessary or appropriate, in the Administrative
Agent's discretion, to perfect the security interests in Intellectual Property.
(iv) Landlord Consents. Landlord consents, estoppel letters or
consents and waivers in respect of Collateral held on leased premises as
reasonably required by the Administrative Agent.
(e) Absence of Legal Proceedings. There shall not exist any action,
suit, investigation or proceeding pending in any court or before any arbitrator
or Governmental Authority which could reasonably be expected to have a Material
Adverse Effect.
(f) Corporate Documents. Receipt by the Administrative Agent of the
following (or the equivalent) for each of the Credit Parties:
(i) Charter Documents. Copies of the articles or certificates
of incorporation or other charter documents of such Credit Party certified to be
true and complete as of a recent date by the appropriate Governmental Authority
of the state or other jurisdiction of its incorporation and certified by a
secretary or assistant secretary of such Credit Party to be true and correct as
of the Closing Date.
(ii) Bylaws. A copy of the bylaws, operating agreement or
equivalent of such Credit Party certified by a secretary or assistant secretary
of such Credit Party to be true and correct and in force and effect as of the
Closing Date.
(iii) Resolutions. Copies of resolutions of the board of
directors of such Credit Party approving and adopting the Credit Documents to
which it is a party, the transactions contemplated therein and authorizing
execution and delivery thereof, certified by a secretary or assistant secretary
of such Credit Party to be true and correct and in force and effect as of the
Closing Date.
(iv) Good Standing. (A) certificates of good standing,
existence or its equivalent certified as of a recent date by the appropriate
governmental authorities of the state of incorporation and each other state in
which the failure to so qualify and be in good standing would be reasonably
likely to have a material adverse effect on the business or operations in such
state and (B) certificates indicating payment of all corporate franchise taxes
certified as of a recent date by the appropriate governmental taxing authorities
of the state of incorporation and each other state in which the failure to pay
corporate franchise taxes would be reasonably likely to have a material adverse
effect on the business and operations in such state.
(v) Secretary's Certificate. A secretary's certificate for
each of the Credit Parties dated as of the Closing Date substantially in the
form of Schedule 5.1(f)(v) with appropriate insertions and attachments.
(g) Evidence of Insurance. Receipt by the Administrative Agent of
copies of insurance policies or certificates of insurance of the members of the
Consolidated Group evidencing liability and casualty insurance meeting the
53
requirements set forth in the Credit Documents, including, but not limited to,
naming the Administrative Agent as additional insured (in the case of liability
insurance) or sole loss payee (in the case of hazard insurance) on behalf of the
Lenders.
(h) Priority of Liens. The Administrative Agent shall have received
satisfactory evidence that (i) the Administrative Agent, on behalf of the
Lenders, holds a perfected, first priority Lien on all Collateral and (ii) none
of the Collateral is subject to any Liens other than Permitted Liens.
(i) Officer's Certificates. The Administrative Agent shall have
received a certificate or certificates executed by an Executive Officer of the
Borrower as of the Closing Date, in form and substance satisfactory to the
Administrative Agent, stating that (A) each Credit Party is in compliance with
all existing financial obligations, (B) all governmental, shareholder and third
party consents and approvals, if any, with respect to the Credit Documents and
the transactions contemplated thereby have been obtained and are in full force
and effect, and all applicable waiting periods shall have expired without any
action that could have a Material Adverse Effect on the transactions
contemplated hereby being taken by any authority, (C) no action, suit,
investigation or proceeding is pending or threatened in any court or before any
arbitrator or governmental instrumentality that purports to affect any Credit
Party or any transaction contemplated by the Credit Documents, if such action,
suit, investigation or proceeding could have a Material Adverse Effect, and no
order, decree, judgment, ruling or injunction restrains the consummation of the
transactions contemplated in the Credit Documents, and (D) immediately after
giving effect to the initial Loans made and Letters of Credit issued on the
Closing Date, (1) no Default or Event of Default exists, (2) all representations
and warranties contained herein and in the other Credit Documents are true and
correct in all material respects and (3) the Credit Parties are in pro forma
compliance with each of the financial covenants set forth in Section 7.11
(assuming for purposes hereof that such financial covenants were measured as of,
and for the twelve-month period ending on, such date).
(j) Opening Borrowing Base Report. Receipt by the Administrative Agent
of a Borrowing Base Certificate as of March 31, 2001 after giving effect to the
transactions contemplated herein, substantially in the form of Schedule 7.1(d)
and certified by an Executive Officer of the Borrower to be true and correct as
of the Closing Date.
(k) Corporate Structure. Receipt by the Administrative Agent of the
corporate capital and ownership structure of the members of the Consolidated
Group.
(l) Fees and Expenses. Payment by the Credit Parties of all fees and
expenses owed by them to the Lenders and the Administrative Agent, including,
without limitation, payment to the Administrative Agent of the fees set forth in
the Administrative Agent's Fee Letter.
5.2 Conditions to all Extensions of Credit.
The obligation of each Lender to make any Extension of Credit hereunder
(including the initial Extension of Credit to be made hereunder) is subject to
the satisfaction of the following conditions precedent on the date of making
such Extension of Credit:
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(a) Representations and Warranties. The representations and warranties
made by the Credit Parties herein and in the other Credit Documents and which
are contained in any certificate furnished at any time under or in connection
herewith shall be true and correct in all material respects on and as of the
date of such Extension of Credit as if made on and as of such date (except for
those which expressly relate to an earlier date).
(b) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date or after giving effect to the
Extension of Credit to be made on such date unless such Default or Event of
Default shall have been waived in accordance with this Credit Agreement.
(c) Other Conditions. The Borrower shall have satisfied the conditions
set forth in Section 2 and, in the case of Continuations and Conversions,
Section 3.2.
Each request for an Extension of Credit (including Continuations and
Conversions) and each acceptance by the Borrower of an Extension of Credit
(including Continuations and Conversions) shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in this Section 5.2 have been satisfied.
SECTION 6
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Credit Agreement and to make
the Extensions of Credit hereunder, each of the Credit Parties hereby represents
and warrants to the Administrative Agent and to each Lender that:
6.1 Financial Condition.
Each of the financial statements described below (copies of which have
heretofore been provided to the Administrative Agent for distribution to the
Lenders) have been prepared in accordance with GAAP consistently applied
throughout the periods covered thereby, are complete and correct in all material
respects and present fairly the financial condition (including disclosure of all
material liabilities, contingent or otherwise) and results from operations of
the entities and for the periods specified, subject in the case of interim
company-prepared statements to normal year-end adjustments and the absence of
footnotes:
(a) the audited consolidated balance sheets of the Borrower and its
consolidated subsidiaries dated as of December 31, 1998, December 31, 1999 and
December 31, 2000, together with the related audited statements of income,
stockholders' equity and cash flows for the respective fiscal year then ended,
certified by Ernst & Young LLP, certified public accountants;
(b) the unaudited, company-prepared balance sheets of the Borrower and
its consolidated subsidiaries dated as of March 31, 2001, together with the
related unaudited, company-prepared statements of income, stockholders' equity
and cash flows for the fiscal quarter then ended; and
(c) after the Closing Date, the annual and quarterly financial
statements provided in accordance with Sections 7.1(a) and (b).
55
6.2 No Changes or Restricted Payments.
Since the date of the most recent annual audited financial statements
referenced in Section 6.1(a):
(a) for the period to the Closing Date, except as previously disclosed
in writing to the Administrative Agent and the Lenders, (i) there have been no
material sales, transfers or other dispositions of any material part of the
business or property of the members of the Consolidated Group, nor have there
been any material purchases or other acquisitions of any business or property
(including the Capital Stock of any other person) by the members of the
Consolidated Group, which are not reflected in the annual audited or
company-prepared quarterly financial statements referenced in Section 6.1(a) and
(b) hereof, and (ii) no Restricted Payments have been declared or paid by
members of the Consolidated Group; and
(b) there has been no circumstance, development or event relating to or
affecting the members of the Consolidated Group which has had or could
reasonably be expected to have a Material Adverse Effect.
6.3 Organization; Existence; Compliance with Law.
Each of the members of the Consolidated Group (a) is duly organized,
validly existing in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary power
and authority, and the legal right to own and operate its Property, to lease the
Property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of Property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing would not, in the aggregate, have a Material
Adverse Effect, and (d) is in compliance with all Requirements of Law, except to
the extent that the failure to comply therewith would not, in the aggregate, be
reasonably expected to have a Material Adverse Effect.
6.4 Power; Authorization; Enforceable Obligations.
Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party and has taken all necessary corporate or other
action to authorize the execution, delivery and performance by it of the Credit
Documents to which it is a party. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with acceptance of Extensions of Credit
or the making of the guaranties hereunder or with the execution, delivery or
performance of any Credit Documents by the Credit Parties (other than those
which have been obtained, such filings as are required by the Securities and
Exchange Commission and to fulfill other reporting requirements with
Governmental Authorities) or with the validity or enforceability of any Credit
Document against the Credit Parties (except such filings as are necessary in
connection with the perfection of the Liens created by such Credit Documents).
Each Credit Document to which it is a party constitutes a legal, valid and
binding obligation of such Credit Party enforceable against such Credit Party in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
56
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
6.5 No Legal Bar.
The execution, delivery and performance of the Credit Documents, the
borrowings hereunder and the use of the Extensions of Credit will not violate
any Requirement of Law or any Contractual Obligation of any member of the
Consolidated Group (except those as to which waivers or consents have been
obtained), and will not result in, or require, the creation or imposition of any
Lien on any of its respective properties or revenues pursuant to any Requirement
of Law or Contractual Obligation other than the Liens arising under or
contemplated in connection with the Credit Documents.
6.6 No Material Litigation and Disputes.
(a) No claim, litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the best knowledge of the
Credit Parties, threatened by or against, any members of the Consolidated Group
or against any of their respective properties or revenues which (a) relate to
the Credit Documents or any of the transactions contemplated hereby or thereby
or (b) if adversely determined, would reasonably be expected to have a Material
Adverse Effect. Set forth on Schedule 6.6 is a summary of all claims,
litigation, investigations and proceedings pending or, to the best knowledge of
the Credit Parties, threatened by or against the members of the Consolidated
Group or against any of their respective properties or revenues, and none of
such actions, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect.
(b) No default exists and, to the best knowledge of the Credit Parties,
no default has been asserted, under any Contractual Obligations to which any
members of the Consolidated Group are party which individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
6.7 No Defaults.
No Default or Event of Default has occurred and is continuing.
6.8 Ownership and Operation of Property.
Each of the members of the Consolidated Group (i) has good record and
marketable title to, or a valid leasehold interest in, all its material real
property, and good title to, or a valid leasehold interest in, all its other
material property, and none of such property is subject to any Lien, except for
Permitted Liens, and (ii) has obtained all material licenses, permits,
franchises or other certifications, consents, approvals and authorizations,
governmental or private, necessary to the ownership of its Property and to the
conduct of its business.
6.9 Intellectual Property.
Each of the members of the Consolidated Group owns, or has the legal
right to use, all United States trademarks, tradenames, copyrights, patents,
technology, know-how and processes, if any, necessary for each of them to
conduct its business as currently conducted (the "Intellectual Property") except
for those the failure to own or have such legal right to use would not be
reasonably expected to have a Material Adverse Effect. Set forth on Schedule
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6.9 is a list of Intellectual Property owned and used by members of the
Consolidated Group. No claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does any Credit
Party know of any such claim, and the use of such Intellectual Property by the
members of the Consolidated Group does not infringe on the rights of any Person,
except for such claims and infringements that, in the aggregate, would not be
reasonably expected to have a Material Adverse Effect.
6.10 No Burdensome Restrictions.
No Requirement of Law or Contractual Obligation of the members of the
Consolidated Group would be reasonably expected to have a Material Adverse
Effect.
6.11 Taxes.
Each of the members of the Consolidated Group has filed or caused to be
filed all income tax returns (federal, state, local and foreign) and all other
material tax returns which are required to be filed and has paid (i) all amounts
shown therein to be due (including interest and penalties) and (ii) all other
taxes, fees, assessments and other governmental charges (including mortgage
recording taxes, documentary stamp taxes and intangibles taxes) owing, except
for such taxes which are not yet delinquent or as are being contested in good
faith by appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established unless the failure to make any such
payment could give rise to an immediate right to foreclose on a Lien securing
such amounts. No tax claim or assessment has been asserted against members of
the Consolidated Group which if adversely determined would reasonably be
expected to have a Material Adverse Effect.
6.12 ERISA.
Except as would not reasonably be expected to have a Material Adverse
Effect:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred, and, to
the best knowledge of the Credit Parties, no event or condition has occurred or
exists as a result of which any ERISA Event could reasonably be expected to
occur, with respect to any Plan; (ii) no "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the Internal
Revenue Code, whether or not waived, has occurred with respect to any Plan;
(iii) each Plan has been maintained, operated, and funded in compliance with its
own terms and in material compliance with the provisions of ERISA, the Internal
Revenue Code, and any other applicable federal or state laws; and (iv) no lien
in favor of the PBGC or a Plan has arisen or is reasonably likely to arise on
account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under each
Single Employer Plan, as of the last annual valuation date prior to the date on
which this representation is made or deemed made (determined, in each case, in
accordance with Financial Accounting Standards Board Statement 87, utilizing the
actuarial assumptions used in such Plan's most recent actuarial valuation
report), did not exceed as of such valuation date the fair market value of the
assets of such Plan.
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(c) No member of the Consolidated Group nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Credit Parties, could be reasonably
expected to incur, any withdrawal liability under ERISA to any Multiemployer
Plan or Multiple Employer Plan. No member of the Consolidated Group nor any
ERISA Affiliate would become subject to any withdrawal liability under ERISA if
any member of the Consolidated Group or any ERISA Affiliate were to withdraw
completely from all Multiemployer Plans and Multiple Employer Plans as of the
valuation date most closely preceding the date on which this representation is
made or deemed made. No member of the Consolidated Group nor any ERISA Affiliate
has received any notification that any Multiemployer Plan is in reorganization
(within the meaning of Section 4241 of ERISA), is insolvent (within the meaning
of Section 4245 of ERISA), or has been terminated (within the meaning of Title
IV of ERISA), and no Multiemployer Plan is, to the best knowledge of the Credit
Parties, reasonably expected to be in reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Internal Revenue Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected or may
subject any member of the Consolidated Group or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Internal Revenue Code, or under any agreement or other instrument pursuant
to which any member of the Consolidated Group or any ERISA Affiliate has agreed
or is required to indemnify any person against any such liability.
(e) No member of the Consolidated Group nor any ERISA Affiliates has
any material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards Board
Statement 106. Each Plan which is a welfare plan (as defined in Section 3(1) of
ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Internal
Revenue Code apply has been administered in compliance in all material respects
of such sections.
(f) Neither the execution and delivery of this Credit Agreement nor the
consummation of the financing transactions contemplated thereunder will involve
any transaction which is subject to the prohibitions of Sections 404, 406 or 407
of ERISA or in connection with which a tax could be imposed pursuant to Section
4975 of the Internal Revenue Code. The representation by the Credit Parties in
the preceding sentence is made in reliance upon and subject to the accuracy of
the Lenders' representation in Section 11.15 with respect to their source of
funds and is subject, in the event that the source of the funds used by the
Lenders in connection with this transaction is an insurance company's general
asset account, to the application of Prohibited Transaction Class Exemption
95-60, 60 Fed. Reg. 35,925 (1995), compliance with the regulations issued under
Section 401(c)(1)(A) of ERISA, or the issuance of any other prohibited
transaction exemption or similar relief, to the effect that assets in an
insurance company's general asset account do not constitute assets of an
"employee benefit plan" within the meaning of Section 3(3) of ERISA of a "plan"
within the meaning of Section 4975(e)(1) of the Internal Revenue Code.
Set forth on Schedule 6.12, to the best knowledge of the Credit Parties, is a
summary of all pending ERISA matters, and none, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
6.13 Governmental Regulations, Etc.
59
(a) No part of the proceeds of the Extensions of Credit hereunder will
be used, directly or indirectly, for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation U, or for the purpose of
purchasing or carrying or trading in any other securities. If requested by any
Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in said Regulation
U. No indebtedness being reduced or retired out of the proceeds of the
Extensions of Credit hereunder was or will be incurred for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation U or
any "margin security" within the meaning of Regulation T. "Margin stock" within
the meanings of Regulation U does not constitute more than twenty-five percent
(25%) of the value of the consolidated assets of the Borrower and its
Subsidiaries. None of the transactions contemplated by this Credit Agreement
(including, without limitation, the direct or indirect use of the proceeds of
the Loans) will violate or result in a violation of the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended, or regulations
issued pursuant thereto, or Regulation T, U or X.
(b) None of the members of the Consolidated Group is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or the Investment Company Act of 1940, each as amended. In addition,
none of the members of the Consolidated Group is (i) an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, and is not controlled by such a company, or (ii) a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(c) No director, executive officer or principal shareholder of any
member of the Consolidated Group is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with reference to any
Lender) have the respective meanings assigned thereto in Regulation O.
6.14 Subsidiaries.
Set forth on Schedule 6.14 are all the Subsidiaries of the Borrower,
including the jurisdiction of organization, classes of Capital Stock (including
options, warrants, rights of subscription, conversion and exchangeability and
other similar rights), ownership and ownership percentages thereof. The
outstanding shares of Capital Stock shown have been validly issued, fully paid
and are non-assessable and owned free of Liens other than Permitted Liens. The
outstanding shares of Capital Stock shown are not the subject of buy-sell,
voting trust or other shareholder agreement except as identified on Schedule
6.14.
6.15 Purpose of Extensions of Credit.
Extensions of Credit hereunder will be used by the Borrower solely to
(i) refinance the outstanding principal amount of existing Indebtedness, (ii)
pay fees and expenses incurred hereunder and under the other Credit Documents,
(iii) finance Acquisitions permitted hereunder and (iv) finance working capital,
capital expenditures and other corporate purposes of the Borrower.
6.16 Environmental Matters.
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Except as would not reasonably be expected to have a Material Adverse
Effect:
(a) Each of the facilities and properties owned, leased or operated by
the members of the Consolidated Group (the "Subject Properties") and all
operations at the Subject Properties are in compliance with all applicable
Environmental Laws, and there is no violation of any Environmental Law with
respect to the Subject Properties or the businesses operated by the members of
the Consolidated Group (the "Businesses"), and there are no conditions relating
to the Businesses or Subject Properties that could give rise to liability under
any applicable Environmental Laws.
(b) None of the Subject Properties contains, or has previously
contained, any Materials of Environmental Concern at, on or under the Subject
Properties in amounts or concentrations that constitute or constituted a
violation of, or could give rise to liability under, Environmental Laws.
(c) None of the members of the Consolidated Group has received any
written or verbal notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Subject Properties or the
Businesses, nor does any member of the Consolidated Group have knowledge or
reason to believe that any such notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Subject Properties, or generated, treated, stored or
disposed of at, on or under any of the Subject Properties or any other location,
in each case by or on behalf any members of the Consolidated Group in violation
of, or in a manner that would be reasonably likely to give rise to liability
under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the best knowledge of any Credit Party, threatened, under any
Environmental Law to which any member of the Consolidated Group is or will be
named as a party, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect to
any member of the Consolidated Group, the Subject Properties or the Businesses.
(f) There has been no release or, threat of release of Materials of
Environmental Concern at or from the Subject Properties, or arising from or
related to the operations (including, without limitation, disposal) of any
member of the Consolidated Group in connection with the Subject Properties or
otherwise in connection with the Businesses, in violation of or in amounts or in
a manner that could give rise to liability under Environmental Laws.
6.17 No Material Misstatements.
None of the information, reports, financial statements, exhibits or
schedules, taken as a whole, furnished by or on behalf of any member of the
Consolidated Group to the Administrative Agent or any Lender in connection with
the negotiation of the Credit Documents or included therein or delivered
pursuant thereto contained, contains or will contain any material misstatement
of fact or omitted, omits or will omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they
were, are or will be made, not materially misleading, provided that to the
61
extent any such information, report, financial statement, exhibit or schedule
was based upon or constitutes a forecast or projection, each of the Credit
Parties represents only that it acted in good faith and utilized reasonable
assumptions and due care in the preparation of such information, report,
financial statement, exhibit or schedule.
6.18 Labor Matters.
Except as would not reasonably be expected to have a Material Adverse
Effect:
(a) There are no strikes or lockouts against any members of the
Consolidated Group pending or, to the best knowledge of the Credit Parties,
threatened;
(b) The hours worked by and payments made to employees of the
Consolidated Group have not been in violation of the Fair Labor Standards Act or
any other applicable federal, state, local or foreign law dealing with such
matters in any case where a Material Adverse Effect would reasonably be expected
to occur as a result of the violation thereof;
(c) All payments due from members of the Consolidated Group, or for
which any claim may be made against a member of the Consolidated Group, on
account of wages and employee health and welfare insurance and other benefits,
have been paid or accrued as a liability on the books of the respective members
of the Consolidated Group; and
(d) None of the members of the Consolidated Group is party to a
collective bargaining agreement.
Set forth on Schedule 6.18, to the best knowledge of the Credit Parties, is a
summary of all pending labor matters, and none of such matters, individually or
in the aggregate, would reasonably be expected to have a Material Adverse
Effect.
6.19 Security Documents.
(a) Security Agreement. The Security Agreement is effective to create
in favor of the Administrative Agent, for the ratable benefit of the holders of
the Secured Obligations identified therein, a legal valid and enforceable
security interest in the Collateral identified therein owned by the Credit
Parties and, when financing statements in appropriate form are filed in the
appropriate offices for the locations specified in Schedule 2 to the Security
Agreement, the Security Agreement shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the grantors
thereunder in such Collateral that may be perfected by filing, recording or
registering a financing statement under the Uniform Commercial Code as in
effect, in each case prior and superior in right to any other Lien on any
Collateral other than Permitted Liens.
(b) Pledge Agreement. The Pledge Agreement is effective to create in
favor of the Administrative Agent, for the ratable benefit of the holders of the
Secured Obligations identified therein, a legal valid and enforceable security
interest in the Collateral identified therein and, when such Collateral is
delivered to the Administrative Agent, the Pledge Agreement shall constitute a
fully perfected first priority Lien on, and security interest in, all right,
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title and interest of the pledgors thereunder in such Collateral, in each case
prior and superior in right to any other Lien.
(c) Intellectual Property. The Security Agreement together with the
Notice of Grant of Security Interest in Trademarks and the Notice of Grant of
Security Interest in Patents filed with the United States Patent and Trademark
Office, and the Notice of Grant of Security Interest in Copyrights filed with
the United States Copyright Office will constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the grantors
thereunder in all Patents and Patent Licenses, Trademarks and Trademark Licenses
and Copyrights and Copyright Licenses (each as defined in the Security
Agreement) and in which a security interest may be perfected by filing,
recording or registration of a Notice in the United States Patent and Trademark
Office and the United States Copyright Office, in each case prior and superior
in right to any other Lien other than Permitted Liens.
6.20 Location of Real Property and Leased Premises.
Set forth on Schedule 6.20(a) is a complete and correct list of all
real property located in the United States and owned or leased by any member of
the Consolidated Group with street address and state where located. Set forth on
Schedule 6.20(b) is a list of all locations where any tangible personal property
of any member of the Consolidated Group is located, including street address and
state where located. Set forth on Schedule 6.20(c) is the chief executive office
and principal place of business of each member of the Consolidated Group.
6.21 Solvency.
Immediately after giving effect to the initial Extensions of Credit
made on the Closing Date, (i) the fair value of the assets of each Credit Party
will exceed its debts and liabilities, subordinated, contingent or otherwise;
(ii) the present fair saleable value of the property of each Credit Party will
be greater than the amount that will be required to pay the probable liability
of its debts and other liabilities, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and mature; and (iii) each
Credit Party will not have unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Closing Date.
6.22 No Other Broker's Fees.
None of the members of the Consolidated Group owes to any Person other
than the Lenders and their affiliates, or otherwise has any obligation in
respect of any finder's fees, broker's fees, investment banker's fees or other
similar fees in connection with the transactions contemplated in the Credit
Agreement and the other Credit Documents.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding or any Letter of Credit is
outstanding, and until all of the Commitments hereunder shall have terminated:
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7.1 Information Covenants.
The Credit Parties will furnish, or cause to be furnished, to the
Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, and in
any event within 120 days after the close of each fiscal year of the members of
the Consolidated Group, a consolidated and consolidating balance sheet and
income statement of the members of the Consolidated Group as of the end of such
fiscal year, together with related consolidated and consolidating statements of
operations and retained earnings and of cash flows for such fiscal year, in each
case setting forth in comparative form consolidated and consolidating figures
for the preceding fiscal year, all such financial information described above to
be in reasonable form and detail and audited by independent certified public
accountants of recognized national standing reasonably acceptable to the
Administrative Agent and whose opinion shall be to the effect that such
financial statements have been prepared in accordance with GAAP (except for
changes with which such accountants concur) and shall not be limited as to the
scope of the audit or qualified as to the status of the members of the
Consolidated Group as a going concern or any other material qualifications or
exceptions.
(b) Quarterly Financial Statements. As soon as available, and
in any event within forty-five days after the close of each fiscal quarter of
the members of the Consolidated Group (other than the fourth fiscal quarter, in
which case ninety days after the end thereof) a consolidated and consolidating
balance sheet and income statement of the members of the Consolidated Group as
of the end of such fiscal quarter, together with related consolidated and
consolidating statements of operations and retained earnings and of cash flows
for such fiscal quarter, in each case setting forth in comparative form
consolidated and consolidating figures for the corresponding period of the
preceding fiscal year, all such financial information described above to be in
reasonable form and detail and reasonably acceptable to the Administrative
Agent, and accompanied by a certificate of an Executive Officer of the Borrower
to the effect that such quarterly financial statements fairly present in all
material respects the financial condition of the members of the Consolidated
Group and have been prepared in accordance with GAAP, subject to changes
resulting from audit and normal year-end audit adjustments.
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b) above, a
certificate of an Executive Officer of the Borrower substantially in the form of
Schedule 7.1(c), (i) demonstrating compliance with the financial covenants
contained in Section 7.11 by calculation thereof as of the end of each such
fiscal period and (ii) stating that no Default or Event of Default exists, or if
any Default or Event of Default does exist, specifying the nature and extent
thereof and what action the Credit Parties propose to take with respect thereto.
(d) Borrowing Base Certificates. Within fifteen days after the
end of each fiscal quarter of the members of the Consolidated Group, a
certificate as of the end of the immediately preceding fiscal quarter,
substantially in the form of Schedule 7.1(d) and certified by an Executive
Officer of the Borrower to be true and correct as of the date thereof (a
"Borrowing Base Certificate").
(e) Annual Business Plan and Budgets. Not later than the last
day of the first calendar quarter of each year, beginning with the fiscal year
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ending December 31, 2001, an annual business plan and budget of the members of
the Consolidated Group containing, among other things, pro forma financial
statements for that fiscal year.
(f) Accountant's Certificate. Within the period for delivery
of the annual financial statements provided in Section 7.1(a), a certificate of
the accountants conducting the annual audit stating that they have reviewed this
Credit Agreement and stating further whether, in the course of their audit, they
have become aware of any Default or Event of Default and, if any such Default or
Event of Default exists, specifying the nature and extent thereof.
(g) Auditor's Reports. Promptly upon receipt thereof, a copy
of any other report or "management letter" submitted by independent accountants
to any member of the Consolidated Group in connection with any annual, interim
or special audit of the books of such Person.
(h) Reports. Promptly upon transmission or receipt thereof,
(i) copies of any filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any successor agency, and copies of all
financial statements, proxy statements, notices and reports as any member of the
Consolidated Group shall send to its shareholders or to a holder of any
Indebtedness owed by any member of the Consolidated Group in its capacity as
such a holder and (ii) upon the request of the Administrative Agent, all reports
and written information to and from the United States Environmental Protection
Agency, or any state or local agency responsible for environmental matters, the
United States Occupational Health and Safety Administration, or any state or
local agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety matters.
(i) Notices. Upon any Executive Officer of a Credit Party
obtaining knowledge thereof, the Credit Parties will give written notice to the
Administrative Agent immediately of (i) the occurrence of an event or condition
consisting of a Default or Event of Default, specifying the nature and existence
thereof and what action the Credit Parties propose to take with respect thereto,
and (ii) the occurrence of any of the following with respect to any member of
the Consolidated Group (A) the pendency or commencement of any litigation,
arbitral or governmental proceeding against such Person which if adversely
determined is likely to have a Material Adverse Effect or (B) the institution of
any proceedings against such Person with respect to, or the receipt of notice by
such Person of potential liability or responsibility for violation, or alleged
violation of any federal, state or local law, rule or regulation, including but
not limited to, Environmental Laws, the violation of which could have a Material
Adverse Effect.
(j) ERISA. Upon any Executive Officer of a Credit Party
obtaining knowledge thereof, the Credit Parties will give written notice to the
Administrative Agent promptly (and in any event within five Business Days) of:
(i) any event or condition, including, but not limited to, any Reportable Event,
that constitutes, or might reasonably lead to, an ERISA Event; (ii) with respect
to any Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against the Credit Parties or any
ERISA Affiliates, or of a determination that any Multiemployer Plan is in
reorganization or insolvent (both within the meaning of Title IV of ERISA);
(iii) the failure to make full payment on or before the due date (including
extensions) thereof of all amounts which any member of the Consolidated Group or
any ERISA Affiliate is required to contribute to each Plan pursuant to its terms
and as required to meet the minimum funding standard set forth in ERISA and the
65
Internal Revenue Code with respect thereto; or (iv) any change in the funding
status of any Plan that could have a Material Adverse Effect, together with a
description of any such event or condition or a copy of any such notice and a
statement by an Executive Officer of the Borrower briefly setting forth the
details regarding such event, condition, or notice, and the action, if any,
which has been or is being taken or is proposed to be taken by the Credit
Parties with respect thereto. Promptly upon request, the Credit Parties shall
furnish the Administrative Agent and the Lenders with such additional
information concerning any Plan as may be reasonably requested, including, but
not limited to, copies of each annual report/return (Form 5500 series), as well
as all schedules and attachments thereto required to be filed with the
Department of Labor and/or the Internal Revenue Service pursuant to ERISA and
the Internal Revenue Code, respectively, for each "plan year" (within the
meaning of Section 3(39) of ERISA).
(k) Environmental.
(i) Upon the reasonable written request of the Administrative
Agent following the occurrence of any event or the discovery of any condition
which the Administrative Agent or the Required Lenders reasonably believe has
caused (or could be reasonably expected to cause) the representations and
warranties set forth in Section 6.16 to be untrue in any material respect, the
Credit Parties will furnish or cause to be furnished to the Administrative
Agent, at the Credit Parties' expense, a report of an environmental assessment
of reasonable scope, form and depth, (including, where appropriate, invasive
soil or groundwater sampling) by a consultant reasonably acceptable to the
Administrative Agent as to the nature and extent of the presence of any
Materials of Environmental Concern on any Subject Properties (as defined in
Section 6.16) and as to the compliance by any member of the Consolidated Group
with Environmental Laws at such Subject Properties. If the Credit Parties fail
to deliver such an environmental report within seventy-five days after receipt
of such written request then the Administrative Agent may arrange for same, and
the members of the Consolidated Group hereby grant to the Administrative Agent
and their representatives access to the Subject Properties to reasonably
undertake such an assessment (including, where appropriate, invasive soil or
groundwater sampling). The reasonable cost of any assessment arranged for by the
Administrative Agent pursuant to this provision will be payable by the Credit
Parties on demand and added to the obligations secured by the Collateral
Documents.
(ii) The members of the Consolidated Group will conduct and
complete all investigations, studies, sampling, and testing and all remedial,
removal, and other actions necessary to address all Materials of Environmental
Concern on, from or affecting any of the Subject Properties to the extent
necessary to be in compliance with all Environmental Laws and with the validly
issued orders and directives of all Governmental Authorities with jurisdiction
over such Subject Properties to the extent any failure could have a Material
Adverse Effect.
(l) Additional Patents and Trademarks. At the time of delivery of the
financial statements and reports provided for in Section 7.1(a), a report signed
by an Executive Officer of the Borrower setting forth (i) a list of registration
numbers for all patents, trademarks, service marks, tradenames and copyrights
awarded to any member of the Consolidated Group since the last day of the
immediately preceding fiscal year and (ii) a list of all patent applications,
trademark applications, service xxxx applications, tradename applications and
copyright applications submitted by any member of the
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Consolidated Group since the last day of the immediately preceding fiscal year
and the status of each such application, all in such form as shall be reasonably
satisfactory to the Administrative Agent.
(m) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or financial
condition of any member of the Consolidated Group as the Administrative Agent or
the Required Lenders may reasonably request.
7.2 Preservation of Existence and Franchises.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5, each
Credit Party will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority.
7.3 Books and Records.
Each Credit Party will, and will cause each of its Subsidiaries to,
keep complete and accurate books and records of its transactions in accordance
with good accounting practices on the basis of GAAP (including the establishment
and maintenance of appropriate reserves).
7.4 Compliance with Law.
Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
Property if noncompliance with any such law, rule, regulation, order or
restriction could have a Material Adverse Effect.
7.5 Payment of Taxes and Other Indebtedness.
Each Credit Party will, and will cause each of its Subsidiaries to, pay
and discharge (a) all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent, (b) all lawful claims (including claims for
labor, materials and supplies) which, if unpaid, might give rise to a Lien upon
any of its properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that no member of the
Consolidated Group shall be required to pay any such tax, assessment, charge,
levy, claim or Indebtedness which is being contested in good faith by
appropriate proceedings for which adequate reserves determined in accordance
with GAAP have been established, unless the failure to make any such payment (i)
could give rise to an immediate right to foreclose on a Lien securing such
amounts or (ii) could have a Material Adverse Effect.
7.6 Insurance.
(a) Each Credit Party will, and will cause each of its Subsidiaries to,
at all times maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and liabilities and
with such deductibles or self-insurance retentions as are in accordance with
normal industry practice (or as otherwise required by the Collateral Documents).
The Administrative Agent shall be named as loss payee and/or additional insured
67
with respect to any such insurance providing coverage in respect of any
Collateral, and each provider of any such insurance shall agree, by endorsement
upon the policy or policies issued by it or by independent instruments furnished
to the Administrative Agent, that it will give the Administrative Agent thirty
days prior written notice before any such policy or policies shall be altered or
canceled, and that no act or default of any member of the Consolidated Group or
any other Person shall affect the rights of the Administrative Agent or the
Lenders under such policy or policies. The present insurance coverage of the
members of the Consolidated Group is outlined as to carrier, policy number,
expiration date, type and amount on Schedule 7.6.
(b) The proceeds from insurance may be held by the Administrative Agent
in a collateral account or delivered over to the applicable Credit Party, in the
discretion of the Administrative Agent. Amounts held in a collateral account
will be disbursed to the Credit Parties on evidence of repair, replacement or
reinvestment in the same or similar property.
7.7 Maintenance of Property.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and casualty and condemnation excepted, and will make, or cause to be made, in
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
7.8 Performance of Obligations.
Each Credit Party will, and will cause each of its Subsidiaries to,
perform in all material respects all of its obligations under the terms of all
material agreements, indentures, mortgages, security agreements and other debt
instruments to which it is a party or by which it is bound.
7.9 Use of Proceeds.
The Borrower will use the proceeds of Extensions of Credit solely for
the purposes set forth in Section 6.15.
7.10 Audits/Inspections.
Upon reasonable notice and during normal business hours (or, following
the occurrence and during the continuation of an Event of Default, at any time
without notice), each Credit Party will, and will cause each of its Subsidiaries
to, permit representatives appointed by the Administrative Agent, including,
without limitation, independent accountants, agents, attorneys, and appraisers
to visit and inspect its property, including its books and records, its accounts
receivable and inventory, its facilities and its other business assets, and to
make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the Administrative
Agent or its representatives to investigate and verify the accuracy of
information provided to the Lenders and to discuss all such matters with the
officers, employees and representatives of such Person. The Credit Parties agree
that the Administrative Agent, and its representatives, may conduct an annual
audit of the Collateral, at the expense of the Credit Parties.
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7.11 Financial Covenants.
(a) Consolidated Total Leverage Ratio. As of the end of each fiscal
quarter, the Consolidated Total Leverage Ratio shall be not greater than
2.5:1.0.
(b) Consolidated Fixed Charge Coverage Ratio. As of the end of each
fiscal quarter, the Consolidated Fixed Charge Coverage Ratio shall be not less
than 2.0:1.0.
(c) Consolidated Net Worth. At all times, the Consolidated Net Worth
shall be not less than the sum of (i) $41,698,000 plus (ii) as of the end of
each of the first three fiscal quarters of each year, beginning with the first
such fiscal quarter to occur after the Closing Date, an amount equal to fifty
percent (50%) of cumulative Consolidated Net Income (but not less than zero) for
the year to date, and as of the end of the fourth and final fiscal quarter of
each fiscal year, beginning with the first such fiscal year end to occur after
the Closing Date, an amount equal to seventy-five percent (75%) of Consolidated
Net Income (but not less than zero) for the fiscal year then-ended, with such
annual increases to be cumulative, plus (iii) an amount equal to one hundred
percent (100%) of net proceeds from Equity Transactions occurring after the
Closing Date.
(d) Consolidated Capital Expenditures. Consolidated Capital
Expenditures for any fiscal year shall not exceed $7 million in the aggregate.
7.12 Additional Guarantors.
(a) Domestic Subsidiaries. At any time that the Borrower forms or
acquires any Domestic Subsidiary, the Borrower will promptly (but in any event
within thirty days) (i) notify the Administrative Agent thereof, (ii) cause such
Domestic Subsidiary to become a Guarantor hereunder by execution of a Joinder
Agreement substantially in the form of Schedule 7.12 attached hereto, (iii)
cause such Domestic Subsidiary to deliver supporting resolutions, incumbency
certificates, corporate formation and organizational documentation and opinions
of counsel as the Administrative Agent may reasonably request, (iv) deliver, or
cause to be delivered, stock certificates and agreements evidencing the pledge
of one hundred percent (100%) of the Voting Stock of all Domestic Subsidiaries,
together with undated stock transfer powers executed in blank, pursuant to the
terms of the Pledge Agreement, and (v) grant to the Administrative Agent and the
Lenders a security interest in all of its Collateral, pursuant to the terms of
the Security Agreement.
(b) Foreign Subsidiaries. No Credit Party will form or acquire any
Foreign Subsidiaries without the prior written consent of the Required Lenders.
7.13 Pledged Assets.
Each Credit Party will cause (i) all of its owned personal property
located in the United States other than Excluded Property and (ii) all of its
Eligible Real Property to be subject at all times to first priority, perfected
and, in the case of real property (whether leased or owned), title insured Liens
in favor of the Administrative Agent to secure the Guaranteed Obligations
pursuant to the terms and conditions of the Collateral Documents or, with
respect to any such Property acquired subsequent to the Closing Date, such other
additional security documents as the Administrative Agent shall reasonably
request, subject in any case to Permitted Liens. With respect to any Eligible
69
Real Property acquired by any Credit Party subsequent to the Closing Date and
required by this Section 7.13 to be pledged to the Administrative Agent, such
Person will cause to be delivered to the Administrative Agent with respect to
such Eligible Real Property all documents, instruments and other items of the
types required to be delivered pursuant to Section 5.1(f) in form acceptable to
the Administrative Agent. Without limiting the generality of the above, the
Credit Parties will cause (i) one hundred percent (100%) of the issued and
outstanding Capital Stock of each Domestic Subsidiary and (ii) sixty-five
percent (65%) (or such greater percentage which would not result in material
adverse tax consequences) of the issued and outstanding Capital Stock entitled
to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and one
hundred percent (100%) of the issued and outstanding Capital Stock not entitled
to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) of each
Foreign Subsidiary directly owned by the Borrower or any Domestic Subsidiary of
the Borrower to be subject at all times to a first priority, perfected Lien in
favor of the Administrative Agent pursuant to the terms and conditions of the
Collateral Documents or such other security documents as the Administrative
Agent shall reasonably request.
If, subsequent to the Closing Date, a Credit Party shall acquire any
Property required to be pledged to the Administrative Agent as Collateral by
this Section 7.13 or by any of the Collateral Documents, the Credit Parties
shall promptly notify the Administrative Agent of same and each Credit Party
shall, and shall cause each of its Subsidiaries to, take such action (including
but not limited to the actions set forth in Sections 5.1(e) and (f)) at its own
expense as requested by the Administrative Agent to ensure that the
Administrative Agent has a first priority perfected Lien to secure the
Guaranteed Obligations in (i) all owned personal property of the Credit Parties
located in the United States other than Excluded Property and (ii) all Eligible
Real Property, subject in each case only to Permitted Liens. Each Credit Party
shall, and shall cause each of its Subsidiaries to, adhere to the covenants
regarding the location of personal property as set forth in this Credit
Agreement and the Security Agreement.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding or any Letter of Credit is
outstanding, and until all of the Commitments hereunder shall have terminated:
8.1 Indebtedness.
The Credit Parties will not permit any member of the Consolidated Group
to contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness existing or arising under this Credit Agreement or the
other Credit Documents;
(b) Indebtedness of the Borrower and its Subsidiaries existing on the
Closing Date and set forth on Schedule 8.1, and renewals, refinancings and
extensions thereof on terms and conditions not materially less favorable to such
Person than such existing Indebtedness;
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(c) purchase money Indebtedness (including obligations in respect of
Capital Leases or Synthetic Leases) hereafter incurred by the Borrower or any of
its Subsidiaries to finance the purchase of fixed assets provided that (i) the
total of all such Indebtedness (other than in respect of Capital Leases from any
Lender) for the Borrower and its Subsidiaries taken together shall not exceed an
aggregate principal amount of $1 million at any one time outstanding; (ii) the
total of all such Indebtedness in respect of Capital Leases from any Lender
shall not exceed an aggregate principal amount of $5 million in any fiscal year;
(iii) such Indebtedness when incurred shall not exceed the purchase price of the
asset(s) financed; and (iv) no such Indebtedness shall be refinanced for a
principal amount in excess of the principal balance outstanding thereon at the
time of such refinancing;
(d) obligations of the Borrower or any of its Subsidiaries owing under
interest rate, commodities and foreign currency exchange protection agreements
entered into in the ordinary course of business to manage existing or
anticipated risks and not for speculative purposes;
(e) unsecured intercompany Indebtedness owing by a member of the
Consolidated Group to another member of the Consolidated Group (subject,
however, to the limitations of Section 8.6 in the case of the member of the
Consolidated Group extending the loan, advance or credit);
(f) obligations to make contingent payments (including, without
limitation, earn-out payments) incurred in connection with Permitted
Acquisitions and Acquisitions consummated prior to the Closing Date; provided
that such obligations shall be expressly subordinated in right of payment to the
prior payment of the loans and obligations under the Credit Agreement and the
other Credit Documents on the terms and conditions and evidenced by
documentation satisfactory to the Administrative Agent and the Required Lenders;
(g) Support Obligations of any Subsidiary of the Borrower with respect
to any Indebtedness of the Borrower permitted under this Section 8.1; and
(h) other unsecured Funded Debt of the Borrower and its Subsidiaries in
an aggregate outstanding principal amount of up to $1 million at any time.
8.2 Liens.
The Credit Parties will not permit any member of the Consolidated Group
to contract, create, incur, assume or permit to exist any Lien with respect to
any of its Property, whether now owned or after acquired, except for Permitted
Liens.
8.3 Nature of Business.
The Credit Parties will not permit any member of the Consolidated Group
to substantively alter the character or conduct of the business conducted by
such Person as of the Closing Date.
8.4 Merger and Consolidation, Dissolution and Acquisitions.
(a) No member of the Consolidated Group will enter into any transaction
of merger or consolidation, except that:
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(i) a Credit Party may be party to a transaction of merger or
consolidation with another Credit Party, provided that if the Borrower is a
party to such transaction, it shall be the surviving entity;
(ii) a Domestic Subsidiary of the Borrower may be a party to a
transaction of merger or consolidation with a Person other than a member of the
Consolidated Group, provided that (A) the surviving entity shall be a Domestic
Subsidiary of the Borrower and shall execute and deliver such joinder and pledge
agreements as may be necessary for compliance with the provisions of Sections
7.12 and 7.13, (B) no Default or Event of Default shall exist immediately after
giving effect thereto, and (C) the transaction shall otherwise constitute a
Permitted Acquisition;
(iii) a Subsidiary of the Borrower may enter into a
transaction of merger or consolidation in connection with an Asset Disposition
permitted under Section 8.5.
(b) No member of the Consolidated Group, other than a Wholly Owned
Subsidiary of the Borrower (and then only if no Material Adverse Effect shall
result on account thereof), may dissolve, liquidate or wind up its affairs.
(c) No member of the Consolidated Group shall make any Acquisition,
unless:
(i) in the case of an acquisition of Capital Stock of another
Person, after giving effect to such acquisition,
(A) if the Acquisition is not of a controlling
interest in the subject Person such that after giving effect thereto the subject
Person will not be a Subsidiary, then such Acquisition constitutes a Permitted
Investment; and
(B) if the Acquisition is of a controlling interest
in the subject Person such that after giving effect thereto the subject Person
will be a Subsidiary, then such Acquisition constitutes a Permitted Acquisition;
(ii) in the case of an Acquisition of all or any substantial
portion of the Property (other than Capital Stock) of another Person, then such
Acquisition constitutes a Permitted Acquisition.
8.5 Asset Dispositions.
The Credit Parties will not permit any member of the Consolidated Group
to make any Asset Disposition (including, without limitation, any Sale and
Leaseback Transaction), unless (a) the consideration paid therefor shall consist
solely of cash and Cash Equivalents, (b) if the subject transaction is a Sale
and Leaseback Transaction, such transaction shall be permitted by Section 8.13,
(c) if the subject transaction involves Capital Stock of a Subsidiary, the
subject transaction is of a controlling interest in such Subsidiary, (d) the
aggregate net book value of all assets sold, leased or otherwise disposed of
shall not exceed $1 million in any fiscal year, (e) no Default or Event of
Default shall exist immediately after giving effect thereto, (f) the Borrower
shall have delivered a Pro Forma Compliance Certificate demonstrating compliance
with the financial covenants hereunder on a Pro Forma Basis after giving effect
to the disposition, and (g) the Borrower shall have given written notice to the
Administrative Agent at least thirty days in advance of the prospective
disposition, and the terms thereof, in sufficient detail as to the book value
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and consideration to be paid, terms of disposition, and net proceeds expected
therefrom and intended application thereof.
The Administrative Agent will promptly deliver to the Borrower upon
request, at the Borrower's expense, such release documentation (including
delivery of applicable stock certificates) as may be reasonably requested to
give effect to the release of subject Property from the security interests
securing the obligations hereunder in connection with Asset Dispositions
permitted hereunder.
8.6 Investments.
The Credit Parties will not permit any member of the Consolidated Group
to make or permit to exist Investments in or to any Person, except for Permitted
Investments.
8.7 Restricted Payments.
The Credit Parties will not make, or permit any member of the
Consolidated Group to make, any Restricted Payment, unless (i) no Default or
Event of Default shall exist immediately after giving effect thereto and (ii)
the Borrower shall have demonstrated compliance with the financial covenants
hereunder on a Pro Forma Basis after giving effect to the Restricted Payment and
shall have delivered to the Administrative Agent a Pro Forma Compliance
Certificate (including reaffirmation of the representations and warranties
hereunder as of such date before and after giving effect to such transaction) in
connection therewith.
8.8 Modifications and Payments in respect of Funded Debt.
None of the members of the Consolidated Group will:
(a) After the issuance thereof, amend or modify (or permit the
amendment or modification of) the terms of any Funded Debt in a manner adverse
to the interests of the Lenders (including specifically shortening any maturity
or average life to maturity or requiring any payment sooner than previously
scheduled or increasing the interest rate or fees applicable thereto);
(b) Amend or modify, or permit or acquiesce to the amendment or
modification (including waivers) of, any material provisions of any Subordinated
Debt, including any notes or instruments evidencing any Subordinated Debt and
any indenture or other governing instrument relating thereto;
(c) Make any payment in contravention of the terms of any Subordinated
Debt; or
(d) Except in connection with a refinancing or refunding permitted
hereunder, make any prepayment, redemption, defeasance or acquisition for value
of (including without limitation, by way of depositing money or securities with
the trustee with respect thereto before due for the purpose of paying when due),
or refund, refinance or exchange of any Funded Debt (other than the Indebtedness
under the Credit Documents and intercompany Indebtedness permitted hereunder)
other than regularly scheduled payments of principal and interest on such Funded
Debt.
8.9 Transactions with Affiliates.
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The Credit Parties will not permit any member of the Consolidated Group
to enter into or permit to exist any transaction or series of transactions with
any officer, director, shareholder, Subsidiary or Affiliate of such Person other
than (a) advances of working capital to any Credit Party, (b) transfers of cash
and assets to any Credit Party other than the Borrower, (c) transactions
permitted by Section 8.1, Section 8.4, Section 8.5, Section 8.6, or Section 8.7,
(d) normal compensation and reimbursement of expenses of officers and directors
and (e) except as otherwise specifically limited in this Credit Agreement, other
transactions which are entered into in the ordinary course of such Person's
business on terms and conditions substantially as favorable to such Person as
would be obtainable by it in a comparable arms-length transaction with a Person
other than an officer, director, shareholder, Subsidiary or Affiliate.
8.10 Fiscal Year; Organizational Documents.
Without the prior written consent of the Required Lenders, (a) the
Credit Parties will not permit any member of the Consolidated Group to change
its fiscal year or (b) to the extent that it could reasonably be expected to
have a Material Adverse Effect, amend, modify or change its articles of
incorporation (or corporate charter or other similar organizational document) or
bylaws (or other similar document).
8.11 Limitation on Restricted Actions.
The Credit Parties will not permit any member of the Consolidated Group
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any such
Person to (a) pay dividends or make any other distributions on its Capital Stock
or with respect to any other interest or participation in, or measured by, its
profits, (b) pay any Indebtedness or other obligation, (c) make loans, advances
or capital contributions, (d) sell, lease or otherwise transfer any of its
properties or assets, or (e) act as a guarantor or pledge its assets, except for
such encumbrances or restrictions existing under or by reason of (i) this Credit
Agreement and the other Credit Documents and (ii) pursuant to the terms of any
purchase money Indebtedness permitted by Section 8.1(c) to the extent such
limitations relate only to the property which is the subject of such financing.
8.12 Ownership of Subsidiaries; Limitations on the Borrower.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not permit any member of the Consolidated
Group to (i) permit any Person (other than the Borrower or any Wholly Owned
Subsidiary of the Borrower) to own any Capital Stock of any Subsidiary of the
Borrower, except as a result of or in connection with a dissolution, merger,
consolidation or disposition of a Subsidiary permitted under Section 8.4 or
Section 8.5, (ii) permit any Subsidiary of the Borrower to issue any shares of
preferred Capital Stock or (iii) permit, create, incur, assume or suffer to
exist any Lien on any Capital Stock of any Subsidiary of the Borrower, except
for Permitted Liens.
8.13 Sale Leasebacks.
The Credit Parties will not permit any member of the Consolidated Group
to enter into any Sale and Leaseback Transaction unless such Sale and Leaseback
Transaction constitutes purchase money Indebtedness permitted by Section 8.1(c).
8.14 No Further Negative Pledges.
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The Credit Parties will not permit any member of the Consolidated Group
to enter into, assume or become subject to any agreement prohibiting or
otherwise restricting the creation or assumption of any Lien upon its properties
or assets, whether now owned or hereafter acquired, or requiring the grant of
any security for any obligation if security is given for any other obligation,
except (a) pursuant to this Credit Agreement and the other Credit Documents and
(b) pursuant to the terms of any purchase money Indebtedness permitted by
Section 8.1(c) to the extent such limitations relate only to the property which
is the subject of such financing.
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. There shall occur a default, and such default shall
continue for three or more Business Days, in the payment when due of any
principal or interest on any of the Loans or of any reimbursement obligations
arising from drawings under Letters of Credit, or of any Fees or other amounts
owing hereunder, under any of the other Credit Documents or in connection
herewith or therewith; or
(b) Representations. Any representation, warranty or statement made or
deemed to be made by any Credit Party herein, in any of the other Credit
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material respect
on the date as of which it was deemed to have been made; or
(c) Covenants. There shall occur a:
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.2, 7.9, 7.11, 7.12, 7.13 or 8.1
through 8.15, inclusive;
(ii) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.1(a), (b) (c) or (d) and such
default shall continue unremedied for a period of at least five days after the
earlier of an Executive Officer of a Credit Party becoming aware of such default
or notice thereof by the Administrative Agent; or
(iii) default in the due performance or observance by it of
any term, covenant or agreement (other than those referred to in subsections
(a), (b), (c)(i) or (c)(ii) of this Section 9.1) contained in this Credit
Agreement or any other Credit Document and such default shall continue
unremedied for a period of at least thirty days after the earlier of an
Executive Officer of a Credit Party becoming aware of such default or notice
thereof by the Administrative Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall default in the
due performance or observance of any term, covenant or agreement in any of the
other Credit Documents (subject to applicable grace or cure periods, if any)
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or (ii) except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5, any
Credit Document shall fail to be in full force and effect or to give the
Administrative Agent and/or the Lenders the Liens, rights, powers and privileges
purported to be created thereby, or any Credit Party shall so state in writing;
or
(e) Guaranties.
(i) Except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under Section 8.4
or Section 8.5, the guaranty given by any Guarantor (including any Person that
becomes a Guarantor after the Closing Date in accordance with Section 7.12) or
any provision thereof shall cease to be in full force and effect (other than as
provided in subsection (e)(ii) below), or any Guarantor (including any Person
that becomes a Guarantor after the Closing Date in accordance with Section 7.12)
or any Person acting by or on behalf of such Guarantor shall deny or disaffirm
such Guarantor's obligations under such guaranty, or any Guarantor shall default
in the due performance or observance of any term, covenant or agreement on its
part to be performed or observed pursuant to such guaranty; or
(ii) To the extent that any provision of the guaranty given by
any Guarantor (including any Person that becomes a Guarantor after the Closing
Date in accordance with Section 7.12) shall cease to be in full force and effect
due to the adoption of, or change in, any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by any Governmental
Authority, and such Guarantor fails to enter an amended or modified guaranty on
terms and conditions satisfactory to the Administrative Agent within a period of
thirty days after the earlier of the date on which an Executive Officer of a
Credit Party becomes aware of such default or notice thereof by the
Administrative Agent; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect to
any member of the Consolidated Group; or
(g) Defaults under Other Agreements. With respect to any Indebtedness
(other than Indebtedness outstanding under this Credit Agreement) in excess of
$1 million in the aggregate for the members of the Consolidated Group taken as a
whole, (i) any member of the Consolidated Group shall (A) default in any payment
(beyond the applicable grace period with respect thereto, if any) with respect
to any such Indebtedness, or (B) the occurrence and continuance of a default in
the observance or performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event or condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or to permit, the holder or holders of
such Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is required),
any such Indebtedness to become due prior to its stated maturity; or (ii) any
such Indebtedness shall be declared due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment, prior to the stated
maturity thereof; or
(h) Judgments. One or more judgments, settlements or decrees shall be
entered against or agreed to by one or more of the members of the Consolidated
Group involving a liability of $1 million or more in the aggregate (to the
extent not paid or fully covered by insurance provided by a carrier who has
acknowledged coverage and has the ability to perform) and any such
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judgments, settlements or decrees shall not have been vacated, discharged or
stayed or bonded pending appeal within thirty days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such event or
condition could involve possible taxes, penalties, and other liabilities in an
aggregate amount in excess of $1 million: (i) any "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section 412 of
the Internal Revenue Code, whether or not waived, shall exist with respect to
any Plan, or any lien shall arise on the assets of any member of the
Consolidated Group or any ERISA Affiliate in favor of the PBGC or a Plan; (ii)
an ERISA Event shall occur with respect to a Single Employer Plan, which is, in
the reasonable opinion of the Administrative Agent, likely to result in the
termination of such Plan for purposes of Title IV of ERISA; (iii) an ERISA Event
shall occur with respect to a Multiemployer Plan or Multiple Employer Plan,
which is, in the reasonable opinion of the Administrative Agent, likely to
result in (A) the termination of such Plan for purposes of Title IV of ERISA, or
(B) any member of the Consolidated Group or any ERISA Affiliate incurring any
liability in connection with a withdrawal from, reorganization of (within the
meaning of Section 4241 of ERISA), or insolvency (within the meaning of Section
4245 of ERISA) of such Plan; or (iv) any prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue Code) or
breach of fiduciary responsibility shall occur which may subject any member of
the Consolidated Group or any ERISA Affiliate to any liability under Sections
406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Internal Revenue
Code, or under any agreement or other instrument pursuant to which any member of
the Consolidated Group or any ERISA Affiliate has agreed or is required to
indemnify any person against any such liability; or
(j) Ownership. There shall occur a Change of Control.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by, or cured to the
satisfaction of, the requisite Lenders (pursuant to the voting requirements of
Section 11.6), the Administrative Agent shall, upon the request and direction of
the Required Lenders, by written notice to the Credit Parties take any of the
following actions:
(a) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid principal of and any accrued
interest in respect of all Loans, any reimbursement obligations arising from
drawings under Letters of Credit and any and all other indebtedness or
obligations of any and every kind owing by the Credit Parties to the
Administrative Agent and/or any of the Lenders hereunder to be due whereupon the
same shall be immediately due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Credit
Parties.
(c) Cash Collateral. Direct the Credit Parties to pay (and the Credit
Parties agree that upon receipt of such notice, or upon the occurrence of an
Event of Default under Section 9.1(f), they will immediately pay) to the
Administrative Agent additional cash, to be held by the Administrative Agent,
for the benefit of the Lenders, in a cash collateral account as additional
security for the LOC Obligations in respect of subsequent drawings under all
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then-outstanding Letters of Credit in an amount equal to the maximum aggregate
amount which may be drawn under all Letters of Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents including, without limitation,
all rights and remedies existing under the Collateral Documents, all rights and
remedies against a Guarantor and all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur with respect to the Borrower, then the Commitments
shall automatically terminate and all Loans, all reimbursement obligations
arising from drawings under Letters of Credit, all accrued interest in respect
thereof, all accrued and unpaid Fees and other indebtedness or obligations owing
to the Administrative Agent and/or any of the Lenders hereunder automatically
shall immediately become due and payable without the giving of any notice or
other action by the Administrative Agent or the Lenders.
SECTION 10
ADMINISTRATIVE AGENT
10.1 Appointment and Authorization of Administrative Agent.
(a) Each Lender hereby irrevocably (subject to Section 10.9) appoints,
designates and authorizes the Administrative Agent to take such action on its
behalf under the provisions of this Credit Agreement and each other Credit
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Credit Agreement or any other Credit
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere herein or in
any other Credit Document, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship with
any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any other Credit Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Credit Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or 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.
(b) The Issuing Lender shall act on behalf of the Lenders with respect
to any Letters of Credit issued by it and the documents associated therewith
until such time (and except for so long) as the Administrative Agent may agree
at the request of the Required Lenders to act for the Issuing Lender with
respect thereto; provided, however, that the Issuing Lender shall have all of
the benefits and immunities (i) provided to the Administrative Agent in this
Section 10 with respect to any acts taken or omissions suffered by the Issuing
Lender in connection with Letters of Credit issued by it or proposed to be
issued by it and the application and agreements for letters of credit pertaining
to the Letters of Credit as fully as if the term "Administrative Agent" as used
in this Section 10 included the Issuing Lender with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to the Issuing
Lender.
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10.2 Delegation of Duties.
The Administrative Agent may execute any of its duties under this
Credit Agreement or any other Credit Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct.
10.3 Liability of Administrative Agent.
No Agent-Related Person shall (a) be liable for any action taken or omitted to
be taken by any of them under or in connection with this Credit Agreement or any
other Credit Document or the transactions contemplated hereby (except for its
own gross negligence or willful misconduct in connection with its duties
expressly set forth herein), or (b) be responsible in any manner to any Lender
or participant for any recital, statement, representation or warranty made by
any Credit Party or any officer thereof, contained herein or in any other Credit
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Credit Agreement or any other Credit Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Credit Agreement or any other Credit Document, or for any failure of any Credit
Party or any other party to any Credit Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this Credit
Agreement or any other Credit Document, or to inspect the properties, books or
records of any Credit Party or any Affiliate thereof.
10.4 Reliance by Administrative Agent.
(a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, 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 any Credit Party), independent accountants
and other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under any
Credit Document unless it shall first receive such 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 Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Credit Agreement
or any other Credit Document in accordance with a request or consent of the
Required Lenders or all the Lenders, if required hereunder, and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
the Lenders and participants. Where this Credit Agreement expressly permits or
prohibits an action unless the Required Lenders otherwise determine, the
Administrative Agent shall, and in all other instances, the Administrative
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Agent may, but shall not be required to, initiate any solicitation for the
consent or a vote of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 5.1, each Lender that has signed this Credit Agreement
shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter either sent by the Administrative Agent to
such Lender for consent, approval, acceptance or satisfaction, or required
thereunder to be consented to or approved by or acceptable or satisfactory to a
Lender.
10.5 Notice of Default.
The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default, except with respect to defaults
in the payment of principal, interest and fees required to be paid to the
Administrative Agent for the account of the Lenders, unless the Administrative
Agent shall have received written notice from a Lender or the Borrower referring
to this Credit Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." The Administrative Agent will
notify the Lenders of its receipt of any such notice. The Administrative Agent
shall take such action with respect to such Default or Event of Default as may
be directed by the Required Lenders in accordance with Section 9; provided,
however, that unless and until the Administrative Agent has received any such
direction, the Administrative 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 or in the best interest of the
Lenders.
10.6 Credit Decision; Disclosure of Information by Administrative Agent.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Credit Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative 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 the Credit Parties and their respective Subsidiaries, and
all applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Credit
Agreement and to extend credit to the Borrower and the other Credit Parties
hereunder. 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 Credit Agreement and the other Credit 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 the Borrower and the other Credit Parties. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent herein, the Administrative Agent shall not
have any duty or responsibility to provide any Lender with any credit or other
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information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any of the Credit Parties or any of
their respective Affiliates which may come into the possession of any
Agent-Related Person.
10.7 Indemnification of Administrative Agent.
Whether or not the transactions contemplated hereby are consummated, the Lenders
shall indemnify upon demand each Agent-Related Person (to the extent not
reimbursed by or on behalf of any Credit Party and without limiting the
obligation of any Credit Party to do so), pro rata, and hold harmless each
Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting from such Person's gross negligence or willful misconduct;
provided, however, that no action taken in accordance with the directions of the
Required Lenders shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section. Without limitation of the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including reasonable fees and
costs of counsel) incurred by the Administrative 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 Credit
Agreement, any other Credit Document, or any document contemplated by or
referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The undertaking in
this Section shall survive termination of the Commitments, the payment of all
Obligations hereunder and the resignation or replacement of the Administrative
Agent.
10.8 Administrative Agent in its Individual Capacity.
Bank of America 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 each of the Credit Parties and their respective
Affiliates as though Bank of America were not the Administrative Agent or the
Issuing Lender hereunder and without notice to or consent of the Lenders. The
Lenders acknowledge that, pursuant to such activities, Bank of America or its
Affiliates may receive information regarding any Credit Party or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of such Credit Party or such Affiliate) and acknowledge that the
Administrative Agent shall be under no obligation to provide such information to
them. With respect to its Loans, Bank of America shall have the same rights and
powers under this Credit Agreement as any other Lender and may exercise such
rights and powers as though it were not the Administrative Agent or the Issuing
Lender, and the terms "Lender" and "Lenders" include Bank of America in its
individual capacity.
10.9 Successor Administrative Agent.
The Administrative Agent may resign as Administrative Agent upon thirty days
notice to the Lenders. If the Administrative Agent resigns under this Credit
Agreement, the Required Lenders shall appoint from among the Lenders a successor
administrative agent for the Lenders which successor administrative agent shall
be consented to by the Borrower at all times other than during the existence of
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an Event of Default (which consent of the Borrower shall not be unreasonably
withheld or delayed). If no successor administrative agent is appointed prior to
the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and the
Borrower, a successor administrative agent from among the Lenders. Upon the
acceptance of its appointment as successor administrative agent hereunder, such
successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term "Administrative Agent"
shall mean such successor administrative agent and the retiring Administrative
Agent's appointment, powers and duties as Administrative Agent shall be
terminated. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Section 10 and Sections 11.4 and
11.9 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Credit Agreement. If no
successor administrative agent has accepted appointment as Administrative Agent
by the date which is thirty days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above.
10.10 Other Agents; Lead Managers.
None of the Lenders identified on the facing page or signature pages of this
Credit Agreement as a "syndication agent," "documentation agent," "co-agent" or
"lead manager" shall have any right, power, obligation, liability,
responsibility or duty under this Credit Agreement 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
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders so identified in deciding to enter into this Credit Agreement
or in taking or not taking action hereunder.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Credit Parties and the
Administrative Agent, set forth below, and, in the case of the Lenders, set
forth on Schedule 11.1, or at such other address as such party may specify by
written notice to the other parties hereto:
if to any Credit Party:
Rockford Corporation
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
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Attn: Xxxxx X. Xxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
if to the Administrative Agent:
Bank of America, N.A., as Administrative Agent
000 Xxxx Xxxxxx
Mail Code: TX1-492-14-14
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxxx X. Xxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
Email: xxxxx.x.xxxxxx@xxxxxxxxxxxxx.xxx
with a copy to:
Bank of America, N.A., as Administrative Agent
000 Xxxxx XxXxxxx Xxxxxx
Mail Code: IL1-231-08-30
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxx, Agency Management
Telephone: 000-000-0000
Telecopy: 000-000-0000
Email: xxxxxxx.x.xxxx@xxxxxxxxxxxxx.xxx
and:
Bank of America, X.X.
Xxxxxxx Center
000 X. Xxxxxxxxxx Xxxxxx
Mail Code: AZ1-200-22-32
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxx Xxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
Email: xxxxxx.xxxxxx@xxxxxxxxxxxxx.xxx
11.2 Right of Set-Off; Adjustments.
Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its Affiliates) is hereby authorized at any time and
from time to time, 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 and other indebtedness at any time owing by such Lender (or any
of its Affiliates) to or for the credit or the account of any Credit Party
against any and all of the obligations of such Person now or hereafter existing
under this Credit Agreement, under the Notes, under any other Credit Document or
otherwise, irrespective of whether such Lender shall have made any demand under
hereunder or thereunder and although such obligations may be unmatured. Each
Lender agrees promptly to notify any affected Credit Party 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. The rights of each Lender under this Section 11.2 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
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11.3 Successors and Assigns.
(a) The provisions of this Credit Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void). Nothing in this Credit Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
and, to the extent expressly contemplated hereby, the Indemnitees) any legal or
equitable right, remedy or claim under or by reason of this Credit Agreement.
(b) Any Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Credit Agreement (including all
or a portion of its Commitment and the Loans (including for purposes of this
subsection (b), participations in LOC Obligations and in Swingline Loans) at the
time owing to it); provided that (i) except in the case of an assignment of the
entire remaining amount of the assigning Lender's Commitment and the Loans at
the time owing to it or in the case of an assignment to a Lender or an Affiliate
of a Lender or an Approved Fund with respect to a Lender, the aggregate amount
of the Commitment (which for this purpose includes Loans outstanding thereunder)
subject to each such assignment, determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent, shall not be less than $5 million unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed), (ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Credit Agreement with respect to the Loans or the Commitment assigned,
except that this clause (ii) shall not apply to rights in respect of outstanding
Swingline Loans, and (iii) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500 payable by the assigning Lender to
the Administrative Agent. Subject to acceptance and recording thereof by the
Administrative Agent pursuant to subsection (c) of this Section, from and after
the effective date specified in each Assignment and Acceptance, the Eligible
Assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Credit Agreement, and the assigning Lender thereunder shall,
to the extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Credit Agreement (and, in the case of
an Assignment and Acceptance covering all of the assigning Lender's rights and
obligations under this Credit Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 11.5 and
11.9). Upon request, the Borrower (at its expense) shall execute and deliver new
or replacement Notes to the assigning Lender and the assignee Lender. Any
assignment or transfer by a Lender of rights or obligations under this Credit
Agreement that does not comply with this subsection shall be treated for
purposes of this Credit Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at its office in Dallas, Texas a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans and LOC Obligations owing to, each Lender
pursuant to the
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terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Credit Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
(d) Any Lender may, without the consent of, or notice to, the Borrower
or the Administrative Agent, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and/or
obligations under this Credit Agreement (including all or a portion of its
Commitment and/or the Loans (including such Lender's participations in LOC
Obligations and/or Swingline Loans) owing to it); provided that (i) such
Lender's obligations under this Credit Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this Credit
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Credit Agreement and to approve any amendment, modification or
waiver of any provision of this Credit Agreement; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification that would (i)
postpone any date upon which any payment of money is scheduled to be paid to
such Participant, (ii) reduce the principal, interest, fees or other amounts
payable to such Participant or (iii) release all or substantially all of the
Guarantors from their obligations under the Credit Documents. Subject to
subsection (e) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 3.6, 3.9, 3.11 and 3.12 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to subsection (b) of this Section. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 11.2 as though it
were a Lender, provided such Participant agrees to be subject to Section 3.14 as
though it were a Lender.
(e) A Participant shall not be entitled to receive any greater payment
under Section 3.6, 3.9 or 3.11 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 3.11 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
3.11(d) as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Credit Agreement (including under
its Notes, if any) to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
(g) If the consent of the Borrower to an assignment or to an Eligible
Assignee is required hereunder (including a consent to an assignment which does
85
not meet the minimum assignment threshold specified in clause (i) of the proviso
to the first sentence of Section 11.3(b), the Borrower shall be deemed to have
given its consent five Business Days after the date notice thereof has been
delivered by the assigning Lender (through the Administrative Agent) unless such
consent is expressly refused by the Borrower prior to such fifth Business Day.
(h) Notwithstanding anything to the contrary contained herein, if at
any time Bank of America assigns all of its Commitment and Loans pursuant to
subsection (b) above, Bank of America may, (i) upon thirty days notice to the
Borrower and the Lenders, resign as Issuing Lender and/or (ii) upon five
Business Days notice to the Borrower, resign as Swingline Lender. In the event
of any such resignation as Issuing Lender or as Swingline Lender, the Borrower
shall be entitled to appoint from among the Lenders a successor Issuing Lender
or Swingline Lender hereunder; provided, however, that no failure by the
Borrower to appoint any such successor shall affect the resignation of Bank of
America as Issuing Lender or as Swingline Lender, as the case may be. Bank of
America shall retain all the rights and obligations of the Issuing Lender
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as Issuing Lender and all LOC Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or
fund participations in Letters of Credit pursuant to Section 2.6(b)). If Bank of
America resigns as Swingline Lender, it shall retain all the rights of the
Swingline Lender provided for hereunder with respect to Swingline Loans made by
it and outstanding as of the effective date of such resignation, including the
right to require the Lenders to make Base Rate Loans or fund participations in
outstanding Swingline Loans pursuant to Section 2.7.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Administrative Agent or any
Lender in exercising any right, power or privilege hereunder or under any other
Credit Document and no course of dealing between the Administrative Agent or any
Lender and any of the Credit Parties shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies provided herein are cumulative and not
exclusive of any rights or remedies which the Administrative Agent or any Lender
would otherwise have. No notice to or demand on any Credit Party in any case
shall entitle the Credit Parties to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
11.5 Expenses; Indemnification.
(a) The Borrower agrees to pay on demand all costs and expenses of the
Administrative Agent in connection with the syndication, preparation, execution,
delivery, administration, modification, and amendment of this Credit Agreement,
the other Credit Documents, and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of counsel
(including the allocated cost of internal counsel) for the Administrative Agent
with respect thereto and with respect to advising the Administrative Agent as to
its rights and responsibilities under the Credit Documents. The Borrower agrees
to pay on demand all costs and expenses of the Administrative Agent and the
Lenders, if any (including, without limitation, reasonable attorneys' fees and
expenses and the allocated cost of internal counsel), in connection with the
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enforcement (whether through negotiations, legal proceedings, or otherwise) of
the Credit Documents and the other documents to be delivered thereunder. The
Borrower further agrees to permit the Administrative Agent to perform inventory
and accounts receivable field audits at the Borrower's expense, provided that
unless a Default shall then be in existence the Borrower's obligation to
reimburse the Administrative Agent for such field audits shall be limited to one
such field audit each fiscal year.
(b) Whether or not the transactions contemplated hereby are
consummated, the Borrower agrees to indemnify, save and hold harmless each
Agent-Related Person, each Lender and their respective Affiliates, directors,
officers, employees, counsel, agents and attorneys-in-fact (collectively the
"Indemnitees") from and against: (a) any and all claims, demands, actions or
causes of action that are asserted against any Indemnitee by any Person (other
than the Administrative Agent or any Lender) relating directly or indirectly to
a claim, demand, action or cause of action that such Person asserts or may
assert against any Credit Party, any Affiliate of any Credit Party or any of
their respective officers or directors; (b) any and all claims, demands, actions
or causes of action that may at any time (including at any time following
repayment of the Obligations and the resignation or removal of the
Administrative Agent or the replacement of any Lender) be asserted or imposed
against any Indemnitee, arising out of or relating to, the Credit Documents, any
predecessor Credit Documents, the Commitments, the use or contemplated use of
the proceeds of any Extension of Credit, or the relationship of any Credit
Party, the Administrative Agent and the Lenders under this Credit Agreement or
any other Credit Document; (c) any administrative or investigative proceeding by
any Governmental Authority arising out of or related to a claim, demand, action
or cause of action described in subsection (a) or (b) above; and (d) any and all
liabilities (including liabilities under indemnities), losses, costs or expenses
(including reasonable fees and costs of counsel) that any Indemnitee suffers or
incurs as a result of the assertion of any foregoing claim, demand, action,
cause of action or proceeding, or as a result of the preparation of any defense
in connection with any foregoing claim, demand, action, cause of action or
proceeding, in all cases, whether or not arising out of the negligence of an
Indemnitee, and whether or not an Indemnitee is a party to such claim, demand,
action, cause of action or proceeding (all the foregoing, collectively, the
"Indemnified Liabilities"); provided that no Indemnitee shall be entitled to
indemnification for any claim caused by its own gross negligence or willful
misconduct or for any loss asserted against it by another Indemnitee. The
agreements in this Section shall survive the termination of the Commitments and
repayment of all the other Obligations.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 11.5 shall survive the repayment of the Loans, LOC Obligations and
other obligations under the Credit Documents and the termination of the
Commitments hereunder.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided, however, that:
87
(a) without the consent of each Lender affected thereby, neither this
Credit Agreement nor any other Credit Document may be amended to:
(i) extend the Termination Date or the final maturity of any
Loan or of any reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(ii) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any post-default
increase in interest rates) thereon or Fees hereunder,
(iii) reduce or waive the principal amount of any Loan or of
any reimbursement obligation, or any portion thereof, arising from drawings
under Letters of Credit,
(iv) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver of any Default
or Event of Default or mandatory reduction in the Commitments shall not
constitute a change in the terms of any Commitment of any Lender),
(v) except as the result of or in connection with a
dissolution, merger or disposition of a member of the Consolidated Group
permitted under Section 8.4, release the Borrower or all or substantially all of
the Guarantors from its or their obligations under the Credit Documents,
(vi) except as the result of or in connection with an Asset
Disposition permitted under Section 8.5, release all or substantially all of the
Collateral,
(vii) amend, modify or waive any provision of this Section
11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 9.1(a),
11.2, 11.3, 11.5 or 11.9,
(viii) reduce any percentage specified in, or otherwise
modify, the definition of Required Lenders, or
(ix) consent to the assignment or transfer by the Borrower or
all or substantially all of the other Credit Parties of any of its or their
rights and obligations under (or in respect of) the Credit Documents except as
permitted thereby;
(b) without the consent of the Administrative Agent, no provision of
Section 10 may be amended; and
(c) without the consent of the Issuing Lender, no provision of Section
2.1(b), 2.2(a)(ii) and 2.6 may be amended.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or insolvency
proceeding.
11.7 Counterparts.
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This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Survival.
All indemnities set forth herein, including, without limitation, in
Section 2.6(h), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and
delivery of this Credit Agreement, the making of the Loans, the issuance of the
Letters of Credit, the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder, and all representations and warranties made by the Credit Parties
herein shall survive delivery of the Notes and the making of the Loans
hereunder.
11.10 Governing Law; Submission to Jurisdiction; Venue.
(a) THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY PROVIDED
THEREIN, THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ARIZONA. Any legal
action or proceeding with respect to this Credit Agreement or any other Credit
Document may be brought in the state or federal courts located in Phoenix,
Arizona, and, by execution and delivery of this Credit Agreement, each of the
Credit Parties hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the nonexclusive jurisdiction of such
courts. Each of the Credit Parties further irrevocably consents to the service
of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to it at the address set out for notices pursuant to Section
11.1, such service to become effective three days after such mailing. Nothing
herein shall affect the right of the Administrative Agent or any Lender to serve
process in any other manner permitted by law or to commence legal proceedings or
to otherwise proceed against any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts referred to
in subsection (a) above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
(c) EACH PARTY TO THIS CREDIT AGREEMENT HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
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ACTION ARISING UNDER ANY CREDIT DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT
TO ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS CREDIT AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
11.11 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 Entirety.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
11.13 Binding Effect; Termination.
(a) This Credit Agreement shall become effective at such time on or after the
Closing Date when it shall have been executed by each Credit Party and the
Administrative Agent, and the Administrative Agent shall have received copies
hereof (telecopied or otherwise) which, when taken together, bear the signatures
of each Lender, and thereafter this Credit Agreement shall be binding upon and
inure to the benefit of each Credit Party, the Administrative Agent and each
Lender and their respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC Obligations
or any other amounts payable hereunder or under any of the other Credit
Documents shall remain outstanding, no Letters of Credit shall be outstanding,
all of the Guaranteed Obligations have been irrevocably satisfied in full and
all of the Commitments hereunder shall have expired or been terminated.
11.14 Confidentiality.
Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential); (b) to the extent requested by any regulatory
authority; (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process; provided that, to the extent permitted by
applicable law, the disclosing party shall provide the Borrower with advance
notice of any such required disclosure so that the Borrower may seek an
appropriate protective order if it so desires; (d) to any other party to this
Credit Agreement; (e) in connection with the exercise of any remedies hereunder
90
or any suit, action or proceeding relating to this Credit Agreement or the
enforcement of rights hereunder; (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any Eligible
Assignee of or Participant in, or any prospective Eligible Assignee of or
Participant in, any of its rights or obligations under this Credit Agreement or
(ii) any direct or indirect contractual counterparty or prospective counterparty
(or such contractual counterparty's or prospective counterparty's professional
advisor) to any credit derivative transaction relating to obligations of the
Borrower; (g) with the consent of the Borrower; (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent or any Lender
on a nonconfidential basis from a source other than the Borrower; or (i) to the
National Association of Insurance Commissioners or any other similar
organization or any nationally recognized rating agency that requires access to
information about a Lender's or its Affiliates' investment portfolio in
connection with ratings issued with respect to such Lender or its Affiliates.
For the purposes of this Section, "Information" means all information received
from the Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by the Borrower; provided that, in the
case of information received from the Borrower after the date hereof, such
information is clearly identified in writing at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
11.15 Source of Funds.
Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to any separate
account maintained by such Lender in which any employee benefit plan (or its
related trust) has any interest;
(b) to the extent that any part of such funds constitutes assets
allocated to any separate account maintained by such Lender, such Lender has
disclosed to the Borrower the name of each employee benefit plan whose assets in
such account exceed ten percent (10%) of the total assets of such account as of
the date of such purchase (and, for purposes of this subsection (b), all
employee benefit plans maintained by the same employer or employee organization
are deemed to be a single plan);
(c) to the extent that any part of such funds constitutes assets of an
insurance company's general account, such insurance company has complied with
all of the requirements of the regulations issued under Section 401(c)(1)(A) of
ERISA; or
(d) such funds constitute assets of one or more specific benefit plans
that such Lender has identified in writing to the Borrower.
As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings provided in Section 3 of ERISA.
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11.16 Conflict.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
[signature pages follow]
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: ROCKFORD CORPORATION,
an Arizona corporation
By:
Name:
Title:
GUARANTORS: ROCKFORD SINGAPORE CORPORATION,
an Arizona corporation
By:
Name:
Title:
[each other Domestic Subsidiary of the Borrower]
By:
Name:
Title:
AGENTS: BANK OF AMERICA, N.A.,
as Administrative Agent
By:
Name:
Title:
BANK ONE, ARIZONA, N.A.,
as Documentation Agent
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By:
Name:
Title:
LENDERS: BANK OF AMERICA, N.A.
By:
Name:
Title:
BANK ONE, ARIZONA, N.A.
By:
Name:
Title:
Schedule 2.1
LENDERS AND COMMITMENTS
Revolving Commitments
Lender
Revolving Revolving LOC
Commitment Committed Committed
Percentage Amount Amount
Bank of America, N.A. 50.00% $15,000,000.00 $2,500,000.00
Bank One, Arizona, N.A. 50.00% $15,000,000.00 $2,500,000.00
------- -------------- -------------
Total 100.00% $30,000,000.00 $5,000,000.00
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Schedule 2.2(a)(i)
FORM OF NOTICE OF BORROWING
Bank of America, N.A., as Administrative Agent
000 Xxxx Xxxxxx
Mail Code: TX1-492-14-14
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxxx X. Xxxxxx, Agency Services
Re: Credit Agreement dated as of June 28, 2001 (as amended, modified,
supplemented, increased and extended from time to time, the "Credit Agreement")
among Rockford Corporation, an Arizona corporation (the "Borrower"), the
Guarantors, the Lenders identified therein and Bank of America, N.A., as
Administrative Agent. Capitalized terms used but not otherwise defined herein
shall have the meanings provided in the Credit Agreement.
Ladies and Gentlemen:
The Borrower hereby gives notice pursuant to Section 2.2 of the Credit
Agreement that it requests a [Revolving Loan] [Swingline Loan] advance under the
Credit Agreement and in connection therewith sets forth below the terms on which
such advance is requested to be made:
(A) Date of Borrowing (which is a Business Day) _______________________
(B) Principal Amount of Borrowing _______________________
(C) Interest rate basis _______________________
(D) Interest Period and the last day thereof _______________________
In accordance with the requirements of Section 5.2, the Borrower hereby
represents and warrants that each of the conditions specified in Section 5.2 of
the Credit Agreement have been satisfied as of the date hereof.
Rockford Corporation,
an Arizona corporation
By:
Name:
Title:
Schedule 2.2(a)(ii)
94
FORM OF NOTICE OF REQUEST OF LETTER OF CREDIT
Bank of America, N.A., as Administrative Agent
[adddress]
Attn: _____________________
Re: Credit Agreement dated as of June 28, 2001 (as amended, modified,
supplemented, increased and extended from time to time, the "Credit Agreement")
among Rockford Corporation, an Arizona corporation (the "Borrower"), the
Guarantors, the Lenders identified therein and Bank of America, N.A., as
Administrative Agent. Capitalized terms used but not otherwise defined herein
shall have the meanings provided in the Credit Agreement.
Ladies and Gentlemen:
The Borrower hereby gives notice pursuant to Section 2.2 of the Credit
Agreement that it requests a the issuance of a Letter of Credit under the Credit
Agreement as follows:
(1) Account Party:
(2) For use by:
(3) Beneficiary:
(4) Face Amount of Letter of Credit:
(5) Date of Issuance:
Delivery of Letter of Credit should be made as follows:
In accordance with the requirements of Section 5.2, the Borrower hereby
represents and warrants that each of the conditions specified in Section 5.2 of
the Credit Agreement have been satisfied as of the date hereof.
Rockford Corporation,
an Arizona corporation
By:
Name:
Title:
Schedule 2.5
FORM OF NOTE
June 28, 2001
FOR VALUE RECEIVED, the undersigned Borrower hereby promises to pay to
the order of ______________________, its successors and assigns (the "Lender"),
on or before the Termination Date to the office of the Administrative Agent in
immediately available funds as provided in the Credit Agreement,
95
(i) in the case of Revolving Loans, the Lender's Revolving
Committed Amount or, if less, the aggregate unpaid principal amount of all
Revolving Loans owing to the Lender; and
(ii) in the case of Swingline Loans, if the Lender is the
Swingline Lender, the Swingline Committed Amount or, if less, the aggregate
unpaid principal amount of all Swingline Loans owing to the Swingline Lender;
together with interest thereon at the rates and as provided in the Credit
Agreement.
This Note is one of the Notes referred to in the Credit Agreement dated
as of the date hereof (as amended, modified, supplemented, increased and
extended from time to time, the "Credit Agreement") among the Borrower, the
Guarantors and Lenders identified therein and Bank of America, N.A., as
Administrative Agent. Capitalized terms used but not otherwise defined herein
shall have the meanings provided in the Credit Agreement.
The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
any failure to endorse such information shall not affect the obligation of the
Borrower to pay amounts evidenced hereby.
Upon the occurrence of an Event of Default, all amounts evidenced by
this Note may, or shall, become immediately due and payable as provided in the
Credit Agreement without presentment, demand, protest or notice of any kind, all
of which are waived by the Borrower. In the event payment of amounts evidenced
by this Note is not made at any stated or accelerated maturity, the Borrower
agrees to pay, in addition to principal and interest, all costs of collection,
including reasonable attorneys' fees and the allocated cost of internal counsel.
This Note and the Loans and amounts evidenced hereby may be transferred
only as provided in the Credit Agreement.
This Note shall be governed by, and construed and interpreted in
accordance with, the law of the State of Arizona.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed by its duly authorized officer as of the day and year first above
written.
ROCKFORD CORPORATION,
an Arizona corporation
By:
Name:
Title:
Schedule 2.6(b)
EXISTING LETTERS OF CREDIT
None
Schedule 3.2
FORM OF NOTICE OF CONTINUATION/CONVERSION
96
Bank of America, N.A., as Administrative Agent
000 Xxxx Xxxxxx
Mail Code: TX1-492-14-14
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxxx X. Xxxxxx, Agency Services
Re: Credit Agreement dated as of June 28, 2001 (as amended, modified,
supplemented, increased and extended from time to time, the "Credit Agreement")
among Rockford Corporation, an Arizona corporation (the "Borrower"), the
Guarantors, the Lenders identified therein and Bank of America, N.A., as
Administrative Agent. Capitalized terms used but not otherwise defined herein
shall have the meanings provided in the Credit Agreement.
Ladies and Gentlemen:
Pursuant to Section 3.2 of the Credit Agreement, the Borrower hereby
requests an Continuation or Conversion of a Revolving Loan outstanding under the
Credit Agreement, and in connection therewith sets forth below the terms on
which such Continuation or Conversion is requested to be made:
(A) Loan Type __________________
(B) Date of Continuation or Conversion
(which is the last day of the applicable Interest Period) __________________
(C) Principal Amount of Continuation or Conversion __________________
(D) Interest rate basis __________________
(E) Interest Period and the last day thereof __________________
In accordance with the requirements of Section 5.2, the Borrower hereby
represents and warrants that each of the conditions specified in Section 5.2 of
the Credit Agreement have been satisfied as of the date hereof.
Rockford Corporation,
an Arizona corporation
By:
Name:
Title:
Schedule 5.1(f)(v)
FORM OF SECRETARY'S CERTIFICATE
Pursuant to Section 5.1(h)(v) of the Credit Agreement (the "Credit
Agreement"), dated as of June 28, 2001, by and among ROCKFORD CORPORATION, an
Arizona corporation (the "Borrower"), the Guarantors, the Lenders identified
therein and Bank of America, N.A., as Administrative Agent, the undersigned,
___________, Secretary of _______________ (the "Corporation"), hereby certifies
as follows:
97
1. Attached hereto as Annex I is a true and complete copy of
resolutions duly adopted by the board of directors of the Corporation on
_______________________, 200_. The attached resolutions have not been rescinded
or modified and remain in full force and effect. The attached resolutions are
the only corporate proceedings of the Corporation now in force relating to or
affecting the matters referenced therein.
2. Attached hereto as Annex II is a true and complete copy of the
Bylaws of the Corporation as in effect on the date hereof.
3. Attached hereto as Annex III is a true and complete copy of the
Certificate of Incorporation of the Corporation and all amendments thereto as in
effect on the date hereof.
4. Each of the following persons is now a duly elected and qualified
officer of the Corporation, holding the office(s) indicated, and the signature
appearing opposite his/her name below is his/her true and genuine signature, and
such officer is duly authorized to execute and deliver on behalf of the
Corporation, the Credit Agreement, the Notes and the other Credit Documents and
to act as an Executive Officer on behalf of the Corporation under the Credit
Agreement.
Name
Title
Signature
IN WITNESS WHEREOF, the undersigned has hereunto set his/her name and
affixed the corporate seal of the Corporation.
-----------------------------
Secretary
Date: June ___, 2001
(CORPORATE SEAL)
I, _____________________, [title, as shown in table above] of the
Corporation, hereby certify that _______________, whose genuine signature
appears above, is, and has been at all times since ______________, a duly
elected, qualified and acting Secretary of the Corporation.
----------------------------------
[Title]
Date: June ___, 2001
Schedule 6.6
LITIGATION
98
1. A former employee has retained counsel and submitted a demand letter seeking
a severance package including one year's salary, health care benefits and a
mutual releases. Rockford disputes the claims alleged, as well as the amount
owed to the employee. Counsel for Rockford responded to the demand letter on
June 7, 2001. The response provided a counter-offer to pay the former employee
the equivalent of five (5) months salary.
2. In 1998, Integrated Electronic Technologies (IET) alleged in correspondence
that Rockford's patented TOPAZ circuit design infringed a patent of IET. After
several meetings with IET and its counsel during the spring and summer of 2000,
Rockford reiterated to IET its position that the TOPAZ circuit does not infringe
on any of IET's patents. IET did not communicate with Rockford after the summer
of 2000 until Rockford's counsel received a demand letter from IET's new
"litigation counsel" on March 1, 2001, stating that IET had filed a complaint
relating to this claim but seeking to settle the matter before serving the
complaint upon Rockford. Rockford believes that the IET's claim is without
merit.
Schedule 6.8
LIENS
Schedule 6.9
INTELLECTUAL PROPERTY
Schedule 6.9
INTELLECTUAL PROPERTY
(See Attached)
Doc. #285642 v.01 [86823.0017]
H
Schedule 6.9
INTELLECTUAL PROPERTY
U.S. Patents
Issued Patents
METHOD AND DEVICE FOR IMPROVED CLASS BD AMPLIFICATION
HAVING SINGLE-TERMINAL ALTERNATING-RAIL DUAL-
SAMPLING TOPOLOGY
6,097,249
8/1/00
AUDIO AMPLIFIER SYSTEM WITH IMPROVED ISOLATION
BETWEEN PREAMPLIFIER AND POWER AMPLIFIER
5,751,823
5/12/98
DYNAMICALLY INVARIANT AB LINEAR OPERATION AMPLIFIER
5,673,000
9/30/97
DYNAMICALLY INVARIANT AB LINEAR OPERATION AMPLIFIER
99
5,936,467
8/10/99
AUTOMOTIVE AUDIO SYSTEM
5,339,362
8/16/94
AUTOMOTIVE AUDIO SYSTEM
5,546,273
8/13/96
AUDIO PREAMP IMPROVEMENT
4,496,910
1/29/85
TRANSNOVA POWER AMPLIFIER
4,467,288
8/21/84
HEAT SINK Punch 200.2 Divisional Desi
403,666
1/5/99
SPEAKER WAVE GUIDE
402 989
12/22/98 1
HEAT SINK Punch 200,2
401,225
11/17/98
HEAT SINK
368,253
1/26/96
HEAT STNK
315,832
4/2/91
Battery Clamp Patent
6,155,889
1/6/99
ROCKFORD CORPORATION
26210-00153
INTERNATIONAL TRADEMARKS
as of June 27, 2001
COUNTRY
XXXX
Reg/Appl No.
NEXT STEP and DATE DUE
Argentina
R (label)
81,538,432
Renewal due 09/30/05
Argentina
ROCKFORD FOSGATE Design
81,563,069
Renewal due 05/31/05
Argentina
ROCKFORD FOSGATE
81,532,622
100
Renewal due 07/29/05
Argentina
THE PUNCH
81,636,984
Renewal due 07/02/08
Australia
DIAMOND R Design
8633,189
Renewal due 0/24/04
Australia
PUNCH/THE PUNCH
8633,188
Renewal due 06/24/04
Australia
ROCKFORD FOSGATE
8633,187
Renewal due 06/24/04
Botswana
DIAMOND R Design
AFT 19613
Pending
Botswana
PUNCH
BW/M/98/00371
Pending
Botswana
ROCKFORD FOSGATE
AFT19611
Pending
Brazil
ROCKFORD FOSGATE &
DIAMOND R
819,384,216
Awaiting registration
Brazil
ROCKFORD FOSGATE
815,841,540
Registered 07/23/93; abandoned -- replaced by
819,384,216
Brazil
THE PUNCH & DIAMOND R
819,384,224
Renewal in process
Canada
DIAMOND R Design
~R446,636
Renewal due 08/25/10
- -
787652.1
COUNTRY
XXXX
Reg/Appl No.
NEXT STEP and DATE DUE
Canada
PUNCH
8447,053
101
Renewal due 09/01/10
Canada
XXXXXXXX XXXXXXX
0000,000
Xxxxxxx due 02/09/11
Chile
DIAMOND R Design
8468,372
Renewal due 09/27/06
Chile
PUNCH
356,606
Abandoned
Chile
ROCKFORD FOSGATE
8468,371
Renewal due 09/27/06
China
DIAMOND R Design
8595,302
Renewal due 05/20/02
China
HAFLER
8594,167
Renewal due 05/10/02
China
ROCKFORD FOSGATE
8594,166
Renewal due 05/10/02
Colombia
DIAMOND R Design
8188,834
Continuous use req'd. within 3 years; renewal due
08/23/06
Colombia
PUNCH
95,051,653
Reconsideration appeal; -00252
Petition for reconsideration of registration rejection filed 1/15/98; awaiting
co-counsel's answer from 4/2/01 letter
Colombia
ROCKFORD FOSGATE
8188,203
Continuous use req'd. within 3 years; renewal due
08/13/06
Costa Rica
DIAMOND R Design
043,718
Published for opposition
Costa Rica
PUNCH
8116.103
Renewal due 09/20/09
Costa Rica
ROCKFORD FOSGATE
8116.102
102
Renewal due 09/20/09
Denmark
DIAMOND R Design
81690/1997
Use req'd. within 5 years -- 04/11/02
Denmark
PUNCH
2000-03133
Renewal due 07/05/10
2 787652.
COUNTRY
XXXX
Reg/Appl No.
NEXT STEP and DATE DUE
Denmark
ROCKFORD FOSGATE
81689/1997
Use req'd. within 5 years - 04/11/02
Ecuador
DIAMOND R Design
3026-99
Renewal due 12/23/09
Ecuador
PUNCH
3022-99
Renewal due 12/23/09
Ecuador
XXXXXXXX XXXXXXX
0000-00
Xxxxxxx due 12/23/09
Egypt
DIAMOND R DESIGN
8116,636
Renewal due 07/18/08
Egypt
PUNCH
8116,365
Renewal due 07/18/08
Egypt
ROCKFORD FOSGATE
8116,364
Renewal due 07/18/08
Finland
DIAMOND R Design
8140,187
Renewal due 09/20/05
Finland
PUNCH
8142,053
Renewal due 01/05/06
Finland
ROCKFORD FOSGATE
8140,186
Renewal due 09/20/05
Germany
103
PUNCH
82,076,321
Renewal due 07/31/04"
Use required prior to 08/29/99
Germany
PUNCH
81,143,651
Renewal due 12/31/06*
Germany
DIAMOND R Design
82,082,761
Renewal due 07/31/04*
Use required prior to 10/26/99
Germany
ROCKFORD FOSGATE
82,076,872
Renewal due 07/31/04
Use required prior to 9/02/99
Greece
DIAMOND R Design
8119,311
Renewal due -- 05/24/04
Greece
PUNCH
8119,310
Renewal due - 05/24/04
Renewal now is due last day of month
3 787652.1
COUNTRY
XXXX
Reg/Appl No.
NEXT STEP and DATE DUE
Greece
ROCKFORD FOSGATE
8119,309
Renewal due - 05/24/04
Guatemala
DIAMOND R Design
Awaiting publication
Guatemala
PUNCH
893,384
Renewal due 02/01/09
Guatemala
ROCKFORD FOSGATE
890,673
Renewal due 07/26/08
Hong Kong
DIAMOND R Design
810769/96
Renewal due - 06/27/01; in process
Hong Kong
PUNCH
104
88569/97
Renewal due - 06/26/01; in process
Hong Kong
ROCKFORD FOSGATE (Series)
832/98
Awaiting publication
Hong Kong
ROCKFORD FOSGATE
7067/94
Awaiting publication
India
DIAMOND R Design
759,688
Pending
India
PUNCH
759,689
Pending
India
ROCKFORD FOSGATE
759,690
Pending
Indonesia
DIAMOND R Design
8350,130
Renewal due 04/27/04
Indonesia
PUNCH
Cancellation pending vs. X. Xxxxx -00081 - correspondence to co-counsel 9/2/98
re status of cancellation against X. Xxxxx, waiting for response;
fax sent 00/00 /00
Xxxxxxxxx
XXXXXXXX XXXXXXX & Design
8314,889
Renewal due 02/03/03
Ireland
DIAMOND R Design
8206,845
Renewal due 02/27/07
Ireland
PUNCH/THE PUNCH
8206,371
Renewal due 02/27/07
Ireland
ROCKFORD FOSGATE
8205,321
Renewal due 02/27/07
Israel
DIAMOND R Design
8110,801
Taxes due for renewal 03/02/04
4 787652 ,
COUNTRY
105
XXXX
Reg/Appl No.
NEXT STEP and DATE DUE
Israel
PUNCH
8110,799
Taxes due for renewal 03/02/04
Israel
ROCKFORD FOSGATE
8110,800
Taxes due for renewal 03/02/04
Italy (XX Xxxx.)
FOSGATE (Stylized)
8795,073
Renewal due 11/11/07; previous reg. no. 512,597
Italy (RF Corp.)
FOSGATE (Stylized) 8683,689
Renewal due 06/16/04
Italy (RF Corp.)
HAFLER
8683,693
Renewal due 06/16/04
Italy (XX Xxxx.)
XXXXXX
8541,459
Pending under Renewal Appl. No. 00-0000 Xxxxxx;
new renewal due 10/25/09
Italy (RF Corp.)
ROCKFORD FOSGATE
8683,696
Renewal due 06/16/04
Italy (XX Xxxx.)
ROCKFORD FOSGATE
8795,079
Renewal due 11/11/07; previous reg. no. 505,843
Jamaica
DIAMOND R Design
856,307
Renewal due 03/11/04
Jamaica
PUNCH
832,770
Renewal due 03/12/05
Jamaica
ROCKFORD FOSGATE
856,306
Renewal due 03/11/04
Japan
DIAMOND R Design
83,308,627
Renewal due - between 11/24/06 and 05/23/07
Japan
HAFLER
84,199,432
Renewal due 10/16/08
Japan
106
PUNCH IN KATAKANA
82,310,085
Assigned to Rockford; filed 01/22/98; renewal due by
05/31 /01; awaiting certificate of registration
Japan
ROCKFORD FOSGATE
82,557,283
Renewal due 04/30/03; proof of use required during
last three years
Japan
PUNCH
84,337,772
Renewal due 11/26/09
Japan
TRANS NOVA
9-111,979
Pending; gov't. fees paid, proceeding to registration
Kenya
DIAMOND R Design
45,697
Renewal due 04/25/14
5 787652.1
COUNTRY
XXXX
Reg/Appl No.
NEXT STEP and DATE DUE
Kenya
PUNCH
45,696
Renewal due 04/25/14
Kenya
ROCKFORD FOSGATE
45,695
Renewal due 04/25/14
Korea, South
HAFLER
8210,057
Renewal due - 02/20/01; in process
Korea, South
ROCKFORD FOSGATE
8210,056
Renewal due - 02/20/01; in process
Korea, South
The PUNCH with R Design
8210,061
Renewal due - 02/20/01; in process
Malaysia
DIAMOND R DESIGN
MA2339/90
Renewal due 09/04/07
Malaysia
ROCKFORD FOSGATE
MA/2340/90
Published; awaiting registration
Malaysia
107
THE PUNCH
82341/90
Renewal due - 04/09/11
Mexico
DIAMOND R Design
8484,449
Renewal due - 07/13/04
Mexico
PUNCH
8494,651
Renewal due - 07/13/04
Mexico
ROCKFORD FOSGATE
85111,146
Renewal due- 11/09/05
Mexico
THE PUNCH
8494,650
Renewal due - 07/13/04
New Zealand
DIAMOND R Design
8238,328
Renewal due - 06/27/15
New Zealand
PUNCH
8238,327
Renewal due - 06/27/15
New Zealand
ROCKFORD FOSGATE
8238,326
Renewal due - 06/27/15
Nigeria
DIAMOND R Design
856,307
Renewal due 03/11/04
Nigeria
PUNCH
856,308
Renewal due 03/11/04
Nigeria
XXXXXXXX XXXXXXX
XX00,000
Published; awaiting registration
Norway
DIAMOND R Design
8173,274
Renewal due 05/23/06
Norway
PUNCH
8172,799
Renewal due 00/00/00
Xxxxxx
XXXXXXXX XXXXXXX
0000,000
Renewal due 05/09/06
6 7876521
108
COUNTRY
XXXX
Reg/Appl No.
NEXT STEP and DATE DUE
Pakistan
DIAMOND R Design
146,631
Awaiting publication; filed 02/21/98
Pakistan
PUNCH
146,629
Awaiting publication; filed 02/21/98
Pakistan
ROCKFORD FOSGATE
146,630
Awaiting publication; filed 02/21/98
Pakistan
THE PUNCH
Per client, do not file
Paraguay
DIAMOND R Design
8218,614
Renewal due 10/29/09
Paraguay
PUNCH
8174,854
Renewal due 12/29/04
Paraguay
ROCKFORD FOSGATE
8218,613
Renewal due 10/29/09
Peru
DIAMOND R Design
837,825
Renewal due - 07/31/07
Peru
PUNCH
837,744
Renewal due - 07/24/07
Peru
ROCKFORD FOSGATE
837,743
Renewal due - 07/24/07
Philippines
DIAMOND R Design
R4-1994-96762
Affidavit of Use to be filed by 05/15/05 and every five years till 2020; renewal
due 05/15/20
Philippines
PUNCH
864745
Affidavit of Use to be filed by 06/25/02 and every 5 years till 2017; renewal
due 06/25/17
Philippines
ROCKFORD FOSGATE
109
866,385
Affidavit of Use to be filed by 11/04/03 and every 5 years till 2018; renewal
due 11/04/13
Poland
DIAMOND R Design
896,834
Renewal due - 07/05/04
Poland
PUNCH
896,836
Renewal due - 07/05/04
Poland
ROCKFORD FOSGATE
896,835
Renewal due - 07/05/04
Russian Fed.
DIAMOND R Design 8167,293
Renewal due 05/12/07
Russian Fed.
PUNCH
I 8167,642
I Renewal due 05/12/07
/ 787652.1
COUNTRY
XXXX
Reg/Appl No.
NEXT STEP and DATE DUE
Russian Fed.
ROCKFORD FOSGATE
97,706,652
Awaiting final decision on registration
Singapore
DIAMOND R Design
8113/90
Renewal due - 01/04/07
Singapore
XXXXXXXX XXXXXXX
0000/00
Xxxxxxx due - 01/22/07
Singapore
THE PUNCH
8114/90
Renewal due - 01/04/07
South Africa
DIAMOND R DESIGN
93/12,188
Awaiting publication
South Africa
ROCKFORD FOSGATE
93/12,187
Awaiting publication
South Africa
The PUNCH and Design
93/12,186
110
Awaiting publication
Sri Lanka
DIAMOND R Design
82,293
Published; awaiting registration
Sri Lanka
PUNCH
82,294
Awaiting publication
Sri Lanka
ROCKFORD FOSGATE
82,295
Published; awaiting registration
Sweden
DIAMOND R Design
8264,191
Renewal due - 02/03/05
Sweden
ROCKFORD FOSGATE
89,404,723
Renewal due - 01/17/07
Taiwan
ACOUSTAT
8527,899
Renewal due - 06/30/01;
renewal in process
Taiwan
DIAMOND R Design
8526,760
Renewal due - 06/15/01;
renewal in process
Taiwan
HAFLER
8526,761
Renewal due - 06/15/01;
renewal in process
Taiwan
PUNCH
8537,325
Renewal due - 10/30/07
Taiwan
PUNCH POWER
8660,427
Renewal due - 10/31/07
Taiwan
ROCKFORD
8512,327
Renewal due -- 10/31/07
Taiwan
ROCKFORD FOSGATE
8381,791
Renewal due - 10/31/07
Taiwan
THE PUNCH
8381,800
Renewal due - 10/31/07
Tanganyika/Tanzania
DIAMOND R Design
Published; awaiting registration
111
797652 1
COUNTRY
XXXX
Reg/Appl No.
NEXT STEP and DATE DUE
Tanganyika/Tanzania
PUNCH
Pending
Tanganyika/Tanzania
ROCKFORD FOSGATE
Published; awaiting registration
Thailand
DIAMOND R Design
Kor 107,103
Renewal due 11 /18/08
Thailand
HAFLER
Kor 80,060
Renewal due 08/16/08
Thailand
PUNCH
Kor 16,576
Renewal due 08/09/03
Thailand
R ACOUSTAT
Kor 107,878
Renewal due - 10/18/09
Thailand
R PERFECT INTERFACE
--
Abandoned by client
Thailand
R ROCKFORD
Kor 106,766
Renewal due 10/18/09
Thailand
ROCKFORD FOSGATE
Kor 101,462
Renewal due 11/18/08
Thailand
ROCKFORD FOSGATE THE
PUNCH
865094
Renewal due 08/21/06
Turkey
DIAMOND R Design
8160,397
Renewal due 06/22/05
Turkey
PUNCH
8160,294
Renewal due 06/22/05
Turkey
112
ROCKFORD FOSGATE
8160,238
Renewal due 06/22/05
United Kingdom
DIAMOND R Design
81,561,888
Renewal due 02/09/01
United Kingdom
FOSGATE
81,561,887
Renewal due 02/09/01
United Kingdom
ROCKFORD
81,561,902
Renewal due 02/09/01
United Kingdom
ROCKFORD FOSGATE (Stylized)
81,561,782
Renewal due 02/09/01
United Kingdom
THE PUNCH (Stylized)
81,561,819
Renewal due 02/09/01
Uruguay
DIAMOND R Design
8293,658
Renewal due - 12/18/07
9 787652 1
COUNTRY
XXXX
Reg/Appl No.
NEXT STEP and DATE DUE
Uruguay
PUNCH
8293,657
Renewal due - 05/06/08; requested original certificate
10/22/98
Uruguay
ROCKFORD FOSGATE
293,659
Renewal due 12/18/07
Venezuela
DIAMOND R Design
10935/94
Awaiting registration certificate; requested original
certificate 10/23/98; 9/00 approx. receipt of same
Venezuela
PUNCH
8316/94
Awaiting letter from co-counsel re reconsideration of
appeal
Venezuela
ROCKFORD FOSGATE
7569/94
Awaiting registration certificate; requested original
113
certificate 10/23/98; 9/00 approx. receipt of same
Zanzibar
DIAMOND R Design
Pending
Zanzibar
PUNCH
R 59/98
Renewal due -- 03/24/12
Zanzibar
ROCKFORD FOSGATE
Pending
Zimbabwe
DIAMOND R Design
8407/97
Renewal due -- 03/06/07
Zimbabwe
PUNCH
405/97
Published; awaiting registration
Zimbabwe
XXXXXXXX XXXXXXX
0000/00
Xxxxxxx due - 03/06/07
1 0 797652 1
INTERNATIONAL REGISTRATIONS
COUNTRY
XXXX
Reg. No.
NEXT STEP and DATE DUE
Austria, Benelux, Czech
DIAMOND R DESIGN
IR 646,247
Renewal due 10/14/15
Republic, France, Hungary,
("Diamond Device")
Italy, Portugal, Spain,
Declaration of Use in Portugal due 10/14/05
Switzerland, Vietnam
Based on German Reg.
No. 2,082,761
114
Austria, Benelux, China,
THE PUNCH
IR 646,246
Renewal due 10/14/15
France, Italy, Portugal,
Spain, Switzerland, Vietnam,
Declaration of Use in Portugal due 10/14/05;
Czech Republic, Hungary
Based on German Reg.
No. 2,076,871
China, Portugal, Spain,
PUNCH
IR 647,284
Renewal due 10/27/15
Vietnam
Declaration of Use in Portugal due 10/27/05
Based on German Reg.
No. 2,076,321
Austria, Benelux, France,
ROCKFORD FOSGATE
IR 646,695
Renewal due 10/14/15
Portugal, Spain,
Switzerland, Vietnam, Czech
Declaration of Use in Portugal due 10/14/05
Republic, Hungary
115
Based on German Reg.
No. 2,076,872
787652.1
Austria, Benelux, Czech
ROCKFORD FOSGATE
IR 542,724
Renewal due 08/01/09; filed by Oppenhoff & Xxxxxx
Republic, France, Germany,
(Stylized)
Hungary, Liechtenstein,
Declaration of Use due in Portugal 10/14/05
Russian Federation, Spain,
San Marino, Monaco,
Based on Italian Reg.
Switzerland
No. 505,843
Austria, Benelux, France,
PUNCH
IR 541,878
Renewal due 08/24/09; awaiting renewal certificate
Italy, Liechtenstein, Monaco,
Based on German Reg.
from previous renewal
Switzerland
No. 1,143,651
China, Russian Federation,
HAFLER
IR 568,728
Renewal due 03/06/01; in process (Oppenhoff &
Switzerland
116
Xxxxxx)
Based on Italian Reg.
No. 541,459
12 787652 1
ROCKFORD DOMESTIC TRADEMARKS
26210-00151
June 27, 2001
Trademark
A 1. No.
Dated
Reg. No.
Dated
Renewal
Due Date
Comments/Next Step
BOOMER
74/162,599
05/01/81
1,695,594
06/16/92
06/16/02
Xxxx Assigned to National Semiconductor
Corp.; Sec. 8 affidavit
ACOUSTAT
73/533,363
04/22/85
1,364,265
10/08/85
10/08/05
Renewal due 10/08/05
ACHROMATIC E
00/397,452
09/30/82
Abandoned
CAR AUDIO
FOR FANATICS
74/725,857
09/06/95
Withdrawn without prejudice 09/26/96
CAR AUDIO
FOR FANATICS
75/350,479
117
09/02/97
2,206,943
12/01/98
12/01/08
Sec. 8/15 due between 12/01/03 &12/01/04
CONNECTING
PUNCH
75/330,996
07/25/97
2,190,790
09/22/98
09/22/08
Sec. 8/15 due between 09/22/03 & 09/22/04
EPX
74/661,153
04/13/95
1,956,529
02/13/96
02/13/06
Sec. 8/15 due between 02/13/01 & 02/13/02
FANATIC P
75/387,975
11/10/97
2,267,726
08/03/99
08/03/09
Sec. 8/15 due between 08/03/04 & 08/03/05
FANATIC Q
75/387,923
11/10/97
2,267,724
08/03/99
08/03/09
Sec. 8/15 due between 08/03/04 & 08/03/05
FANATIC X
75/387,940
11/10/97
2,267,725
08/03/99
09/03/09
Sec. 8/15 due between 08/03/04 & 08/03/05
HAFLER
73/744,026
08/04/88
1,573,000
12/26/89
12/26/99
Renewal due 12/26/09
IRIS
73/792,685
04/11/89
1,576,152
01/09/90
01/09/00
Abandoned
PERFECT
INTERFACE
118
73/812,411
07/14/89
1,592,841
04/24/90
04/24/00
Abandoned per client 04/96
PRACTICE SAFE
SOUND
74/096,073
09/10/90
Abandoned
PUNCH
73/723,547
04/20/88
1,514,462
11/29/88
11/29/08
Renewal due 11/29/08
PUNCH
74/661,158
04/13/95
2,108,111
10/28/97
10/28/07
Sec. 8/15 due between 10/28/02 & 10/28/03
PUNCH DSM
74/689,855
06/16/95
2,013,318
11/05/96
11/05/06
Sec. 8/15 due between 11/05/01 & 11/05/02
R (Stylized) & Design
74/661,157
04/13/95
Abandoned by client 08/96
--
822808 1
Trademark
A 1. No.
Dated
Re g. No.
Dated
Renewal
Due Date
Comments/Next Step
R and Desi
73/727,942
05/12/88
1,524,277
119
02/14/89
02/14/09
Renewal due 02/14/09
RF Design
Never filed per client 10/95
RF PUNCH & DESIGN
74/716,952
08/17/95
2,005,905
10/08/96
10/08/06
Sec. 8/15 due between 10/08/01 & 10/08/02
ROCKFORD
FOSGATE
73/289,325
12/11/80
1,216,478
11/16/82
11/16/02
Renewal due 11/16/02
ROCKFORD
FOSGATE (Stylized)
73/723,591
04/15/88
1,526,601
02/28/89
02/28/09
Renewal due 02/28/09
SERIES 1
74/147,595
03/14/91
1,801,415
10/26/93
10/26/03
Abandoned per client 08/98
SERIES 1
74/147,514
03/14/91
1,715,158
09/15/92
09/15/02
Abandoned per client 09/11/97
SYMMETRY
74/105,296
10/12/90
1,712,627
09/01/92
09/01/02
Renewal due 09/01/02
THE BOX
THAT ROCKS
74/644,588
120
03/10/95
Abandoned
THE PUNCH
73/723,560
04/20/88
1,515,245
12/06/88
12/06/08
Renewal due 12/06/08
TOPAZ
74/676,045
05/18/95
2,021,730
12/10/96
12/10/06
Sec. 8/15 due between 12/10/01 & 12/10/02
TRANS-NOVA
00/355,961
03/22/82
1,259,237
11/29/83
11/29/03
Abandoned 4/90
TRANS-NOVA
74/661,135
04/13/95
1,961,961
03/12/96
03/12/06
Sec. 8/15 due between 03/12/01 & 12/02
RF ARROW Design
oval
76/102,564
08/02/00
Published 04/24/01; awaiting registration
VRM
76/101,226
08/02/00
Published 04/17/01; awaiting registration
ROCKFORD
FOSGATE/DIAMOND
R Desi
Awaiting return from client
000
XX Xxxxx Desi
Awaiting return from client
DIAMOND R Design
Cl. 6, 14, 25
Awaiting return from client
TEAM ROCKFORD
FOSGATE w/Oval RF
Arrow Design
Awaiting return from client
2
LIGHTNING AUDIO Trademarks
26210-00300
June 27, 2001
Trademark
A 1. No.
Dated
Re g. No.
Dated
Renewal
Due Date
Comments/Next Step
BOLT
75/822,847
10/11/99
Published for Opposition 01/16/01; awaiting
registration
STRIKE
75/822,846
10/14/99
2,431,126
02/27/01
02/27/11
Section 8/15 Affidavit due 02/27/06 -
02/27/07
122
3
822908.1
ROCKFORD CORPORATION
26210-00300
LIGHTNING AUDIO TRADEMARKS
as of June 27, 2001
COUNTRY
XXXX
Reg/Appl No.
Co-Counsel
NEXT STEP and DATE DUE
Brazil
BOLT
823,181,715
Momsen
Awaiting registration; application filed
09/26/00; published for opposition
11 /28/00
Brazil
LIGHTNING AUDIO
823,181,723
Momsen
Awaiting registration; application filed
09/26/00
Brazil
STORM
823,428,494
Momsen
Awaiting registration; application filed
123
11 /29/00
Brazil
STRIKE
823,424,448
Momsen
Awaiting registration; application filed
11 /28/00
CTM
BOLT
81,440,619
Bureau Gevers
Registered 01/29/01; renewal due
12/24/09
CTM
LIGHTNING AUDIO & Design
8423,806
Bureau Gevers
Registered 11/30/99; renewal due
08/05/07
CTM
STORM
1,440,650
Bureau Gevers
Published, awaiting registration
1155382 1
COUNTRY
XXXX
Reg/Appl No.
Co-Counsel
NEXT STEP and DATE DUE
CTM
STRIKE
81,440,650
Bureau Gevers
Registered 01/26/01; renewal due
12/24/09
Germany
BOLT
Oppenhoff
124
On hold
Germany
LIGHTNING AUDIO
Oppenhoff
On hold
Germany
STORM
Oppenhoff
On hold
Germany
STRIKE
Oppenhoff
On hold
Japan
BOLT
11-72550
Matsubara
Awaiting registration; filed 08/11/99
Japan
LIGHTNING AUDIO and Design
2000/122,439
Matsubara
Awaiting registration; filed 11/13/00
Japan
LIGHTNING AUDIO CORPORATION
84,405,401
Matsubara
Registered 08/04/00; renewal due 08/04/10
Japan
STORM
11-72548
Matsubara
Awaiting registration; filed 08/11/99
Japan
STRIKE
11-72549
Matsubara
Awaiting registration; filed 08/11/99
Norway
LIGHTNING AUDIO
8184,480
Cegumark
Registered?
Need to check w/co- counsel re copy of
registration certificate
Paraguay
BOLT
19,308
Xxxxxxxxxx
Awaiting registration; filed 08/01/00
Paraguay
LIGHTNING AUDIO (Stylized)
125
19,310
Xxxxxxxxxx
Awaiting registration; filed 08/01/00
Paraguay
STORM
19,303
Xxxxxxxxxx
Awaiting registration; filed 08/01/00
Paraguay
STRIKE
19,309
Xxxxxxxxxx
Awaiting registration; filed 08/01/00
1. _
2 1155382.,
COUNTRY
XXXX
Reg/Appl No.
Co-Counsel
NEXT STEP and DATE DUE
Switzerland
LIGHTNING AUDIO
8441,597
Cegumark
Registered 05/29/97; renewal due
12/09/06; need to check w/co-
counsel re copy of registration
certificate
United Kingdom
BOLT
Xxxxxxx/Xxxxxx
On hold
United Kingdom
LIGHTNING AUDIO
Xxxxxxx/Xxxxxx
On hold
United Kingdom
STORM
Xxxxxxx/Xxxxxx
On hold
000
Xxxxxx Xxxxxxx
XXXXXX
Xxxxxxx/Xxxxxx
Xx hold
United States
BOLT
75/822,847
Registered 04/10/01; 8/15 declaration
2,2442,197
due 04/10/06 - 04/10/07; 8/9 renewal
due 04/10/10 - 04/10/11
United States
LIGHTNING AUDIO and Design
74/612,343
Registered 01/02/96; 8/15 declaration
1,945,498
due 01/02/01 - 01/02/02, filed
04/04/01; 8/9 renewal due 01/02/05-
01 /02/06
United States
PNR/PORT NOISE REDUCTION
74/684,723
Registered 05/26/96; 8/15 declaration
Design
1,976,543
due 05/28/01 - 05/28/02, client
abandoned 04/01
United States
STRIKE
127
75/822,846
Registered 02/27/01; 8/15 declaration
2,431,126
due 02/27/06 - 02/27/07; 8/9 renewal
due 02/27/10 - 02/27/11
3 1155382 1
Schedule 6.14
SUBSIDIARIES
SUBSIDIARIES
Rockford Singapore Corporation, an Arizona corporation
Xxxx Xxxxx, Singapore Operations Manager
000 Xxxx Xxxxx Xxxxxxx Xxxx
Xxxxxxxx Xxxxxxxxx xxxxxxx #00-00/00
Xxxxxxxxx 000000
Tele 000-00-000-0000
Fax 000-00-000-0000
Rockford (Europe) Elektronik Vertriebs GmbH, a German GmbH
Xxxx-Xxxxxx Xxxx, European Operations Manager
Xx Xxxxxxx 0
00000 Xxxxx
Xxxxxxx
Tele 000-00-0000-0000-0
Fax 000-00-0000-0000-00
Rockford Japan Corporation, a Japanese corporation
Norio Kawasaki, Operations Manager
514-1 Hita, Kannami-Cho
Xxxxxx-Xxx
Xxxxxxxx-Xxx, 000-00
Xxxxx
Tele 000-00-000-000000
Fax 000-00-000-000000
Rockford Foreign Sales Corporation, a Barbados corporation
Xxxxxxxx Xxxxxxx-XxXxxxxx, Senior Administrator, Corporate Services
Ernst & Young Building
Xxx Xxxxxx
000
X.X. Xxx 000
Xxxxxxxxxx,
Xxxxxxxx
Tele 0-000-000-0000
Fax 0-000-000-0000
Lightning Audio Corporation, an Arizona corporation
c/o Xxxxx Xxxxx
Xxxxxxx & Xxxxxxx LLP
000 X Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Tele 000-000-0000
Fax 000-000-0000
Rockford Xxxxx.Xxx, Inc., an Arizona corporation
W. Xxxx Xxxxxx, Chief Executive Officer
000 Xxxxx Xxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Schedule 6.16
ERISA MATTERS
In 1995, Rockford Corporation permitted certain employees to purchase
convertible debentures issued by Rockford, using their account assets in the
Rockford 401(k) plan. In a 1999 plan audit, it was determined that the purchase
and holding of such debentures might constitute a violation of ERISA, the
prohibited transaction rules of ERISA and the Internal Revenue Code ("Code"), as
well as a potential violation of the nondiscrimination rules for qualified plans
under the Code. Rockford coordinated the removal of the debentures from the
401(k) plan.
On December 22, 1999, Rockford filed a request for an exemption from
the prohibited transaction provisions of ERISA and the Code with the Department
of Labor. In April of 2000, Rockford disclosed these violations to the Internal
Revenue Service ("IRS"), advised the IRS of its voluntary corrections and sought
a settlement agreement from the IRS with respect to these potential violations.
It filed the necessary IRS excise tax returns, paid the tax, and has reached a
closing agreement with the IRS on the potential Code violations. That closing
agreement should be signed in June or July of 2001. The Labor Department is
considering Rockford's request for an exemption or, in the alternative, its
informal request for the Department to rule that the removal of all debentures
from the plan was a correction of the violation for purposes of the prohibited
transaction provisions of ERISA and the Code.
Schedule 6.18
LABOR MATTERS
There are no pending or threatened labor matters.
Schedule 7.1(c)
129
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended _________________, ________.
I, ______________________, [Title] of Rockford Corporation (the
"Borrower") hereby certify that, to the best of my knowledge and belief, with
respect to that certain Credit Agreement dated as of June 28, 2001 (as amended,
modified, supplemented, increased and extended from time to time, the "Credit
Agreement"; all of the defined terms in the Credit Agreement are incorporated
herein by reference) among the Borrower, the Guarantors and Lenders party
thereto, and Bank of America, N.A., as Administrative Agent:
a. The company-prepared financial statements which accompany this
certificate are true and correct in all material respects and have been prepared
in accordance with GAAP applied on a consistent basis, subject to changes
resulting from normal year-end audit adjustments.
b. Since ___________ (the date of the last similar certification, or,
if none, the Closing Date) no Default or Event of Default has occurred under the
Credit Agreement.
Delivered herewith are detailed calculations demonstrating compliance
by the Credit Parties with the financial covenants contained in Section 7.11 of
the Credit Agreement as of the end of the fiscal period referred to above.
This ______ day of ___________, 200_.
ROCKFORD CORPORATION,
an Arizona corporation
By:
Name:
Title:
Attachment to Officer's Certificate
Computation of Financial Covenants
1. Consolidated EBITDA.
(a) Consolidated Net Income
(excluding any extraordinary
gains or losses and related tax
effects thereon) $
(b) Consolidated Interest Expense
(to the extent deducted in determining
net income) $
(c) taxes (to the extent deducted in
determining net income) $
(d) depreciation and amortization
(to the extent deducted in determining
130
net income) $
(e) Consolidated EBITDA
[(a) + (b) + (c) + (d)] $
2. Consolidated Total Leverage Ratio.
(a) Consolidated Total Funded Debt $
(b) Consolidated EBITDA $
(c) Consolidated Total Leverage Ratio
[(a) / (b)] :1.0
3. Consolidated Fixed Charge Coverage Ratio.
(a) Consolidated Adjusted EBITDAR
(i) Consolidated EBITDA $
(ii) rent and lease expense $
(iii) cash taxes paid $
(iv) Consolidated Capital Expenditures $
(v) Consolidated Adjusted EBITDAR
[(i) + (ii) - (iii) - (iv)] $
(b) Consolidated Fixed Charges
(i) cash portion of Consolidated Interest
Expense $
(ii) rent and lease expense $
(iii) current maturities of Consolidated
Total Funded Debt $
(iv) Consolidated Fixed Charges
[(i) + (ii) + (iii)] $
(c) Consolidated Fixed Charge Coverage Ratio
[(a)(v) / (b)(iv)] : 1.0
4. Consolidated Net Worth.
(a) Consolidated Net Worth $
5. Consolidated Capital Expenditures.
(a) Consolidated Capital Expenditures $
Schedule 7.1(d)
FORM OF
131
BORROWING BASE CERTIFICATE
For the calendar month ended _______________, 200_.
I, ______________________, ________________ [title] of ROCKFORD
CORPORATION, an Arizona corporation (the "Borrower"), hereby certify that, to
the best of my knowledge and belief, with respect to that certain Credit
Agreement dated as of June 28, 2001 (as amended, modified, supplemented,
increased and extended from time to time, the "Credit Agreement"; all of the
defined terms in the Credit Agreement are incorporated herein by reference)
among the Borrower, the Guarantors, the Lenders and Bank of America, N.A., as
Administrative Agent and as Collateral Agent:
RECEIVABLES
1. Receivables (as defined in the
definition of Eligible Receivables in
Section 1.1 of the Credit Agreement)
owned by or owing to the Credit
Parties on a consolidated basis after
deducting retainage and allowances
or reserves relating thereto $_____________
2. (i) Receivables owing to an account
debtor that is not solvent or is subject
to any bankruptcy or insolvency
proceeding of any kind $_____________
(ii) Receivables that are not subject to
a perfected, first priority Lien in favor
of the Collateral Agent to secure the
Obligations $_____________
(iii) Receivables subject to any Lien,
other than a Permitted Lien $_____________
(iv) Sum of lines (i) through (iii)$_____________
3. Eligible Receivables
(95% of the sum of Line 1 less Line 2(iv)) $_____________
4. Eligible Receivables Borrowing Base
(85% of Eligible Receivables) $_____________
INVENTORY
5. Inventory (the lower of the aggregate
book value or fair market value of all
raw materials and finished goods inventory held
for sale or lease owned by the
Credit Parties less appropriate reserves determined,
as to any inventory held
for sale only, in accordance with GAAP $_____________
6. (i) Inventory that is not subject to a
perfected, first priority Lien in favor
132
of the Collateral Agent to secure the
Obligations $_____________
(ii) Inventory subject to any Lien,
other than a Permitted Lien $_____________
(iii) Inventory in excess of $5 million
located outside of the United States $_____________
(iv) Inventory held or stored on premises not owned or leased by a
Credit Party, unless the owner or tenant of such premises shall have
given written acknowledgment of the security interest in favor of the
Collateral Agent in form and substance satisfactory to the
Administrative Agent (subject to normal statutory mechanics and
laborers liens), except for such inventory held under existing
arrangements (in which case the Credit Parties shall use reasonable
efforts to secure acceptable acknowledgments), provided that where
existing arrangements are formally modified or extended, acceptable
acknowledgements are obtained $_____________
(v) Sum of lines (i) through (iv) $_____________
7. Eligible Inventory
(85% of the sum of Line 6 less Line 7(v)) $_____________
8. Eligible Inventory Borrowing Base
(50% of Eligible Inventory) $_____________
BORROWING BASE
9. Total Borrowing Base availability
(Line 4 plus Line 8) $_____________
10. Aggregate outstanding Obligations $_____________
11. If Line 9 is greater than Line 10,
then the difference (or, if less, the
remaining amount of the Revolving
Committed Amount) is available for
Extensions of Credit Available Amount: $_____________
If Line 10 is greater than Line 9, then the Borrower shall prepay or
otherwise reduce so much of the outstanding Obligations as shall be
necessary to eliminate such excess Amount to be Prepaid: $____________
With reference to this Borrowing Base certificate, I hereby certify
that the above statements are true and correct.
133
IN WITNESS WHEREOF, I have hereunto set my hand and seal this _____ day
of ______________, 200_.
ROCKFORD CORPORATION,
an Arizona corporation
By:
Name:
Title:
Schedule 7.6
INSURANCE
See Attached
Schedule 7.12
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of _____________,
___, is by and between _____________________, a ___________________ (the
"Subsidiary"), and Bank of America, N.A., in its capacity as Administrative
Agent under that certain Credit Agreement (as amended, modified, supplemented,
increased and extended from time to time, the "Credit Agreement"), dated as of
June 28, 2001, among Rockford Corporation, an Arizona corporation (the
"Borrower"), the Subsidiaries and Affiliates of the Borrower identified therein
(collectively, the "Guarantors"), the Lenders identified therein and Bank of
America, N.A., as Administrative Agent. All of the defined terms in the Credit
Agreement are incorporated herein by reference.
The Credit Parties are required by Section 7.12 of the Credit Agreement
to cause the Subsidiary to become a "Guarantor".
Accordingly, the Subsidiary hereby agrees as follows with the
Administrative Agent, for the benefit of the Lenders:
1. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Credit Agreement and a "Guarantor" for all purposes of the Credit Agreement, and
shall have all of the obligations of a Guarantor thereunder as if it had
executed the Credit Agreement. The Subsidiary hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
applicable to the Guarantors contained in the Credit Agreement. Without limiting
the generality of the foregoing terms of this paragraph 1, the Subsidiary hereby
jointly and severally together with the other Guarantors, guarantees to each
Lender and the Administrative Agent, as provided in Section 4 of the Credit
Agreement, the prompt payment and performance of the Guaranteed Obligations in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise) strictly in accordance with the terms thereof.
2. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Security Agreement, and shall have all the obligations of an "Grantor" (as such
term is defined in the Security Agreement) thereunder as if it had executed the
134
Security Agreement. The Subsidiary hereby ratifies, as of the date hereof, and
agrees to be bound by, all of the terms, provisions and conditions contained in
the Security Agreement. Without limiting generality of the foregoing terms of
this paragraph 2, the Subsidiary hereby grants to the Administrative Agent, for
the benefit of the Lenders, a continuing security interest in, and a right of
set off against any and all right, title and interest of the Subsidiary in and
to the Collateral (as such term is defined in Section 2 of the Security
Agreement) of the Subsidiary. The Subsidiary hereby represents and warrants to
the Administrative Agent that:
(i) The Subsidiary's chief executive office and chief place of
business are (and for the prior four months have been) located at the locations
set forth on Schedule 1 attached hereto and the Subsidiary keeps its books and
records at such locations.
(ii) The type of Collateral owned by the Subsidiary and the
location of all Collateral owned by the Subsidiary is as shown on Schedule 2
attached hereto.
(iii) The Subsidiary's legal name is as shown in this
Agreement and the Subsidiary has not in the past four months changed its name,
been party to a merger, consolidation or other change in structure or used any
tradename except as set forth in Schedule 3 attached hereto.
(iv) The patents and trademarks listed on Schedule 4 attached
hereto constitute all of the registrations and applications for the patents and
trademarks owned by the Subsidiary.
3. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Pledge Agreement, and shall have all the obligations of a "Pledgor" thereunder
as if it had executed the Pledge Agreement. The Subsidiary hereby ratifies, as
of the date hereof, and agrees to be bound by, all the terms, provisions and
conditions contained in the Pledge Agreement. Without limiting the generality of
the foregoing terms of this paragraph 3, the Subsidiary hereby pledges and
assigns to the Administrative Agent, for the benefit of the Lenders, and grants
to the Administrative Agent, for the benefit of the Lenders, a continuing
security interest in any and all right, title and interest of the Subsidiary in
and to Pledged Shares (as such term is defined in Section 2 of the Pledge
Agreement) listed on Schedule 5 attached hereto and the other Pledged Collateral
(as such term is defined in Section 2 of the Pledge Agreement).
4. The address of the Subsidiary for purposes of all notices and other
communications is ____________________, ____________________________, Attention
of ______________ (Facsimile No. ____________).
5. The Subsidiary hereby waives acceptance by the Administrative Agent
and the Lenders of the guaranty by the Subsidiary under Section 4 of the Credit
Agreement upon the execution of this Agreement by the Subsidiary.
6. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
7. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of Arizona.
135
IN WITNESS WHEREOF, the Subsidiary has caused this Joinder Agreement to
be duly executed by its authorized officers, and the Administrative Agent, for
the benefit of the Lenders, has caused the same to be accepted by its authorized
officer, as of the day and year first above written.
[SUBSIDIARY]
By:
Name:
Title:
Acknowledged and accepted:
BANK OF AMERICA, N.A.,
as Administrative Agent
By:
Name:
Title:
Schedule 8.1
INDEBTEDNESS
A. Rockford Corporation (USA)
Banc One Leasing Corporation
0000 Xxxxxxx Xxxxxxx, Xxxxx X0
Xxxxxxxx XX 00000
$5,000,000 capital lease credit facility for equipment financing, $823,700
utilized, expires June 1, 2001.
Lease # 0000000000, current balance = $226,500.00
Lease # 1000100950, current balance = $369,500.00
Lease # 1000108168, current balance = $227,700.00
B. Bank of America
$5,000,000 line of credit, start date of June 20, 2001.
C. Rockford Japan Corporation
See attached
D. Standby Letter of Credit is open with Finova for the benefit
of Toronto Dominion Bank for USD 30,000. Expires in October 2001.
Schedule 8.6
INVESTMENTS
We periodically invest excess cash in overnight investments with:
136
Banc One Capital Markets, Inc.
000 X. Xxxxxxx Xxxxxx
XX0-0000
Xxxxxxx, XX 00000
(000) 000-0000
Schedule 11.1
LENDERS' ADDRESSES
Credit Contact
Operations Contact
Bank of America, X.X.
Xxxxxxx Center
000 X. Xxxxxxxxxx Xxxxxx
XX0-000-00-00
Xxxxxxx, Xxxxxxx 00000-0000
Xxxxxx Xxxxxx
Ph: 000-000-0000
Fx: 000-000-0000
Bank of America, N.A.
000 X. XxXxxxx Xxxxxx
XX0-000-00-00
Xxxxxxx, Xxxxxxxx 00000
Xxxxxxx Xxxx
Ph: 000-000-0000
Fx: 000-000-0000
Bank One, Arizona, N.A.
000 X. Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx XX0-0000
Xxxxxxx, Xxxxxxx 00000
Xxxxxxx Xxxxxxx
Ph: 000-000-0000
Fx: 000-000-0000
Bank One, Arizona, N.A.
000 X. Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx XX0-0000
Xxxxxxx, Xxxxxxx 00000
Xxxxxxx Xxxxxxx
Ph: 000-000-0000
Fx: 000-000-0000
Schedule 11.3(b)
FORM OF ASSIGNMENT AND ACCEPTANCE
137
THIS ASSIGNMENT AND ACCEPTANCE, dated as of ______________, (this
"Assignment"), is entered into between THE LENDER IDENTIFIED ON THE SIGNATURE
PAGES AS THE "ASSIGNOR" (the "Assignor") and THE PARTY IDENTIFIED ON THE
SIGNATURE PAGES AS "ASSIGNEE" ("Assignee").
Reference is made to the Credit Agreement dated as of June 28,2001 (as
amended, modified, supplemented, increased and extended from time to time, the
"Credit Agreement") among ROCKFORD CORPORATION, an Arizona corporation (the
"Borrower"), the Subsidiaries and Affiliates of the Borrower identified therein
(collectively, the "Guarantors"), the Lenders identified therein and Bank of
America, N.A., as Administrative Agent. Capitalized terms defined in the Credit
Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns to the Assignee, without
recourse and without representation or warranty except as expressly set forth
herein, and the Assignee hereby purchases and assumes from the Assignor,
effective as of the effective date set forth in paragraph 9(c) hereof (the
"Effective Date"), those rights and interests of the Assignor under the Credit
Agreement and the other Credit Documents identified on Schedule 1 hereto (the
"Assigned Interests"), together with unpaid interest and fees relating to the
Assigned Interests accruing from the Effective Date. After giving effect to such
sale and assignment, the Commitment of, and the amount of the Loans owing to,
the Assignor and the Assignee will be as set forth on Schedule 1 hereto.
Schedule 2.1(a) is deemed modified and amended to the extent necessary to give
effect to this Assignment.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Credit Party or
the performance or observance by any Credit Party of any of its obligations
under the Credit Documents or any other instrument or document furnished
pursuant thereto; and (iv) attaches the Notes held by the Assignor and requests
that the Administrative Agent exchange such Notes for new Notes payable to the
order of the Assignee in an amount equal to the Commitment assumed by the
Assignee pursuant hereto and to the Assignor in an amount equal to the
Commitment retained by the Assignor, if any, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Documents, together with copies of the financial statements referred to in
Section 7.1 of the Credit Agreement and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment; (ii) agrees that it will, independently and without
reliance upon the Administrative Agent, the Assignor 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 the Credit Agreement and the other Credit Documents; (iii) confirms that
it is an Eligible Assignee; (iv) appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement and the other Credit Documents as are
delegated to the Administrative Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; (v) agrees that it
138
will perform in accordance with their terms all of the obligations that by the
terms of the Credit Agreement are required to be performed by it as a Lender;
and (vi) attaches any U.S. Internal Revenue Service or other forms required
under Section 3.11.
4. Following the execution of this Assignment, it will be delivered to
the Administrative Agent for acceptance and recording by the Administrative
Agent. The effective date for this Assignment shall be the Effective Date.
5. Upon such acceptance and recording by the Administrative Agent, as
of the Effective Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment, have the rights and obligations
of a Lender thereunder and (ii) the Assignor shall, to the extent provided in
this Assignment, relinquish its rights and be released from its obligations
under the Credit Agreement.
6. Upon such acceptance and recording by the Administrative Agent, from
and after the Effective Date, the Administrative Agent shall make all payments
under the Credit Agreement and the Notes in respect of the interest assigned
hereby (including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The Assignor and Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
and the Notes for periods prior to the Effective Date directly between
themselves.
7. This Assignment shall be governed by, and construed in accordance
with, the laws of the State of North Carolina.
8. This Assignment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
Schedule 1 to this Assignment by telecopier shall be effective as delivery of a
manually executed counterpart of this Assignment.
9. Terms of Assignment:
(a) Legal Name of Assignor: SEE SIGNATURE PAGE
(b) Legal Name of Assignee: SEE SIGNATURE PAGE
(c) Effective Date of Assignment:
, __
See Schedule I attached for a description of the Loans, Obligations and
Commitments (and the percentage interests therein and relating thereto) which
are the subject of this Assignment.
10. The fee payable to the Administrative Agent in connection with this
Assignment is enclosed.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Assignment to
be executed by their officers thereunto duly authorized as of the date hereof.
____________________, as Assignor
By:
Name:
139
Title:
_____________________, as Assignee
By:
Name:
Title:
Notice address of Assignee:
________________________________
________________________________
Attn: ______________________
Telephone: (___) ____________
Telecopy: (___) ____________
CONSENTED TO AND ACCEPTED:
BANK OF AMERICA, N.A.,
as Administrative Agent
By:
Name:
Title:
ROCKFORD CORPORATION, an Arizona corporation *
By:
Name:
Title:
SCHEDULE I
TO ASSIGNMENT AND ACCEPTANCE
ROCKFORD CORPORATION
REVOLVING LOANS AND LOC OBLIGATIONS PRIOR TO ASSIGNMENT
Revolving
Committed
Amount
Revolving
Commitment
Percentage
Revolving
Loans
Outstanding
LOC
Committed
Amount
LOC
Obligations
140
Outstanding
ASSIGNOR
ASSIGNEE
$
141
%
$
$
$
SCHEDULE I
TO ASSIGNMENT AND ACCEPTANCE
ROCKFORD CORPORATION
REVOLVING LOANS AND LOC OBLIGATIONS SUBJECT TO THIS ASSIGNMENT
Revolving
Committed
Amount
Revolving
Commitment
Percentage
Revolving
Loans
Outstanding
LOC
Committed
Amount
LOC
Obligations
Outstanding
ASSIGNOR
ASSIGNEE
142
$
%
$
$
$
SCHEDULE I
TO ASSIGNMENT AND ACCEPTANCE
ROCKFORD CORPORATION
REVOLVING LOANS AND LOC OBLIGATIONS AFTER ASSIGNMENT
Revolving
Committed
Amount
Revolving
Commitment
Percentage
Revolving
Loans
Outstanding
LOC
Committed
143
Amount
LOC
Obligations
Outstanding
ASSIGNOR
ASSIGNEE
144
$
%
$
$
$
* Required if no Event of Default has occurred and is continuing.
1
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ROCKFORD CORPORATION
CREDIT AGREEMENT
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CREDIT AGREEMENT
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