EXHIBIT 4
CREDIT AGREEMENT
DATED AS OF JULY 30, 2003
AMONG
PARK-OHIO INDUSTRIES, INC.,
AS BORROWER,
THE LOAN PARTIES PARTY HERETO,
THE LENDERS PARTY HERETO FROM TIME TO TIME,
BANK ONE, NA,
AS AGENT AND LC ISSUER
AND
KEYBANK NATIONAL ASSOCIATION,
AS SYNDICATION AGENT
AND
BANC ONE CAPITAL MARKETS, INC.,
AS LEAD ARRANGER AND SOLE BOOK RUNNER
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS........................................................................................... 1
ARTICLE II. THE FACILITY......................................................................................... 14
2.1. THE FACILITY........................................................................................... 14
2.2. RATABLE LOANS; RISK PARTICIPATION...................................................................... 14
2.3. PAYMENT OF THE OBLIGATIONS............................................................................. 14
2.4. MINIMUM AMOUNT OF EACH ADVANCE......................................................................... 14
2.5. FUNDING ACCOUNT........................................................................................ 14
2.6. RELIANCE UPON AUTHORITY; NO LIABILITY.................................................................. 14
2.7. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES.................................................... 14
2.8. TELEPHONIC NOTICES..................................................................................... 14
2.9. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND COMMITMENT REDUCTIONS........................ 14
2.10. FEES................................................................................................... 14
2.11. INTEREST RATES......................................................................................... 14
2.12. EURODOLLAR ADVANCES POST DEFAULT; DEFAULT RATES........................................................ 14
2.13. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS......................................................... 14
2.14. VOLUNTARY PREPAYMENTS.................................................................................. 14
2.15. MANDATORY PREPAYMENTS.................................................................................. 14
2.16. TERMINATION OF THE FACILITY............................................................................ 14
2.17. METHOD OF PAYMENT...................................................................................... 14
2.18. APPORTIONMENT, APPLICATION, AND REVERSAL OF PAYMENTS................................................... 14
2.19. SETTLEMENT............................................................................................. 14
2.20. INDEMNITY FOR RETURNED PAYMENTS........................................................................ 14
2.21. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS........................................................... 14
2.22. LENDING INSTALLATIONS.................................................................................. 14
2.23. NON-RECEIPT OF FUNDS BY THE AGENT...................................................................... 14
2.24. FIXED CHARGE COVERAGE RATIO CONDITION.................................................................. 14
2.25. DESIGNATED SENIOR INDEBTEDNESS......................................................................... 14
ARTICLE III. YIELD PROTECTION; TAXES............................................................................. 14
3.1. YIELD PROTECTION....................................................................................... 14
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS................................................................ 14
3.3. AVAILABILITY OF TYPES OF ADVANCES...................................................................... 14
3.4. FUNDING INDEMNIFICATION................................................................................ 14
3.5. TAXES.................................................................................................. 14
3.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY............................................................... 14
ARTICLE IV. CONDITIONS PRECEDENT................................................................................. 14
4.1. EFFECTIVENESS.......................................................................................... 14
4.2. EACH CREDIT EXTENSION.................................................................................. 14
4.3. POST-CLOSING CONDITIONS............................................................................... 14
ARTICLE V. REPRESENTATIONS AND WARRANTIES........................................................................ 14
5.1. EXISTENCE AND STANDING................................................................................. 14
5.2. AUTHORIZATION AND VALIDITY............................................................................. 14
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5.3. NO CONFLICT; GOVERNMENT CONSENT........................................................................ 14
5.4. SECURITY INTEREST IN COLLATERAL........................................................................ 14
5.5. FINANCIAL STATEMENTS................................................................................... 14
5.6. MATERIAL ADVERSE CHANGE................................................................................ 14
5.7. TAXES.................................................................................................. 14
5.8. LITIGATION AND CONTINGENT OBLIGATIONS.................................................................. 14
5.9. CAPITALIZATION AND SUBSIDIARIES........................................................................ 14
5.10. ERISA.................................................................................................. 14
5.11. ACCURACY OF INFORMATION................................................................................ 14
5.12. NAMES; PRIOR TRANSACTIONS.............................................................................. 14
5.13. REGULATION U........................................................................................... 14
5.14. MATERIAL AGREEMENTS.................................................................................... 14
5.15. COMPLIANCE WITH LAWS................................................................................... 14
5.16. OWNERSHIP OF PROPERTIES................................................................................ 14
5.17. PLAN ASSETS; PROHIBITED TRANSACTIONS................................................................... 14
5.18. ENVIRONMENTAL MATTERS.................................................................................. 14
5.19. INVESTMENT COMPANY ACT................................................................................. 14
5.20. PUBLIC UTILITY HOLDING COMPANY ACT..................................................................... 14
5.21. BANK ACCOUNTS.......................................................................................... 14
5.22. INDEBTEDNESS........................................................................................... 14
5.23. AFFILIATE TRANSACTIONS................................................................................. 14
5.24. REAL PROPERTY; LEASES.................................................................................. 14
5.25. INTELLECTUAL PROPERTY RIGHTS........................................................................... 14
5.26. INSURANCE.............................................................................................. 14
5.27. SOLVENCY............................................................................................... 14
5.28. SUBORDINATED INDEBTEDNESS.............................................................................. 14
5.29. COMMON ENTERPRISE...................................................................................... 14
5.30. REPORTABLE TRANSACTION................................................................................. 14
5.31. INDENTURE.............................................................................................. 14
5.32. PERMITTED INDEBTEDNESS................................................................................. 14
ARTICLE VI. COVENANTS............................................................................................ 14
6.1. FINANCIAL AND COLLATERAL REPORTING..................................................................... 14
6.2. USE OF PROCEEDS........................................................................................ 14
6.3. NOTICES................................................................................................ 14
6.4. CONDUCT OF BUSINESS.................................................................................... 14
6.5. TAXES.................................................................................................. 14
6.6. PAYMENT OF INDEBTEDNESS AND OTHER LIABILITIES.......................................................... 14
6.7. INSURANCE.............................................................................................. 14
6.8. COMPLIANCE WITH LAWS................................................................................... 14
6.9. INSPECTION............................................................................................. 14
6.10. APPRAISALS............................................................................................. 14
6.11. COMMUNICATIONS WITH ACCOUNTANTS........................................................................ 14
6.12. COLLATERAL ACCESS AGREEMENTS AND REAL ESTATE PURCHASES................................................. 14
6.13. DEPOSIT ACCOUNT CONTROL AGREEMENTS..................................................................... 14
6.14. ADDITIONAL COLLATERAL; FURTHER ASURANCES............................................................... 14
6.15. DIVIDENDS.............................................................................................. 14
6.16. INDEBTEDNESS........................................................................................... 14
6.17. CAPITAL STRUCTURE...................................................................................... 14
6.18. MERGER................................................................................................. 14
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6.19. SALE OF ASSETS......................................................................................... 14
6.20. INVESTMENTS AND ACQUISITIONS........................................................................... 14
6.21. LIENS.................................................................................................. 14
6.22. CHANGE OF NAME OR LOCATION; CHANGE OF FISCAL YEAR...................................................... 14
6.23. AFFILIATE TRANSACTIONS................................................................................. 14
6.24. AMENDMENTS TO AGREEMENTS............................................................................... 14
6.25. PREPAYMENT OF INDEBTEDNESS; SUBORDINATED INDEBTEDNESS.................................................. 14
6.26. LETTERS OF CREDIT...................................................................................... 14
6.27. FINANCIAL CONTRACTS.................................................................................... 14
6.28. CAPITAL EXPENDITURES................................................................................... 14
6.29. DEBT SERVICE COVERAGE RATIO............................................................................ 14
6.30. DEPOSITORY BANKS....................................................................................... 14
6.31. SALE OF ACCOUNTS....................................................................................... 14
6.32. OFF-BALANCE SHEET LIABILITIES; SALE AND LEASEBACK TRANSACTIONS......................................... 14
6.33. SUBORDINATION OF INTERCOMPANY NOTES.................................................................... 14
6.34. POST-CLOSING MORTGAGES................................................................................. 14
ARTICLE VII. DEFAULTS............................................................................................ 14
ARTICLE VIII. REMEDIES; WAIVERS AND AMENDMENTS................................................................... 14
8.1. REMEDIES............................................................................................... 14
8.2. WAIVERS BY LOAN PARTIES................................................................................ 14
8.3. AMENDMENTS............................................................................................. 14
8.4. PRESERVATION OF RIGHTS................................................................................. 14
ARTICLE IX. GENERAL PROVISIONS................................................................................... 14
9.1. SURVIVAL OF REPRESENTATIONS............................................................................ 14
9.2. GOVERNMENTAL REGULATION................................................................................ 14
9.3. HEADINGS............................................................................................... 14
9.4. ENTIRE AGREEMENT....................................................................................... 14
9.5. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT........................................................ 14
9.6. EXPENSES; INDEMNIFICATION.............................................................................. 14
9.7. NUMBERS OF DOCUMENTS................................................................................... 14
9.8. ACCOUNTING............................................................................................. 14
9.9. SEVERABILITY OF PROVISIONS............................................................................. 14
9.10. NONLIABILITY OF LENDERS................................................................................ 14
9.11. CONFIDENTIALITY........................................................................................ 14
9.12. NONRELIANCE............................................................................................ 14
9.13. DISCLOSURE............................................................................................. 14
ARTICLE X. THE AGENT............................................................................................. 14
10.1. APPOINTMENT; NATURE OF RELATIONSHIP.................................................................... 14
10.2. POWERS................................................................................................. 14
10.3. GENERAL IMMUNITY....................................................................................... 14
10.4. NO RESPONSIBILITY FOR CREDIT EXTENSIONS, RECITALS, ETC................................................. 14
10.5. ACTION ON INSTRUCTIONS OF THE LENDERS.................................................................. 14
10.6. EMPLOYMENT OF AGENTS AND COUNSEL....................................................................... 14
10.7. RELIANCE ON DOCUMENTS; COUNSEL......................................................................... 14
10.8. AGENT'S REIMBURSEMENT AND INDEMNIFICATION.............................................................. 14
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10.9. NOTICE OF DEFAULT...................................................................................... 14
10.10. RIGHTS AS A LENDER..................................................................................... 14
10.11. LENDER CREDIT DECISION................................................................................. 14
10.12. SUCCESSOR AGENT........................................................................................ 14
10.13. AGENT AND ARRANGER FEES................................................................................ 14
10.14. DELEGATION TO AFFILIATES............................................................................... 14
10.15. EXECUTION OF LOAN DOCUMENTS............................................................................ 14
10.16. COLLATERAL MATTERS..................................................................................... 14
10.17. SYNDICATION AGENT...................................................................................... 14
ARTICLE XI. SETOFF; RATABLE PAYMENTS............................................................................. 14
11.1. SETOFF................................................................................................. 14
11.2. RATABLE PAYMENTS....................................................................................... 14
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS................................................... 14
12.1. SUCCESSORS AND ASSIGNS................................................................................. 14
12.2. PARTICIPATIONS......................................................................................... 14
12.3. ASSIGNMENTS............................................................................................ 14
12.4. DISSEMINATION OF INFORMATION........................................................................... 14
12.5. TAX TREATMENT.......................................................................................... 14
12.6. ASSIGNMENT BY LC ISSUER................................................................................ 14
ARTICLE XIII. NOTICES............................................................................................ 14
13.1. NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION....................................................... 14
13.2. CHANGE OF ADDRESS, ETC................................................................................. 14
ARTICLE XIV. COUNTERPARTS........................................................................................ 14
ARTICLE XV. GUARANTY............................................................................................. 14
15.1. GUARANTY............................................................................................... 14
15.2. GUARANTY OF PAYMENT.................................................................................... 14
15.3. NO DISCHARGE OR DIMINISHMENT OF GUARANTY............................................................... 14
15.4. DEFENSES WAIVED........................................................................................ 14
15.5. RIGHTS OF SUBROGATION.................................................................................. 14
15.6. REINSTATEMENT; STAY OF ACCELERATION.................................................................... 14
15.7. INFORMATION............................................................................................ 14
15.9. TAXES.................................................................................................. 14
15.10. CONTRIBUTION......................................................................................... 14
15.11. LENDING INSTALLATIONS................................................................................ 14
15.12. LIABILITY CUMULATIVE................................................................................. 14
15.13. FRAUDULENT CONVEYANCE MATTERS........................................................................ 14
ARTICLE XVI. CASH MANAGEMENT..................................................................................... 14
16.1. LOCKBOX AND CASH MANAGEMENT ACCOUNT.................................................................... 14
16.2. APPLICATION OF PAYMENTS................................................................................ 14
ARTICLE XVII. RELATIONSHIP OF THE BORROWER AND THE OTHER LOAN PARTIES............................................ 14
17.1. NOTICES................................................................................................ 14
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17.2. EXECUTION OF LOAN DOCUMENTS; BORROWING BASE CERTIFICATE................................................ 14
17.3. REPORTING.............................................................................................. 14
17.4. DISBURSEMENT OF LOAN PROCEEDS.......................................................................... 14
ARTICLE XVIII. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL; CONFESSION OF JUDGMENT.............. 14
18.1. CHOICE OF LAW.......................................................................................... 14
18.2. CONSENT TO JURISDICTION................................................................................ 14
18.3. WAIVER OF JURY TRIAL................................................................................... 14
18.4. CONFESSION OF JUDGMENT................................................................................. 14
COMMITMENT SCHEDULE.................................................................... Error! Bookmark not defined.
PRICING SCHEDULE....................................................................... Error! Bookmark not defined.
EXHIBIT A. EURODOLLAR BORROWING NOTICE............................................... Error! Bookmark not defined.
EXHIBIT B. CONVERSION/CONTINUATION NOTICE............................................ Error! Bookmark not defined.
EXHIBIT C. REVOLVING NOTE............................................................ Error! Bookmark not defined.
EXHIBIT D. RESERVED.................................................................. Error! Bookmark not defined.
EXHIBIT E. COMPLIANCE CERTIFICATE.................................................... Error! Bookmark not defined.
EXHIBIT F. JOINDER AGREEMENT......................................................... Error! Bookmark not defined.
EXHIBIT G. ASSIGNMENT AND ASSUMPTION AGREEMENT....................................... Error! Bookmark not defined.
EXHIBIT H. BORROWING BASE CERTIFICATE................................................ Error! Bookmark not defined.
EXHIBIT I. INDENTURE CERTIFICATE..................................................... Error! Bookmark not defined.
EXHIBIT J. ORDERLY LIQUIDATION PERCENTAGE............................................ Error! Bookmark not defined.
v
CREDIT AGREEMENT
This Agreement, dated as of July 30, 2003, is among Park-Ohio
Industries, Inc., an Ohio corporation (the "BORROWER"), the Loan Parties, the
Lenders and Bank One, NA, a national banking association, having its principal
office in Chicago, Illinois, as LC Issuer and as the Agent.
RECITALS
WHEREAS, the Borrower has requested that the Lenders make available to
the Borrower loans and other extensions of credit in an aggregate principal
amount not to exceed $165,000,000.00, which extensions of credit will be used by
the Borrower and the other Loan Parties for the purposes set forth in Section
6.2;
WHEREAS, the Borrower and the other Loan Parties have agreed to secure
all of their obligations under the Loan Documents by granting to the Agent, on
behalf of the Lenders, a security interest in and lien upon the Collateral as
set forth in the Collateral Documents; and
WHEREAS, the Guarantors have agreed to guarantee all of the Obligations
of the Borrower under the Loan Documents to the Agent and the Lenders as set
forth in the Guaranties.
NOW, THEREFORE, in consideration of these premises and the terms and
conditions set forth in this Agreement, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Account" shall have the meaning given to such term in the Security
Agreement.
"Account Debtor" means any Person obligated on an Account.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the Closing Date, by which any Loan Party
(a) acquires any going business or all or substantially all of the assets of any
Person, whether through purchase of assets, merger or otherwise or (b) directly
or indirectly acquires (in one transaction or as the most recent transaction in
a series of transactions) at least a majority (in number of votes) of the
Capital Stock of a Person which has ordinary voting power for the election of
directors or other similar management personnel of a Person (other than Capital
Stock having such power only by reason of the happening of a contingency) or a
majority of the outstanding Capital Stock of a Person.
"Advance" means a borrowing hereunder, (a) made by some or all of the
Lenders on the same Borrowing Date, or (b) converted or continued by the Lenders
on the same date of conversion or continuation, consisting, in either case, of
the aggregate amount of the several Loans of the same Type and, in the case of
Eurodollar Loans, for the same Interest Period. The term Advance shall include
Non-Ratable Loans, Overadvances and Protective Advances unless otherwise
expressly provided.
1
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of the voting Capital Stock of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through ownership
of Capital Stock, by contract or otherwise.
"Agent" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Borrowing Base" means the aggregate of the Borrowing Bases
of all of the Loan Parties.
"Aggregate Borrowing Base Certificate" means a certificate signed by an
Authorized Officer, in the form of EXHIBIT H or another form which is acceptable
to the Agent in its sole discretion.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as reduced from time to time pursuant to the terms hereof, which
Aggregate Commitment shall initially be in the amount of $165,000,000.00.
"Aggregate Credit Exposure" means, at any time, the aggregate of the
Credit Exposure of all the Lenders.
"Agreement" means this Credit Agreement, as it may be amended or
modified and in effect from time to time.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (a) the Prime Rate for such day and (b) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Fee Rate" means, at any time, the percentage rate per annum
at which fees accrue on Available Commitment at such time as set forth in the
Pricing Schedule.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Arranger" means Banc One Capital Markets, Inc., a Delaware corporation,
and its successors, in its capacity as Lead Arranger and Sole Book Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Assignment Agreement" is defined in Section 12.3(a).
"Authorized Officer" means any of the chief executive officer, chief
operating officer, President, Vice President, Secretary or the chief financial
officer, acting singly.
"Availability" means at any time, an amount equal to (a) the Maximum
Borrowing Amount, minus (b) the Aggregate Credit Exposure.
2
"Available Commitment" means, at any time, the Aggregate Commitment
then in effect minus the Aggregate Credit Exposure at such time.
"Bank One" means Bank One, NA, a national banking association, in its
individual capacity, and its successors.
"Banking Services" means each and any of the following bank services
provided to any Loan Party by the Lenders, or any of their Affiliates: (a)
commercial credit cards, (b) stored value cards, (c) treasury management
services (including, without limitation, controlled disbursement, automated
clearinghouse transactions, return items, overdrafts and interstate depository
network services), (d) leasing services, and (e) Rate Management Transactions.
"Banking Services Obligations" of the Loan Parties means any and all
obligations of the Loan Parties, whether absolute or contingent and howsoever
and whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor) in connection
with Banking Services.
"Banking Services Reserves" means all Reserves which the Agent from
time to time establishes in its sole discretion for Banking Services then
provided or outstanding.
"Bankruptcy Code" means Title 11 of the U.S. Code (11 U.S.C. Section
101 et seq.) as amended, reformed, or otherwise modified from time to time, and
any rule or regulation issued thereunder.
"Borrower" means Park-Ohio Industries, Inc. and its successors and
assigns.
"Borrowing Base" means, at any time, with respect to each Loan Party
the sum of (a) up to 85% of such Loan Party's Eligible Accounts at such time,
plus (b) the lesser of (i) up to 65% of such Loan Party's Eligible Inventory,
valued at the lower of cost or market value, determined on a first-in-first-out
basis, at such time, (ii) (A) 85% multiplied by (B) the Orderly Liquidation
Percentage multiplied by (C) the value of such Loan Party's Inventory, or (iii)
$100,000,000, plus (c) the Capex Borrowing Base, plus (d) the Fixed Asset
Borrowing Base, minus (e) Reserves related to such Loan Party. The Agent may, in
its Permitted Discretion, reduce the advance rates set forth above or reduce one
or more of the other elements used in computing the Borrowing Base.
"Borrowing Base Certificate" means a certificate in the form of EXHIBIT
H or another form which is acceptable to the Agent in its sole discretion.
"Borrowing Base Report" means a certificate in the form of EXHIBIT H or
another form which is acceptable to the Agent in its sole discretion.
"Borrowing Date" means a date on which an Advance or a Loan is made
hereunder.
"Borrowing Loan Party" means each Loan Party that owns Collateral used
in the calculation of the Aggregate Borrowing Base.
"Borrowing Notice" is defined in Section 2.1.1(b).
"Business Day" means (a) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York City for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in U.S. dollars are
carried on in the London
3
interbank market and (b) for all other purposes, a day (other than a Saturday or
Sunday) on which banks generally are open in Chicago for the conduct of
substantially all of their commercial lending activities and interbank wire
transfers can be made on the Fedwire system.
"Capex Advance" means a portion of the Loans equal to the then current
Capex Borrowing Base.
"Capex Advance Period" means that period of time from the date of this
Agreement until the earlier of (i) the date the Capex Borrowing Base first
equals $10,000,000 or (ii) July 30, 2005.
"Capex Borrowing Base" means (a) during the Capex Advance Period, the
lesser of (i) $10,000,000 and (ii) 80% of the Invoice Value of all Capital
Expenditures requested by the Borrower as part of the Capex Borrowing Base to be
incurred by the Loan Parties; and (b) after the Capex Advance Period, an amount
equal to the Capex Borrowing Base on the last day of the Capex Advance Period;
provided that (x) if the Capex Advance Period ends prior to July 30, 2004, then
beginning with the first day of each Fiscal Quarter after the Capex Advance
Period, the Capex Borrowing Base shall be reduced by an amount equal to 1/20th
of the Capex Borrowing Base, or (y) if the Capex Advance Period ends on or after
July 30, 2004, then beginning with the first day of the fifth, sixth, seventh
and eighth Fiscal Quarters after the Closing Date, the Capex Borrowing Base will
be reduced by an amount equal to 1/20th of the Capex Borrowing Base as of the
first anniversary of the Closing Date and, on the first day of the ninth Fiscal
Quarter after the Closing Date and each Fiscal Quarter thereafter, an amount
equal to 1/20th of the Capex Borrowing Base at the end of the Capex Advance
Period.
"Capital Expenditures" means, without duplication, any expenditures for
any purchase or other acquisition or development of any asset which would be
classified as a fixed or capital asset on a consolidated balance sheet of the
Borrower and its Subsidiaries prepared in accordance with GAAP.
"Capital Stock" means any and all corporate stock, units, shares,
partnership interests, membership interests, equity interests, rights,
securities, or other equivalent evidences of ownership (howsoever designated)
issued by any Person.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with GAAP.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
"Cash Equivalent Investments" means (a) short-term obligations of, or
fully guaranteed by, the U.S., (b) commercial paper rated A-1 or better by S&P
or P-1 or better by Moody's, (c) demand deposit accounts maintained in the
ordinary course of business, and (d) certificates of deposit issued by and time
deposits with any Lender or any commercial bank (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; provided that, in each
case, the same provides for payment of both principal and interest (and not
principal alone or interest alone) and is not subject to any contingency
regarding the payment of principal or interest.
"Cash Management Account" is defined in Section 16.1.
"Certified Acquisition Amount" means the amount of borrowings by the
Loan Parties used for acquisitions for the period from November 25, 1997 through
the Closing Date, which are being refinanced with a portion of the initial
Credit Extensions hereunder, as certified to the Agent and the Lenders in a
certificate signed by an Authorized Officer of the Borrower.
4
"Change" is defined in Section 3.2.
"Change in Control" means (a) the acquisition by any Person (other than
the Permitted Holders), or two or more Persons acting in concert, of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 20% or more of the
outstanding voting Capital Stock of any Loan Party; (b) the Permitted Holders
shall collectively cease to own, free and clear of all Liens or other
encumbrances, at least 15% of the outstanding voting Capital Stock of the Parent
on a fully diluted basis, or if they own less than 15%, either ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall cease to hold the office of chairman, chief
executive officer, or president of the Borrower or the Parent; (c) Parent shall
cease to own 100% of the Capital Stock of the Borrower; or (d) the occurrence of
a Change in Control, as defined in the Indenture.
"Closing Date" means the date of this Agreement.
"Closing Date LC" is defined in Section 2.1.2(a).
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any rule or regulation issued
thereunder.
"Collateral" means any and all property covered by the Collateral
Documents and any and all other property, real or personal, tangible or
intangible of any Loan Party, now existing or hereafter acquired, that may at
any time be or become subject to a security interest or Lien in favor of the
Agent, on behalf of itself and the Lenders, to secure the Secured Obligations.
"Collateral Access Agreement" means any landlord waiver or other
agreement, in form and substance satisfactory to the Agent, between the Agent
and any third party (including any bailee, consignee, customs broker, or other
similar Person) in possession of any Collateral or any landlord of any Loan
Party for any real Property where any Collateral is located, as such landlord
waiver or other agreement may be amended, restated, or otherwise modified from
time to time.
"Collateral Documents" means, collectively, the Security Agreement, the
Mortgages, the Pledge Agreements and any other documents granting a Lien upon
the Collateral as security for payment of the Secured Obligations.
"Collateral Shortfall Amount" is defined in Section 2.1.2(l).
"Commitment" means, for each Lender, the obligation of such Lender to
make Loans to, and participate in Facility LCs issued upon the application of,
the Borrower in an aggregate amount not exceeding the amount set forth in the
Commitment Schedule or as set forth in any Assignment Agreement that has become
effective pursuant to Section 12.3(a), as such amount may be modified from time
to time pursuant to the terms hereof.
"Commitment Schedule" means the Schedule attached hereto identified as
such.
"Compliance Certificate" is defined in Section 6.1(e).
"Consolidated Capital Expenditures" means, with reference to any
period, the Capital Expenditures of the Borrower and its Subsidiaries calculated
on a consolidated basis for such period.
5
"Consolidated Debt Charges" means, with reference to any period,
without duplication, Consolidated Interest Expense to the extent paid in cash in
such period, plus scheduled principal payments on Indebtedness made during such
period, plus any scheduled reductions in the Capex Borrowing Base and the Fixed
Asset Borrowing Base during such period, all calculated for the Borrower and its
Subsidiaries on a consolidated basis.
"Consolidated EBITDA" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (a) Consolidated
Interest Expense, (b) Consolidated Tax Expense, (c) depreciation, (d)
amortization, and (e) other non-cash expenses, all calculated for the Borrower
and its Subsidiaries on a consolidated basis.
"Consolidated Interest Expense" means, with reference to any period,
the interest expense of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period.
"Consolidated Net Income" means, with reference to any period, the net
income or loss of the Borrower and its Subsidiaries calculated on a consolidated
basis for such period.
"Consolidated Tax Expense" means, with reference to any period, the tax
expense of the Borrower and its Subsidiaries calculated on a consolidated basis
for such period.
"Contention Account" means any Account which is owing by an Account
Debtor to ILS and which is classified by ILS, on its books or otherwise, as a
"contention" Account.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership.
"Conversion/Continuation Notice" is defined in Section 2.7.
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with a Loan Party or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Copyrights" shall have the meaning given to such term in the Security
Agreement.
"Credit Exposure" means, as to any Lender at any time, the sum of (a)
the aggregate principal amount of its Revolving Loans outstanding at such time,
plus (b) an amount equal to its Pro Rata Share of any LC Obligations at such
time, plus (c) an amount equal to its Pro Rata Share, if any, of the aggregate
principal amount of Non-Ratable Loans, Overadvances, and Protective Advances
outstanding at such time.
"Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
6
"Customer List" means, as at any date, a list of each Loan Party's
customers within the last 120 days prior to such date, specifying each
customer's name, mailing address and phone number.
"Debt Service Coverage Ratio" means, the ratio, determined as of the
end of each of Fiscal Quarter of the Borrower for the then most-recently ended
four Fiscal Quarters, of (a) Consolidated EBITDA minus cash taxes paid, minus
unfunded Capital Expenditures, minus cash dividends, plus cash tax refunds to
(b) Consolidated Debt Charges.
"Default" means an event described in Article VII.
"Deposit Account Control Agreement" means an agreement, in form and
substance satisfactory to the Agent, among any Loan Party, a banking institution
holding such Loan Party's funds, and the Agent with respect to collection and
control of all deposits and balances held in a deposit account maintained by any
Loan Party with such banking institution.
"Designated Account Debtors" shall mean those parties listed on
Schedule 1, which Schedule may be updated from time to time with the Agent's
prior written consent.
"Document" shall have the meaning given to such term in the Security
Agreement.
"Domestic Subsidiary" means any Subsidiary which is organized under the
laws of the U.S. or any state of the U.S.
"Eligible Accounts" means, at any time, the Accounts of a Loan Party,
or any of its Canadian, United Kingdom or Puerto Rican Subsidiaries, which the
Agent determines in its Permitted Discretion are eligible as the basis for
Credit Extensions hereunder. Without limiting the Agent's discretion provided
herein, Eligible Accounts shall not include any Account:
(a) which is not subject to a first priority perfected
security interest in favor of the Agent;
(b) which is subject to any Lien other than (i) a Lien in
favor of the Agent, and (ii) a Permitted Lien which does not have
priority over the Lien in favor of the Agent;
(c) with respect to which (i) more than 60 days have
elapsed since the due date for payment, (ii) more than 120 days have
elapsed since the date of the original invoice therefor, or (iii) with
respect to the Designated Account Debtors, more than 60 days have
elapsed since the due date for payment, which shall in no event exceed
150 days;
(d) which is owing by an Account Debtor to a Loan Party
for which more than 50% of the Accounts owing from such Account Debtor
to that Loan Party are ineligible hereunder;
(e) which is owing by an Account Debtor to a Loan Party
to the extent the aggregate amount of Eligible Accounts owing from such
Account Debtor to such Loan Party exceeds 25% of the aggregate Eligible
Accounts;
(f) with respect to which any covenant, representation,
or warranty contained in this Agreement or in the Security Agreement
has been breached or is not true;
(g) which (i) does not arise from the sale of goods or
performance of services in the ordinary course of business, (ii) is not
evidenced by an invoice or other documentation
7
satisfactory to the Agent which has been sent to the Account Debtor,
(iii) represents a progress billing, (iv) is contingent upon such Loan
Party's completion of any further performance, or (v) represents a sale
on a ▇▇▇▇-and-hold, guaranteed sale, sale-and-return, sale on approval,
consignment, or any other repurchase or return basis;
(h) for which the goods giving rise to such Account have
not been shipped to the Account Debtor or for which the services giving
rise to such Account have not been performed by such Loan Party;
(i) with respect to which any check or other instrument
of payment has been returned uncollected for any reason;
(j) which is owed by an Account Debtor which has (i)
applied for, suffered, or consented to the appointment of any receiver,
custodian, trustee, or liquidator of its assets, (ii) has had
possession of all or a material part of its property taken by any
receiver, custodian, trustee or liquidator, (iii) filed, or had filed
against it, any request or petition for liquidation, reorganization,
arrangement, adjustment of debts, adjudication as bankrupt, winding-up,
or voluntary or involuntary case under any state or federal bankruptcy
laws; provided, however, that Accounts of a "Post-Petition" Account
Debtor shall be Eligible Accounts if such Accounts are paid within the
earlier of (A) 30 days, or (B) the amount of time specified in the
Post-Petition Order, (iv) has admitted in writing its inability, or is
generally unable to, pay its debts as they become due, (v) become
insolvent, or (vi) ceased operation of its business;
(k) which is owed by an Account Debtor that (i) does not
maintain its principal place of business in the U.S., Canada, the
United Kingdom, or Puerto Rico, or (ii) is not organized under the
applicable laws of the U.S., any state or territory of the U.S., the
District of Columbia, Canada, any province of Canada, the United
Kingdom, or Puerto Rico, unless such Account is backed by a Letter of
Credit or foreign credit insurance acceptable to the Agent which is in
the possession of the Agent;
(l) which is owed in any currency other than U.S.
dollars, Canadian Dollars, Pounds Sterling, or Euros;
(m) which is owed by (i) the government (or any
department, agency, public corporation, or instrumentality thereof) of
any country other than the U.S. unless such Account is backed by a
Letter of Credit acceptable to the Agent which is in the possession of
the Agent, or (ii) the government of the U.S., or any department,
agency, public corporation, or instrumentality thereof, in an aggregate
amount exceeding $750,000, unless the Federal Assignment of Claims Act
of 1940, as amended (31 U.S.C. Section 3727 et seq. and 41 U.S.C.
Section 15 et seq.), and any other steps necessary to perfect the Lien
of the Agent in such Account have been complied with to the Agent's
satisfaction;
(n) which is owed by any Affiliate, employee, or director
of any Loan Party;
(o) which, for any Account Debtor, exceeds a credit limit
determined by the Agent, in its Permitted Discretion, to the extent of
such excess;
(p) which is owed by an Account Debtor or any Affiliate
of such Account Debtor to which any Loan Party is indebted, but only to
the extent of such indebtedness;
8
(q) which is subject to any counterclaim, deduction,
defense, setoff or dispute to the extent of such counterclaim,
deduction, defense, set-off or dispute, unless such Account is a
Contention Account;
(r) which is evidenced by any promissory note, chattel
paper, or instrument;
(s) which is owed by an Account Debtor located in any
jurisdiction which requires filing of a "Notice of Business Activities
Report" or other similar report in order to permit such Loan Party to
seek judicial enforcement in such jurisdiction of payment of such
Account, unless such Loan Party has filed such report or qualified to
do business in such jurisdiction;
(t) with respect to which such Loan Party has made any
agreement with the Account Debtor for any reduction thereof, other than
discounts and adjustments given in the ordinary course of business;
(u) which is a Contention Account, but only to the extent
that such Contention Account when added together with the aggregate of
all of ILS' Contention Accounts exceeds $750,000; or
(v) which the Agent determines in its Permitted
Discretion may not be paid by reason of the Account Debtor's inability
to pay.
In the event that an Account which was previously an Eligible Account ceases to
be an Eligible Account hereunder, such Loan Party or the Borrower (if such Loan
Party is not the Borrower) shall notify the Agent thereof (i) within three
Business Days of the date the Borrower has obtained knowledge thereof if any
such Account is in excess of $1,000,000 in the aggregate for such Account Debtor
and (ii) on and at the time of submission by the Borrower to the Agent of the
next Aggregate Borrowing Base Certificate in all other cases.
"Eligible Inventory" means, at any time, the Inventory of a Loan Party,
or any of its Canadian, United Kingdom or Puerto Rican Subsidiaries, which the
Agent determines in its Permitted Discretion is eligible as the basis for Credit
Extensions hereunder. Without limiting the Agent's discretion provided herein,
Eligible Inventory shall not include any Inventory:
(a) which is not subject to a first priority perfected
Lien in favor of the Agent;
(b) which is subject to any Lien other than (i) a Lien in
favor of the Agent and (ii) a Permitted Lien which does not have
priority over the Lien in favor of the Agent;
(c) which is, in the Agent's opinion, slow moving,
obsolete, unmerchantable, defective, unfit for sale, not salable at
prices approximating at least the cost of such Inventory in the
ordinary course of business or unacceptable due to age, type, category
and/or quantity;
(d) with respect to which any covenant, representation,
or warranty contained in this Agreement or the Security Agreement has
been breached or is not true;
(e) which does not conform to all material standards
imposed by any governmental authority;
(f) which constitutes work-in-process, subassemblies,
packaging and shipping material, manufacturing supplies, display items,
▇▇▇▇-and-hold goods, returned or repossessed
9
goods, defective goods, goods held on consignment, or goods which are
not of a type held for sale in the ordinary course of business;
(g) which is not located in the U.S., Canada, the United
Kingdom or Puerto Rico or is in transit with a common carrier from
vendors and suppliers, provided that Inventory in transit may be
included as eligible despite this clause (g) so long as (i) the Agent
shall have received (A) a true and correct copy of the non-negotiable
▇▇▇▇ of lading and other shipping documents for such Inventory, (B)
evidence that such Inventory is insured pursuant to casualty insurance
naming the Agent as loss payee and otherwise covering such risks as the
Agent may reasonably request, and (C) such other duly executed
documents as reasonably requested by the Agent for such Inventory and
(ii) the common carrier is not an Affiliate of the applicable vendor or
supplier;
(h) which is located in any location leased by such Loan
Party unless the lessor has delivered to the Agent a Collateral Access
Agreement or, with respect to any such location for which the Agent
does not receive a Collateral Access Agreement the Inventory located
there will continue to be Eligible Inventory, but the Agent shall
establish a Reserve in an amount equal to three (3) months rent for
such location; provided, however, that with respect to Inventory
located at a leased location for which the Agent shall not have
received a Collateral Access Agreement on the Closing Date, such
Inventory shall be Eligible Inventory under this subpart (h) for a
period of 45 days after the Closing Date;
(i) which is located in any third party warehouse or is
in the possession of a bailee and is not evidenced by a Document (other
than non-negotiable bills of lading to the extent permitted pursuant to
clause (g) above), unless such warehouseman or bailee has delivered to
the Agent a Collateral Access Agreement and such other documentation as
the Agent may require;
(j) which is the subject of a consignment by such Loan
Party as consignor;
(k) which contains or bears any Intellectual Property
Rights licensed to such Loan Party unless the Agent is satisfied that
it may sell or otherwise dispose of such Inventory without (i)
infringing the rights of such licensor, (ii) violating any contract
with such licensor, or (iii) incurring any liability with respect to
payment of royalties other than royalties incurred pursuant to sale of
such Inventory under the current licensing agreement;
(l) which is not reflected in a current perpetual
inventory report of such Loan Party (unless such Inventory is reflected
in an acceptable separate report to the Agent, reflecting such
Inventory as "in transit," "work in process," "outside processing," or
any other category (as is acceptable to the Agent) of Inventory); or
(m) which the Agent otherwise determines is unacceptable
in its Permitted Discretion.
In the event that Inventory which was previously Eligible Inventory ceases to be
Eligible Inventory hereunder, such Loan Party or the Borrower (if such Loan
Party is not the Borrower) shall notify the Agent thereof (i) within three
Business Days of the date the Borrower has obtained knowledge thereof if any
such Inventory has a value (based on the lower of cost, determined on a
first-in, first-out basis, or market) in excess of $2,000,000 in the aggregate
and (ii) on and at the time of submission by the Borrower to the Agent of the
next Aggregate Borrowing Base Certificate in all other cases.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits,
10
concessions, grants, franchises, licenses, agreements and other legally
enforceable governmental restrictions relating to (a) the protection of the
environment, (b) the effect of the environment on human health, (c) emissions,
discharges or releases of pollutants, contaminants, hazardous substances or
wastes into surface water, ground water or land, or (d) the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, hazardous substances or wastes or the
clean-up or other remediation thereof.
"Equipment" has the meaning specified in the Security Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"ERISA Plan" means each "employee benefit plan" (within the meaning of
ERISA Section 3(3)) that a Loan Party or any member of its Controlled Group at
any time sponsors, maintains, contributes to, has liability with respect to or
has an obligation to contribute to such plan.
"Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable British Bankers' Association LIBOR
rate for deposits in U.S. dollars as reported by any generally recognized
financial information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, and having a maturity equal to
such Interest Period, provided that, if no such British Bankers' Association
LIBOR rate is available to the Agent, the applicable Eurodollar Base Rate for
the relevant Interest Period shall instead be the rate determined by the Agent
to be the rate at which Bank One or one of its Affiliate banks offers to place
deposits in U.S. dollars with first-class banks in the interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, in the approximate amount of Bank One's relevant
Eurodollar Loan and having a maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.12, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (a) the quotient of (i) the Eurodollar Base
Rate applicable to such Interest Period, divided by (ii) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(b) the Applicable Margin.
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, taxes imposed on its overall revenue or net
income, and franchise taxes imposed on it, by (a) the jurisdiction under the
laws of which such Lender or the Agent is incorporated or organized or (b) the
jurisdiction in which the Agent's or such Lender's principal executive office or
such Lender's applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"Facility" means the credit facility described in Section 2.1 hereof to
be provided to the Borrower on the terms and conditions set forth in this
Agreement.
"Facility LC" is defined in Section 2.1.2(a).
11
"Facility LC Application" is defined in Section 2.1.2(c).
"Facility LC Collateral Account" is defined in Section 2.1.2(j).
"Facility Termination Date" means July 30, 2007 or any earlier date on
which the Aggregate Commitment is reduced to zero or otherwise terminated
pursuant to the terms hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum 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 for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Fee Letter" is defined in Section 2.10(c).
"Financial Contract" of a Person means (a) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (b) any Rate Management Transaction.
"Fiscal Month" means any of the monthly accounting periods of the
Borrower.
"Fiscal Quarter" means any of the quarterly accounting periods of the
Borrower, ending on the last day of March, June, September and December of each
year.
"Fiscal Year" means any of the annual accounting periods of the
Borrower, ending on December 31 of each year.
"Fixed Asset Advance" means a portion of the Loans equal to the then
current Fixed Asset Borrowing Base.
"Fixed Asset Borrowing Base" means, from the Closing Date until
September 30, 2003, $25,000,000, which amount shall be reduced by $892,857.15 on
the first day of each Fiscal Quarter beginning on October 1, 2003.
"Fixed Charge Condition Period" means the period (a) commencing on the
Closing Date and ending on the date when Borrower shall have presented evidence
satisfactory to the Agent, in its sole discretion, that the Fixed Charge
Coverage Ratio Condition no longer exists and, within the next three (3) months
will not be reasonably likely to exist, and (b) thereafter, commencing on the
date that the determination is made that the Fixed Charge Coverage Ratio
Condition exists or, within the next three (3) months, is reasonably likely to
exist, until the date when the Borrower shall have presented evidence to the
Agent, satisfactory to the Agent in its sole discretion, that the Fixed Charge
Coverage Ratio Condition no longer exists and, within the next three (3) months,
will not be reasonably likely to exist.
"Fixed Charge Coverage Ratio Condition" means any time that (a) the
Borrower's Consolidated Fixed Charge Coverage Ratio (as defined in the
Indenture) is less than 2.25 to 1.00, as calculated in accordance with the terms
and conditions of the Indenture, or (b) the Consolidated Fixed Charge Coverage
Ratio (as defined in the Indenture) of any Subsidiary (as defined in the
Indenture) of the
12
Borrower is less than 2.50 to 1.00, as calculated in accordance with the terms
and conditions of the Indenture.
"Fixture" has the meaning specified in the Security Agreement.
"Floating Rate" means, for any day, a rate per annum equal to (a) the
Alternate Base Rate for such day plus (b) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided
in Section 2.12, bears interest at the Floating Rate.
"Foreign Subsidiary" means any Subsidiary which is not a Domestic
Subsidiary.
"Funding Account" means a deposit account of the Borrower maintained
with the Agent to which the Agent is authorized by the Borrower to deposit the
proceeds of Loans.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied in a manner consistent with that used in preparing the
financial statements referred to in Section 5.5.
"Guaranteed Obligations" is defined in Section 15.1.
"Guarantor" means each Loan Party (other than the Borrower) and any
other Person who becomes a party to the Guaranty pursuant to a Joinder
Agreement, together with their successors and assigns.
"Guaranty" means Article XV of this Agreement, as it may be amended or
modified and in effect from time to time.
"ILS" means each of the "ILS" and "Integrated Logistics Solutions" Loan
Parties.
"Indebtedness" of a Person means such Person's (a) obligations for
borrowed money, (b) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (c)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (d) obligations which are evidenced by notes, acceptances, or other
instruments, (e) obligations of such Person to purchase securities or other
Property arising out of or in connection with the sale of the same or
substantially similar securities or Property or any other Off-Balance Sheet
Liabilities, (f) Capitalized Lease Obligations, (g) Contingent Obligations for
which the underlying transaction constitutes Indebtedness under this definition,
(h) the maximum available stated amount of all letters of credit or bankers'
acceptances created for the account of such Person and, without duplication, all
reimbursement obligations with respect to letters of credit, (i) any and all
obligations, contingent or otherwise, whether now existing or hereafter arising,
under or in connection with Rate Management Transactions, including, without
limitation, Net ▇▇▇▇ to Market Exposure, and (j) obligations of such Person
under any Sale and Leaseback Transaction.
"Indenture" shall mean that certain Indenture dated as of June 2, 1999,
between the Borrower, as Issuer, and Norwest Bank Minnesota, National
Association, as Trustee, pursuant to which the Senior
13
Subordinated Notes were issued to the Senior Subordinated Noteholders, as the
same may, with the prior written consent of the Agent and the Required Lenders,
be from time to time amended, restated or otherwise modified.
"Indenture Certificate" means a certificate substantially in the form
of Exhibit I attached hereto.
"Intellectual Property Rights" means, with respect to any Person, all
of such Person's Patents, Copyrights, Trademarks, and Licenses all other rights
under any of the foregoing, all extensions, renewals, reissues, divisions,
continuations and continuations-in-part of any of the foregoing.
"Intercompany Notes" is defined in Section 6.16.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the day
which corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Inventory" has the meaning specified in the Security Agreement.
"Investment" of a Person means any (a) loan or advance, (b) extension
of credit (other than accounts receivable arising in the ordinary course of
business on terms customary in the trade), (c) contribution of capital by such
Person, (d) stocks, bonds, mutual funds, partnership interests, notes,
debentures, securities or other Capital Stock owned by such Person, (e) any
certificate of deposit owned by such Person, and (f) structured notes,
derivative financial instruments and other similar instruments or contracts
owned by such Person.
"Invoice Value" means the actual invoice cost of the equipment
purchased and shall not be deemed to include costs related to the design,
transportation, installation, taxes and testing of such equipment, modification
or other equipment or other "soft" costs related thereto.
"Joinder Agreement" is defined in Section 6.14(a).
"KeyBank" means KeyBank National Association, a national banking
association, in its individual capacity, and its successors.
"LC Fee" is defined in Section 2.10(b).
"LC Issuer" means Bank One (or any subsidiary or Affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder,
and, solely for the purposes specifically set forth in Section 2.1.2(a),
KeyBank.
"LC Obligations" means, at any time, the sum, without duplication, of
(a) the aggregate undrawn stated amount under all Facility LCs outstanding at
such time plus (b) the aggregate unpaid amount at such time of all Reimbursement
Obligations.
"LC Payment Date" is defined in Section 2.1.2(d).
14
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender, the LC Issuer
or the Agent, the office, branch, subsidiary or Affiliate of such Lender, LC
Issuer or the Agent listed on the signature pages hereof or on a Schedule or
otherwise selected by such Lender, the LC Issuer or the Agent pursuant to
Section 2.22.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Licenses" has the meaning given to such term in the Security
Agreement.
"Loans" means, with respect to a Lender, such Lender's loans made
pursuant to Article II (or any conversion or continuation thereof), including
Non-Ratable Loans, Overadvances, and Protective Advances.
"Loan Documents" means this Agreement, any Notes, the Facility LC
Applications, the Collateral Documents, the Guaranty, and all other agreements,
instruments, documents and certificates identified in Section 4.1 executed and
delivered to, or in favor of, Agent or any Lenders and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, letter
of credit agreements and all other written matter whether heretofore, now or
hereafter executed by or on behalf of any Loan Party, and delivered to the Agent
or any Lender in connection with the Agreement or the transactions contemplated
thereby. Any reference in the Agreement or any other Loan Document to a Loan
Document shall include all appendices, exhibits or schedules thereto, and all
amendments, restatements, supplements or other modifications thereto, and shall
refer to the Agreement or such Loan Document as the same may be in effect at any
and all times such reference becomes operative.
"Loan Parties" means the Borrower, the Borrower's wholly-owned Domestic
Subsidiaries and any other Person who becomes a party to this Agreement pursuant
to a Joinder Agreement.
"Locked Box" is defined in Section 16.1.
"Margin Stock" is defined in Section 5.13.
"Material Adverse Effect" means a material adverse effect on (a) the
business, Property, condition (financial or otherwise), or results of operations
of the Borrower and its Subsidiaries taken as a whole, (b) the ability of any
Loan Party to perform its material obligations under the Loan Documents to which
it is a party, (c) a material portion of the Collateral, or the Agent's Liens
(on behalf of itself and the Lenders) on the Collateral or the priority of such
Liens or (d) the validity or enforceability of any of the Loan Documents or the
rights or remedies of the Agent, the LC Issuer or the Lenders thereunder.
"Material Indebtedness" means Indebtedness in an outstanding principal
amount of $5,000,000 or more in the aggregate (or the equivalent thereof in any
currency other than U.S. dollars).
15
"Material Indebtedness Agreement" means any agreement under which any
Material Indebtedness was created or is governed or which provides for the
incurrence of Indebtedness in an amount which would constitute Material
Indebtedness (whether or not an amount of Indebtedness constituting Material
Indebtedness is outstanding thereunder).
"Maximum Borrowing Amount" means, at any time, an amount equal to (a)
the lesser of (i) the Aggregate Commitment minus all Reserves then in effect, or
(ii) the Aggregate Borrowing Base.
"Modify" and "Modification" are defined in Section 2.1.2(a).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgages" means any mortgage, deed of trust or other agreement which
conveys or evidences a Lien in favor of the Agent, for the benefit of the Agent
and the Lenders, on real Property of a Loan Party, including any amendment,
modification or supplement thereto.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which a Loan Party or any
member of a Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Net Cash Proceeds" means, if in connection with an asset disposition,
cash proceeds net of (i) commissions and other reasonable and customary
transaction costs, fees and expenses properly attributable to such transaction
and payable by such Loan Party in connection therewith (in each case, paid to
non-Affiliates), (ii) transfer taxes, (iii) amounts payable to holders of
Permitted Liens on such asset), if any, and (iv) an appropriate reserve for
income taxes in accordance with GAAP established in connection therewith or, if
in connection with an equity issuance, cash proceeds net of underwriting
discounts and commissions and other reasonable costs paid to non-Affiliates in
connection therewith.
"Net ▇▇▇▇-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions. As used in
this definition, "unrealized losses" means the fair market value of the cost to
such Person of replacing such Rate Management Transaction as of the date of
determination (assuming the Rate Management Transaction were to be terminated as
of that date), and "unrealized profits" means the fair market value of the gain
to such Person of replacing such Rate Management Transaction as of the date of
determination (assuming such Rate Management Transaction were to be terminated
as of that date).
"Non-Paying Guarantor" is defined in Section 15.11.
"Non-Ratable Loan" and "Non-Ratable Loans" are defined in Section
2.1.3.
"Non-U.S. Lender" is defined in Section 3.5(d).
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all LC Obligations, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the Loan Parties
to the Lenders or to any Lender, the Agent, the LC Issuer or any indemnified
party arising under the Loan Documents.
"Off-Balance Sheet Liability" of a Person means (a) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (b) any indebtedness, liability or
16
obligation under any Sale and Leaseback Transaction which is not a Capitalized
Lease, (c) any indebtedness, liability or obligation under any so-called
"synthetic lease" transaction entered into by such Person, or (d) any
indebtedness, liability or obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheets of
such Person, but excluding (d) Operating Leases from this clause.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Operating Lease Obligations" means, as at any date of determination,
the amount obtained by aggregating the present values, determined in the case of
each particular Operating Lease by applying a discount rate (which discount rate
shall equal the discount rate which would be applied under GAAP if such
Operating Lease were a Capitalized Lease) from the date on which each fixed
lease payment is due under such Operating Lease to such date of determination,
of all fixed lease payments due under all Operating Leases of the Borrower and
its Subsidiaries.
"Orderly Liquidation Percentage" means, with respect to Inventory of
any Person, (a) the net recovery dollars of such Inventory divided by (b) the
gross value of such Inventory, determined in a manner acceptable to the Agent by
an appraiser acceptable to the Agent, net of all costs of liquidation thereof.
As of the Closing Date, the Orderly Liquidation Percentage will be determined as
set forth in Exhibit J, and such percentage will thereafter be computed in a
manner reasonably consistent with the methodology set forth on Exhibit J.
"Other Taxes" is defined in Section 3.5(b).
"Overadvances" is defined in Section 2.1.4(b).
"Parent" means Park-Ohio Holdings Corp., an Ohio corporation.
"Participants" is defined in Section 12.2(a).
"Patents" has the meaning given to such term in the Security Agreement.
"Paying Guarantor" is defined in Section 15.11.
"Payment Date" means (a) with respect to interest payments due on any
Floating Rate Loan, the first day of each Fiscal Month and the Facility
Termination Date, (b) with respect to interest payments due on any Eurodollar
Loan, (i) the last day of the applicable Interest Period, and (ii) in the case
of any Interest Period in excess of three months, the day which is three months
after the first day of such Interest Period, and (iii) the Facility Termination
Date, and (c) with respect to any payment of LC Fees or Unused Commitment Fees,
the first day of each Fiscal Quarter and the Facility Termination Date.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Discretion" means a determination made in good faith and in
the exercise of reasonable (from the perspective of a secured asset-based
lender) credit judgment.
"Permitted Holders" means (a) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, either of their spouses, lineal descendants, or the probate estate of
any such person, (b) any trust, so long as one or more of the foregoing is the
beneficiary thereof, and (c) any other corporation, partnership, limited
liability
17
company, or other similar entity, all of the shareholders, partners, members, or
owners of which are any of the foregoing.
"Permitted Liens" is defined in Section 6.21.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which a Loan Party or any member of a Controlled Group may have any
liability.
"Pledge Agreement" means each of the Pledge Agreements executed and
delivered to the Agent, for the benefit of the Agent and the Lenders, by the
Parent or a Loan Party, on or after the Closing Date, as the same may be
amended, restated or otherwise modified from time to time.
"Prepayment Fee" is defined in Section 2.16(b).
"Pricing Schedule" means the Schedule attached hereto identified as
such.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Prior Agreement" is defined in Section 4.1(k).
"Projections" is defined in Section 6.1(d).
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Pro Rata Share" means, with respect to any Lender, (a) with respect to
Revolving Loans, LC Obligations, Non-Ratable Loans or Overadvances, a portion
equal to a fraction the numerator of which is such Lender's Commitment and the
denominator of which is the Aggregate Commitment, and (b) with respect to
Protective Advances or with respect to all Credit Extensions in the aggregate, a
portion equal to a fraction the numerator of which is such Lender's Commitment
and the denominator of which is the Aggregate Commitment.
"Protective Advances" is defined in Section 2.1.4.
"Purchasers" is defined in Section 12.3(a).
"Rate Management Obligations" of a Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all Rate
Management Transactions, and (b) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.
"Rate Management Transaction" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered into by any
Loan Party which is a rate swap, basis swap,
18
forward rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, forward transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions) or any combination
thereof, whether linked to one or more interest rates, foreign currencies,
commodity prices, equity prices or other financial measures.
"Register" is defined in Section 12.3(d).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.1.2 to reimburse
the LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within thirty
days of the occurrence of such event, provided however, that a failure to meet
the minimum funding standard of Section 412 of the Code and of Section 302 of
ERISA shall be a Reportable Event regardless of the issuance of any such waiver
of the notice requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.
"Reports" is defined in Section 9.6(a)(i).
"Required Lenders" means Lenders in the aggregate having at least 66
2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 66 2/3% of the Aggregate
Credit Exposure.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Reserves" means any and all reserves which the Agent deems necessary,
without duplication of any other reserve or adjustment made under the definition
of Eligible Accounts or Eligible Inventory, in its Permitted Discretion, to
maintain (including, without limitation, the Reserved Commitment Amount,
reserves for accrued and unpaid interest on the Secured Obligations, Banking
Services Reserves, reserves for rent at locations leased by any Loan Party and
for consignee's, warehousemen's and bailee's charges, reserves for dilution of
Accounts, reserves for Inventory shrinkage, reserves for customs charges and
shipping charges related to any Inventory in transit, reserves for Rate
Management Transactions, and reserves for taxes, fees, assessments, and other
governmental charges) with respect to the Collateral or any Loan Party.
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"Reserved Commitment Amount" is defined in Section 2.1.1(a).
"Revolving Loans" means the revolving loans extended by the Lenders to
the Borrower pursuant to Section 2.1.1 hereof.
"Revolving Note" is defined in Section 2.21(d).
"Risk-Based Capital Guidelines" is defined in Section 3.2.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Secured Obligations" means, collectively, (i) the Obligations; (ii)
all Banking Services Obligations; and (iii) all Rate Management Obligations
owing to one or more Lenders, provided that, at or prior to the time that any
Rate Management Transaction relating to such Rate Management Obligation is
executed, the Lender party thereto (if other than Bank One) shall have delivered
written notice to the Agent that such a Rate Management Transaction has been
entered into and that it constitutes a Secured Obligation entitled to the
benefits of the Collateral Documents.
"Security Agreement" means that certain Security Agreement, dated as of
the date hereof, between the Loan Parties and the Agent, for the benefit of the
Agent and the Lenders, and any other pledge or security agreement entered into
after the Closing Date by any other Loan Party (as required by this Agreement or
any other Loan Document), or any other Person, as the same may be amended,
restated or otherwise modified from time to time.
"Senior Subordinated Noteholder" shall mean the holder or purchaser of
any Note (as defined in the Indenture) under the Indenture.
"Senior Subordinated Notes" shall mean the Notes (as defined in the
Indenture) issued pursuant to the Indenture.
"Settlement" is defined in Section 2.9(a).
"Settlement Date" is defined in Section 2.9(a).
"Single Employer Plan" means a Plan maintained by a Loan Party or any
member of a Controlled Group for employees of such Loan Party or any member of a
Controlled Group.
"Subordinated Indebtedness" of a Person means any Indebtedness of such
Person the payment of which is subordinated to payment of the Guaranteed
Obligations to the written satisfaction of the Agent.
20
"Subsidiary" of a Person means any corporation, partnership, limited
liability company, association, joint venture or similar business organization
more than 50% of the outstanding Capital Stock having ordinary voting power of
which shall at the time be owned or controlled by such Person. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which represents more than 10% of the
consolidated assets of the Borrower and its Subsidiaries or property which is
responsible for more than 10% of the consolidated net sales or of the
consolidated net income of the Borrower and its Subsidiaries, in each case, as
would be shown in the consolidated financial statements of the Borrower and its
Subsidiaries as at the beginning of the twelve-month period ending with the
month in which such determination is made (or if financial statements have not
been delivered hereunder for that month which begins the twelve-month period,
then the financial statements delivered hereunder for the quarter ending
immediately prior to that month).
"Supporting Letter of Credit" is defined in Section 2.1.2(l).
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
"Trademarks" shall have the meaning given to such term in the Security
Agreement.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or a Eurodollar Advance and with respect to any Loan, its nature as
a Floating Rate Loan or a Eurodollar Loan.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of Ohio or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unliquidated Secured Obligations" means, at any time, any Secured
Obligations (or portion thereof) that is contingent in nature or unliquidated at
such time, including any Secured Obligation that is: (i) an obligation to
reimburse a bank for drawings not yet made under a letter of credit issued by
it; (ii) any other obligation (including any guarantee) that is contingent in
nature at such time; or (iii) an obligation to provide collateral to secure any
of the foregoing types of obligations.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Unused Commitment Fee" is defined in Section 2.10(a).
"U.S." means the United States of America.
21
"Wholly-Owned Subsidiary" of a Person means, any Subsidiary all of the
outstanding Capital Stock of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE FACILITY
2.1. The Facility. Each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to (a) make Loans to the Borrower as set
forth below and (b) participate in Facility LCs issued upon the request of the
Borrower, provided that, after giving effect to the making of each such Loan and
the issuance of each such Facility LC, such Lender's Credit Exposure shall not
exceed its Commitment; provided further, that the Aggregate Credit Exposure
shall not exceed the Aggregate Commitment. The LC Issuer will issue Facility LCs
hereunder on the terms and conditions set forth in Section 2.1.2. The Facility
shall be composed of Revolving Loans, Non-Ratable Loans, Protective Advances,
Overadvances, and Facility LCs as set forth below:
2.1.1. Revolving Loans.
(a) Amount. From and including the Closing Date and prior
to the Facility Termination Date, subject to the terms and provisions
of Section 2.24, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make revolving loans (the
"REVOLVING LOANS") and participate in Facility LCs issued as set forth
in Section 2.1.2 below, to the Borrower, in aggregate amounts not to
exceed such Lender's Pro Rata Share. If any Advance to the Borrower
would exceed the Availability, the Lenders will refuse to make or may
otherwise restrict the making of Revolving Loans or the issuance of
Facility LCs as the Lenders determine until such excess has been
eliminated, subject to the Agent's authority, in its sole discretion,
to make Protective Advances and Overadvances pursuant to the terms of
Section 2.1.4. The Revolving Loans may consist of Floating Rate
Advances or Eurodollar Advances, or a combination thereof, selected by
the Borrower in accordance with Sections 2.1.1(b) and 2.7. Subject to
the terms of this Agreement, the Borrower may borrow, repay and
reborrow Revolving Loans any time prior to the Facility Termination
Date. The Commitments to extend credit hereunder shall expire on the
Facility Termination Date. On the Closing Date, the Borrower will be
deemed to have borrowed the entire amount of the Fixed Asset Advance.
Proceeds of Revolving Loans will be available for any use
permitted under the applicable provisions of Section 6.2, provided
that, in the event that, as contemplated by Section 2.15(b), the
Borrower prepays Revolving Loans from the proceeds of an asset
disposition hereunder, then an amount of Aggregate Commitment, as
specified by the Borrower pursuant to the next sentence, equal to the
amount of such prepayment (the "RESERVED COMMITMENT AMOUNT") shall be
reserved and will not be available for borrowings except and to the
extent that the proceeds of such borrowings are to be applied to make
reinvestments permitted under Section 2.15(b). The Borrower agrees to
advise the Agent at the time it requests any Advance whether it is
utilizing any Reserved Commitment Amount, identifying the amount of
such Advance that is to constitute such utilization, the reinvestments
in respect of which the proceeds of such Advance are to be
22
applied and the reduced Reserved Commitment Amount to be in effect
after giving effect to such Advance.
(b) Borrowing Procedures. The Borrower shall select the
Type of Advance and, in the case of each Eurodollar Advance, the
Interest Period applicable thereto, from time to time. The Borrower
shall give the Agent irrevocable notice (a "BORROWING NOTICE") not
later than 10:00 a.m. (Chicago time) on the Borrowing Date of each
Floating Rate Advance and three Business Days before the Borrowing Date
for each Eurodollar Advance, specifying (in the form of EXHIBIT A for
Eurodollar Advances): (1) the Borrowing Date, which shall be a Business
Day, of such Advance, (2) the aggregate amount of such Advance, (3) the
Type of Advance selected; provided that, if the Borrower fails to
specify the Type of Advance requested, such request shall be deemed a
request for a Floating Rate Advance; and (4) the duration of the
Interest Period if the Type of Advance requested is a Eurodollar
Advance; provided that, if the Borrower fails to select the duration of
the Interest Period for the requested Eurodollar Advance, the Borrower
shall be deemed to have requested that such Eurodollar Advance be made
with an Interest Period of one month.
(c) The Agent's Election. Promptly after receipt of a
Borrowing Notice (or telephonic notice in lieu thereof) of a requested
Floating Rate Advance, the Agent shall elect in its discretion to have
the terms of Section 2.1.1(d) (pro rata advance by all Lenders) or
Section 2.1.3 (advance by the Agent, in the form of a Non-Ratable Loan,
on behalf of the Lenders) apply to such requested Advance.
(d) Pro Rata Advance. Unless the Agent elects to have the
terms of Section 2.1.3 apply to a requested Floating Rate Advance or if
a requested Advance is for a Eurodollar Advance, then promptly after
receipt of a Borrowing Notice or telephonic notice in lieu thereof as
permitted by Section 2.8, the Agent shall notify the Lenders by
telecopy, telephone, or e-mail of the requested Advance. Not later than
noon (Chicago time) on each Borrowing Date, each Lender shall make
available its Revolving Loan in funds immediately available in Chicago
to the Agent and the Agent will make the funds so received from the
Lenders available to the Borrower at the Funding Account as set forth
in Section 2.5.
2.1.2. Facility LCs.
(a) Issuance. The LC Issuer hereby agrees, on the terms
and conditions set forth in this Agreement, to issue to any Loan Party
standby and commercial Letters of Credit (each, a "FACILITY LC") and to
renew, extend, increase, decrease or otherwise modify each Facility LC
("MODIFY," and each such action a "MODIFICATION"), from time to time
from and including the Closing Date of this Agreement and prior to the
Facility Termination Date upon the request of the Borrower, on behalf
of itself or the applicable Loan Party; provided that, the maximum face
amount of the Facility LC to be issued or Modified, does not exceed the
lesser of (i) an amount equal to $20,000,000 minus the sum of (1) the
aggregate undrawn amount of all outstanding Facility LCs at such time
plus, without duplication, (2) the aggregate unpaid Reimbursement
Obligations with respect to all Facility LCs outstanding at such time
and (ii) the Availability. No Facility LC (or any renewal thereof)
shall have an expiry date later than the earlier of (x) the fifth
Business Day prior to the Facility Termination Date and (y) one year
after its issuance; provided that each Facility LC with a one-year
tenor may provide for the renewal thereof for additional one-year
periods. The Agent, the Lenders and the Loan Parties hereby acknowledge
and agree that the Letters of Credit listed on Schedule 2.1.2 attached
hereto ("CLOSING DATE LCS") shall constitute Facility LCs for all
purposes hereunder. In no event shall the Closing Date LCs be subject
to Modification and, upon expiration thereof, such Closing Date LCs
shall be replaced (if
23
necessary) by new Facility LCs hereunder. Until the expiration of the
Closing Date LCs, KeyBank shall be a LC Issuer for purposes of this
Agreement.
(b) Participations. With respect to the Closing Date LCs
and upon the issuance or Modification by the LC Issuer of a Facility LC
in accordance with this Section 2.1.2, the LC Issuer shall be deemed,
without further action by any party hereto, to have unconditionally and
irrevocably sold to each Lender, and each Lender shall be deemed,
without further action by any party hereto, to have unconditionally and
irrevocably purchased from the LC Issuer, a participation in such
Facility LC (and each Modification thereof) and the related LC
Obligations in proportion to its Pro Rata Share.
(c) Notice. Subject to Section 2.1.2(a), the Borrower, on
behalf of itself or the applicable Loan Party, shall give the LC Issuer
notice prior to 10:00 a.m. (Chicago time) at least three Business Days
prior to the proposed date of issuance or Modification of each Facility
LC, specifying the beneficiary, the proposed date of issuance (or
Modification) and the expiry date of such Facility LC, and describing
the proposed terms of such Facility LC and the nature of the
transactions proposed to be supported thereby. Upon receipt of such
notice, the LC Issuer shall promptly notify the Agent, and the Agent
shall promptly notify each Lender, of the contents thereof and of the
amount of such Lender's participation in such proposed Facility LC. The
issuance or Modification by the LC Issuer of any Facility LC shall, in
addition to the conditions precedent set forth in Article IV (the
satisfaction of which the LC Issuer shall have no duty to ascertain),
be subject to the conditions precedent that such Facility LC shall be
satisfactory to the LC Issuer and that the Borrower, on behalf itself
or the applicable Loan Party, shall have executed and delivered such
application agreement and/or such other instruments and agreements
relating to such Facility LC as the LC Issuer shall have reasonably
requested (each, a "FACILITY LC APPLICATION"). In the event of any
conflict between the terms of this Agreement and the terms of any
Facility LC Application, the terms of this Agreement shall control.
(d) Administration; Reimbursement by Lenders. Upon
receipt from the beneficiary of any Facility LC of any demand for
payment under such Facility LC, the LC Issuer shall notify the Agent
and the Agent shall promptly notify the Borrower and each other Lender
as to the amount to be paid by the LC Issuer as a result of such demand
and the proposed payment date (the "LC PAYMENT DATE"). The
responsibility of the LC Issuer to the Borrower, and each Lender shall
be only to determine that the documents (including each demand for
payment) delivered under each Facility LC in connection with such
presentment shall be in conformity in all material respects with such
Facility LC. The LC Issuer shall endeavor to exercise the same care in
the issuance and administration of the Facility LCs as it does with
respect to letters of credit in which no participations are granted, it
being understood that in the absence of any gross negligence or willful
misconduct by the LC Issuer, each Lender shall be unconditionally and
irrevocably liable without regard to the occurrence of any Default or
any condition precedent whatsoever, to reimburse the LC Issuer on
demand for (i) such Lender's Pro Rata Share of the amount of each
payment made by the LC Issuer under each Facility LC to the extent such
amount is not reimbursed by the Borrower pursuant to Section 2.1.2(e)
below, plus (ii) interest on the foregoing amount to be reimbursed by
the Lender, for each day from the date of the LC Issuer's demand for
such reimbursement (or, if such demand is made after 11:00 a.m.
(Chicago time) on such date, from the next succeeding Business Day) to
the date on which such Lender pays the amount to be reimbursed by it,
at a rate of interest per annum equal to the Federal Funds Effective
Rate for the first three days and, thereafter, at a rate of interest
equal to the rate applicable to Floating Rate Advances.
24
(e) Reimbursement by the Borrower. The Borrower shall be
irrevocably and unconditionally obligated to reimburse the LC Issuer on
or before the applicable LC Payment Date for any amounts to be paid by
the LC Issuer upon any drawing under any Facility LC, without
presentment, demand, protest or other formalities of any kind; provided
that, neither the Borrower nor any Lender shall hereby be precluded
from asserting any claim for direct (but not consequential) damages
suffered by the Borrower or such Lender to the extent, but only to the
extent, caused by (i) the willful misconduct or gross negligence of the
LC Issuer in determining whether a request presented under any Facility
LC issued by it complied with the terms of such Facility LC or (ii) the
LC Issuer's failure to pay under any Facility LC issued by it after the
presentation to it of a request strictly complying with the terms and
conditions of such Facility LC. All such amounts paid by the LC Issuer
and remaining unpaid by the Borrower shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to (x) the
rate applicable to Floating Rate Advances for such day if such day
falls on or before the applicable LC Payment Date and (y) the sum of 2%
plus the rate applicable to Floating Rate Advances for such day if such
day falls after such LC Payment Date. The LC Issuer will pay to each
Lender ratably in accordance with its Pro Rata Share all amounts
received by it from the Borrower for application in payment, in whole
or in part, of the Reimbursement Obligation in respect of any Facility
LC issued by the LC Issuer, but only to the extent such Lender has made
payment to the LC Issuer in respect of such Facility LC pursuant to
Section 2.1.2(d). Subject to the terms and conditions of this Agreement
(including without limitation the submission of a Borrowing Notice in
compliance with Section 2.1.1(b) and the satisfaction of the applicable
conditions precedent set forth in Article IV), the Borrower may request
an Advance hereunder for the purpose of satisfying any Reimbursement
Obligation.
(f) Obligations Absolute. The Borrower's obligations
under this Section 2.1.2 shall be absolute and unconditional under any
and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against the
LC Issuer, any Lender or any beneficiary of a Facility LC. The Borrower
further agrees with the LC Issuer and the Lenders that the LC Issuer
and the Lenders shall not be responsible for, and the Borrower's
Reimbursement Obligation in respect of any Facility LC shall not be
affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such documents should
in fact prove to be in any or all respects invalid, fraudulent or
forged, or any dispute between or among the Borrower, any of its
Affiliates, the beneficiary of any Facility LC or any financing
institution or other party to whom any Facility LC may be transferred
or any claims or defenses whatsoever of the Borrower or of any of its
Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Facility
LC. The Borrower agrees that any action taken or omitted by the LC
Issuer or any Lender under or in connection with each Facility LC and
the related drafts and documents, if done without gross negligence or
willful misconduct, shall be binding upon the Borrower and shall not
put the LC Issuer or any Lender under any liability to the Borrower.
Nothing in this Section 2.1.2(f) is intended to limit the right of the
Borrower to make a claim against the LC Issuer for damages as
contemplated by the proviso to the first sentence of Section 2.1.2(e).
(g) Actions of LC Issuer. The LC Issuer shall be entitled
to rely, and shall be fully protected in relying, upon any Facility LC,
draft, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document 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, independent
accountants and other experts selected by the LC Issuer. The LC Issuer
shall be fully justified in
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failing or refusing to take any action under this Agreement unless it
shall first have received such advice or concurrence of the Required
Lenders as it reasonably deems appropriate or it shall first be
indemnified to its reasonable 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. Notwithstanding any other
provision of this Section 2.1.2, the LC Issuer shall in all cases be
fully protected in acting, or in refraining from acting, under this
Agreement in accordance with a request of the Required Lenders, and
such request and any action taken or failure to act pursuant thereto
shall be binding upon the Lenders and any future holders of a
participation in any Facility LC.
(h) Indemnification. The Borrower hereby agrees to
indemnify and hold harmless each Lender, the LC Issuer and the Agent,
and their respective directors, officers, agents and employees from and
against any and all claims and damages, losses, liabilities, costs or
expenses which such Lender, the LC Issuer or the Agent may incur (or
which may be claimed against such Lender, the LC Issuer or the Agent by
any Person whatsoever) by reason of or in connection with the issuance,
execution and delivery or transfer of or payment or failure to pay
under any Facility LC or any actual or proposed use of any Facility LC,
including, without limitation, any claims, damages, losses,
liabilities, costs or expenses which the LC Issuer may incur by reason
of or in connection with (i) the failure of any other Lender to fulfill
or comply with its obligations to the LC Issuer hereunder (but nothing
herein contained shall affect any rights the Borrower may have against
any defaulting Lender) or (ii) by reason of or on account of the LC
Issuer issuing any Facility LC which specifies that the term
"Beneficiary" included therein includes any successor by operation of
law of the named Beneficiary, but which Facility LC does not require
that any drawing by any such successor Beneficiary be accompanied by a
copy of a legal document, satisfactory to the LC Issuer, evidencing the
appointment of such successor Beneficiary; provided that, the Borrower
shall not be required to indemnify any Lender, the LC Issuer or the
Agent for any claims, damages, losses, liabilities, costs or expenses
to the extent, but only to the extent, caused by (x) the willful
misconduct or gross negligence of the LC Issuer in determining whether
a request presented under any Facility LC complied with the terms of
such Facility LC or (y) the LC Issuer's failure to pay under any
Facility LC after the presentation to it of a request strictly
complying with the terms and conditions of such Facility LC. Nothing in
this Section 2.1.2(h) is intended to limit the obligations of the
Borrower under any other provision of this Agreement.
(i) Lenders' Indemnification. Each Lender shall, ratably
in accordance with its Pro Rata Share, indemnify the LC Issuer, its
Affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by the Borrower) against any
cost, expense (including reasonable counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from
such indemnitees' gross negligence or willful misconduct or the LC
Issuer's failure to pay under any Facility LC after the presentation to
it of a request strictly complying with the terms and conditions of the
Facility LC) that such indemnitees may suffer or incur in connection
with this Section 2.1.2 or any action taken or omitted by such
indemnitees hereunder.
(j) Facility LC Collateral Account. The Borrower agrees
that it will, after the occurrence and during the continuance of an
Event of Default, upon the request of the Agent or the Required Lenders
and until the final expiration date of any Facility LC and thereafter
as long as any amount is payable to the LC Issuer or the Lenders in
respect of any Facility LC, maintain a special collateral account
pursuant to arrangements satisfactory to the Agent (the "FACILITY LC
COLLATERAL ACCOUNT") at the Agent's office at the address specified
pursuant to Article XIII, in the name of the Borrower but under the
sole dominion and control of the Agent, for the benefit of the Lenders,
and in which the Borrower shall have no interest other than as set
forth in Section
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8.1. The Borrower hereby pledges, assigns and grants to the Agent, on
behalf of and for the ratable benefit of the Lenders and the LC Issuer,
a security interest in all of the Borrower's right, title and interest
in and to all funds which may from time to time be on deposit in the
Facility LC Collateral Account to secure the prompt and complete
payment and performance of the Secured Obligations. The Agent will
invest any funds on deposit from time to time in the Facility LC
Collateral Account in certificates of deposit of Bank One having a
maturity not exceeding thirty days. Nothing in this Section 2.1.2(j)
shall either obligate the Agent to require the Borrower to deposit any
funds in the Facility LC Collateral Account or limit the right of the
Agent to release any funds held in the Facility LC Collateral Account
in each case other than as required by Section 8.1.
(k) Rights as a Lender. In its capacity as a Lender, the
LC Issuer shall have the same rights and obligations as any other
Lender.
(l) Termination of the Facility. If, notwithstanding the
provisions of this Section 2.1.2, any Facility LC is outstanding upon
the termination of this Agreement, then upon such termination the
Borrower shall deposit with the Agent, for the benefit of the Agent and
the Lenders, with respect to all LC Obligations, as the Agent in its
discretion shall specify, either (i) a standby letter of credit (a
"SUPPORTING LETTER OF CREDIT"), in form and substance satisfactory to
the Agent, issued by an issuer satisfactory to the Agent, in an amount
in immediately available funds (which funds shall be held in the
Facility LC Collateral Account) equal to 105% of the difference of (x)
the amount of LC Obligations of the Borrower at such time, less (y) the
amount on deposit in the Borrower's Facility LC Collateral Account at
such time which is free and clear of all rights and claims of third
parties and has not been applied against the Obligations (such
difference, the "COLLATERAL SHORTFALL AMOUNT"), under which Supporting
Letter of Credit the Agent is entitled to draw amounts necessary to
reimburse the Agent, the LC Issuer and the Lenders for payments to be
made by the Agent, the LC Issuer and the Lenders under any such
Facility LC and any fees and expenses associated with such Facility LC,
or (ii) cash in an amount equal to 105% of the Collateral Shortfall
Amount. Such Supporting Letter of Credit or deposit of cash shall be
held by the Agent, for the benefit of the Agent and the Lenders, as
security for, and to provide for the payment of, the aggregate undrawn
amount of such Facility LC remaining outstanding.
2.1.3. Non-Ratable Loans. Subject to the restrictions set
forth in Section 2.1.1(a), the Agent may elect to have the terms of
this Section 2.1.3 apply to any requested Floating Rate Advance and
Bank One shall thereafter make an Advance, on behalf of the Lenders and
in the amount requested, available to the Borrower on the applicable
Borrowing Date by transferring same day funds to the Funding Account.
Each Advance made solely by the Agent pursuant to this Section 2.1.3 is
referred to in this Agreement as a "NON-RATABLE LOAN," and such
Advances are referred to as the "NON-RATABLE LOANS." Each Non-Ratable
Loan shall be subject to all the terms and conditions applicable to
other Advances funded by the Lenders, except that all payments thereon
shall be payable to Bank One solely for its own account. The aggregate
amount of Non-Ratable Loans outstanding at any time shall not exceed
the lesser of (a) $5,000,000 and (b) the Availability (before giving
effect to such Non-Ratable Loan). Non-Ratable Loans may be made even if
a Default or Unmatured Default exists, but may not be made if the
conditions precedent set forth in Section 4.2 have not been satisfied.
The Non-Ratable Loans shall be secured by the Liens granted to the
Agent in and to the Collateral and shall constitute Obligations
hereunder. All Non-Ratable Loans shall be Floating Rate Advances and
are subject to the settlement provisions set forth in Section 2.19.
Notwithstanding anything to the contrary contained in this Agreement,
each Non-Ratable Loan shall be repaid by the Borrower within five
Business Days after the date on which such Non-Ratable Loan was made.
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2.1.4. Protective Advances and Overadvances.
(a) Protective Advances. Subject to the limitations set
forth below, the Agent is authorized by the Borrower and the Lenders,
from time to time in the Agent's sole discretion, to make Advances, on
behalf of all Lenders, in an aggregate amount outstanding at any time
not to exceed $5,000,000, which the Agent, in its reasonable business
judgment, deems necessary or desirable (i) to preserve or protect the
Collateral, or any portion thereof, (ii) to enhance the likelihood of,
or maximize the amount of, repayment of the Loans and other
Obligations, or (iii) to pay any other amount chargeable to or required
to be paid by the Borrower pursuant to the terms of this Agreement,
including costs, fees, and expenses as described in Section 9.6 (any of
such Advances are herein referred to as "PROTECTIVE ADVANCES");
provided that, no Protective Advance shall cause any Lender's Credit
Exposure to exceed its Commitment or the Aggregate Credit Exposure to
exceed the Aggregate Commitment. Protective Advances may be made even
if the conditions precedent set forth in Section 4.2 have not been
satisfied. The Protective Advances shall be secured by the Liens in
favor of the Agent in and to the Collateral and shall constitute
Obligations hereunder. All Protective Advances shall be Floating Rate
Advances and are subject to the settlement provisions set forth in
Section 2.19.
(b) Overadvances. Any provision of this Agreement to the
contrary notwithstanding, at the request of the Borrower, the Agent may
in its sole discretion (but shall have absolutely no obligation to),
make Advances to the Borrower, on behalf of the Lenders, in amounts
that exceed Availability (any such excess Advances are herein referred
to collectively as "OVERADVANCES"); provided that, (i) no such event or
occurrence shall cause or constitute a waiver of the Agent's or the
Lenders' right to refuse to make any further Overadvances, Revolving
Loans or Non-Ratable Loans, or issue Facility LCs, as the case may be,
at any time that an Overadvance exists, (ii) no Overadvance shall
result in a Default or Unmatured Default due to the Borrower's failure
to comply with Section 2.1.1(a) for so long as the Agent permits such
Overadvance to remain outstanding, but solely with respect to the
amount of such Overadvance, and (iii) in no event shall Overadvances be
outstanding for more than 60 days (which days need not be consecutive)
in any 120 day period. In addition, Overadvances may be made even if a
Default or Unmatured Default exists, but may not be made if the
conditions precedent set forth in Section 4.2 have not been satisfied.
All Overadvances shall constitute Floating Rate Advances, shall bear
interest at the default rate set forth in Section 2.12 and shall be
payable on the earlier of demand or the Facility Termination Date. In
addition, all Overadvances are subject to the settlement provisions set
forth in Section 2.19. The authority of the Agent to make Overadvances
is limited to an aggregate amount not to exceed $5,000,000 at any time
and no Overadvance shall cause any Lender's Credit Exposure to exceed
its Commitment or the Aggregate Credit Exposure to exceed the Aggregate
Commitment; provided that, the Required Lenders may at any time revoke
the Agent's authorization to make Overadvances. Any such revocation
must be in writing and shall become effective prospectively upon the
Agent's receipt thereof.
2.2. Ratable Loans; Risk Participation. Except as otherwise
provided below, each Advance made in connection with a Revolving Loan shall
consist of Loans made by each Lender in an amount equal to such Lender's Pro
Rata Share. Upon the making of an Advance by the Agent in connection with a
Non-Ratable Loan or an Overadvance (whether before or after the occurrence of a
Default or an Unmatured Default and regardless of whether the Agent has
requested a Settlement with respect to such Non-Ratable Loan) or an Overadvance,
the Agent shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably sold to each Lender and each Lender shall be
deemed, without further action by any party hereto, to have unconditionally and
irrevocably purchased from the Agent, without recourse or warranty, an undivided
interest and participation in such Non-Ratable Loan or an Overadvance in
proportion to its Pro Rata Share of the Aggregate Commitment. Upon the making of
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an Advance by the Agent in connection with a Protective Advance (whether before
or after the occurrence of a Default or an Unmatured Default and regardless of
whether the Agent has requested a Settlement with respect to such Protective
Advance), the Agent shall be deemed, without further action by any party hereto,
to have unconditionally and irrevocably sold to each Lender and each Lender
shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably purchased from the Agent, without recourse or
warranty, an undivided interest and participation in such Protective Advance in
proportion to its Pro Rata Share of the Aggregate Commitment.
2.3. Payment of the Obligations. The Borrower shall repay the
outstanding principal balance of the Loans, together with all other Obligations,
including all accrued and unpaid interest thereon, on the Facility Termination
Date.
2.4. Minimum Amount of Each Advance. Each Eurodollar Advance shall
be in the minimum amount of $5,000,000 and in multiples of $1,000,000 if in
excess thereof. Floating Rate Advances may be in any amount.
2.5. Funding Account. The Borrower shall deliver to the Agent, on
the Closing Date, a notice setting forth the deposit account of the Borrower
(the "FUNDING ACCOUNT") to which the Agent is authorized by the Borrower to
transfer the proceeds of any Advances requested pursuant to this Agreement. The
Borrower may designate a replacement Funding Account from time to time by
written notice to the Agent. Any designation by the Borrower of the Funding
Account must be reasonably acceptable to the Agent.
2.6. Reliance Upon Authority; No Liability. The Agent is entitled
to rely conclusively on any individual's request for Advances hereunder, so long
as the proceeds thereof are to be transferred to the Funding Account. The Agent
shall have no duty to verify the identity of any individual representing himself
or herself as a person authorized by the Borrower to make such requests on the
behalf of the Borrower. The Agent shall not incur any liability to the Borrower
as a result of acting upon any notice referred to in Section 2.1 which the Agent
reasonably believes to have been given by an officer or other person duly
authorized by the Borrower to request Advances on behalf of the Borrower or for
otherwise acting under this Agreement. The crediting of Advances to the Funding
Account shall conclusively establish the obligation of the Borrower to repay
such Advances as provided herein.
2.7. Conversion and Continuation of Outstanding Advances. Floating
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into Eurodollar Advances pursuant to this
Section 2.7 or are repaid in accordance with this Agreement. Each Eurodollar
Advance shall continue as a Eurodollar Advance until the end of the then
applicable Interest Period therefor, at which time such Eurodollar Advance shall
be automatically converted into a Floating Rate Advance unless (x) such
Eurodollar Advance is or was repaid in accordance with this Agreement or (y) the
Borrower shall have given the Agent a Conversion/Continuation Notice (as defined
below) requesting that, at the end of such Interest Period, such Eurodollar
Advance continue as a Eurodollar Advance for the same or another Interest
Period. Subject to the terms of Section 2.4, the Borrower may elect from time to
time to convert all or any part of a Floating Rate Advance into a Eurodollar
Advance. The Borrower shall give the Agent irrevocable notice in the form of
EXHIBIT B (a "CONVERSION/CONTINUATION NOTICE") of each conversion of a Floating
Rate Advance into a Eurodollar Advance or continuation of a Eurodollar Advance
not later than 10:00 a.m. (Chicago time) at least three Business Days prior to
the date of the requested conversion or continuation, specifying (i) the
requested date, which shall be a Business Day, of such conversion or
continuation, (ii) the aggregate amount and Type of the Advance which is to be
converted or continued, (iii) the amount of such Advance which is to be
converted into or continued as a Eurodollar Advance (provided that the amounts
set forth in Section 2.4 shall be complied with), and (iv) the duration of the
Interest Period applicable thereto. In each
29
Conversion/Continuance Notice, the Borrower shall designate whether any Advance
is a Fixed Asset Advance or a Capex Advance.
2.8. Telephonic Notices. The Borrower hereby authorizes the Lenders
and the Agent to extend, convert or continue Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be acting on
behalf of the Borrower, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically. The Borrower agrees to deliver promptly to
the Agent a written confirmation, if such confirmation is requested by the Agent
or any Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.9. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Borrowing Notice, Conversion/Continuation
Notice, and repayment notice received by it hereunder. Promptly after notice
from the LC Issuer, the Agent will notify each Lender of the contents of each
request for issuance of a Facility LC hereunder. The Agent will notify each
Lender of the interest rate applicable to each Eurodollar Advance promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Alternate Base Rate.
2.10. Fees.
(a) Unused Commitment Fee. The Borrower agrees to pay to the
Agent, for the account of each Revolving Lender in accordance with such Lender's
Pro Rata Share, an unused commitment fee at a per annum rate equal to the
Applicable Fee Rate on the average daily Available Commitment from the date
hereof to and including the Facility Termination Date, payable on each Payment
Date hereafter and on the Facility Termination Date (the "UNUSED COMMITMENT
FEE").
(b) LC Fees. The Borrower shall pay to the Agent, for the account
of the Lenders ratably in accordance with their respective Pro Rata Shares, a
letter of credit fee at a per annum rate equal to the Applicable Margin for
Eurodollar Loans in effect from time to time for Revolving Loans on the average
daily undrawn stated amount under each Facility LC, such fee to be payable in
arrears on each Payment Date (the "LC FEE"). The Borrower shall also pay to the
LC Issuer for its own account (x) at the time of issuance or renewal of each
standby Facility LC, a fronting fee of .125% of the face amount of such Facility
LC, and (y) documentary and processing charges in connection with the issuance
or Modification of and draws under Facility LCs in accordance with the LC
Issuer's standard schedule for such charges as in effect from time to time.
(c) Agent; Arranger and Administration Fees. The Borrower agrees
to pay to the Agent and the Arranger such additional fees as are specified in
the fee letter dated as of June 24, 2003, among the Agent, the Arranger and the
Borrower (the "FEE LETTER").
2.11. Interest Rates. Each Floating Rate Advance shall bear interest
on the outstanding principal amount thereof, for each day from and including the
date such Advance is made or is automatically converted from a Eurodollar
Advance into a Floating Rate Advance pursuant to Section 2.7, to but excluding
the date it is paid or is converted into a Eurodollar Advance pursuant to
Section 2.7 hereof, at a rate per annum equal to the Floating Rate for such day.
Changes in the rate of interest on that portion of any Advance maintained as a
Floating Rate Advance will take effect simultaneously with each change in the
Alternate Base Rate. Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but
30
not including) the last day of such Interest Period at the interest rate
determined by the Agent as applicable to such Eurodollar Advance based upon the
Borrower's selections under Sections 2.1.1 and 2.7 and otherwise in accordance
with the terms hereof. No Interest Period may end after the Facility Termination
Date. Notwithstanding anything in this Agreement to the contrary, the Fixed
Asset Advance shall at all times bear interest at a rate per annum equal to the
Eurodollar Rate (determined on the basis of the Applicable Margin applicable to
Fixed Asset Advances).
2.12. Eurodollar Advances Post Default; Default Rates.
Notwithstanding anything to the contrary contained hereunder, during the
continuance of a Default or Unmatured Default, the Agent or the Required Lenders
may, at their option, by notice to the Borrower (which notice may be revoked at
the option of the Required Lenders notwithstanding any provision of Section 8.3
requiring unanimous consent of the Lenders to reductions in interest rates),
declare that no Advance may be made as, converted into or continued as a
Eurodollar Advance. During the continuance of a Default, the Agent or the
Required Lenders may, at their option, by notice to the Borrower (which notice
may be revoked at the option of the Required Lenders notwithstanding any
provision of Section 8.3 requiring unanimous consent of the Lenders to
reductions in interest rates), declare that (i) each Eurodollar Advance shall
bear interest for the remainder of the applicable Interest Period at the rate
otherwise applicable to such Interest Period plus 2% per annum, (ii) each
Floating Rate Advance shall bear interest at a rate per annum equal to the
Floating Rate in effect from time to time plus 2% per annum and (iii) the LC Fee
shall be increased by 2% per annum, provided that, during the continuance of a
Default under subsection (g), (h) or (i) of Article VII, the interest rates set
forth in clauses (i) and (ii) above and the increase in the LC Fee set forth in
clause (iii) above shall be applicable to all Credit Extensions without any
election or action on the part of the Agent or any Lender.
2.13. Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Floating Rate Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof and at
maturity. Interest accrued on each Eurodollar Advance shall be payable on the
last day of its applicable Interest Period, on any date on which the Eurodollar
Advance is prepaid, whether by acceleration or otherwise, and at maturity.
Interest accrued on each Eurodollar Advance having an Interest Period longer
than three months shall also be payable on the last day of each three-month
interval during such Interest Period. Interest on all Advances, Unused
Commitment Fees and LC Fees shall be calculated for actual days elapsed on the
basis of a 360-day year. Interest shall be payable for the day an Advance is
made but not for the day of any payment on the amount paid if payment is
received prior to noon (Chicago time) at the place of payment. If any payment of
principal of or interest on an Advance shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment. After giving
effect to any Loan, Advance, continuation, or conversion of any Eurodollar Rate
Loan, there may not be more than 10 different Interest Periods in effect
hereunder.
2.14. Voluntary Prepayments. The Borrower may from time to time
prepay, without penalty or premium, all of the outstanding Floating Rate
Advances, or in a minimum aggregate amount of $500,000, any portion of the
outstanding Floating Rate Advances upon one Business day's prior notice to the
Agent. The Borrower may also from time to time prepay, subject to the payment of
any funding indemnification amounts required by Section 3.4 but without penalty
or premium, all outstanding Eurodollar Advances, or, in a minimum aggregate
amount of $5,000,000 or any integral multiple of $500,000 in excess thereof, any
portion of the outstanding Eurodollar Advances upon three Business Days' prior
notice to the Agent. The Borrower shall have the right to instruct the Agent
which Advances it is repaying with any voluntary prepayment. To the extent the
Borrower does not specify which Advances are being repaid, the Agent shall apply
such repayments to the Revolving Loans in the inverse order of the Revolving
Loans made;
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provided that the repayments will be applied first to Floating Rate Advances and
second to Eurodollar Advances.
2.15. Mandatory Prepayments.
(a) Borrowing Base Compliance. Except for Overadvances permitted
pursuant to Section 2.1.4(b), the Borrower shall immediately repay the Revolving
Loans, Reimbursement Obligations or Non-Ratable Loans if at any time the
Aggregate Credit Exposure exceeds Maximum Borrowing Amount, to the extent
required to eliminate such excess. If any such excess remains after repayment in
full of all outstanding Revolving Loans, Reimbursement Obligations and
Non-Ratable Loans, the Borrower shall provide cash collateral or a Supporting
Letter of Credit for the LC Obligations in the manner set forth in Section
2.1.2(l) to the extent required to eliminate such excess.
(b) Sale of Assets. Immediately upon receipt by the Borrower of
the Net Cash Proceeds of any asset disposition (other than an asset disposition
permitted by Section 6.19), the Borrower shall prepay the Obligations in an
amount equal to all such Net Cash Proceeds. Any such prepayment shall be applied
first, to pay the principal of the Protective Advances and the Overadvances,
second, to pay the principal of the Non-Ratable Loans, third, to pay the
principal of the Revolving Loans without a concomitant reduction in the
Aggregate Commitment, and fourth, to cash collateralize outstanding Facility
LCs. At the option of the Borrower, at the time the Borrower is required to make
any prepayment pursuant to this Section 2.15(b), it may advise the Agent that it
intends to reinvest such Net Cash Proceeds in assets to be used in the business
of the Borrower or any other Loan Party (including through Capital
Expenditures), and (y) such Net Cash Proceeds will be applied by the Borrower to
the prepayment of Revolving Loans hereunder and, as contemplated by the second
paragraph of Section 2.1.1(a), a portion of the Aggregate Commitment equal to
the amount of such prepayment will give rise to a Reserved Commitment Amount
that will be available hereunder for purposes of acquiring assets to be used in
the business of the Borrower and the other Loan Parties (including through
Capital Expenditures), and (z) the Net Cash Proceeds from any such asset
disposition must be so reinvested within 360 days of such asset disposition (it
being understood that, in the event Net Cash Proceeds from more than one asset
disposition are applied to the prepayment of Revolving Loans as provided in
clause (y) above, such Net Cash Proceeds shall be deemed to be released (or, as
the case may be, Revolving Loans utilizing the Reserved Commitment Amount shall
be deemed to be made) in the same order in which such asset dispositions
occurred; provided that, the Aggregate Commitment will be automatically and
permanently reduced in an amount equal to the amount of any net cash proceeds
not so reinvested after 360 days.
(c) Issuance of Debt or Equity. If the Borrower or any of their
respective Subsidiaries issues Capital Stock or any Loan Party issues
Indebtedness (other than Indebtedness permitted by Sections 6.16(a),(c),(e) and
(g)) or if any Loan Party receives any dividend or distribution from a Person
other than a Loan Party, no later than the Business Day following the date of
receipt of the Net Cash Proceeds of such issuance or receipt of such dividend,
distribution, loan or advance, the Borrower shall prepay the Obligations in an
amount equal to all such Net Cash Proceeds, dividends, distributions, loans or
advances. Any such prepayment shall be applied first, to pay the principal of
the Protective Advances and the Overadvances, second, to pay the principal of
the Non-Ratable Loans, third, to pay the principal of the Revolving Loans
without a concomitant reduction in the Aggregate Commitment, and fourth, to cash
collateralize outstanding Facility LCs.
(d) Insurance/Condemnation Proceeds. Any insurance or condemnation
proceeds to be applied to the Obligations in accordance with Section 6.7(c)
shall be applied as follows: (i) insurance proceeds from casualties or losses to
cash or Inventory shall be applied, first, to the Protective Advances and the
Overadvances pro rata, second, to the Non-Ratable Loans, third, to the Revolving
Loans and fourth, to cash collateralize outstanding Facility LCs; and (ii)
insurance or condemnation proceeds from
32
casualties or losses to cash or Inventory shall be applied, first, to the
Protective Advances and the Overadvances pro rata, second, to the Non-Ratable
Loans, third, to the Revolving Loans and fourth, to cash collateralize
outstanding Facility LCs; and (ii) insurance or condemnation proceeds from
casualties or losses to Equipment, Fixtures and real Property shall be applied
first, to pay the principal of the Protective Advances, second, to pay the
principal of the Non-Ratable Loans, third, to pay the principal of the Revolving
Loans, and fourth, to cash collateralize outstanding Facility LCs. The Aggregate
Commitment shall not be permanently reduced by the amount of any such
prepayments.
(e) General. Without in any way limiting the foregoing,
immediately upon receipt by any Loan Party of proceeds of any sale of any
Collateral, other than as provided in Section 6.19, the Borrower shall cause
such Loan Party to deliver such proceeds to the Agent, or deposit such proceeds
in a deposit account subject to a Deposit Account Control Agreement. All of such
proceeds shall be applied as set forth above or otherwise as provided in Section
2.18. Nothing in this Section 2.15 shall be construed to constitute the Agent's
or any Lender's consent to any transaction that is not permitted by other
provisions of this Agreement or the other Loan Documents.
(f) Cash Management Account. Notwithstanding anything in this
Agreement to the contrary, if the application of proceeds contemplated by this
Section 2.15 would reduce the Loans below the then Certified Acquisition Amount,
then, at the option of the Borrower, the Agent shall place such proceeds into a
separate cash management account maintained by the Agent.
2.16. Termination of the Facility.
(a) Without limiting Section 2.3 or Section 8.1, (a) the Aggregate
Commitments shall expire on the Facility Termination Date and (b) the Aggregate
Credit Exposure and all other unpaid Obligations shall be paid in full by the
Borrower on the Facility Termination Date.
(b) The Borrower may terminate this Agreement upon (i) at least 10
Business Days' prior written notice thereof to the Agent and the Lenders, (ii)
the payment in full of all outstanding Loans, together with accrued and unpaid
interest thereon, (iii) the cancellation and return of all outstanding Facility
LCs (or alternatively, with respect to each such Facility LC, the furnishing to
the Agent of a cash deposit or Supporting Letter of Credit as required by
Section 2.1.2(l)), (iv) the payment in full of the early termination fee set
forth in the following sentence (the "PREPAYMENT FEE"), (v) the payment in full
of all reimbursable expenses and other Obligations together with accrued and
unpaid interest thereon, and (vi) the payment in full of any amount due under
Section 3.4. If this Agreement is terminated at any time prior to the first
anniversary of the Closing Date, whether pursuant to this Section 2.16 or
pursuant to Section 8.1, the Borrower shall pay to the Agent, for the account of
the Lenders, an early termination fee in an amount equal to 1% of the Aggregate
Commitment. No such Prepayment Fee shall be payable in the event this Agreement
is terminated in connection with refinancing of the Obligations in a transaction
in which Bank One or one of its Affiliates that is a banking institution
provides or arranges a replacement bank credit facility for the Borrower.
2.17. Method of Payment.
(a) All payments of the Obligations hereunder shall be made,
without setoff, deduction, or counterclaim, in immediately available funds to
the Agent at the Agent's address specified pursuant to Article XIII, or at any
other Lending Installation of the Agent specified in writing by the Agent to the
Borrower, by noon (Chicago time) on the date when due and shall be applied
ratably by the Agent among the Lenders. Any payment received by the Agent after
such time shall be deemed to have been received on the following Business Day
and any applicable interest or fee shall continue to accrue. Each payment
delivered to the Agent for the account of any Lender shall be delivered promptly
by the Agent to such Lender in the same type of funds that the Agent received at
its address specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Agent from such Lender.
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(b) At the election of the Agent, all payments of principal,
interest, reimbursement obligations in connection with Facility LCs, fees,
premiums, reimbursable expenses (including, without limitation, all
reimbursement for fees and expenses pursuant to Section 9.6), and other sums
payable under the Loan Documents, may be paid from the proceeds of Advances made
hereunder whether made following a request by the Borrower pursuant to Section
2.1 or a deemed request as provided in this Section 2.17 or may be deducted from
the Funding Account or any other deposit account of the Borrower maintained with
the Agent. The Borrower hereby irrevocably authorizes (i) the Agent to make an
Advance for the purpose of paying each payment of principal, interest and fees
as it becomes due hereunder or any other amount due under the Loan Documents and
agrees that all such amounts charged shall constitute Loans (including
Non-Ratable Loans, Overadvances and Protective Advances) and that all such
Advances shall be deemed to have been requested pursuant to Section 2.1 and (ii)
the Agent to charge the Funding Account or any other deposit account of the
Borrower maintained with Bank One for each payment of principal, interest and
fees as it becomes due hereunder or any other amount due under the Loan
Documents.
2.18. Apportionment, Application and Reversal of Payments. Except as
otherwise required pursuant to Article XVI, principal and interest payments
shall be apportioned ratably among the Lenders as set forth in this Article II
and payments of the fees shall, as applicable, be apportioned ratably among the
Lenders, except for fees payable solely to the Agent and the LC Issuer and
except as provided in Section 2.10(c). All payments (other than those collected
pursuant to Section 16.2) shall be remitted to the Agent and all such payments
not relating to principal or interest of specific Loans or not constituting
payment of specific fees as specified by the Borrower, and all proceeds of any
Collateral received by the Agent, shall be applied, ratably, subject to the
provisions of this Agreement, first, to pay any fees, indemnities, or expense
reimbursements including amounts then due to the Agent from the Borrower (other
than in connection with Banking Services or Rate Management Obligations),
second, to pay any fees or expense reimbursements then due to the Lenders from
the Borrower (other than in connection with Banking Services or Rate Management
Obligations), third, to pay interest due in respect of the Loans, including
Non-Ratable Loans, Overadvances and Protective Advances, fourth, to pay or
prepay principal of the Non-Ratable Loans, Overadvances and Protective Advances,
fifth, to pay or prepay principal of the Revolving Loans (other than Non-Ratable
Loans, Overadvances and Protective Advances) and unpaid reimbursement
obligations in respect of Facility LCs, sixth, to pay an amount to the Agent
equal to one hundred five percent (105%) of the aggregate undrawn face amount of
all outstanding Facility LCs and the aggregate amount of any unpaid
reimbursement obligations in respect of Facility LCs, to be held as cash
collateral for such Obligations, seventh, to payment of any amounts owing with
respect to Banking Services and Rate Management Obligations, and eighth, to the
payment of any other Obligation due to the Agent or any Lender by the Borrower.
Notwithstanding anything to the contrary contained in this Agreement, unless so
directed by the Borrower, or unless a Default is in existence, neither the Agent
nor any Lender shall apply any payment which it receives to any Eurodollar Loan,
except (a) on the expiration date of the Interest Period applicable to any such
Eurodollar Loan or (b) in the event, and only to the extent, that there are no
outstanding Floating Rate Loans and, in any event, the Borrower shall pay the
Eurodollar breakage losses in accordance with Section 3.4. The Agent and the
Lenders shall have the continuing and exclusive right to apply and reverse and
reapply any and all such proceeds and payments to any portion of the
Obligations.
2.19. Settlement. Each Lender's funded portion of the Loans is
intended by the Lenders to be equal at all times to such Lender's Pro Rata Share
of the outstanding Loans. Notwithstanding such agreement, the Agent, Bank One,
and the Lenders agree (which agreement shall not be for the benefit of or
enforceable by the Loan Parties) that in order to facilitate the administration
of this Agreement and the other Loan Documents, settlement among them as to the
Loans, including the Non-Ratable Loans, Overadvances, and Protective Advances
shall take place on a periodic basis in accordance with the following
provisions:
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(a) The Agent shall request settlement (a "SETTLEMENT")
with the Lenders on at least a weekly basis, or on a more frequent
basis at the Agent's election, (i) for itself, with respect to each
Non-Ratable Loan, Overadvances and Protective Advance, and (ii) with
respect to collections received, in each case, by notifying the Lenders
of such requested Settlement by telecopy, telephone, or e-mail no later
than noon (Chicago time) on the date of such requested Settlement (the
"SETTLEMENT DATE"). Each Lender (other than the Agent, in the case of
the Non-Ratable Loans, Overadvances and Protective Advances) shall
transfer the amount of such Lender's Pro Rata Share of the outstanding
principal amount of the applicable Loan with respect to which
Settlement is requested to the Agent, to such account of the Agent as
the Agent may designate, not later than 2:00 p.m. (Chicago time), on
the Settlement Date applicable thereto. Settlements may occur during
the existence of a Default or an Unmatured Default and whether or not
the applicable conditions precedent set forth in Section 4.2 have then
been satisfied. Such amounts transferred to the Agent shall be applied
against the amounts of the applicable Loan and, together with Bank
One's Pro Rata Share of such Non-Ratable Loan, Overadvances or
Protective Advance, shall constitute Loans of such Lenders,
respectively. If any such amount is not transferred to the Agent by any
Lender on the Settlement Date applicable thereto, the Agent shall be
entitled to recover such amount on demand from such Lender together
with interest thereon as specified in Section 2.23.
(b) From and after the date, if any, on which any Lender
is required to fund its participation in any Non-Ratable Loan,
Overadvances or Protective Advance purchased pursuant to Section 2.2,
the Agent shall promptly distribute to such Lender, such Lender's Pro
Rata Share of all payments of principal and interest and all proceeds
of Collateral received by the Agent in respect of such Loan.
2.20. Indemnity for Returned Payments. If after receipt of any
payment which is applied to the payment of all or any part of the Obligations,
the Agent or any Lender is for any reason compelled to surrender such payment or
proceeds to any Person because such payment or application of proceeds is
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference, impermissible setoff, or a diversion of trust funds, or for any
other reason, then the Obligations or part thereof intended to be satisfied
shall be revived and continued and this Agreement shall continue in full force
as if such payment or proceeds had not been received by the Agent or such Lender
and the Borrower shall be liable to pay to the Agent and the Lenders, and the
Borrower hereby indemnifies the Agent and the Lenders and holds the Agent and
the Lenders harmless for the amount of such payment or proceeds surrendered. The
provisions of this Section 2.20 shall be and remain effective notwithstanding
any contrary action which may have been taken by the Agent or any Lender in
reliance upon such payment or application of proceeds, and any such contrary
action so taken shall be without prejudice to the Agent's and the Lenders'
rights under this Agreement and shall be deemed to have been conditioned upon
such payment or application of proceeds having become final and irrevocable. The
provisions of this Section 2.20 shall survive the termination of this Agreement.
2.21. Noteless Agreement; Evidence of Indebtedness.
(a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender from time to time,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.
(b) The Agent shall also maintain accounts in which it will record
(i) the amount of each Loan extended hereunder, the Type thereof and the
Interest Period with respect thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender
35
hereunder, (iii) the original stated amount of each Facility LC and the amount
of LC Obligations outstanding at any time, and (iv) the amount of any sum
received by the Agent hereunder from the Borrower and each Lender's share
thereof.
(c) The entries maintained in the accounts maintained pursuant to
paragraphs (a) and (b) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided however, that the failure
of the Agent or any Lender to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Obligations
in accordance with their terms.
(d) Any Lender may request that its Revolving Loans be evidenced
by a promissory note in substantially the form of EXHIBIT C (each, a "REVOLVING
NOTE"). In such event, the Borrower shall prepare, execute and deliver to such
Lender such Note payable to the order of such Lender. Thereafter, the Revolving
Loans evidenced by such Revolving Notes and interest thereon shall at all times
(prior to any assignment pursuant to Section 12.3) be represented by one or more
Notes payable to the order of the payee named therein, except to the extent that
any such Lender subsequently returns any such Revolving Note for cancellation
and requests that such Revolving Loans once again be evidenced as described in
paragraphs (a) and (b) above.
2.22. Lending Installations. Each Lender may book its Loans and its
participation in any LC Obligations and the LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or the LC Issuer, as the
case may be, and may change its Lending Installation from time to time. All
terms of this Agreement shall apply to any such Lending Installation and the
Loans, Facility LCs, participations in LC Obligations and any Notes issued
hereunder shall be deemed held by each Lender or the LC Issuer, as the case may
be, for the benefit of any such Lending Installation. Each Lender and the LC
Issuer may, by written notice to the Agent and the Borrower in accordance with
Article XIII, designate replacement or additional Lending Installations through
which Loans will be made by it or Facility LCs will be issued by it and for
whose account Loan payments or payments with respect to Facility LCs are to be
made.
2.23. Non-Receipt of Funds by the Agent. Unless the Borrower, or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.
2.24. Fixed Charge Coverage Ratio Condition.
(a) The Borrower hereby acknowledges and agrees that the Fixed
Charge Coverage Ratio Condition exists as of the Closing Date and hereby
certifies to the Agent and the Lenders that the Certified Acquisition Amount as
of the Closing Date is $106,500,000 Subsequent to the expiration of the initial
Fixed Charge Condition Period, the Borrower shall provide immediate written
notice to the Agent and the Lenders at any time that the Fixed Charge Coverage
Ratio Condition exists or, within the next
36
three months, is reasonably likely to exist. After the initial Revolving Loans
shall have been made hereunder on the Closing Date, during any Fixed Charge
Condition Period, in addition to the other requirements and conditions set forth
in this Agreement, the Borrower shall not request any Loan or Facility LC, and
the Lenders or the Agent shall not be obligated to make any Loan and the LC
Issuer shall not be obligated to issue any Facility LC on behalf of the Lenders,
unless (A) the Borrower shall have complied with the requirements of subpart (b)
below, (B) the proceeds of such Loan or the purpose of the Facility LC
transaction and all other Indebtedness incurred hereunder shall constitute
Permitted Indebtedness (as defined in the Indenture), and (C) upon request of
the Agent, the Borrower shall provide to the Lenders such evidence of use of
proceeds of the Loans or the purpose of such Facility LC transaction and such
opinion of counsel with respect to the Indenture, as the Agent may from time to
time require in its sole discretion.
(b) After the initial Revolving Loans have been made hereunder on
the Closing Date, during any Fixed Charge Condition Period, in addition to the
other requirements and conditions set forth in this Agreement:
(i) neither the Borrower nor any of its Subsidiaries
shall make, or commit to make, any Acquisition with the proceeds of the
Loans, unless, prior to any such Acquisition, the Borrower shall
deliver a written certification to the Agent, for the benefit of the
Lenders, by an Authorized Officer of the Borrower confirming that any
Indebtedness incurred in connection with such Acquisition (including,
but not limited to, any such Indebtedness incurred hereunder) is
Permitted Indebtedness (as defined under the Indenture) and that such
Indebtedness did not consist of proceeds of the Loans;
(ii) the use of proceeds of any Loan or Facility LC by the
Borrower and its Subsidiaries shall be for working capital purposes or
Capital Expenditures of the Borrower and its Subsidiaries, and (A) with
respect to working capital loans:
(1) after giving effect to the making of such
Loan or the issuance of such Facility LC, the Aggregate Credit
Exposure on such date (minus the then Certified Acquisition
Amount) shall be less than an amount equal to the greater of
(i) $50,000,000, or (ii) the sum of (A) forty-five percent
(45%) of the book value of accounts receivable of the Borrower
and its Subsidiaries on a consolidated basis, and (B)
twenty-five percent (25%) of the book value of the inventory
of the Borrower and its Subsidiaries on a consolidated basis,
in each case as such terms are used in the Indenture,
(2) the Borrower shall have provided such
evidence as the Agent may require with respect to the actual
use of the proceeds of any Loan or Facility LC, certified by
an Authorized Officer of the Borrower and otherwise in form
and substance satisfactory to the Agent, and
(3) concurrently with the request for any Loan
or Facility LC, and in addition to the requirements set forth
in Section 2.1.1(b) hereof, the Borrower shall have submitted
to the Agent an Indenture Certificate certified by an
Authorized Officer of the Borrower, in the form of EXHIBIT I
hereto and otherwise in form and substance satisfactory to the
Agent, certifying among other things, compliance with this
Section 2.4(b)(ii)(A), or
(B) with respect to Capital Expenditures:
37
(1) any such Loan shall constitute Permitted
Indebtedness (as defined in the Indenture) pursuant to subpart
(v) of the definition of Permitted Indebtedness set forth in
the Indenture,
(2) the aggregate principal amount of all such
Loans the proceeds of which are used for Capital Expenditures
in accordance with this subpart shall not exceed (when
combined with all other loans and capitalized leases used to
finance Capital Expenditures, so long as such other loans and
capital leases are permitted pursuant to Sections 6.16 and
6.28 hereof) at any time outstanding do not exceed five
percent (5%) of the tangible consolidated total assets of the
Borrower, and
(3) with respect to the capital asset being
purchased with the proceeds of such Loan, within five (5)
Business Days after the purchase of such asset, the
appropriate Loan Party shall have executed and delivered to
the Agent, for the benefit of the Lenders, such security
agreements, UCC financing statements and other documents as
the Agent, in its sole discretion, shall require so that the
Agent shall have, for the benefit of the Lenders, a first
priority security interest and Lien on such asset.
(c) Notwithstanding anything in this Section 2.24 or elsewhere in
this Agreement to the contrary, if, at any time, the Agent, in its sole
discretion, shall be unable to agree with the Borrower that any Loan made or
Facility LC issued, or requested to be made or issued, during the Fixed Charge
Condition Period constitutes Permitted Indebtedness (as defined in the
Indenture), then the Lenders shall not be obligated to make any Loan and the
Agent shall not be obligated to issue any Facility LC until such time as any
uncertainty is resolved in a manner reasonably satisfactory to the Agent.
2.25. Designated Senior Indebtedness. The Agent, Lenders and the LC
Issuer hereby designate all Indebtedness and all other obligations now or
hereafter incurred or otherwise outstanding under any Loan Document to be
"Designated Senior Indebtedness" as set forth and defined in the Indenture.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the Closing Date, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation or the LC Issuer with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(a) subjects any Lender or any applicable Lending
Installation or the LC Issuer to any Taxes, or changes the basis of
taxation of payments (other than with respect to Excluded Taxes) to any
Lender or the LC Issuer in respect of its Eurodollar Loans, Facility
LCs or participations therein, or
(b) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation or the
LC Issuer
38
(other than reserves and assessments taken into account in determining
the interest rate applicable to Eurodollar Advances), or
(c) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation
or the LC Issuer of making, funding or maintaining its Eurodollar
Loans, or of issuing or participating in Facility LCs, or reduces any
amount receivable by any Lender or any applicable Lending Installation
or the LC Issuer in connection with its Eurodollar Loans, Facility LCs
or participations therein, or requires any Lender or any applicable
Lending Installation or the LC Issuer to make any payment calculated by
reference to the amount of Eurodollar Loans, Facility LCs or
participations therein held or interest or LC Fees received by it, by
an amount deemed material by such Lender or the LC Issuer as the case
may be,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making
or maintaining its Eurodollar Loans or Commitment or of issuing or participating
in Facility LCs or to reduce the return received by such Lender or applicable
Lending Installation or the LC Issuer, as the case may be, in connection with
such Eurodollar Loans, Commitment, Facility LCs or participations therein, then,
within 15 days of demand by such Lender or the LC Issuer, as the case may be,
the Borrower shall pay such Lender or the LC Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or the LC Issuer, as
the case may be, for such increased cost or reduction in amount received.
3.2. Changes in Capital Adequacy Regulations. If a Lender or the LC
Issuer determines the amount of capital required or expected to be maintained by
such Lender or the LC Issuer, any Lending Installation of such Lender or the LC
Issuer, or any corporation controlling such Lender or the LC Issuer is increased
as a result of a "CHANGE," then, within 15 days of demand by such Lender or the
LC Issuer, the Borrower shall pay such Lender or the LC Issuer the amount
necessary to compensate for any shortfall in the rate of return on the portion
of such increased capital which such Lender or the LC Issuer determines is
attributable to this Agreement, its Credit Exposure or its Commitment to make
Loans and issue or participate in Facility LCs, as the case may be, hereunder
(after taking into account such Lender's or the LC Issuer's policies as to
capital adequacy). "CHANGE" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines (as defined below) or (ii) any
adoption of or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender or the LC
Issuer or any Lending Installation or any corporation controlling any Lender or
the LC Issuer. "RISK-BASED CAPITAL GUIDELINES" means (i) the risk-based capital
guidelines in effect in the U.S. on the date of this Agreement, including
transition rules, and (ii) the corresponding capital regulations promulgated by
regulatory authorities outside the U.S. implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines
that maintenance of its Eurodollar Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.
39
3.4. Funding Indemnification. If any payment of a Eurodollar
Advance occurs on a date which is not the last day of the applicable Interest
Period, whether because of acceleration, prepayment or otherwise, or a
Eurodollar Advance is not made on the date specified by the Borrower, for any
reason other than default by the Lenders, the Borrower will indemnify each
Lender for any loss or cost incurred by it resulting therefrom, including,
without limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain such Eurodollar Advance.
3.5. Taxes.
(a) All payments by the Borrower to or for the account of any
Lender, the LC Issuer or the Agent hereunder or under any Revolving Note or
Facility LC Application shall be made free and clear of and without deduction
for any and all Taxes. If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder to any Lender, the LC
Issuer or the Agent, (a) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 3.5) such Lender, the LC Issuer or
the Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (b) the Borrower shall make such
deductions, (c) the Borrower shall pay the full amount deducted to the relevant
authority in accordance with applicable law and (d) the Borrower shall furnish
to the Agent the original copy of a receipt evidencing payment thereof within
thirty days after such payment is made.
(b) In addition, the Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any Revolving Note or Facility LC Application or from the execution or delivery
of, or otherwise with respect to, this Agreement or any Revolving Note or
Facility LC Application ("OTHER TAXES").
(c) The Borrower hereby agrees to indemnify the Agent, the LC
Issuer and each Lender for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed on amounts payable under
this Section 3.5) paid by the Agent, the LC Issuer or such Lender as a result of
its Commitment, any Loans made by it hereunder, any Facility LC issued hereunder
or otherwise in connection with its participation in this Agreement and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. Payments due under this indemnification shall be made within
thirty days of the date the Agent, the LC Issuer or such Lender makes demand
therefor pursuant to Section 3.6.
(d) Each Lender that is not incorporated under the laws of the
U.S. or a state thereof (each a "NON-U.S. LENDER") agrees that it will, not more
than five days after the date that it enters into this Agreement, (i) deliver to
the Borrower and the Agent two duly completed copies of U.S. Internal Revenue
Service Form W-8BEN or W-8ECI, certifying in either case that such Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any U.S. federal income taxes, and (ii) deliver to the Agent a
U.S. Internal Revenue Form W-8 or W-9, as the case may be, and certify that it
is entitled to an exemption from U.S. backup withholding tax, along with any
additional certifications reasonably required by the Borrower attesting to such
Non-U.S. Lender's qualification for exemption from withholding tax. Each
Non-U.S. Lender further undertakes to deliver to each of the Borrower and the
Agent (x) renewals or additional copies of such form (or any successor form) on
or before the date that such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent forms so delivered
by it, such additional forms or amendments thereto as may be reasonably
requested by the Borrower or the Agent. All forms or amendments described in the
preceding sentence shall certify that such Non-U.S. Lender is entitled to
receive
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payments under this Agreement without deduction or withholding of any U.S.
federal income taxes, unless an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Non-U.S. Lender from duly completing and delivering
any such form or amendment with respect to it and such Non-U.S. Lender advises
the Borrower and the Agent that it is not capable of receiving payments without
any deduction or withholding of U.S. federal income tax.
(e) For any period during which a Non-U.S. Lender has failed to
provide the Borrower with the form specified in the first sentence of Section
3.5(d) above (unless such failure is due to a change in treaty, law or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, occurring subsequent to the date on which a form
originally was required to be provided), such Non-U.S. Lender shall not be
entitled to payment under this Section 3.5 with respect to Taxes imposed by the
U.S. attributable to such failure; provided that, should a Non-U.S. 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 under Section
3.5(d), above, the Borrower shall take such steps as such Non-U.S. Lender shall
reasonably request to assist such Non-U.S. Lender to recover such Taxes.
(f) Any Lender that is entitled to an exemption from or reduction
of withholding tax with respect to payments under this Agreement or any
Revolving Note pursuant to the law of any relevant jurisdiction or any treaty
shall deliver to the Borrower (with a copy to the Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate.
(g) If the U.S. Internal Revenue Service or any other governmental
authority of the U.S. or any other country or any political subdivision thereof
asserts a claim that the Agent did not properly withhold tax from amounts paid
to or for the account of any Lender (because the appropriate form was not
delivered or properly completed, because such Lender failed to notify the Agent
of a change in circumstances which rendered its exemption from withholding
ineffective, or for any other reason), such Lender shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax,
withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the Agent
under this subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent). The obligations of the Lenders under
this Section 3.5(g) shall survive the payment of the Obligations and termination
of this Agreement.
3.6. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any liability of the
Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the
unavailability of Eurodollar Advances under Section 3.3, so long as such
designation is not, in the judgment of such Lender, disadvantageous to such
Lender. Each Lender shall deliver a written statement of such Lender to the
Borrower (with a copy to the Agent), as to the amount due, if any, under Section
3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in reasonable
detail the calculations upon which such Lender determined such amount and shall
be final, conclusive and binding on the Borrower in the absence of manifest
error. Determination of amounts payable under such Sections in connection with a
Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar
Loan through the purchase of a deposit of the type and maturity corresponding to
the deposit used as a reference in determining the Eurodollar Rate applicable to
such Loan, whether in fact that is the case or not. Unless otherwise provided
herein, the amount specified in the written statement of any Lender shall be
payable on demand after receipt by the Borrower of such written statement. The
obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive
payment of the Obligations and termination of this Agreement, and in
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the case of obligations under Section 3.5, shall terminate upon the expiration
of all statute of limitation periods applicable to the final tax year in which
this Agreement is in effect.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Effectiveness. This Agreement will not become effective unless
the Loan Parties have satisfied each of the following conditions in a manner
satisfactory to the Agent and the Lenders, and with respect to any condition
requiring delivery of any agreement, certificate, document, or instrument, the
Loan Parties shall have furnished to the Agent the requested number of
sufficient copies of any such agreement, certificate, document, or instrument
for distribution to the Lenders.
(a) This Agreement or counterparts hereof shall have been
duly executed by each Loan Party, the Agent and the Lenders; and the
Agent shall have received duly executed copies of the Loan Documents
and such other documents, instruments, and agreements as the Agent
shall reasonably request in connection with the transactions
contemplated by this Agreement and the other Loan Documents, each in
form and substance reasonably satisfactory to the Agent.
(b) Each Loan Party shall have delivered copies of its
articles or certificate of incorporation or organization, together with
all amendments, and a certificate of good standing, each certified by
the appropriate governmental officer in its jurisdiction of
incorporation or organization.
(c) Each Loan Party shall have delivered copies,
certified by its Secretary or Assistant Secretary, of its by-laws, code
of regulations or operating or management agreement and of its Board of
Directors' resolutions or the resolutions of its members and of
resolutions or actions of any other body authorizing the execution,
delivery and performance of the Loan Documents to which such Loan Party
is a party.
(d) Each Loan Party shall have delivered an incumbency
certificate, executed by its Secretary or Assistant Secretary, which
shall identify by name and title and bear the signatures of the
Authorized Officers and any other officers such Loan Party authorized
to sign the Loan Documents to which such Loan Party is a party, upon
which certificate the Agent and the Lenders shall be entitled to rely
until informed of any change in writing by such Loan Party.
(e) The Borrower shall have delivered a certificate,
signed by the chief financial officer of the Borrower, stating that on
the initial Credit Extension Date (i) no Default or Unmatured Default
has occurred and is continuing, (ii) the representations and warranties
contained in Article V are true and correct as of such Credit Extension
Date (except for representations and warranties that are made as of
another date, in which case such representation and warranties are true
and correct as of such date), (iii) specifying the deposit account at
Bank One which shall be used as the Funding Account and (iv) certifying
any other factual matters as may be reasonably requested by the Agent
or any Lender.
(f) The Loan Parties shall have delivered a written
opinion of the Loan Parties' counsel, addressed to the Agent, the LC
Issuer and the Lenders covering such matters as the Agent may
reasonably request.
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(g) The Borrower shall have delivered an Indenture
Certificate certified by an Authorized Officer in the form of EXHIBIT
I.
(h) The Borrower shall have delivered any Revolving Notes
requested by a Lender pursuant to Section 2.21 payable to the order of
each such requesting Lender.
(i) The Borrower shall have delivered money transfer
authorizations as the Agent may have reasonably requested.
(j) The Loan Parties shall have delivered, with respect
to each parcel of real Property which is required to be subject to a
Lien in favor of the Agent on the Closing Date, each of the following,
in form and substance reasonably satisfactory to the Agent:
(i) a Mortgage on such real Property; and
(ii) such other information, documentation, and
certifications as may be reasonably required by the Agent.
(k) The Loan Parties shall have delivered and the Agent
shall have received a fully executed original of a pay-off letter
reasonably satisfactory to the Agent confirming that all of the Loan
Parties' obligations under that certain Credit and Security Agreement
among the Borrower, various financial institutions, and KeyBank
National Association, as administrative assistant, (as amended, the
"PRIOR AGREEMENT") will be repaid in full from the proceeds the initial
Credit Extension and all Liens upon any of the property of the Loan
Parties constituting Collateral will be terminated immediately upon
such payment.
(l) The Agent shall have received all Lien and other
searches that the Agent deems necessary, the Loan Parties shall have
delivered UCC termination statements or amendments to existing UCC
financing statements with respect to any filings against the Collateral
as may be requested by the Agent and shall have authorized the filing
of such termination statements or amendments, the Agent shall have been
authorized to file any UCC financing statements that the Agent deems
necessary to perfect its Liens in the Collateral and Liens creating a
first priority security interest (subject to Permitted Liens) in the
Collateral in favor of the Agent shall have been perfected.
(m) The Borrower shall have delivered an Aggregate
Borrowing Base Certificate which calculates the Aggregate Borrowing
Base in form and substance acceptable to the Agent.
(n) With respect to the Indenture, the Borrower shall
have provided to the Agent and the Lenders (a) a copy of the Indenture,
together with any amendments or supplements thereto, certified by an
Authorized Officer as being true and complete, (b) an officer's
certificate, signed by an Authorized Officer, and otherwise in form and
substance satisfactory to the Agent and the Lenders, certifying that
(i) no Default (as defined in the Indenture) or Event of Default (as
defined in the Indenture) exists under the Indenture, nor will exist
after the making of the first Loans hereunder, and (ii) all of the
Obligations constitutes both Senior Indebtedness (as defined in the
Indenture) and Designated Senior Indebtedness (as defined in the
Indenture); and (c) the Borrower and the Agent shall have provided
notice to the Trustee in accordance with the terms of the Indenture of
the consummation of the transaction contemplated by this Agreement and
also notifying the Trustee that the Indebtedness under the Loan
Documents is "Designated Senior Indebtedness" under the Indenture.
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(o) The Agent shall have completed its business due
diligence and the Loan Parties' corporate structure, capital structure,
material accounts and governing documents shall be acceptable to the
Agent. In addition, the terms and conditions of all Indebtedness of
each Loan Party (including, without limitation, the Indebtedness
relating to the Indenture) shall be acceptable to the Agent.
(p) All legal (including tax implications) and regulatory
matters, including, but not limited to compliance with applicable
requirements of Regulations U, T and X of the Board of Governors of the
Federal Reserve System, shall be satisfactory to the Agent and the
Lenders.
(q) The Loan Parties shall have delivered (i) Collateral
audits, satisfactory to the Agent, and (ii) appraisals, prepared by an
independent appraiser engaged directly by the Agent, of each parcel of
real Property or interest in real Property described in the Mortgages,
which appraisals satisfy the requirements of the Financial Institutions
Reform, Recovery and Enforcement Act, as amended, and the regulations
promulgated thereunder, if applicable, and which shall evidence
compliance with the supervisory loan-to-value limits set forth in the
Federal Deposit Insurance Corporation Improvement Act of 1991, as
amended, and the regulations promulgated thereunder, if applicable,
which audits and appraisals shall be satisfactory to the Agent,
together with evidence of compliance with applicable federal
regulations governing loans in areas having special flood hazards and
(iii) Inventory and Equipment appraisals.
(r) The Borrower shall have delivered evidence of
insurance coverage in form, scope, and substance reasonably
satisfactory to the Agent and otherwise in compliance with the terms of
Section 6.7.
(s) The Borrower shall have delivered each Collateral
Access Agreement required to be provided pursuant to Section 6.12.
(t) The Borrower shall have delivered each Deposit
Account Control Agreement required to be provided pursuant to Section
6.13, if any.
(u) The Agent shall have determined that (i) since June
24, 2003, there is an absence of any material adverse change or
disruption in primary or secondary loan syndication markets, financial
markets or in capital markets generally that would likely materially
impair syndication of the Credit Extensions hereunder and (ii) the Loan
Parties shall have fully cooperated with the Agent's syndication
efforts including, without limitation, by providing the Agent with
information regarding the Loan Parties' operations and prospects and
such other information as the Agent deems necessary to successfully
syndicate the Credit Extensions hereunder.
(v) The Borrower shall have delivered a properly
completed Facility LC Application if the initial Credit Extension will
include the issuance of a Facility LC.
(w) After giving effect to all Credit Extensions to be
made on the Closing Date and payment of all fees and expenses due
hereunder, and with all of the Loan Parties' indebtedness, liabilities,
and obligations current, the Borrower's Availability shall not be less
than $20,000,000.
(x) The Borrower shall have paid all of the fees and
expenses owing to the Agent, the Arranger, the LC Issuer and the
Lenders pursuant to Section 2.10, and Section 9.6(a).
(y) The Loan Parties shall have delivered such other
documents as the Agent, the LC Issuer, any Lender or their respective
counsel may have reasonably requested.
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4.2. Each Credit Extension. Except as otherwise expressly provided
herein, the Lenders shall not be required to make any Credit Extension if on the
applicable Credit Extension Date:
(a) There exists any Default or Unmatured Default or any
Default or Unmatured Default shall result from any such Credit
Extension and the Agent or the Required Lenders shall have determined
not to make any Credit Extension as a result of such Default or
Unmatured Default,
(b) Any representation or warranty contained in Article V
is untrue or incorrect as of such Credit Extension Date (except for
representations and warranties that are made as of another date, in
which case such representation and warranties are true and correct as
of such date), and the Agent or the Required Lenders shall have
determined not to make any Credit Extension as a result of the fact
that such representation or warranty is untrue or incorrect,
(c) After giving effect to any Credit Extension, there is
no Availability, or
(d) Any legal matter incident to the making of such
Credit Extension shall not be satisfactory to the Agent, the Lenders
and their respective counsel.
Each Borrowing Notice or request for issuance of Facility LC with
respect to each such Credit Extension shall constitute a representation and
warranty by the Borrower that the conditions contained in Sections 4.1 have been
satisfied and that none of the conditions set forth in Section 4.2 exist as of
any Credit Extension Date.
4.3. Post-Closing Conditions.
(a) Except as otherwise provided herein, the Lenders shall not be
required to make any Credit Extensions if within ninety (90) days after the
Closing Date the Borrower has not delivered, with respect to the real Property
required to be subject to a Lien in favor of the Agent on the Closing Date:
(i) ALTA or other mortgagee's title policy;
(ii) an ALTA survey prepared and certified to the Agent by
a surveyor acceptable to the Agent;
(iii) the Loan Parties shall have delivered any requested
environmental review reports from firm(s) satisfactory to the Agent,
which review reports shall be acceptable to the Agent. Any
environmental hazards or liabilities identified in any such
environmental review report shall indicate the Loan Parties' plans with
respect thereto;
(iv) evidence that a counterpart of the Mortgage has been
recorded in the place necessary, in the Agent's judgment, to create a
valid and enforceable first priority Lien in favor of the Agent for the
benefit of itself and the Lenders;
(v) an opinion of counsel in the state in which such
parcel of real Property is located in form and substance and from
counsel reasonably satisfactory to the Agent; and
(vi) such other information, documentation, and
certifications as may be reasonably required by the Agent.
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(b) If the appraised value of the real Property secured by
Mortgages pursuant hereto on the Closing Date multiplied by 75% does not equal
or exceed $3,900,000, the Borrower shall, within ninety (90) days after the
Closing Date, grant to the Agent, for the benefit of the Lenders, Liens on
additional real Property (along with a title commitment and an opinion of local
counsel) until the appraised value of all such real Property multiplied by 75%
equals or exceeds $3,900,000, pursuant to such documents as the Agent may deem
necessary and deliver such documents to the Agent as the Agent may require to
perfect the Liens of the Agent in such real Property.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Lenders as follows:
5.1. Existence and Standing. Each Loan Party is a corporation,
partnership (in the case of Subsidiaries only) or limited liability company duly
and properly incorporated or organized, as the case may be, validly existing and
(to the extent such concept applies to such entity) in good standing or in full
force and effect under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted, except where the failure to
have such requisite authority would not have or cause a Material Adverse Effect.
5.2. Authorization and Validity. Each Loan Party has the corporate,
partnership or limited liability company, as the case may be, power and
authority and legal right to execute and deliver the Loan Documents to which it
is a party and to perform its obligations thereunder. The execution and delivery
by each Loan Party of the Loan Documents to which it is a party and the
performance of its obligations thereunder have been duly authorized by proper
corporate or other proper proceedings, as the case may be, and the Loan
Documents to which such Loan Party is a party constitute legal, valid and
binding obligations of such Loan Party enforceable against such Loan Party in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by any Loan Party of the Loan Documents to which it is a party, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof will violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on such Loan Party, (ii) any Loan
Party's articles or certificate of incorporation, partnership agreement,
certificate of partnership, articles or certificate of organization, by-laws,
code of regulations, or operating or other management agreement, as the case may
be, or (iii) the provisions of any material indenture (including, without
limitation, the Indenture), instrument or agreement to which any Loan Party is a
party or is subject, or by which it, or its Property, is bound, or conflict with
or constitute a default thereunder, or result in, or require, the creation or
imposition of any Lien (other than a Permitted Lien) in, of or on the Property
of such Loan Party pursuant to the terms of any such indenture (including,
without limitation, the Indenture), instrument or agreement. No order, consent,
adjudication, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or other action in respect of
any governmental or public body or authority, or any subdivision thereof, which
has not been obtained by a Loan Party, is required to be obtained by any Loan
Party in connection with the execution and delivery of the Loan Documents, the
borrowings under this Agreement, the payment and performance by the Loan Parties
of the Obligations or the legality, validity, binding effect or enforceability
of any of the Loan Documents.
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5.4. Security Interest in Collateral. The provisions of this
Agreement and the other Loan Documents create legal and valid Liens on all the
Collateral in favor of the Agent, for the benefit of the Agent and the Lenders,
and such Liens constitute perfected and continuing Liens on the Collateral,
securing the Obligations, enforceable against the applicable Loan Party and all
third parties, and having priority over all other Liens on the Collateral except
in the case of (a) Permitted Liens, to the extent any such Permitted Liens would
have priority over the Liens in favor of the Agent pursuant to any applicable
law or agreement and (b) Liens perfected only by possession (including
possession of any certificate of title) to the extent the Agent has not obtained
or does not maintain possession of such Collateral.
5.5 Financial Statements.
(a) The audited consolidated financial statements of the Borrower
and its Subsidiaries for the period ending on December 31, 2002 heretofore
delivered to the Lenders and each of the other financial statements now or
hereafter delivered pursuant to Section 6.1(a) were prepared in accordance with
GAAP (as in effect on the date such statements were prepared) and fairly present
in all material respects the consolidated financial condition and operations of
the Borrower and its Subsidiaries at such date and the consolidated results of
their operations for the period then ended. The unaudited consolidated financial
statements of the Borrower and their Subsidiaries for the Fiscal Quarter ended
March 31, 2003 heretofore now or hereafter delivered by the Borrower to the
Lenders and each of the other financial statements delivered pursuant to Section
6.1(b) and (c) were prepared in accordance with GAAP (as in effect on the date
such statements were prepared except for the presentation of footnotes and for
applicable normal year-end audit adjustments) and fairly present in all material
respects the consolidated financial condition and operations of the Borrower and
its Subsidiaries at such date and the consolidated results of their operations
for the period then ended.
(b) The most recent Projections when delivered to the Agent and
the Lenders, including Projections delivered pursuant to Section 6.1(d),
represent the Borrower's good faith estimate (based on assumptions that the
Borrower believed at the time to be reasonable) of the future financial
performance of the Borrower and its Subsidiaries for the period(s) set forth
therein.
5.6. Material Adverse Change. Since December 31, 2002, there has
been no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the Loan Parties which could reasonably
be expected to have a Material Adverse Effect.
5.7. Taxes. The Loan Parties have filed all U.S. federal, state and
local tax returns and all other material tax returns which are required to be
filed and have paid all material taxes due pursuant to said returns or pursuant
to any assessment received by any Loan Party, except such taxes, if any, as are
being contested in good faith and as to which adequate reserves have been
provided in accordance with GAAP and as to which no Lien exists. No tax liens
have been filed and no claims are being asserted with respect to any such taxes.
The charges, accruals and reserves on the books of the Loan Parties in respect
of any taxes or other governmental charges are adequate.
5.8. Litigation and Contingent Obligations. Except as set forth on
Schedule 5.8, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their senior
officers, threatened against or affecting any Loan Party or ERISA Plan which
could reasonably be expected to have a Material Adverse Effect or which seeks to
prevent, enjoin or delay the making of any Credit Extensions. Other than any
liability incident to any litigation, arbitration or proceeding which (i) could
not reasonably be expected to have a Material Adverse Effect or (ii) is set
forth on Schedule 5.8, no Loan Party has any material contingent obligations not
provided for or disclosed in the financial statements referred to in Section
5.5.
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5.9. Capitalization and Subsidiaries. Schedule 5.9 sets forth (a) a
correct and complete list of the name and relationship to each Loan Party of
each and all of the their Subsidiaries of each Loan Party, (b) the location of
the chief executive office of each Loan Party and each of their Subsidiaries and
each other location where any of them have maintained their chief executive
office in the past five years, (c) a true and complete listing of each class of
each of Loan Party's authorized Capital Stock, of which all of such issued
shares are validly issued, outstanding, fully paid and non-assessable, and owned
beneficially and of record by the Persons identified on Schedule 5.9, and (d)
the type of entity of each Loan Party and each of their Subsidiaries. With
respect to each Loan Party, Schedule 5.9 also sets forth the employer or
taxpayer identification number of each Loan Party and the organizational
identification number issued by the jurisdiction of organization of each Loan
Party or a statement that no such number has been issued. All of the issued and
outstanding Capital Stock owned by any Loan Party has been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and is fully paid and non-assessable.
5.10. ERISA. The Unfunded Liabilities of all Single Employer Plans
do not in the aggregate exceed $7,800,000. The aggregate withdrawal liability
the Loan Parties and each member of their Controlled Group would incur if all
such persons were to incur a "complete withdrawal" (within the meaning of ERISA
Section 4203) from the Multiemployer Plans as of the Borrowing Date does not
exceed $4,000,000. No Loan Party or any other member of the Controlled Group has
incurred, or is reasonably expected to incur, any excise tax or penalty relating
to an ERISA Plan, any material liability to the PBGC or any withdrawal liability
to Multiemployer Plans. Each ERISA Plan complies and has been administered in
all material respects with all applicable requirements of law and regulations,
no Reportable Event, prohibited transaction (as defined in ERISA Section 406 or
Code Section 4975) or breach of fiduciary duty under ERISA has occurred with
respect to any Plan, no Loan Party or any other member of a Controlled Group has
withdrawn from any Plan or initiated steps to do so, and no steps have been
taken to reorganize or terminate any Plan.
5.11. Accuracy of Information. No information, exhibit or report
furnished by any Loan Party to the Agent or to any Lender in connection with the
negotiation of, or compliance with, the Loan Documents taken as a whole
contained any material misstatement of fact or omitted to state a material fact
or any fact necessary to make the statements contained therein not misleading in
light of the circumstances in which such facts were presented.
5.12. Names; Prior Transactions. Except as set forth on Schedule
5.12, the Loan Parties have not, during the past five years, been known by or
used any other corporate or fictitious name, or been a party to any merger or
consolidation, or been a party to any Acquisition.
5.13. Regulation U. No Loan Party is engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" as such
terms are defined in Regulation U of the Federal Reserve Board as now and from
time to time hereafter in effect (such securities being referred to herein as
"MARGIN STOCK"). No Loan Party owns any Margin Stock, and none of the proceeds
of the Loans or other extensions of credit under this Agreement will be used,
directly or indirectly, for the purpose of purchasing or carrying any Margin
Stock, for the purpose of reducing or retiring any Indebtedness that was
originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any of the Loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulations T, U or X of the Federal Reserve Board. No Loan Party will take or
permit to be taken any action that might cause any Loan Document to violate any
regulation of the Federal Reserve Board.
5.14. Material Agreements. Schedule 5.14 hereto sets forth as of the
Closing Date all material agreements and contracts to which any Loan Party is a
party or is bound as of the date hereof (defined as
48
being required to be listed in the Borrower's filings with the Securities and
Exchange Commission). No Loan Party is in default in the performance, observance
or fulfillment of any of the obligations, covenants or conditions contained in
(i) any such material agreement to which it is a party or (ii) any agreement or
instrument evidencing or governing Material Indebtedness.
5.15. Compliance With Laws. The Loan Parties have complied with all
applicable statutes, rules, regulations, orders and legally enforceable
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property.
5.16. Ownership of Properties. Except as set forth on Schedule 5.16,
on the date of this Agreement, the Loan Parties will have good title, free of
all Liens other than those permitted by Section 6.21, to all of the Property
reflected in the Loan Parties' most recent consolidated financial statements
provided to the Agent as owned by the Loan Parties.
5.17. Plan Assets; Prohibited Transactions. The Borrower is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R. Section
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making of
Credit Extensions hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code. The Borrower is an
"operating company" as defined in 29 C.F.R 2510-101 (c).
5.18. Environmental Matters. In the ordinary course of its business,
the officers of each Loan Party consider the effect of Environmental Laws on the
business of such Loan Party, in the course of which they identify and evaluate
potential risks and liabilities accruing to such Loan Party due to Environmental
Laws. The Loan Parties have complied with all Environmental Laws in all material
respects. Except as set forth on Schedule 5.18, no Loan Party has received any
notice to the effect that its operations are not in material compliance with any
of the requirements of applicable Environmental Laws or are the subject of any
federal or state investigation evaluating whether any material remedial action
is needed to respond to a release of any toxic or hazardous waste or substance
into the environment.
5.19. Investment Company Act. No Loan Party is an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
5.20. Public Utility Holding Company Act. No Loan Party is a
"holding company" or a "subsidiary company" of a "holding company," or an
"Affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
5.21. Bank Accounts. EXHIBIT B to the Security Agreement contains a
complete and accurate list of all bank accounts, other than ▇▇▇▇▇ cash accounts
with a balance of less than $5,000, maintained by each Loan Party with any bank
or other financial institution.
5.22. Indebtedness. The Loan Parties have no Indebtedness, except
for (a) the Obligations, and (b) any Indebtedness permitted under Section 6.16.
5.23. Affiliate Transactions. Except for immaterial matters or as
set forth on Schedule 5.23, there are no existing or proposed agreements,
arrangements, understandings, or transactions between any Loan Party and any of
the officers, members, managers, directors, stockholders, parents, other
interest holders, employees, or Affiliates (other than Subsidiaries) of any Loan
Party or any members of their
49
respective immediate families, and none of the foregoing Persons are directly or
indirectly indebted to or have any direct or indirect ownership, partnership, or
voting interest in any Affiliate of any Loan Party or any Person with which any
Loan Party has a business relationship or which competes with any Loan Party.
5.24. Real Property; Leases. Schedule 5.24 sets forth a correct and
complete list of all real Property owned by each Loan Party, all material leases
and subleases of real Property by each Loan Party as lessee or sublessee, and
all material leases and subleases of real Property by each Loan Party as lessor
or sublessor. For purposes of the foregoing sentence, "material" shall mean a
lease or sublease related to a location where Inventory in excess of $1,000,000
is located. Each of such leases and subleases is valid and enforceable in
accordance with its terms and is in full force and effect, and no default by any
party to any such lease or sublease exists. Each Loan Party has good and
indefeasible title in fee simple to the real Property identified on Schedule
5.24 as owned by such Loan Party, or valid leasehold interests in all real
Property designated therein as "leased" by such Loan Party.
5.25. Intellectual Property Rights. (a) Schedule 5.25 sets forth a
correct and complete list of all registered Intellectual Property Rights of each
Loan Party; (b) none of the Intellectual Property Rights listed in Schedule 5.25
is subject to any material licensing agreement or similar arrangement except as
set forth in Schedule 5.25; (c) the Intellectual Property Rights described in
Schedule 5.25 constitute all of the material property of such type necessary to
the current and anticipated future conduct of the Loan Parties' business; (d) to
the best of each Loan Party's knowledge, no Intellectual Property Right, now
employed, or now contemplated to be employed, by any Loan Party infringes in any
material respect upon any rights held by any other Person; and (e) no claim or
litigation regarding any of the foregoing is pending or, to the knowledge of any
Loan Party, threatened.
5.26. Insurance. Each Loan Party maintains, with financially sound
and reputable insurers, insurance with coverage and limits as required by law
and as is customary with Persons engaged in the same businesses as such Loan
Party. Schedule 5.26 lists all insurance policies of any nature maintained, by
each Loan Party, as well as a summary of the terms of each such policy.
5.27. Solvency.
(a) Immediately after the making of each Credit Extension, and
after giving effect to the application of the proceeds of such Credit
Extensions, (a) the fair value of the assets of each Loan Party, at a fair
valuation, will exceed the debts and liabilities, subordinated, contingent or
otherwise, of each Loan Party; (b) the present fair saleable value of the
Property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of each Loan Party on its debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) each Loan Party will be able to pay
its debts and liabilities, subordinated, contingent or otherwise, as such debts
and liabilities become absolute and matured; and (d) each Loan Party will not
have unreasonably small capital with which to conduct the businesses in which it
is engaged as such businesses are now conducted and are presently proposed to be
conducted after the date hereof.
(b) The Borrower does not intend to, or to permit any of its
Subsidiaries to, and does not believe that they or any of its Subsidiaries will,
incur debts beyond its ability to pay such debts as they mature, taking into
account the timing of and amounts of cash to be received by the Borrower or any
such Subsidiary and the timing of the amounts of cash to be payable on or in
respect of its Indebtedness or the Indebtedness of any such Subsidiary.
50
5.28. Subordinated Indebtedness. The Secured Obligations constitute
senior indebtedness which is entitled to the benefits of the subordination
provisions of all outstanding Subordinated Indebtedness.
5.29. Common Enterprise. The successful operation and condition of
each of the Loan Parties and the Parent is dependent on the continued successful
performance of the functions of the group of the Loan Parties and the Parent as
a whole and the successful operation of each of the Loan Parties and the Parent
is dependent on the successful performance and operation of each other Loan
Party and the Parent. Each Loan Party and the Parent expects to derive benefit
(and its board of directors or other governing body has determined that it may
reasonably be expected to derive benefit), directly and indirectly, from (i)
successful operations of each of the other Loan Parties and the Parent and (ii)
the credit extended by the Lenders to the Borrower hereunder, both in their
separate capacities and as members of the group of companies. Each Loan Party
and the Parent has determined that execution, delivery, and performance of this
Agreement and any other Loan Documents to be executed by such Loan Party or the
Parent is within its purpose, will be of direct and indirect benefit to such
Loan Party and the Parent, and is in its best interest.
5.30. Reportable Transaction. The Borrower does not intend to treat
the Advances and related transactions as being a "reportable transaction"
(within the meaning of Treasury Regulation Section 1.6011-4). In the event the
Borrower determines to take any action inconsistent with such intention, it will
promptly notify the Agent thereof.
5.31. Indenture. (a) No Event of Default (as defined in the
Indenture) or Default (as defined in the Indenture) exists, nor will any such
Event of Default or Default exist immediately after the granting or continuation
of any Loan, under the Indenture, the Senior Subordinated Notes or any agreement
executed by the Borrower in connection therewith; (b) no Loan Party or any of
its Subsidiaries has incurred (as defined in the Indenture) any Designated
Senior Indebtedness (as defined in the Indenture) other than the Secured
Obligations; (c) no Loan Party or any of its Subsidiaries has incurred (as
defined in the Indenture) either prior to or after the granting of any Loan, any
Indebtedness (as defined in the Indenture) in violation of Section 4.06
(Limitation on Additional Indebtedness) of the Indenture; and (d) all of the
Secured Obligations constitutes both Senior Indebtedness (as defined in the
Indenture) and Designated Senior Indebtedness (as defined in the Indenture).
5.32. Permitted Indebtedness. The Secured Obligations constitute
indebtedness permitted under the terms of the Indenture and, during any Fixed
Charge Condition Period, constitute Permitted Indebtedness (as defined in the
Indenture).
ARTICLE VI
COVENANTS
Each Loan Party executing this Agreement jointly and severally agrees
as to all Loan Parties that from and after the date hereof and until the
Facility Termination Date:
6.1. Financial and Collateral Reporting. The Borrower will
maintain, for itself and each of its Subsidiaries, a system of accounting
established and administered to produce financial statements that conform with
GAAP, and will, through the Borrower, furnish to the Lenders:
(a) within 120 days after the close of each Fiscal Year
of the Borrower and its Subsidiaries, an unqualified (as to scope and
without a going concern or similar qualifier) audit
51
report certified by independent certified public accountants acceptable
to the Agent, prepared in all material respects in accordance with GAAP
on a consolidated and consolidating basis (consolidating statements
need not be (1) prepared in accordance with GAAP or (2) certified by
such accountants), including balance sheets as of the end of such
Fiscal Year and a statement of profit and loss for the period then
ended, and a consolidated statement of changes in shareholders' equity
and a consolidated statement of cash flows, accompanied by (i) any
management letter prepared by said accountants and (ii) a certificate
of said accountants that, in the course of their examination necessary
for their certification of the foregoing, they have obtained no
knowledge of any Default or Unmatured Default, or if, in the opinion of
such accountants, any Default or Unmatured Default shall exist, stating
the nature and status thereof;
(b) within 50 days after the close of the first three
quarterly periods of each Fiscal Year of the Borrower and its
Subsidiaries, consolidated and consolidating unaudited balance sheets
as at the close of each such Fiscal Quarter and consolidated and
consolidating (which consolidating statements need not be prepared in
accordance with GAAP) statements of profit and loss for the period then
ended, and a consolidated statement of changes in shareholders' equity
and a consolidated statement of cash flows for the period from the
beginning of the applicable Fiscal Year to the end of such Fiscal
Quarter, all certified by its chief financial officer and prepared in
all material respects in accordance with GAAP (except for consolidating
statements need not be prepared in accordance with GAAP and except for
exclusion of footnotes and subject to normal year-end audit
adjustments);
(c) within 30 days after the close of each Fiscal Month
of the Borrower and its Subsidiaries, consolidated and consolidating
unaudited balance sheets as at the close of each such Fiscal Month and
consolidated and consolidating (which consolidating statements may not
be prepared in accordance with GAAP) statements of profit and loss for
the period then ended, and a consolidated statement of changes in
shareholders' equity and a consolidated statement of cash flows for the
period from the beginning of the applicable Fiscal Year to the end of
such Fiscal Month, all prepared in all material respects in accordance
with GAAP (except for exclusion of footnotes and subject to normal
year-end audit adjustments) and certified by (1) its chief financial
officer or (2) its controller and an executive officer;
(d) as soon as available, but in any event not more than
30 days prior to the end of each Fiscal Year, but prior to the end of
such Fiscal Year, a draft copy on a business unit basis of the plan and
forecast of the Borrower and its Subsidiaries of the next Fiscal Year
on an annual basis and, not more than 90 days after the end of the
Fiscal Year, a final copy of the plan and forecast (including a
projected consolidated and consolidating balance sheet, income
statement and funds flow statement) of the Borrower and its
Subsidiaries for each month of the next Fiscal Year (the "PROJECTIONS")
in form reasonably satisfactory to the Agent;
(e) together with each of the financial statements
required under Sections 6.1(a) and (b), a compliance certificate in
substantially the form of EXHIBIT E (a "COMPLIANCE CERTIFICATE") signed
by the (1) chief financial officer or (2) controller and executive
officer of the Borrower showing the calculations necessary to determine
compliance with this Agreement (including, without limitation,
compliance with the Fixed Charge Coverage Ratio, if applicable) and
stating that no Default or Unmatured Default exists, or if any Default
or Unmatured Default exists, stating the nature and status thereof;
(f) At the Borrower's option, as soon as available, and
in any event no later than 3 Business Days after the end of each
calendar week, a Borrowing Base Report showing the computation of the
Aggregate Borrowing Base in reasonable detail as of the close of
business on
52
the last day of the immediately preceding week, together with such
other information as is therein required, in each case prepared by the
Borrower and certified to by the Borrower's chief financial officer or
controller;
(g) as soon as available but in any event within 20
Business Days of the end of each Fiscal Month, and at such other times
as may be requested by the Agent, as of the period then ended, an
Aggregate Borrowing Base Certificate and supporting information in
connection therewith;
(h) as soon as available but in any event within 20 days
(30 days with respect to subpart (iv) below) of the end of each Fiscal
Month and at such other times as may be requested by the Agent, as of
the period then ended:
(i) a detailed accounts receivable aging for
each Loan Party (1) specifying the name and balance due for
each Account Debtor and (2) reconciled to the Aggregate
Borrowing Base Certificate delivered as of such date prepared
in a manner reasonably acceptable to the Agent;
(ii) a schedule detailing each Loan Party's
Inventory, in form satisfactory to the Agent, (1) by location
(including any Inventory located with a third party under any
consignment, bailee arrangement, or warehouse agreement),
product type, volume on hand, which Inventory shall be valued
at the lower of cost (determined on a first-in, first-out
basis) or market and adjusted for Reserves as the Agent has
previously indicated to such Loan Party are deemed by the
Agent to be appropriate, (2) including a report of any
variances or other results of Inventory counts performed by
such Loan Party since the last Inventory schedule (including
information regarding sales or other reductions, additions,
returns, credits issued by such Loan Party and complaints and
claims made against such Loan Party), and (3) reconciled to
such Loan Party's Borrowing Base Certificate delivered as of
such date;
(iii) a worksheet of calculations prepared by the
Borrower to determine Eligible Accounts and Eligible
Inventory, such worksheets detailing the Accounts and
Inventory excluded from Eligible Accounts and Eligible
Inventory and the reason for such exclusion; and
(iv) a reconciliation of the applicable Loan
Parties' Accounts and Inventory between the amounts shown in
such Loan Parties' books and financial statements and the
reports delivered pursuant to clauses (i) and (ii) above;
(i) as soon as available but in any event within 20 days
of the end of each Fiscal Month and at such other times as may be
requested by the Agent, as of the month then ended, a schedule and
aging or listing of the Loan Parties' accounts payable;
(j) promptly upon the Agent's request:
(i) copies of invoices in connection with the
invoices issued by the Loan Parties in connection with any
Accounts, credit memos, shipping and delivery documents, and
other information related thereto; and
(ii) copies of purchase orders, invoices, and
shipping and delivery documents in connection with any
Inventory or Equipment purchased by any Loan Party.
53
(k) as soon as possible and in any event within
two-hundred and seventy days after the close of the Fiscal Year of the
Borrower, a statement of the Unfunded Liabilities of each Single
Employer Plan, certified as correct by an actuary enrolled under ERISA;
(l) as soon as possible and in any event within 10 days
after any Loan Party knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by the chief financial officer
of such Loan Party, describing said Reportable Event and the action
which such Loan Party proposes to take with respect thereto;
(m) as soon as possible and in any event within 10 days
after receipt by any Loan Party, a copy of (i) any notice or claim to
the effect that any Loan Party is or may be liable to any Person as a
result of the release by any Loan Party, or any other Person of any
toxic or hazardous waste or substance into the environment, and (ii)
any notice alleging any violation of any federal, state or local
environmental, health or safety law or regulation by the any Loan
Party;
(n) within 30 days after the first date on which the
Availability is less than $25,000,000 and, as the Agent may request, no
more than once during any twelve-month period thereafter, so long as
the Availability remains less than $25,000,000, an updated Customer
List, certified as true and correct by an Authorized Officer of each
Loan Party;
(o) concurrently with the furnishing thereof to the
shareholders of the Borrower, copies of all financial statements,
reports and proxy statements so furnished;
(p) promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular
reports which any Loan Party files with the Securities and Exchange
Commission; and
(q) such other information (including non-financial
information) as the Agent or any Lender may from time to time
reasonably request.
In addition, not later than 20 days after the end of each Fiscal Month,
the Borrower shall cause each Loan Party to submit a Borrowing Base Certificate
to the Borrower with respect to its Borrowing Base for the immediately preceding
month, and the Borrower shall retain such Borrowing Base Certificate and deliver
same to the Agent upon the Agent's request therefor.
6.2. Use of Proceeds.
(a) The Borrower will use the proceeds of the Credit
Extensions (i) to repay the outstanding indebtedness, liabilities and
obligations under the Prior Agreement, and (ii) for general corporate
purposes (not otherwise prohibited by this Agreement).
(b) The Borrower will not, nor will it permit any Loan
Party to, use any of the proceeds of the Credit Extensions to (i)
purchase or carry any Margin Stock in violation of Regulation U, (ii)
repay or refinance any Indebtedness of any Person incurred to buy or
carry any Margin Stock, or (iii) acquire any security in any
transaction that is subject to Section 13 or Section 14 of the
Securities Exchange Act of 1934 (and the regulations promulgated
thereunder).
(c) The Borrower will not, nor will it permit any Loan
Party to, use any of the proceeds of Credit Extensions in any manner
not permitted under the Indenture or in any manner that would otherwise
cause a default under or a breach of the Indenture.
54
6.3 Notices. Each Loan Party, through the Borrower, will give
prompt notice in writing to the Agent of:
(a) the occurrence of any Default or Unmatured Default;
(b) any other development, financial or otherwise, which
could reasonably be expected to have a Material Adverse Effect;
(c) the assertion by the holder of any Indebtedness of
any Loan Party in excess of $5,000,000 that any default exists with
respect thereto or that any Loan Party is not in compliance therewith;
(d) receipt of any written notice that any Loan Party is
subject to any investigation by any governmental entity with respect to
any potential or alleged violation of any applicable Environmental Law
that would reasonably be expected to have a Material Adverse Effect or
of imposition of any Lien against any Property of any Loan Party for
any material liability with respect to damages arising from, or costs
resulting from, any violation of any Environmental Laws;
(e) receipt of any notice of litigation commenced or
threatened against any Loan Party that (i) seeks damages in excess of
$5,000,000, (ii) seeks injunctive relief, (iii) is asserted or
instituted against any Multiemployer Plan or ERISA Plan, its
fiduciaries or its assets, (iv) alleges criminal misconduct by any Loan
Party, (v) alleges the violation of any law regarding, or seeks
remedies in connection with, any Environmental Laws; or (vi) involves
any product recall to the extent that such product recall would have a
Material Adverse Effect;
(f) any Lien (other than Permitted Liens) or claim made
or asserted against any material portion of the Collateral;
(g) unless otherwise permitted hereunder, its decision to
change, (i) such Loan Party's name or type of entity, (ii) such Loan
Party's articles or certificate of incorporation, partnership
agreement, certificate of partnership, articles or certificate of
organization, by-laws, or operating or other management agreement, and
(iii) the location where any Collateral is held or maintained; provided
that in no event shall the Agent receive notice of such change less
than thirty days prior thereto;
(h) commencement of any proceedings contesting any tax,
fee, assessment, or other governmental charge in excess of $250,000;
(i) the opening of any new deposit account by any Loan
Party with any bank or other financial institution other than Agent;
(j) any loss, damage, or destruction to the Collateral in
the amount of $1,000,000 or more, whether or not covered by insurance;
(k) any and all payment or other material default notices
received under or with respect to any leased location or public
warehouse where Collateral with a value in excess of $1,000,000 is
located (which shall be delivered within two Business Days after
receipt thereof);
(l) all material amendments to real estate leases where
Collateral in excess of $1,000,000 is located, together with a copy of
such amendment;
55
(m) the fact that such Loan Party has entered into a Rate
Management Transaction or an amendment to a Rate Management
Transaction, other than, each case, any Rate Management Transaction
with the Agent, together with copies of all agreements evidencing such
Rate Management Transactions or amendments thereto (which shall be
delivered within two Business Days);
(n) any notice provided to the trustee or the Senior
Subordinated Noteholders under the Indenture or the Senior Subordinated
Notes, such notice to be contemporaneously delivered by the Borrower to
the Agent and the Lenders; and
(o) any other matter as the Agent may reasonably request.
6.4. Conduct of Business. Each Loan Party will:
(a) carry on and conduct its business in substantially
the same manner and in substantially the same fields of enterprise as
it is presently conducted;
(b) do all things necessary to remain duly incorporated
or organized, validly existing and (to the extent such concept applies
to such entity) in good standing as a domestic corporation, partnership
or limited liability company in its jurisdiction of incorporation or
organization, as the case may be, and maintain all requisite authority
to conduct its business in each jurisdiction in which its business is
conducted;
(c) keep adequate books and records with respect to its
business activities in which proper entries, reflecting all financial
transactions, are made as necessary to permit preparation of the
Borrower's consolidated financial statements in accordance in all
material respects with GAAP and on a basis consistent with the
Financial Statements delivered to the Agent pursuant to Section 4.1(l);
(d) at all times maintain, preserve and protect all of
its assets and properties used or useful in the conduct of its
business, and keep the same in good repair, working order and condition
in all material respects (taking into consideration ordinary wear and
tear) and from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements thereto consistent
with the Loan Parties' practices; and
(e) transact business only in such corporate and trade
names as are set forth in Schedule 5.12.
6.5. Taxes. Each Loan Party will timely file complete and correct
U.S. federal and applicable foreign, state and local tax returns required by law
and pay when due all taxes, assessments and governmental charges and levies upon
it or its income, profits, Property or Collateral, except those which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been provided for in accordance with GAAP on the
Borrower's consolidated financial statements.
6.6. Payment of Indebtedness and Other Liabilities. Each Loan Party
will pay or discharge when due all Indebtedness permitted by Section 6.16 owed
by such Loan Party and all other liabilities and obligations due to materialmen,
mechanics, carriers, warehousemen, and landlords, except that the Loan Parties
may in good faith contest, by appropriate proceedings diligently pursued, any
such obligations; provided that, (a) adequate reserves have been set aside for
such liabilities in accordance with GAAP, (b) such liabilities would not result
in aggregate liabilities in excess of $5,000,000, (c) no Lien shall be
56
imposed to secure payment of such liabilities that is superior to the Agent's
Liens securing the Secured Obligations, (d) no material portion of the
Collateral becomes subject to forfeiture or loss as a result of the contest and
(e) such Loan Party shall promptly pay or discharge such contested liabilities,
if any, and shall deliver to the Agent evidence reasonably acceptable to the
Agent of such compliance, payment or discharge, if such contest is terminated or
discontinued adversely to such Loan Party or the conditions set forth in this
proviso are no longer met.
6.7. Insurance.
(a) Each Loan Party shall at all times maintain, with financially
sound and reputable carriers, insurance against: (i) loss or damage by fire and
loss in transit; (ii) theft, burglary, pilferage, larceny, embezzlement, and if
available and appropriate other criminal activities; (iii) business
interruption; (iv) general liability and (v) and such other hazards, as is
customary in the business of such Loan Party. All such insurance shall be in
amounts, cover such assets and be under policies customary with the Loan
Parties' business and acceptable to the Agent in its Permitted Discretion. In
the event any Collateral is located in any area that has been designated by the
Federal Emergency Management Agency as a "SPECIAL FLOOD HAZARD AREA," the
applicable Loan Party shall purchase and maintain flood insurance on such
Collateral (including any personal Property which is located on any real
Property leased by such Loan Party within a "SPECIAL FLOOD HAZARD AREA"). The
amount of all insurance required by this Section shall at a minimum comply with
applicable law, including the Flood Disaster Protection Act of 1973, as amended.
All premiums on such insurance shall be paid when due by the applicable Loan
Party. If any Loan Party fails to obtain any insurance as required by this
Section, the Agent at the direction of the Required Lenders may obtain such
insurance at the Borrower's expense. By doing so, the Agent shall not be deemed
to have waived any Default or Unmatured Default arising from any Loan Party's
failure to maintain such insurance or pay any premiums therefor. No Loan Party
will use or permit any Property to be used in material violation of applicable
law or in any manner which might render inapplicable any insurance coverage.
(b) All insurance policies required under Section 6.7(a) shall
name the Agent (for the benefit of the Agent and the Lenders) as an additional
insured or as loss payee, as applicable, and shall provide that, or contain loss
payable clauses or mortgagee clauses, in form and substance satisfactory to the
Agent, which provide that:
(i) all proceeds thereunder with respect to any
Collateral shall be payable to the Agent;
(ii) no such insurance shall be affected by any act or
neglect of the insured or owner of the Property described in such
policy; and
(i) such policy and loss payable clauses may be canceled,
amended, or terminated only upon at least thirty days prior written
notice given to the Agent.
(c) Notwithstanding the foregoing, any property insurance or
condemnation proceeds received by the Loan Parties shall be immediately
forwarded to the Agent and the Agent may, at its option, apply any such proceeds
to the reduction of the Obligations in accordance with Section 2.15, provided
that in the case of insurance proceeds pertaining to any Loan Party other than
the Borrower, such insurance proceeds shall be applied to the Loans owing by the
Borrower. The Agent may permit or require any Loan Party to use such money, or
any part thereof, to replace, repair, restore or rebuild the Collateral in a
diligent and expeditious manner with materials and workmanship of substantially
the same quality as existed before the loss, damage or destruction.
Notwithstanding the foregoing, if the casualty giving rise to such insurance
proceeds could not reasonably be expected to have a Material Adverse
57
Effect and such insurance proceeds do not exceed $3,000,000 for any single
event, the Agent shall permit such Loan Party to replace, restore, repair or
rebuild the property; provided that, if such Loan Party has not completed or
entered into binding agreements to complete such replacement, restoration,
repair or rebuilding within 180 days of such casualty, the Agent may apply such
insurance proceeds to the Obligations in accordance with Section 2.15. All
insurance proceeds made available to any Loan Party to replace, repair, restore
or rebuild the Collateral shall be deposited in a cash collateral account
maintained with the Agent. Thereafter, such funds shall be made available to the
applicable Loan Party to provide funds to replace, repair, restore or rebuild
the Collateral as follows:
(i) the Borrower shall request a release from the cash
collateral account be made to the applicable Loan Party in the amount
requested to be released; and
(ii) so long as the conditions set forth in Section 4.2
have been met, the Agent shall release funds from the cash collateral
account.
6.8. Compliance with Laws. Except where the failure to comply would
have a Material Adverse Effect, each Loan Party will comply with all laws,
rules, regulations, orders, writs, judgments, injunctions, decrees or awards to
which it may be subject including, without limitation, all Environmental Laws.
6.9. Inspection. Each Loan Party will permit the Agent by its
employees, representatives and agents, from time to time upon two Business Days'
prior notice as frequently as the Agent reasonably determines to be appropriate,
to (a) inspect any of the Property, the Collateral, and the books and financial
records of such Loan Party, (b) examine, audit and make extracts or copies of
the books of accounts and other financial records of such Loan Party, (c) have
access to its properties, facilities, the Collateral and its advisors, officers,
directors and employees to discuss the affairs, finances and accounts of such
Loan Party and (d) review, evaluate and make test verifications and counts of
the Accounts, Inventory and other Collateral of such Loan Party. If a Default
has occurred and is continuing, each Loan Party shall provide such access to the
Agent and to each Lender at all times and without advance notice. Furthermore,
so long as any Default has occurred and is continuing, each Loan Party shall
provide the Agent and each Lender with access to its suppliers. Each Loan Party
shall promptly make available to the Agent and its counsel originals or copies
of all books and records that the Agent may reasonably request. The Loan Parties
acknowledge that from time to time the Agent may prepare and may distribute to
the Lenders certain audit reports pertaining to the Loan Parties' assets for
internal use by the Agent and the Lenders from information furnished to the
Agent by or on behalf of the Loan Parties, after the Agent has exercised its
rights of inspection pursuant to this Agreement.
6.10. Appraisals. Once every Fiscal Year for Inventory and once
every three Fiscal Years for Equipment and real Property, and, at any time
during the existence of an Unmatured Default or a Default, at the request of the
Agent, the Loan Parties shall, at their sole expense, provide the Agent with
appraisals or updates thereof of their Inventory, Equipment and real Property
from an appraiser, and prepared on a basis, reasonably satisfactory to the
Agent, such appraisals and updates to include, without limitation, information
required by applicable law and regulations and by the internal policies of the
Lenders.
6.11. Communications with Accountants. Each Loan Party executing
this Agreement authorizes (a) the Agent, and (b) so long as a Default has
occurred and is continuing, each Lender, to communicate, upon advance notice to
the Borrower, directly with its independent certified public accountants and
authorizes and shall instruct those accountants and advisors to communicate to
the Agent and each Lender information relating to any Loan Party with respect to
the business, results of operations and financial condition of any Loan Party.
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6.12. Collateral Access Agreements and Real Estate Purchases. Each
Loan Party shall use commercially reasonable efforts to obtain a Collateral
Access Agreement from the lessor of each leased property, mortgagee of owned
property or bailee or consignee with respect to any warehouse, processor or
converter facility or other location where Collateral is stored or located,
which agreement or letter shall contain a waiver or subordination of all Liens
or claims that the landlord, mortgagee or bailee or consignee may assert against
the Collateral at that location, and shall otherwise be reasonably satisfactory
in form and substance to the Agent. After the Closing Date, no real Property or
warehouse space shall be leased by any Loan Party and no Inventory shall be
shipped to a processor or converter under arrangements established after the
Closing Date without the prior written consent of the Agent (which consent, in
the Agent's discretion, may be conditioned upon the exclusion from the Aggregate
Borrowing Base of 3 months rent at that location in accordance with subpart (h)
of the definition of Eligible Inventory) or, unless and until a satisfactory
Collateral Access Agreement shall first have been obtained with respect to such
location. Each Loan Party shall timely and fully pay and perform in all material
respects its obligations under all leases and other agreements with respect to
each leased location or third party warehouse where any Collateral is or may be
located. To the extent permitted hereunder, if any Loan Party proposes to
acquire a fee ownership interest in real Property after the Closing Date, it
shall (a) if proceeds of the Loans were not used to purchase such real Property,
provide to the Agent in escrow a mortgage or deed of trust granting the Agent a
first priority Lien on such real Property, or (b) if proceeds of the Loans were
used to purchase such real Property, provide to the Agent a mortgage or deed of
trust granting the Agent a first priority Lien on such real Property, together
with an environmental audit, mortgage title insurance commitment, real property
survey, local counsel opinion, and, if required by the Agent, supplemental
casualty insurance and flood insurance, and such other documents, instruments or
agreements reasonably requested by the Agent, in each case, in form and
substance reasonably satisfactory to the Agent.
6.13. Deposit Account Control Agreements. The Loan Parties will
provide to the Agent a Deposit Account Control Agreement duly executed on behalf
of each financial institution holding a deposit account of a Loan Party as set
forth in the Security Agreement; provided that the Agent may, in its Permitted
Discretion, defer delivery of any such Deposit Account Control Agreement,
establish a Reserve with respect to any deposit account for which the Agent has
not received such Deposit Account Control Agreement, or require the Loan Party
to open and maintain a new deposit account with a financial institution subject
to a Deposit Account Control Agreement.
6.14 Additional Collateral; Further Assurances.
(a) Subject to applicable law, each Loan Party shall, unless the
Required Lenders otherwise consent, except as otherwise permitted hereunder (i)
cause each Subsidiary of the Borrower (excluding any Foreign Subsidiary) to
become or remain a Loan Party and a Guarantor and (ii) cause each Subsidiary of
the Borrower (excluding any Foreign Subsidiary) formed or acquired after the
Closing Date in accordance with the terms of this Agreement to (1) become a
party to this Agreement by executing the Joinder Agreement set forth as EXHIBIT
F hereto (the "JOINDER AGREEMENT"), and (2) guarantee payment and performance of
the Guaranteed Obligations pursuant to the Guaranty and enter into a Security
Agreement granting to the Agent, for the benefit of the Lenders, a first
priority security interest in all of its personal property. Upon execution and
delivery of such Loan Documents and other instruments, certificates, and
agreements, each such Person shall automatically become a Guarantor hereunder
and thereupon shall have all of the rights, benefits, duties, and obligations in
such capacity under the Loan Documents.
(b) Upon the request of the Agent, each Loan Party shall (i) grant
Liens to the Agent, for the benefit of the Agent and the Lenders, pursuant to
such documents as the Agent may reasonably deem
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necessary and deliver such property, documents, and instruments as the Agent may
request to perfect the Liens of the Agent in any Property of such Loan Party
which constitutes Collateral, and (ii) in connection with the foregoing
requirements, or either of them, deliver to the Agent all items of the type
required by Section 4.1 (as applicable). Notwithstanding the foregoing, the
Borrower shall not be required to grant mortgages to the Agent and the Lenders
on their real Property (other than those granted on the Closing Date) so long as
the Availability exceeds $25,000,000. If, at any time, the Availability falls
below $25,000,000, the Agent, in the Agent's sole and absolute discretion, shall
have the right to require perfected, first priority mortgage liens on the
Borrower's real Property at the Borrower's sole cost and expense.
(c) The Parent will cause 100% of the issued and outstanding
Capital Stock of the Borrower to be subject at all times to a first priority,
perfected Lien in favor of the Agent pursuant to the terms and conditions of the
Loan Documents or other security documents as the Agent shall reasonably
request. Upon the occurrence and at all times during the existence of an Event
of Default under this Agreement, the Borrower shall, upon the request of Agent,
in its sole and absolute discretion, cause (i) 100% of the issued and
outstanding Capital Stock of each of its Domestic Subsidiaries and (ii) 65% (or
such greater percentage that, due to a change in an applicable law after the
date hereof, (1) could not reasonably be expected to cause the undistributed
earnings of such Foreign Subsidiary as determined for U.S. federal income tax
purposes to be treated as a deemed dividend to such Foreign Subsidiary's U.S.
parent and (2) could not reasonably be expected to cause any 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 100% of the issued
and outstanding Capital Stock not entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) in each first-tier Foreign Subsidiary directly owned
by the Borrower or any Domestic Subsidiary to be subject at all times to a first
priority, perfected Lien in favor of the Agent pursuant to the terms and
conditions of the Loan Documents or other security documents.
(d) Without limiting the foregoing, each Loan Party shall, and
shall cause each of the Borrower's Subsidiaries which is required to become a
Loan Party pursuant to the terms of this Agreement to, execute and deliver, or
cause to be executed and delivered, to the Agent such documents and agreements,
and shall take or cause to be taken such actions as the Agent and the Required
Lenders may, from time to time, reasonably request to carry out the terms and
conditions of this Agreement and the other Loan Documents.
6.15. Dividends.
(a) No Loan Party will declare or pay any dividends or make any
distributions on its Capital Stock (other than dividends or distributions
permitted under the Indenture and those payable in its own common stock) or
redeem, repurchase or otherwise acquire or retire any of its Capital Stock at
any time outstanding, except that, if no Default or Unmatured Default has
occurred or is continuing or would result after giving effect to such payment,
(i) any Subsidiary may declare and pay dividends or make distributions to a Loan
Party or to a Wholly-Owned Subsidiary and (ii) the Borrower may declare and pay
or make distributions to the Parent in an aggregate amount not to exceed
$750,000 in any Fiscal Year.
(b) No Loan Party shall directly or indirectly enter into or
become bound by any agreement, instrument, indenture or other obligation (other
than this Agreement and the other Loan Documents) that could directly or
indirectly restrict, prohibit or require the consent of any Person with respect
to the payment of dividends or distributions or the making or repayment of
intercompany loans by a Subsidiary to the Borrower.
6.16. Indebtedness. The Borrower will not, nor will it permit any
Loan Party to, create, incur or suffer to exist any Indebtedness, except:
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(a) the Obligations;
(b) Indebtedness existing on the date hereof and
described in Schedule 6.16;
(c) purchase money Indebtedness or Capitalized Lease
Obligations or incurred in connection with the purchase of any
Equipment; provided that, the amount of such purchase money
Indebtedness and Capitalized Lease Obligations shall be limited to an
amount not in excess of the purchase price of such Equipment and the
aggregate of all such purchase money Indebtedness and Capitalized Lease
Obligations incurred in any Fiscal Year shall not exceed $5,000,000;
provided however, that during any Fixed Charge Condition Period, such
Indebtedness shall constitute Permitted Indebtedness as defined under
the Indenture;
(d) Indebtedness which represents an extension,
refinancing, or renewal of any of the Indebtedness described in clauses
(b) and (c) hereof; provided that, (i) the principal amount or interest
rate of such Indebtedness is not increased, (ii) any Liens securing
such Indebtedness are not extended to any additional Property of any
Loan Party, (iii) no Loan Party that is not originally obligated with
respect to repayment of such Indebtedness is required to become
obligated with respect thereto, (iv) such extension, refinancing or
renewal does not result in a shortening of the average weighted
maturity of the Indebtedness so extended, refinanced, renewed, (v) the
terms of any such extension, refinancing, or renewal are not materially
less favorable to the obligor thereunder than the original terms of
such Indebtedness, and (iv) if the Indebtedness that is refinanced,
renewed, or extended was subordinated in right of payment to the
Obligations, then the terms and conditions of the refinancing, renewal,
or extension Indebtedness must include subordination terms and
conditions that are at least as favorable to the Agent and the Lenders
as those that were applicable to the refinanced, renewed, or extended
Indebtedness;
(e) Indebtedness owing by any Loan Party to any other
Loan Party with respect to intercompany loans, provided further, that:
(i) the applicable Loan Parties shall have
executed and delivered to such Loan Party, on the Closing
Date, a demand note (collectively, the "INTERCOMPANY NOTES")
to evidence any such intercompany Indebtedness owing at any
time by any Loan Party to any other Loan Party, which
Intercompany Notes shall be in form and substance reasonably
satisfactory to the Agent and shall be pledged and delivered
to the Agent pursuant to the Security Agreement as additional
collateral security for the Secured Obligations;
(ii) the Loan Parties shall record all
intercompany transactions on their books and records in a
manner reasonably satisfactory to the Agent;
(iii) the obligations of the Loan Parties under
any such Intercompany Notes shall be subordinated to the
Obligations of the Loan Parties hereunder in a manner
reasonably satisfactory to the Agent;
(iv) at the time any such intercompany loan or
advance is made by a Loan Party and after giving effect
thereto, such Loan Party shall be Solvent;
(v) no Default or Unmatured Default would occur
and be continuing after giving effect to any such proposed
intercompany loan;
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(vi) each intercompany loan from the Borrower
shall be to a Borrowing Loan Party that is wholly owned by the
Borrower or any wholly owned Subsidiary of the Borrower, and
shall be in accordance with the provisions of Section 17.7
hereof; and
(vii) all such Indebtedness under Intercompany
Notes shall otherwise constitute Permitted Indebtedness (as
defined in the Indenture).
(f) Contingent Obligations (i) by endorsement of
instruments for deposit or collection in the ordinary course of
business, (ii) consisting of the Reimbursement Obligations and (iii)
consisting of the Guaranty and guarantees of Indebtedness incurred for
the benefit of any other Loan Party if the primary obligation is
expressly permitted elsewhere in this Section 6.16;
(g) Indebtedness arising under Rate Management
Transactions related to the Loans having a Net ▇▇▇▇-to-Market Exposure
not exceeding $2,000,000;
(h) the Subordinated Indebtedness of the Borrower
incurred under the Senior Subordinated Notes in an aggregate original
principal amount not to exceed $199,930,000, provided that such
Subordinated Indebtedness may not be renewed, extended or increased;
and
(i) other unsecured Indebtedness in an amount, for the
Borrower and all of its Subsidiaries, not in excess of $1,000,000.
6.17. Capital Structure. Except as otherwise permitted herein, no
Loan Party shall make any change in its capital structure. If all or any part of
a Loan Party's Capital Stock has been pledged to the Agent, that Loan Party
shall not issue additional Capital Stock.
6.18. Merger. No Loan Party will merge or consolidate with or into
any other Person, except that (a) any Subsidiary of the Borrower may merge into
a Wholly-Owned Subsidiary of the Borrower (or the Borrower so long as the
Indenture is no longer in effect) and (b) any Loan Party (other than the
Borrower) may merge with any other Loan Party.
6.19. Sale of Assets. No Loan Party will lease, sell or otherwise
dispose of its Property (including any Capital Stock owned by it) to any other
Person (other than another Loan Party), except:
(a) sales of Inventory in the ordinary course of
business;
(b) the sale or other disposition of Equipment that is
obsolete or no longer useful in such Loan Party's business; and
(c) for (1) the sale of assets classified on the
Borrower's consolidated balance sheet on the Closing Date as "Held for
Sale," and (2) the sale or disposition of other assets having a book
value not exceeding $25,000,000 in the aggregate during the term of
this Agreement.
The proceeds of any sale or disposition permitted pursuant to this Section shall
be delivered to the Agent if required by Section 2.15 and applied to the
Obligations as set forth therein.
6.20. Investments and Acquisitions. No Loan Party will (a) make or
suffer to exist any Investments (including without limitation, loans and
advances to, and other Investments in, Subsidiaries), or commitments therefor,
(b) create any Subsidiary except as permitted herein, (c) become or remain a
partner in any partnership or joint venture, or (d) make any Acquisition,
except:
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(i) Cash Equivalent Investments, subject to control
agreements in favor of the Agent for the benefit of the Lenders or
otherwise subject to a perfected security interest in favor of the
Agent for the benefit of the Lenders;
(ii) existing Investments in Subsidiaries;
(iii) other Investments in existence on the Closing Date
and described in Schedule 6.20;
(iv) Investments consisting of loans or advances made to
employees of such Loan Party on an arms-length basis in the ordinary
course of business consistent with past practices for travel and
entertainment expenses, relocation costs and similar purposes up to a
maximum of $10,000 to any employee and up to a maximum of $25,000 in
the aggregate at any one time outstanding;
(v) subject to Sections 4.2(a) and 4.4 of the Security
Agreement, Investments comprised of notes payable, or stock or other
securities issued by Account Debtors to such Loan Party pursuant to
negotiated agreements with respect to settlement of such Account
Debtor's Accounts in the ordinary course of business, consistent with
past practices;
(vi) additional Investments in Subsidiaries which are Loan
Parties;
(vii) other Investments in Subsidiaries of a Loan Party not
to exceed $4,500,000 in the aggregate during the term of this
Agreement;
(viii) other Investments not to exceed $3,000,000 in the
aggregate during the term of this Agreement; and
(ix) subject to Section 2.24 hereof, Acquisitions not to
exceed $1,000,000 each and an aggregate amount not to exceed $5,000,000
during any four (4) consecutive Fiscal Quarters, unless the Borrower
receives prior written consent from the Agent.
6.21. Liens
(a) No Loan Party will create, incur, or suffer to exist any Lien
in, of, or on the Property of such Loan Party, except the following
(collectively, "PERMITTED LIENS"):
(i) Liens for taxes, fees, assessments, or other
governmental charges or levies on the Property of such Loan Party if
such Liens (a) shall not at the time be delinquent or (b) do not secure
obligations in excess of $250,000, are being contested in good faith
and by appropriate proceedings diligently pursued, adequate reserves in
accordance with GAAP have been provided on the books of such Loan
Party, and a stay of enforcement of such Lien is in effect;
(ii) Liens imposed by law, such as carrier's,
warehousemen's, and mechanic's Liens and other similar Liens arising in
the ordinary course of business which secure payment of obligations not
more than ten days past due or which are being contested in good faith
by appropriate proceedings diligently pursued and for which adequate
reserves shall have been provided on such Loan Party's books;
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(iii) statutory Liens in favor of landlords of real
Property leased by such Loan Party; provided that such Loan Party is
current with respect to payment of all rent and other material amounts
due to such landlord under any lease of such real Property;
(iv) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar legislation
or to secure the performance of bids, tenders, or contracts (other than
for the repayment of Indebtedness) or to secure indemnity, performance,
or other similar bonds for the performance of bids, tenders, or
contracts (other than for the repayment of Indebtedness) or to secure
statutory obligations (other than material liens arising under ERISA or
Environmental Laws) or surety or appeal bonds, or to secure indemnity,
performance, or other similar bonds;
(v) utility easements, building restrictions, and such
other encumbrances or charges against real Property as are of a nature
generally existing with respect to properties of a similar character
and which do not in any material way affect the marketability of such
real Property or materially and adversely interfere with the use
thereof in the business of such Loan Party;
(vi) Liens existing on the Closing Date and described in
Schedule 6.21;
(vii) Liens resulting from any extension, refinancing, or
renewal of the related Indebtedness as permitted pursuant to Section
6.16(d); provided that, the Liens evidenced thereby are not increased
to cover any additional Property not originally covered thereby;
(viii) Liens securing purchase money Indebtedness of such
Loan Party permitted pursuant to Section 6.16(c); provided that, such
Liens attach only to the Property which was purchased with the proceeds
of such purchase money Indebtedness; and
(ix) Liens in favor of the Agent granted pursuant to any
Loan Document.
(b) Notwithstanding the foregoing, none of the Liens permitted
pursuant to this Section 6.21, other than (x) clause (i) above, may at any time
attach to any Accounts of any Loan Party and (y) clauses (i) through (iii)
above, may at any time attach to any Inventory of any Loan Party.
(c) Other than as provided in the Loan Documents or in connection
with the creation or incurrence of any Indebtedness under Section 6.16(c), no
Loan Party will enter into or become subject to any negative pledge or other
restriction on the right of such Loan Party to grant Liens to the Agent and the
Lenders on any of its Property; provided that, any such negative pledge or other
restriction entered into in connection with the creation of Indebtedness under
Section 6.16(c) shall be limited to the Property securing such purchase money
Indebtedness.
6.22. Change of Name or Location; Change of Fiscal Year. Except as
permitted hereunder, no Loan Party shall (a) change its name as it appears in
official filings in the state of its incorporation or organization, (b) change
its chief executive office, principal place of business, mailing address,
corporate offices or warehouses or locations at which Collateral is held or
stored, or the location of its records concerning the Collateral as set forth in
the Security Agreement, (c) change the type of entity that it is, (d) change its
organization identification number, if any, issued by its state of incorporation
or other organization, or (e) change its state of incorporation or organization,
in each case, without at least thirty days prior written notice to the Agent and
the Agent shall have either (1) determined that such event or occurrence will
not adversely affect the validity, perfection or priority of the Agent's
security interest in the Collateral, or (2) after the Agent's written
acknowledgment that any reasonable action requested by the Agent in connection
therewith, including to continue the perfection of any Liens in favor of the
Agent,
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on behalf of Lenders, in any Collateral, has been completed or taken, and,
provided that any new location shall be in the continental U.S. No Loan Party
shall change its Fiscal Year.
6.23. Affiliate Transactions. Except as permitted hereunder, no Loan
Party will enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer (including, without limitation, any payment or transfer with respect to
any fees or expenses for management services) to, any Affiliate except in the
ordinary course of business and pursuant to the reasonable requirements of such
Loan Party's business and upon fair and reasonable terms no less favorable to
such Loan Party than such Loan Party would obtain in a comparable arms-length
transaction.
6.24. Amendments to Agreements. Except as permitted hereunder, the
Borrower will not, and will not permit any of its Subsidiaries to, amend or
terminate their organizational documents or governing documents in a manner that
would be adverse to the Lenders.
6.25. Prepayment of Indebtedness; Subordinated Indebtedness.
(a) No Loan Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount payable in respect of any Indebtedness prior to its scheduled
maturity, other than (i) the Obligations; (ii) Indebtedness secured by a
Permitted Lien if the asset securing such Indebtedness has been sold or
otherwise disposed of in accordance with Section 6.19; (iii) Indebtedness
permitted by Section 6.16(d) upon any refinancing thereof in accordance
therewith; and (iv) Indebtedness permitted by Section 6.16(e).
(b) No Loan Party shall make any amendment or modification to the
Indenture, note or other agreement evidencing or governing any Subordinated
Indebtedness, or directly or indirectly voluntarily prepay, defease or in
substance defease, purchase, redeem, retire or otherwise acquire, any
Subordinated Indebtedness; provided that, the Borrower may make scheduled
payments of interest with respect to Subordinated Indebtedness as long as no
Default or Unmatured Default has occurred and is continuing or would result
after giving effect to such payment.
6.26 Letters of Credit. No Loan Party will apply for or become
liable upon or in respect of any Letter of Credit other than Facility LCs.
6.27. Financial Contracts. No Loan Party shall enter into or remain
liable upon any Financial Contract, except for Rate Management Transactions
permitted by Section 6.16.
6.28. Capital Expenditures. No Loan Party shall expend, or be
committed to expend, in the aggregate for the Loan Parties in excess of (a)
$16,000,000 during Fiscal Year 2003, (b) $18,000,000 during Fiscal Year 2004,
(c) $20,000,000 during Fiscal Year 2005, and (d) $22,000,000 during Fiscal Years
2006 and 2007, for unfunded Capital Expenditures for the Loan Parties.
6.29. Debt Service Coverage Ratio. The Borrower will not permit the
Debt Service Coverage Ratio, determined as of the end of each Fiscal Quarter for
the then most-recently ended four Fiscal Quarters, to be less than (a) 1.10 to
1.00 for any period of two consecutive Fiscal Quarters, or (b) 1.00 to 1.00.
6.30. Depository Banks. Each Loan Party shall maintain the Agent as
such Loan Party's principal depository bank, including for the maintenance of
operating, administrative, cash management, collection activity, and other
deposit accounts for the conduct of its business.
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6.31. Sale of Accounts. The Borrower will not, and will not it
permit any of its Subsidiaries to, sell or otherwise dispose of any notes
receivable or accounts receivable, with or without recourse.
6.32. Off-Balance Sheet Liabilities; Sale and Leaseback
Transactions. The Loan Parties shall not have any Off-Balance Sheet Liabilities
or engage in any Sale and Leaseback Transactions.
6.33. Subordination of Intercompany Notes.
(a) All Indebtedness evidenced by an Intercompany Note, together
with all accrued interest thereon, and any other indebtedness for borrowed money
now owing or which hereafter may become owing by or from a Loan Party to any
other Loan Party, howsoever such indebtedness may be hereafter created,
extended, renewed or evidenced, together with all accrued interest thereon and
any and all other obligations and liabilities of any kind owing by or from a
Loan Party to any other Loan Party shall at all times and in all respects be
subordinate and junior in right of payment to any and all obligations,
liabilities and indebtedness of any kind of the Loan Parties to the Lenders, and
their respective successors and assigns, including, without limitation, the
Obligations, Guaranteed Obligations and any extensions, renewals, modifications,
and amendments thereof and all accrued interest thereon and any Fees owing by
the Loan Parties to the Lenders.
(b) Unless and until (i) all of the Guaranteed Obligations shall
have been fully and finally paid and satisfied and (ii) all financing
arrangements, including, but not limited to this Agreement, between the
Borrower, the other Loan Parties and the Lenders have been terminated, no Loan
Party shall: (A) enforce or exercise any right of demand or setoff or commence
any legal or other action against any other Loan Party to collect upon any
Intercompany Note; (B) take or accept any collateral or security with respect to
the obligations evidenced by any Intercompany Note without the prior written
consent of the Agent; (C) commence foreclosure or any other similar type of
proceedings or exercise any similar remedies in respect of any collateral for
the obligations evidenced by any Intercompany Note; (D) enforce any judgment
that it might obtain with respect to the obligations evidenced by the
Intercompany Notes without obtaining the prior written consent of the Agent; or
(E) commence or join with any other creditor or creditors of the Loan Parties in
commencing any bankruptcy, reorganization or insolvency proceedings against such
Loan Party. All rights, liens and security interests of each Loan Party in any
assets of any other Loan Party and/or any other person securing the obligations
evidenced by any Intercompany Note, whether now or hereafter arising and
howsoever existing, shall be and hereby are subordinated to the rights and
interests of the Agent under this Agreement and in those assets. The Loan
Parties shall have no right to possession of any such assets or to foreclose or
execute upon any such assets, whether by judicial action or otherwise. The Loan
Parties represent and warrant that all Intercompany Notes are and will remain
unsecured.
6.34. Post-Closing Mortgages. Within ninety (90) days after the
Closing Date, the Borrower shall deliver, with respect to each parcel of real
Property which is not required to be subject to a Lien in favor of the Agent on
the Closing Date, a Mortgage on such real Property, in form and substance
reasonably satisfactory to the Agent, to be held by the Agent until such time as
the Agent is permitted to file and perfect such Mortgage in accordance with the
provisions of Section 6.14.
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ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a "DEFAULT" hereunder:
(a) nonpayment, when due (whether upon demand or
otherwise), of any principal, interest, fee, Reimbursement Obligation
or any other obligation owing under any of the Loan Documents;
(b) any representation or warranty made or deemed made by
or on behalf of any Loan Party to the Lenders or the Agent under or in
connection with this Agreement, any other Loan Document, any Credit
Extension, or any certificate or information delivered in connection
with any of the foregoing shall be materially false on the date as of
which made;
(c) the breach by any Loan Party of any of the terms or
provisions of Sections 2.24, 6.2, 6.5, 6.7, 6.9, 6.10, 6.13 through
6.34, or 17.4;
(d) the breach by any Loan Party (other than a breach
which constitutes a Default under another Section of this Article VII)
of any of the terms or provisions of this Agreement which is not
remedied (i) in the case of Section 6.1, within 5 days of such breach,
and (ii) in all other cases, within 30 days of such breach;
(e) (i) failure of any Loan Party or Parent to pay when
due any Indebtedness in an aggregate amount equal to $5,000,000, (ii) a
default, breach or other event occurs under any term, provision or
condition contained in any Material Indebtedness Agreement of any Loan
Party or Parent, the effect of which default, event or condition is to
cause, or to permit the holder(s) of such Material Indebtedness or the
lender(s) under any Material Indebtedness Agreement to cause, such
Material Indebtedness to become due prior to its stated maturity; any
Indebtedness in an aggregate amount equal to $3,000,000 of any Loan
Party or Parent shall be declared to be due and payable or required to
be prepaid or repurchased (other than by a regularly scheduled payment)
prior to the stated maturity thereof; or any Loan Party or Parent shall
not pay, or (iii) admit in writing its inability to pay, its debts
generally as they become due.
(f) any Loan Party or Parent shall (i) have an order for
relief entered with respect to it under the Bankruptcy Code as now or
hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or
similar official for it or any Substantial Portion of Property, (iv)
institute any proceeding seeking an order for relief under the
Bankruptcy Code as now or hereafter in effect or seeking to adjudicate
it a bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed
against it, (v) take any corporate, partnership or limited liability
company action to authorize or effect any of the foregoing actions set
forth in this subsection (f) or (vi) fail to contest in good faith any
appointment or proceeding described in subsection (g) below;
(g) a receiver, trustee, examiner, liquidator or similar
official shall be appointed for any Loan Party or Parent or any
Substantial Portion of Property, or a proceeding described in
subsection (f)(iv) of Article VII shall be instituted against any Loan
Party or Parent and such
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appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of sixty consecutive days;
(h) any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or control of,
all or any portion of the Property of any Loan Party which, when taken
together with all other Property of any Loan Party so condemned,
seized, appropriated, or taken custody or control of, during the
twelve-month period ending with the month in which any such action
occurs, constitutes a Substantial Portion;
(i) any loss, theft, damage or destruction of any item or
items of Collateral or other property of any Loan Party occurs which
could reasonably be expected to cause a Material Adverse Effect and is
not adequately covered by insurance;
(j) any Loan Party shall fail within thirty days when due
to pay, bond or otherwise discharge one or more (i) judgments or orders
for the payment of money in excess of $1,000,000 (or the equivalent
thereof in currencies other than U.S. Dollars) in the aggregate, or
(ii) nonmonetary judgments or orders which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect, which judgments or orders, in any such case, are not stayed on
appeal or otherwise being appropriately contested in good faith by
proper proceedings diligently pursued;
(k) any Change in Control shall occur;
(l) the Unfunded Liabilities of all Single Employer Plans
shall exceed in the aggregate $7,800,000 or any Reportable Event shall
occur in connection with any Plan;
(m) a Loan Party or any other member of a Controlled
Group has incurred or shall have been notified by the sponsor of a
Multiemployer Plan that it has incurred withdrawal liability to such
Multiemployer Plan;
(n) a Loan Party or any other member of a Controlled
Group shall have been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, if as a result of
such reorganization or termination the aggregate annual contributions
of a Loan Party and the other members of a Controlled Group (taken as a
whole) to all Multiemployer Plans which are then in reorganization or
being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the respective plan years
of each such Multiemployer Plan immediately preceding the plan year in
which the reorganization or termination occurs by an amount exceeding
$250,000;
(o) the occurrence of any "default," as defined in any
Loan Document (other than this Agreement) or the breach of any of the
terms or provisions of any Loan Document (other than this Agreement),
which default or breach continues beyond any period of grace therein
provided;
(p) the Guaranty shall fail to remain in full force or
effect or any action shall be taken to discontinue or to assert the
invalidity or unenforceability of the Guaranty, or any Guarantor shall
fail to comply with any of the material terms or provisions of the
Guaranty to which it is a party, or any Guarantor shall deny that it
has any further liability under the Guaranty to which it is a party, or
shall give notice to such effect;
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(q) any Collateral Document shall for any reason fail to
create a valid and perfected first priority security interest in any
material portion of the Collateral purported to be covered thereby,
except as permitted by the terms of any Loan Document, or any
Collateral Document shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Loan Document;
(r) any material provision of any Loan Document for any
reason ceases to be valid, binding and enforceable in accordance with
its terms (or any Loan Party shall challenge the enforceability of any
Loan Document or shall assert in writing, or engage in any action or
inaction based on any such assertion, that any provision of any of the
Loan Documents has ceased to be or otherwise is not valid, binding and
enforceable in accordance with its terms);
(s) (i) any Default (as defined in the Indenture) or
Event of Default (as defined in the Indenture) shall exist under the
Indenture, the Senior Subordinated Notes or any agreement executed by
the Borrower in connection therewith, (ii) without the prior written
consent of the Agent and the Required Lenders, the Indenture or the
Senior Subordinated Notes shall be amended or modified in any respect
or replaced, or (iii) the Senior Subordinated Notes shall be
accelerated for any reason;
(t) nonpayment by the Borrower or any of its Subsidiaries
of any Rate Management Obligation when due or the breach by the
Borrower or any of its Subsidiaries of any term, provision or condition
contained in any Rate Management Transaction or any transaction of the
type described in the definition of "RATE MANAGEMENT TRANSACTIONS,"
whether or not any Lender or Affiliate of a Lender is a party thereto
or the occurrence or existence of any default, event of default or
other similar condition or event (however described) with respect to
Rate Management Transactions;
(u) there is filed against any Loan Party any action,
suit or proceeding under any federal or state racketeering statute
(including the Racketeer Influenced and Corrupt Organization Act of
1970), which action, suit or proceeding (i) is not dismissed within one
hundred twenty days, and (ii) could reasonably be expected to result in
the confiscation or forfeiture of any material portion of the
Collateral;
(v) if any loan Party shall incur or permit to exist any
Designated Senior Indebtedness (as defined in the Indenture) other than
the Secured Obligations; or
(w) the Parent shall guaranty the indebtedness of any
Person other than a Loan Party.
ARTICLE VIII
REMEDIES; WAIVERS AND AMENDMENTS
8.1. Remedies.
(a) If any Default occurs, the Agent (i) may in its discretion
(and at the written request of the Required Lenders, shall) (A) reduce the
Aggregate Commitment, (B) terminate or suspend the obligations of the Lenders to
make Loans hereunder and the obligation and power of the LC Issuer to issue
Facility LCs, (C) upon notice to the Borrower, and in addition to the continuing
right to demand payment of all amounts payable under this Agreement, the Agent
may either (1) make demand on the Borrower to pay, and the Borrower shall,
forthwith upon such demand and without any further notice or act, pay to the
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Agent an amount, in immediately available funds (which funds shall be held in
the Facility LC Collateral Account), equal to 105% of the Collateral Shortfall
Amount or (2) deliver a Supporting Letter of Credit as required by Section
2.1.2(l), whichever the Agent may specify in its sole discretion, (D) increase
the rate of interest applicable to the Loans and the LC Fees as set forth in
this Agreement and (E) exercise any rights and remedies provided to the Agent
under the Loan Documents or at law or equity, including all remedies provided
under the UCC, and (ii) shall, at the written request of the Required Lenders,
declare all or any portion of the Obligations to be due and payable, whereupon
the Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Borrower hereby
expressly waives.
(b) If any Default described in subsections (f) or (g) of Article
VII occurs with respect to any Loan Party, the obligations of the Lenders to
make Loans hereunder and the obligation and power of the LC Issuer to issue
Facility LCs shall automatically terminate and all Obligations shall immediately
become due and payable without any election or action on the part of the Agent,
the LC Issuer or any Lender and the Loan Parties will be and become thereby
unconditionally obligated, without any further notice, act or demand, to pay to
the Agent an amount equal to 105% of the Collateral Shortfall Amount, which
funds shall be deposited in the Facility LC Collateral Account.
(c) If, within thirty days after acceleration of the maturity of
the Obligations or termination of the obligations of the Lenders to make Loans
and the obligation and power of the LC Issuer to issue Facility LCs hereunder as
a result of any Default (other than any Default as described in subsections (f)
or (g) of Article VII with respect to the Borrower) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so direct, the
Agent shall, by notice to the Borrower, rescind and annul such acceleration
and/or termination.
(d) If at any time while any Default is continuing, the Agent
determines that the Collateral Shortfall Amount at such time is greater than
zero, the Agent may make demand on the Borrower to pay, and the Borrower shall,
forthwith upon such demand and without any further notice or act, pay to the
Agent an amount equal to 105% of the Collateral Shortfall Amount, which funds
shall be deposited in the Facility LC Collateral Account. The Borrower hereby
pledges, assigns, and grants to the Agent, on behalf of and for the benefit of
the Agent, the Lenders, and the LC Issuer, a security interest in all of the
Borrower's right, title, and interest in and to all funds which may from time to
time be on deposit in the Facility LC Collateral Account to secure the prompt
and complete payment and performance of the Obligations.
(e) The Agent may at any time or from time to time after funds are
deposited in the Facility LC Collateral Account, apply such funds to the payment
of the Obligations and any other amounts as shall from time to time have become
due and payable by the Borrower to the Lenders or the LC Issuer under the Loan
Documents.
(f) At any time while any Default is continuing, neither the
Borrower nor any Person claiming on behalf of or through the Borrower shall have
any right to withdraw any of the funds held in the Facility LC Collateral
Account. After all of the Obligations have been indefeasibly paid in full and
the Aggregate Commitment has been terminated, any funds remaining in the
Facility LC Collateral Account shall be returned by the Agent to the Borrower or
paid to whomever may be legally entitled thereto at such time.
8.2. Waivers by Loan Parties. Except as otherwise provided for in
this Agreement or by applicable law, each Loan Party waives: (a) presentment,
demand and protest and notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default, nonpayment, maturity,
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release, compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights, documents, instruments, chattel paper and
guaranties at any time held by the Agent on which any Loan Party may in any way
be liable, and hereby ratifies and confirms whatever the Agent may do in this
regard, (b) all rights to notice and a hearing prior to the Agent's taking
possession or control of, or to the Agent's replevy, attachment or levy upon,
the Collateral or any bond or security that might be required by any court prior
to allowing the Agent to exercise any of its remedies, and (c) the benefit of
all valuation, appraisal, marshaling and exemption laws.
8.3. Amendments.
(a) Subject to the provisions of this Section 8.3, no amendment,
waiver or modification of any provision of this Agreement or any other Loan
Document, and no consent with respect to any departure by any Loan Party
therefrom, shall be effective unless the same shall be in writing and signed by
the Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Loan Parties and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(b) Notwithstanding subsection (a) above, no such amendment,
waiver or other modification with respect to this Agreement shall, without the
consent of all of the Lenders:
(i) extend the final maturity of any Loan to a date after
the Facility Termination Date;
(ii) postpone any regularly scheduled payment of principal
of any Loan or reduce or forgive all or any portion of the principal
amount of any Loan or any Reimbursement Obligation;
(iii) reduce the rate or extend the time of payment of
interest or fees payable to the Lenders pursuant to any Loan Document;
(iv) reduce the percentage or number of Lenders specified
in the definition of Required Lenders;
(v) extend the Facility Termination Date;
(vi) increase the amount of the Aggregate Commitment
hereunder;
(vii) increase the advance rates set forth in the
definition of Borrowing Base above the initial levels;
(viii) permit any Loan Party to assign its rights under this
Agreement;
(ix) amend this Section 8.3;
(x) release any guarantor of any Credit Extension, except
as otherwise permitted herein or in the other Loan Documents; or
(xi) except as provided in Section 10.16 or any Collateral
Document, release all or substantially all of the Collateral.
(c) No amendment of any provision of this Agreement relating to
the Agent or to the Non-Ratable Loans, the Overadvances or the Protective
Advances shall be effective without the written
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consent of the Agent. No amendment of any provision relating to the LC Issuer
shall be effective without the written consent of the LC Issuer. The Agent may
(i) amend the Commitment Schedule to reflect assignments entered into pursuant
to Section 12.3, and (ii) waive payment of the fee required under Section
12.3(c).
8.4. Preservation of Rights. No delay or omission of the Lenders,
the LC Issuer or the Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Credit Extension notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Credit Extension shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.3, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Agent, the LC Issuer and the Lenders until the Obligations have been paid
in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and
warranties of the Loan Parties contained in this Agreement and the other Loan
Documents shall survive the execution and delivery of the Loan Documents and the
making of the Credit Extensions herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Loan Parties, the Agent, the LC Issuer and
the Lenders and supersede all prior agreements and understandings among the Loan
Parties, the Agent and the Lenders relating to the subject matter thereof other
than those contained in the fee letter described in Section 10.13 which shall
survive and remain in full force and effect during the term of this Agreement.
9.5. Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not joint and no
Lender shall be the partner or agent of any other lender (except to the extent
to which the Agent is authorized to act as administrative agent for the Lenders
hereunder). The failure of any Lender to perform any of its obligations
hereunder shall not relieve any other Lender from any of its obligations
hereunder. This Agreement shall not be construed so as to confer any right or
benefit upon any Person other than the parties to this Agreement and their
respective successors and assigns, provided however, that the parties hereto
expressly agree that the Arranger shall enjoy the benefits of the provisions of
Sections 9.6, 9.10 and 10.11 to the extent specifically set forth therein and
shall have the right to enforce such provisions on its own behalf and in its own
name to the same extent as if it were a party to this Agreement.
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9.6. Expenses; Indemnification.
(a) The Borrower shall reimburse the Agent and the Arranger (and
each Lender up to a maximum amount of $2,500) for any costs, internal charges
and out-of-pocket expenses (including attorneys' fees and time charges of
attorneys for the Agent, which attorneys may be employees of the Agent) paid or
incurred by the Agent or the Arranger in connection with the preparation,
negotiation, execution, delivery, syndication, distribution (including, without
limitation, via the internet or through a service such as Intralinks), review,
amendment, modification, and administration of the Loan Documents. The Borrower
also agrees to reimburse the Agent, the Arranger, the LC Issuer and the Lenders
for any costs, internal charges and out-of-pocket expenses (including attorneys'
fees and time charges of attorneys for the Agent, the Arranger, the LC Issuer
and the Lenders, which attorneys may be employees of the Agent, the Arranger,
the LC Issuer or the Lenders) paid or incurred by the Agent, the Arranger, the
LC Issuer or any Lender in connection with the restructuring, collection and
enforcement of the Loan Documents. Expenses being reimbursed by the Borrower
under this Section include, without limitation, costs and expenses incurred in
connection with:
(i) appraisals of all or any portion of the Collateral,
each parcel of real Property or interest in real Property described in
any Collateral Document, which appraisals shall be in conformity with
the applicable requirements of any law or any governmental rule,
regulation, policy, guideline or directive (whether or not having the
force of law), or any interpretation thereof, including, without
limitation, the provisions of Title XI of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, as amended, reformed or
otherwise modified from time to time, and any rules promulgated to
implement such provisions (including travel, lodging, meals and other
out of pocket expenses for inspections of the Collateral and the
Borrower's operations by the Agent) plus the Agent's then customary
charge for field examinations and audits and the preparation of certain
audit reports (the "REPORTS") which the Borrower acknowledges may be
prepared by Bank One from time to time and which the Borrower agrees
may be distributed to the Lenders by Bank One pertaining to the
Borrower's assets from information furnished to it by or on behalf of
the Borrower, after Bank One has exercised its rights of inspection
pursuant to this Agreement (such charge is currently $850 per day (or
portion thereof) for each Person retained or employed by the Agent with
respect to each field examination or audit);
(ii) any amendment, modification, supplement, consent,
waiver or other documents prepared with respect to any Loan Document
and the transactions contemplated thereby;
(iii) lien and title searches and title insurance;
(iv) taxes, fees and other charges for recording the
Mortgages, filing financing statements and continuations, and other
actions to perfect, protect, and continue the Agent's Liens (including
costs and expenses paid or incurred by the Agent in connection with the
consummation of the Agreement);
(v) sums paid or incurred to take any action required of
the Borrower under the Loan Documents that the Borrower fails to pay or
take;
(vi) any litigation, contest, dispute, proceeding or
action (whether instituted by the Agent, the LC Issuer, any Lender, any
Loan Party or any other Person and whether as to party, witness or
otherwise) in any way relating to the Collateral, the Loan Documents or
the transactions contemplated thereby; and
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(vii) costs and expenses of forwarding loan proceeds,
collecting checks and other items of payment, and establishing and
maintaining the Funding Account and lock boxes, and costs and expenses
of preserving and protecting the Collateral.
The foregoing shall not be construed to limit any other provisions of
the Loan Documents regarding costs and expenses to be paid by the Borrower. All
of the foregoing costs and expenses may be charged to the Borrower's Loan
Account as Revolving Loans or to another deposit account, all as described in
Section 2.17(b).
(b) The Borrower hereby further agrees to indemnify the Agent, the
Arranger, the LC Issuer, each Lender, their respective Affiliates, and each of
their directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not the Agent, the
Arranger, the LC Issuer any Lender or any Affiliate is a party thereto) which
any of them may pay or incur arising out of or relating to this Agreement, the
other Loan Documents, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of any Credit
Extension hereunder except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrower under this Section 9.6 shall
survive the termination of this Agreement.
9.7. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
9.8. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP in a manner
consistent with that used in preparing the financial statements referred to in
Section 5.5, except that any calculation or determination which is to be made on
a consolidated basis shall be made for the Borrower and all of its Subsidiaries,
including those Subsidiaries, if any, which are unconsolidated on the Borrower's
audited financial statements. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and the Borrower, the Agent or the Required Lenders shall so request
the Agent, the Lenders and the Loan Parties shall negotiate in good faith to
amend such ratio or requirement to preserve the original intent thereof in light
of such change in GAAP (subject to the approval of the Required Lenders),
provided that, until so amended, such ratio or requirement shall continue to be
computed in accordance with GAAP prior to such change therein and the Borrower
shall provide to the Agent and the Lenders reconciliation statements showing the
difference in such calculation, together with the delivery of monthly, quarterly
and annual financial statements required hereunder.
9.9. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. Nonliability of Lenders. The relationship between any Loan
Party on the one hand and the Lenders, the LC Issuer and the Agent on the other
hand shall be solely that of debtor and creditor. Neither the Agent, the
Arranger, the LC Issuer nor any Lender shall have any fiduciary responsibilities
to any Loan Party. Neither the Agent, the Arranger, the LC Issuer nor any Lender
undertakes any responsibility to any Loan Party to review or inform such Loan
Party of any matter in connection with any phase of any Loan Party's business or
operations. The Loan Parties agree that neither the Agent, the
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Arranger, the LC Issuer nor any Lender shall have liability to any Loan Party
(whether sounding in tort, contract or otherwise) for losses suffered by any
Loan Party in connection with, arising out of, or in any way related to, the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the
Agent, the Arranger, the LC Issuer nor any Lender shall have any liability with
respect to, and each Loan Party hereby waives, releases and agrees not to ▇▇▇
for, any special, indirect, consequential or punitive damages suffered by any
Loan Party in connection with, arising out of, or in any way related to the Loan
Documents or the transactions contemplated thereby.
9.11. Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from any Loan Party in connection with this
Agreement in confidence, except for disclosure (a) to its Affiliates and to
other Lenders and their respective Affiliates, (b) to legal counsel,
accountants, and other professional advisors to such Lender or to a Transferee,
(c) to regulatory officials, (d) to any Person as requested pursuant to or as
required by law, regulation, or legal process, (e) to any Person in connection
with any legal proceeding to which such Lender is a party, (f) to such Lender's
direct or indirect contractual counterparties in swap agreements or to legal
counsel, accountants and other professional advisors to such counterparties, (g)
permitted by Section 12.4 and (h) to rating agencies if requested or required by
such agencies in connection with a rating relating to the Credit Extensions
hereunder. Notwithstanding anything herein to the contrary, confidential
information shall not include, and each Lender (and each employee,
representative or other agent of any Lender) may disclose to any and all
Persons, without limitation of any kind, the "tax treatment" and "tax structure"
(in each case, within the meaning of Treasury Regulation Section 1.6011-4) of
the transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are or have been provided to such Lender
relating to such tax treatment or tax structure; provided that, with respect to
any document or similar item that in either case contains information concerning
such tax treatment or tax structure of the transactions contemplated hereby as
well as other information, this sentence shall only apply to such portions of
the document or similar item that relate to such tax treatment or tax structure.
9.12. Nonreliance. Each Lender hereby represents that it is not
relying on or looking to any Margin Stock for the repayment of the Credit
Extensions provided for herein.
9.13 Disclosure. Each Loan Party and each Lender hereby
acknowledges and agrees that Bank One and/or its Affiliates from time to time
may hold investments in, make other loans to or have other relationships with
any of the Loan Parties and their respective Affiliates.
ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. Bank One, NA is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "AGENT") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the
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other Loan Documents. In its capacity as the Lenders' contractual
representative, the Agent (a) does not hereby assume any fiduciary duties to any
of the Lenders, (b) is a "representative" of the Lenders within the meaning of
the term "secured party" as defined in the UCC and (c) is acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders hereby agrees to assert no claim against the Agent on any agency theory
or any other theory of liability for breach of fiduciary duty, all of which
claims each Lender hereby waives.
10.2. Powers. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the terms
of each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to any Loan Party, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. No Responsibility for Credit Extensions, Recitals, etc.
Neither the Agent nor any of its directors, officers, agents or employees shall
be responsible for or have any duty to ascertain, inquire into, or verify (a)
any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (b) the performance or observance of any of
the covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (c) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered solely to the Agent; (d) the
existence or possible existence of any Default or Unmatured Default; (e) the
validity, enforceability, effectiveness, sufficiency or genuineness of any Loan
Document or any other instrument or writing furnished in connection therewith;
(f) the value, sufficiency, creation, perfection or priority of any Lien in any
Collateral; or (g) the financial condition of any Loan Party, any Guarantor or
any Affiliate of any Loan Party. The Agent shall have no duty to disclose to the
Lenders information that is not required to be furnished by the Loan Parties to
the Agent at such time, but is voluntarily furnished by any Loan Party to the
Agent (either in its capacity as the Agent or in its individual capacity). Each
Lender has received a copy of the Indenture and has reviewed the terms and
conditions thereof, including, but limited to, the conditions relating to the
status of the Obligations as Designated Senior Indebtedness (as defined in the
Indenture) and Senior Indebtedness (as defined in the Indenture) under the
Indenture. Furthermore, none of the Lenders shall be deemed to have a fiduciary
relationship with any other Lender.
10.5. Action on Instructions of the Lenders. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Lenders, and such instructions and any action taken or failure to
act pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
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10.6. Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by the Agent or its
authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent shall be
entitled to advice of counsel concerning the contractual arrangement between the
Agent and the Lenders and all matters pertaining to the Agent's duties hereunder
and under any other Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Revolving Note, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex, electronic mail message, statement, paper or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and, in respect to legal matters, upon the
opinion of counsel selected by the Agent, which counsel may be employees of the
Agent. For purposes of determining compliance with the conditions specified in
Sections 4.1 and 4.2, each Lender that has signed this Agreement shall be deemed
to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Agent shall have received
notice from such Lender prior to the applicable date specifying its objection
thereto.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree
to reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (a) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by
the Borrower under the Loan Documents, (b) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders) and (c) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of the Loan Documents or
any other document delivered in connection therewith or the transactions
contemplated thereby (including, without limitation, for any such amounts
incurred by or asserted against the Agent in connection with any dispute between
the Agent and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that, (i) no Lender shall be liable for any of the foregoing
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Agent and (ii) any indemnification required
pursuant to Section 3.5(g) shall, notwithstanding the provisions of this Section
10.8, be paid by the relevant Lender in accordance with the provisions thereof.
The obligations of the Lenders under this Section 10.8 shall survive payment of
the Obligations and termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or the
Borrower, referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a "notice of default." In the event that
the Agent receives such a notice, the Agent shall give prompt notice thereof to
the Lenders; provided, that, the Agent shall not be liable to any Lender for any
failure to do so, except to the extent that such failure is attributable to the
Agent's gross negligence or willful misconduct.
10.10. Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Credit Extensions as any Lender
and may exercise the same as though it were not the Agent, and the term
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"LENDER" or "LENDERS" shall, at any time when the Agent is a Lender, unless the
context otherwise indicates, include the Agent in its individual capacity. The
Agent and its Affiliates may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with any Loan
Party in which such Loan Party is not restricted hereby from engaging with any
other Person, all as if Bank One were not the Agent and without any duty to
account therefor to Lenders. Bank One and its Affiliates may accept fees and
other consideration from any Loan Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. The
Agent in its individual capacity, is not obligated to remain a Lender.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Loan Parties and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrower and the Lenders, a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders within thirty days after
the resigning Agent's giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent. Notwithstanding the previous sentence, the Agent may at any
time without the consent of the Borrower or any Lender, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder. If the
Agent has resigned or been removed and no successor Agent has been appointed,
the Lenders may perform all the duties of the Agent hereunder and the Borrower
shall make all payments in respect of the Obligations to the applicable Lender
and for all other purposes shall deal directly with the Lenders. No successor
Agent shall be deemed to be appointed hereunder until such successor Agent has
accepted the appointment. Any such successor Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as the Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed the Agent.
Upon the effectiveness of the resignation or removal of the Agent, the resigning
or removed Agent shall be discharged from its duties and obligations hereunder
and under the Loan Documents. After the effectiveness of the resignation or
removal of an Agent, the provisions of this Article X shall continue in effect
for the benefit of such Agent in respect of any actions taken or omitted to be
taken by it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term "PRIME RATE" as used in this Agreement shall mean
the prime rate, base rate or other analogous rate of the new Agent.
10.13. Agent and Arranger Fees. The Borrower agrees to pay to the
Agent and the Arranger, for their respective accounts, the fees agreed to by the
Borrower, the Agent and the Arranger pursuant to that certain letter agreement
dated June 24, 2003, or as otherwise agreed from time to time.
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10.14. Delegation to Affiliates. The Borrower and the Lenders agree
that the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.15. Execution of Loan Documents. The Lenders hereby empower and
authorize the Agent, on behalf of the Agent and the Lenders, to execute and
deliver to the Loan Parties the Loan Documents and all related agreements,
certificates, documents, or instruments as shall be necessary or appropriate to
effect the purposes of the Loan Documents. Each Lender agrees that any action
taken by the Agent or the Required Lenders in accordance with the terms of this
Agreement or the other Loan Documents, and the exercise by the Agent or the
Required Lenders of their respective powers set forth therein or herein,
together with such other powers that are reasonably incidental thereto, shall be
binding upon all of the Lenders. The Lenders acknowledge that all of the
Obligations hereunder constitute one debt, secured pari passu by all of the
Collateral.
10.16. Collateral Matters.
(a) The Lenders hereby irrevocably authorize the Agent, at its
option and in its sole discretion, to release any Liens granted to the Agent by
the Loan Parties on any Collateral (i) upon the termination of the Aggregate
Commitment, payment and satisfaction in full in cash of all Obligations (other
than Unliquidated Secured Obligations), and the cash collateralization of all
Unliquidated Secured Obligations in a manner satisfactory to each affected
Lender, (ii) constituting Property being sold or disposed of if the Loan Party
disposing of such Property certifies to the Agent that the sale or disposition
is made in compliance with the terms of this Agreement (and the Agent may rely
conclusively on any such certificate, without further inquiry), (iii)
constituting Property in which no Loan Party has at any time during the term of
this Agreement owned any interest, (iv) constituting property leased to a Loan
Party under a lease which has expired or been terminated in a transaction
permitted under this Agreement, (v) owned by or leased to an Loan Party which is
subject to a purchase money security interest or which is the subject of a
Capitalized Lease, in either case, entered into by such Loan Party pursuant to
Section 6.16(c), or (vi) as required to effect any sale or other disposition of
such Collateral in connection with any exercise of remedies of the Agent and the
Lenders pursuant to Section 8.1. Upon request by the Agent at any time, the
Lenders will confirm in writing the Agent's authority to release any Liens upon
particular types or items of Collateral pursuant to this Section 10.16. Except
as provided in the preceding sentence, the Agent will not release any Liens on
Collateral without the prior written authorization of the Required Lenders;
provided that, the Agent may in its discretion, release its Liens on Collateral
valued in the aggregate not in excess of $1,000,000 during any Fiscal Year
without the prior written authorization of the Lenders.
(b) Upon receipt by the Agent of any authorization required
pursuant to Section 10.16(a) from the Required Lenders of the Agent's authority
to release any Liens upon particular types or items of Collateral, and upon at
least five Business Days prior written request by the Loan Parties, the Agent
shall (and is hereby irrevocably authorized by the Lenders to) execute such
documents as may be necessary to evidence the release of its Liens upon such
Collateral; provided that, (i) the Agent shall not be required to execute any
such document on terms which, in the Agent's opinion, would expose the Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty and (ii) such release shall
not in any manner discharge, affect, or impair the Obligations or any Liens
(other than those expressly being released) upon (or obligations of the Loan
Parties in respect of) all interests retained by the Loan Parties, including the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral.
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(c) The Agent shall have no obligation whatsoever to any of the
Lenders to assure that the Collateral exists or is owned by the Loan Parties or
is cared for, protected, or insured or has been encumbered, or that the Liens
granted to the Agent therein have been properly or sufficiently or lawfully
created, perfected, protected, or enforced or are entitled to any particular
priority, or to exercise at all or in any particular manner or under any duty of
care, disclosure, or fidelity, or to continue exercising, any of the rights,
authorities, and powers granted or available to the Agent pursuant to any of the
Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto, the Agent may act in
any manner it may deem appropriate, in its sole discretion given the Agent's own
interest in the Collateral in its capacity as one of the Lenders and that the
Agent shall have no other duty or liability whatsoever to any Lender as to any
of the foregoing.
(d) Each Lender hereby appoints each other Lender as its agent for
the purpose of perfecting Liens, for the benefit of the Agent and the Lenders,
in assets which, in accordance with Article 9 of the UCC or any other applicable
law can be perfected only by possession. Should any Lender (other than the
Agent) obtain possession of any such Collateral, such Lender shall notify the
Agent thereof, and, promptly upon the Agent's request therefor shall deliver
such Collateral to the Agent or otherwise deal with such Collateral in
accordance with the Agent's instructions.
(e) Each Lender hereby agrees as follows: (a) such Lender is
deemed to have requested that the Agent furnish such Lender, promptly after it
becomes available, a copy of each Report prepared by or on behalf of the Agent;
(b) such Lender expressly agrees and acknowledges that neither Bank One nor the
Agent (i) makes any representation or warranty, express or implied, as to the
completeness or accuracy of any Report or any of the information contained
therein, or (ii) shall be liable for any information contained in any Report;
(c) such Lender expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent, Bank One, or any other
party performing any audit or examination will inspect only specific information
regarding the Loan Parties and will rely significantly upon the Loan Parties'
books and records, as well as on representations of the Loan Parties' personnel
and that Bank One undertakes no obligation to update, correct or supplement the
Reports; (d) such Lender agrees to keep all Reports confidential and strictly
for its internal use, not share the Report with any Loan Party and not to
distribute any Report to any other Person except as otherwise permitted pursuant
to this Agreement; and (e) without limiting the generality of any other
indemnification provision contained in this Agreement, such Lender agrees (i)
that neither Bank One nor the Agent shall be liable to such Lender or any other
Person receiving a copy of the Report for any inaccuracy or omission contained
in or relating to a Report, (ii) to conduct its own due diligence investigation
and make credit decisions with respect to the Loan Parties based on such
documents as such Lender deems appropriate without any reliance on the Reports
or on the Agent or Bank One, (iii) to hold the Agent and any such other Person
preparing a Report harmless from any action the indemnifying Lender may take or
conclusion the indemnifying Lender may reach or draw from any Report in
connection with any Credit Extensions that the indemnifying Lender has made or
may make to the Loan Parties, or the indemnifying Lender's participation in, or
the indemnifying Lender's purchase of, any Obligations and (iv) to pay and
protect, and indemnify, defend, and hold the Agent and any such other Person
preparing a Report harmless from and against, the claims, actions, proceedings,
damages, costs, expenses, and other amounts (including reasonable attorney fees)
incurred by the Agent and any such other Person preparing a Report as the direct
or indirect result of any third parties who might obtain all or part of any
Report through the indemnifying Lender.
10.17. Syndication Agent. The Lender identified in this Agreement as
the "Syndication Agent" shall not have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of such Lenders shall have
or be deemed to have a fiduciary relationship with any Lender. Each Lender
hereby makes the same acknowledgments with respect to such Lenders as it makes
with respect to the Agent in Section 10.11.
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ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights
of the Lenders under applicable law, if any Loan Party becomes insolvent,
however evidenced, or any Default occurs, any and all deposits (including all
account balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower, or
any Guarantor, may be offset and, if offset, shall be applied toward the payment
of the Secured Obligations, whether or not the Secured Obligations, or any part
thereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Credit Exposure (other than payments
received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Aggregate Credit Exposure held by the other Lenders so
that after such purchase each Lender will hold its Pro Rata Share of the
Aggregate Credit Exposure. If any Lender, whether in connection with setoff or
amounts which might be subject to setoff or otherwise, receives collateral or
other protection for its Secured Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to respective Pro Rata Share of the Aggregate Credit Exposure. In
case any such payment is disturbed by legal process, or otherwise, appropriate
further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Loan Parties and
the Lenders and their respective successors and assigns permitted hereby, except
that (a) the Loan Parties shall not have the right to assign its rights or
obligations under the Loan Documents without the prior written consent of each
Lender, (b) any assignment by any Lender must be made in compliance with Section
12.3, and (c) any transfer by Participation must be made in compliance with
Section 12.2. Any attempted assignment or transfer by any party not made in
compliance with this Section 12.1 shall be null and void, unless such attempted
assignment or transfer is treated as a participation in accordance with Section
12.3. The parties to this Agreement acknowledge that clause (b) of this Section
12.1 relates only to absolute assignments and this Section 12.1 does not
prohibit assignments creating security interests, including, without limitation,
any pledge or assignment by any Lender of all or any portion of its rights under
this Agreement and any Revolving Note to a Federal Reserve Bank; provided
however, that no such pledge or assignment creating a security interest shall
release the transferor Lender from its obligations hereunder unless and until
the parties thereto have complied with the provisions of Section 12.3. The Agent
may treat the Person which made any Credit Extension or which holds any
Revolving Note as the owner thereof for all purposes hereof unless and until
such Person complies with Section 12.3; provided however, that the Agent may in
its discretion (but shall not be required to) follow instructions from the
Person which made any Credit Extension or which holds any Revolving Note to
direct payments relating to such Credit Extension or Revolving Note to another
Person. Any assignee of the rights to any Credit Extension or any Revolving Note
agrees by acceptance of such assignment to be bound by all the terms and
provisions of the Loan
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Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the owner of the
rights to any Credit Extension (whether or not a Revolving Note has been issued
in evidence thereof), shall be conclusive and binding on any subsequent holder
or assignee of the rights to such Credit Extension.
12.2. Participations.
(a) Permitted Participants; Effect. Any Lender may at any time
sell to one or more banks or other entities ("PARTICIPANTS") participating
interests in any Credit Exposure of such Lender, any Revolving Note held by such
Lender, any Commitment of such Lender or any other interest of such Lender under
the Loan Documents. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under the Loan Documents
shall remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the owner of its Credit Exposure and the holder of any Revolving Note issued to
it in evidence thereof for all purposes under the Loan Documents, all amounts
payable by the Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and the Borrower and the Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under the Loan Documents.
(b) Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification or
waiver of any provision of the Loan Documents other than any amendment,
modification or waiver with respect to any Credit Extension or Commitment in
which such Participant has an interest which would require consent of all of the
Lenders pursuant to the terms of Section 8.3 or of any other Loan Document.
(c) Benefit of Certain Provisions. Each Loan Party agrees that
each Participant shall be deemed to have the right of setoff provided in Section
11.1 in respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under the Loan Documents, provided that, each
Lender shall retain the right of setoff provided in Section 11.1 with respect to
the amount of participating interests sold to each Participant. The Lenders
agree to share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each Lender, any
amount received pursuant to the exercise of its right of setoff, such amounts to
be shared in accordance with Section 11.2 as if each Participant were a Lender.
The Borrower further agrees that each Participant shall be entitled to the
benefits of Sections 3.1, 3.2, 3.4 and 3.5 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section 12.3,
provided that, (i) a Participant shall not be entitled to receive any greater
payment under Section 3.1, 3.2 or 3.5 than the Lender who sold the participating
interest to such Participant would have received had it retained such interest
for its own account, unless the sale of such interest to such Participant is
made with the prior written consent of the Borrower, and (ii) any Participant
not incorporated under the laws of the U.S. or any state thereof agrees to
comply with the provisions of Section 3.5 to the same extent as if it were a
Lender.
12.3. Assignments.
(a) Permitted Assignments. Any Lender may at any time assign to
one or more banks or other entities ("PURCHASERS") all or any part of its rights
and obligations under the Loan Documents. Such assignment shall be substantially
in the form of EXHIBIT G (an "ASSIGNMENT AGREEMENT"); provided, however, that
neither such Lender nor any of its successors or assigns shall assign or
transfer any interest herein without obtaining a prior determination from the
Borrower that any such assignment or transfer would not result, at the time of
such transfer or assignment, in a non-exempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code with respect to any Employee
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Benefit Plan. Anything herein to the contrary notwithstanding, such Lender and
its successors or assigns may at any time assign or transfer any interest herein
if an Unmatured Default or Default has occurred, such assignment or transfer is
to another Lender or any Affiliate of a Lender, or such assignment or transfer
is to a Federal Reserve Bank. Each such assignment with respect to a Purchaser
which is not a Lender or an Affiliate of a Lender shall either be in an amount
equal to the entire applicable Commitment and Credit Extensions of the assigning
Lender or (unless the Borrower and the Agent otherwise consents) be in an
aggregate amount not less than $10,000,000. The amount of the assignment shall
be based on the Commitment or outstanding Credit Extensions (if the Commitment
has been terminated) subject to the assignment, determined as of the date of
such assignment or as of the "Trade Date," if the "Trade Date" is specified in
the assignment.
(b) Consents. The consent of the Borrower shall be required prior
to an assignment becoming effective unless the Purchaser is a Lender or an
Affiliate of a Lender, provided that, the consent of the Borrower shall not be
required if a Default has occurred and is continuing. The consent of the Agent
shall be required prior to an assignment becoming effective unless the Purchaser
is a Lender. Any consent required under this Section 12.3(b) shall not be
unreasonably withheld or delayed.
(c) Effect; Effective Date. Upon (i) delivery to the Agent of a
duly executed Assignment Agreement, together with any consents required by
Sections 12.3(a) and 12.3(b), and (ii) payment of a $3,500 fee to the Agent for
processing such assignment (unless such fee is waived by the Agent), such
Assignment Agreement shall become effective on the effective date specified by
the Agent in such Assignment Agreement. The Assignment Agreement shall contain a
representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the Commitment and Credit Exposure under the
applicable Assignment Agreement constitutes "plan assets" as defined under ERISA
and that the rights and interests of the Purchaser in and under the Loan
Documents will not be "plan assets" under ERISA. On and after the effective date
of such Assignment Agreement, such Purchaser shall for all purposes be a Lender
party to this Agreement and any other Loan Document executed by or on behalf of
the Lenders and shall have all the rights and obligations of a Lender under the
Loan Documents, to the same extent as if it were an original party thereto, and
the transferor Lender shall be released with respect to the Commitment and
Credit Exposure assigned to such Purchaser without any further consent or action
by the Borrower, the Lenders or the Agent. In the case of an Assignment
Agreement covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a Lender hereunder but shall
continue to be entitled to the benefits of, and subject to, those provisions of
this Agreement and the other Loan Documents which survive payment of the
Obligations and termination of the applicable agreement. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this Section 12.3 shall be treated for purposes of this Agreement as
a sale by such Lender of a participation in such rights and obligations in
accordance with Section 12.2. Upon the consummation of any assignment to a
Purchaser pursuant to this Section 12.3(c), the transferor Lender, the Agent and
the Borrower shall, if the transferor Lender or the Purchaser desires that its
Loans be evidenced by Notes, make appropriate arrangements so that new Notes or,
as appropriate, replacement Notes are issued to such transferor Lender and new
Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in
each case in principal amounts reflecting their respective Commitments, as
adjusted pursuant to such assignment.
(d) Register. The Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices in the U.S. a copy
of each Assignment Agreement delivered to it and a register for the recordation
of the names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Credit Extensions owing to, each Lender pursuant to the terms
hereof from time to time (the "REGISTER"). The entries in the Register shall be
conclusive, and the Borrower, the 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 Agreement, notwithstanding notice to the
contrary. The
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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.
12.4. Dissemination of Information. Each Loan Party authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "TRANSFEREE") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that, each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is not incorporated under the laws of the
U.S. or any state thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply with the
provisions of Section 3.5(d).
12.6. Assignment by LC Issuer. Notwithstanding anything contained
herein, if at any time Bank One assigns all of its Commitment and Revolving
Loans pursuant to Section 12.3, Bank One may, upon thirty days' notice to the
Borrower, and the Lenders, resign as LC Issuer. In the event of any such
resignation as LC Issuer, the Borrower shall be entitled to appoint from among
the Lenders a successor LC Issuer hereunder; provided however, that no failure
by the Borrower to appoint any such successor shall affect the resignation of
Bank One as LC Issuer. If Bank One resigns as LC Issuer, it shall retain all the
rights and obligations of the LC Issuer hereunder with respect to the Facility
LCs outstanding as of the effective date of its resignation as LC Issuer and all
LC Obligations with respect thereto (including the right to require the Lenders
to make Revolving Loans or fund risk participations in outstanding Reimbursement
Obligations pursuant to Section 2.1.2(d)).
ARTICLE XIII
NOTICES
13.1. Notices; Effectiveness; Electronic Communication.
(a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in paragraph (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows:
(i) if, to any Loan Party, such notice shall be delivered
to the Borrower, on behalf of such Loan Party, at the Borrower's
address or telecopier number set forth on the signature page hereof;
(ii) if to the Agent, at its address or telecopier number
set forth on the signature page hereof;
(iii) if to the LC Issuer, at its address or telecopier
number set forth on the signature page hereof; and
(iv) if to a Lender, to it at its address or telecopier
number set forth in its Administrative Questionnaire.
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Notices sent by hand or overnight courier service, or mailed by
certified or registered mail, shall be deemed to have been given when received;
notices sent by telecopier shall be deemed to have been given when sent (except
that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next Business Day
for the recipient). Notices delivered through electronic communications to the
extent provided in paragraph (b) below, shall be effective as provided in said
paragraph (b).
(b) Electronic Communications. Notices and other communications to
the Lenders and the LC Issuer hereunder may be delivered or furnished by
electronic communication (including e-mail and internet or intranet websites)
pursuant to procedures approved by the Agent or as otherwise determined by the
Agent, provided that, the foregoing shall not apply to notices to any Lender or
the LC Issuer pursuant to Article II if such Lender or the LC Issuer, as
applicable, has notified the Agent that it is incapable of receiving notices
under such Article by electronic communication. The Agent or any Loan Party may,
in its respective discretion, agree to accept notices and other communications
to it hereunder by electronic communications pursuant to procedures approved by
it or as it otherwise determines, provided that such determination or approval
may be limited to particular notices or communications. Notwithstanding the
foregoing, in every instance, the Borrower shall be required to provide paper
copies of the Compliance Certificates required by Section 6.1(e) to the Agent.
Unless the Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that, if such notice or other communication
is not given during the normal business hours of the recipient, such notice or
communication shall be deemed to have been given at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
13.2. Change of Address, Etc. Any party hereto may change its
address or telecopier number for notices and other communications hereunder by
notice to the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Loan Parties, the
Agent, the LC Issuer and the Lenders and each party has notified the Agent by
facsimile transmission or telephone that it has taken such action.
ARTICLE XV
GUARANTY
15.1. Guaranty. Each Loan Party (other than the Borrower, each to be
referred to in this Section as a "GUARANTOR" and collectively as the
"GUARANTORS") hereby agrees that it is jointly and severally liable for, and, as
primary obligor and not merely as surety, absolutely and unconditionally
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guarantees to the Lenders the prompt payment when due, whether at stated
maturity, upon acceleration or otherwise, and at all times thereafter, of the
Secured Obligations and all costs and expenses including, without limitation,
all out-of-pocket court costs and attorneys' and paralegals' fees and expenses
paid or incurred by the Agent, the LC Issuer and the Lenders in endeavoring to
collect all or any part of the Obligations from, or in prosecuting any action
against, the Borrower, any Guarantor or any other guarantor of all or any part
of the Obligations (such costs and expenses, together with the Secured
Obligations, collectively the "GUARANTEED OBLIGATIONS"). Each Guarantor further
agrees that the Guaranteed Obligations may be extended or renewed in whole or in
part without notice to or further assent from it, and that it remains bound upon
its guarantee notwithstanding any such extension or renewal. Anything in this
Agreement or any other Loan Document to the contrary notwithstanding, the Loan
Parties listed on Schedule 15.1 shall be liable with respect to the Guaranteed
Obligations only to the extent such Guaranteed Obligations exceed the Certified
Acquisition Amount.
15.2. Guaranty of Payment. This Guaranty is a guaranty of payment
and not of collection. Each Guarantor waives any right to require the Agent, the
LC Issuer or any Lender to ▇▇▇ the Borrower, any Guarantor, any other guarantor,
or any other person obligated for all or any part of the Guaranteed Obligations,
or otherwise to enforce its payment against any collateral securing all or any
part of the Guaranteed Obligations.
15.3. No Discharge or Diminishment of Guaranty.
(a) Except as otherwise provided for herein and to the extent
provided for herein, the obligations of each Guarantor hereunder are
unconditional and absolute and not subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Guaranteed Obligations), including:
(i) any claim of waiver, release, extension, renewal,
settlement, surrender, alteration, or compromise of any of the
Guaranteed Obligations, by operation of law or otherwise;
(ii) any change in the corporate existence, structure or
ownership of the Borrower or any other guarantor of or other person
liable for any of the Guaranteed Obligations;
(iii) any insolvency, bankruptcy, reorganization or other
similar proceeding affecting the Borrower, any Guarantor, or any other
guarantor of or other person liable for any of the Guaranteed
Obligations, or their assets or any resulting release or discharge of
any obligation of the Borrower, any Guarantor, or any other guarantor
of or other person liable for any of the Guaranteed Obligations; or
(iv) the existence of any claim, setoff or other rights
which any Guarantor may have at any time against the Borrower, any
Guarantor, any other guarantor of the Guaranteed Obligations, the
Agent, the LC Issuer, any Lender, or any other person, whether in
connection herewith or in any unrelated transactions.
(b) The obligations of each Guarantor hereunder are not subject to
any defense or setoff, counterclaim, recoupment, or termination whatsoever by
reason of the invalidity, illegality, or unenforceability of any of the
Guaranteed Obligations or otherwise, or any provision of applicable law or
regulation purporting to prohibit payment by the Borrower, any Guarantor or any
other guarantor of or other person liable for any of the Guaranteed Obligations,
of the Guaranteed Obligations or any part thereof.
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(c) Further, the obligations of any Guarantor hereunder are not
discharged or impaired or otherwise affected by:
(i) the failure of the Agent, the LC Issuer or any Lender
to assert any claim or demand or to enforce any remedy with respect to
all or any part of the Guaranteed Obligations;
(ii) any waiver or modification of or supplement to any
provision of any agreement relating to the Guaranteed Obligations;
(iii) any release, non-perfection, or invalidity of any
indirect or direct security for the obligations of the Borrower for all
or any part of the Guaranteed Obligations or any obligations of any
other guarantor of or other person liable for any of the Guaranteed
Obligations;
(iv) any action or failure to act by the Agent, the LC
Issuer or any Lender with respect to any collateral securing any part
of the Guaranteed Obligations;
(v) any default, failure or delay, willful or otherwise,
in the payment or performance of any of the Guaranteed Obligations, or
any other circumstance, act, omission or delay that might in any manner
or to any extent vary the risk of such Guarantor or that would
otherwise operate as a discharge of any Guarantor as a matter of law or
equity (other than the indefeasible payment in full in cash of the
Guaranteed Obligations).
15.4. Defenses Waived. To the fullest extent permitted by applicable
law, each Guarantor hereby waives any defense based on or arising out of any
defense of the Borrower or any Guarantor or the unenforceability of all or any
part of the Guaranteed Obligations from any cause, or the cessation from any
cause of the liability of the Borrower or any Guarantor, other than the
indefeasible payment in full in cash of the Guaranteed Obligations. Without
limiting the generality of the foregoing, each Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and, to the fullest extent
permitted by law, any notice not provided for herein, as well as any requirement
that at any time any action be taken by any person against the Borrower, any
Guarantor, any other guarantor of any of the Guaranteed Obligations, or any
other person. The Agent may, at its election, foreclose on any Collateral held
by it by one or more judicial or nonjudicial sales, accept an assignment of any
such Collateral in lieu of foreclosure or otherwise act or fail to act with
respect to any collateral securing all or a part of the Guaranteed Obligations,
compromise or adjust any part of the Guaranteed Obligations, make any other
accommodation with the Borrower, any Guarantor, any other guarantor or any other
person liable on any part of the Guaranteed Obligations or exercise any other
right or remedy available to it against the Borrower, any Guarantor, any other
guarantor or any other person liable on any of the Guaranteed Obligations,
without affecting or impairing in any way the liability of such Guarantor under
this Guaranty except to the extent the Guaranteed Obligations have been fully
and indefeasibly paid in cash. To the fullest extent permitted by applicable
law, each Guarantor waives any defense arising out of any such election even
though that election may operate, pursuant to applicable law, to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
any Guarantor against the Borrower, any other guarantor or any other person
liable on any of the Guaranteed Obligations, as the case may be, or any
security.
15.5. Rights of Subrogation. No Guarantor will assert any right,
claim or cause of action, including, without limitation, a claim of subrogation,
contribution or indemnification that it has against the Borrower, any Guarantor,
any person liable on the Guaranteed Obligations, or any collateral, until the
Loan Parties and the Guarantors have fully performed all their obligations to
the Agent, the LC Issuer and the Lender.
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15.6. Reinstatement; Stay of Acceleration. If at any time any
payment of any portion of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned upon the insolvency, bankruptcy, or
reorganization of the Borrower or otherwise, each Guarantor's obligations under
this Guaranty with respect to that payment shall be reinstated at such time as
though the payment had not been made and whether or not the Agent, the LC Issuer
and the Lenders are in possession of this Guaranty. If acceleration of the time
for payment of any of the Guaranteed Obligations is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower, all such amounts otherwise subject
to acceleration under the terms of any agreement relating to the Guaranteed
Obligations shall nonetheless be payable by the Guarantors forthwith on demand
by the Lender.
15.7. Information. Each Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower's financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks that
each Guarantor assumes and incurs under this Guaranty, and agrees that neither
the Agent, the LC Issuer nor any Lender shall have any duty to advise any
Guarantor of information known to it regarding those circumstances or risks.
15.8. [Intentionally Deleted.]
15.9. Taxes. All payments of the Guaranteed Obligations will be made
by each Guarantor free and clear of and without deduction for or on account of
any and all present or future taxes, levies, imposts, duties, charges,
deductions or withholdings of whatever nature imposed by any governmental
authority with respect to such payments, and any and all liabilities with
respect to the foregoing, but excluding franchise taxes and taxes imposed on
overall net income of the Lender by the U.S. or the jurisdiction in which the
Lender's applicable Lending Installation is located (collectively, "TAXES"). If
any Guarantor is required by law to deduct any Taxes from or in respect of any
sum payable to the Lenders under this Guaranty, (a) the sum payable must be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this provision) the
Lenders receive an amount equal to the sum it would have received had no such
deductions been made, (b) the Guarantors must then make such deductions, and
must pay the full amount deducted to the relevant authority in accordance with
applicable law, and (c) the Guarantors must furnish to the Lender within
forty-five days after their due date certified copies of all official receipts
evidencing payment thereof.
15.10. Contribution. In the event any Guarantor (a "PAYING
GUARANTOR") shall make any payment or payments under this Guaranty or shall
suffer any loss as a result of any realization upon any collateral granted by it
to secure its obligations under this Guaranty, each other Guarantor (each a
"NON-PAYING GUARANTOR") shall contribute to such Paying Guarantor an amount
equal to such Non-Paying Guarantor's "Pro Rata Share" of such payment or
payments made, or losses suffered, by such Paying Guarantor. For purposes of
this Article XV, each Non-Paying Guarantor's "PRO RATA SHARE" with respect to
any such payment or loss by a Paying Guarantor shall be determined as of the
date on which such payment or loss was made by reference to the ratio of (i)
such Non-Paying Guarantor's Maximum Liability as of such date (without giving
effect to any right to receive, or obligation to make, any contribution
hereunder) or, if such Non-Paying Guarantor's Maximum Liability has not been
determined, the aggregate amount of all monies received by such Non-Paying
Guarantor from the Borrower after the date hereof (whether by loan, capital
infusion or by other means) to (ii) the aggregate Maximum Liability of all
Guarantors hereunder (including such Paying Guarantor) as of such date (without
giving effect to any right to receive, or obligation to make, any contribution
hereunder), or to the extent that a Maximum Liability has not been determined
for any Guarantor, the aggregate amount of all monies received by such
Guarantors from the Borrower after the date hereof (whether by loan, capital
infusion or by other means). Nothing in this provision shall affect any
Guarantor's several liability for the entire amount of the Guaranteed
Obligations (up to such Guarantor's Maximum Liability). Each of the Guarantors
covenants
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and agrees that its right to receive any contribution under this Guaranty from a
Non-Paying Guarantor shall be subordinate and junior in right of payment to the
payment in full in cash of the Guaranteed Obligations. This provision is for the
benefit of both the Agent, the LC Issuer, the Lenders and the Guarantors and may
be enforced by any one, or more, or all of them in accordance with the terms
hereof.
15.11. Lending Installations. The Guaranteed Obligations may be
booked at any Lending Installation. All terms of this Guaranty apply to and may
be enforced by or on behalf of any Lending Installation.
15.12 Liability Cumulative. The liability of each Loan Party as a
Guarantor under this Article XV is in addition to and shall be cumulative with
all liabilities of each Loan Party to the Agent, the LC Issuer and the Lenders
under this Agreement and the other Loan Documents to which such Loan Party is a
party or in respect of any obligations of liabilities of the other Loan Parties,
without any limitation as to amount, unless the instrument or agreement
evidencing or creating such other liability specifically provides to the
contrary.
15.13 Fraudulent Conveyance Matters. Notwithstanding anything to the
contrary contained herein or in any Loan Document, in any proceeding involving
the bankruptcy, reorganization, arrangement, adjustment of debts, relief of
debtors, dissolution or insolvency or any similar proceeding with respect to the
Borrower or any Guarantor or their assets, it is the intention of the Loan
Parties and the Lenders that the amount of the Guarantors' Guaranteed
Obligations of the Borrower or any Guarantor shall be in, but not in excess of,
the maximum amount thereof (the "MAXIMUM LIABILITY") not subject to avoidance or
recovery by operation of applicable law governing bankruptcy, reorganization,
arrangement, adjustment of debts, relief of debtors, dissolution, insolvency,
fraudulent transfers or conveyances or other similar laws (including, without
limitation, 11 U.S.C. Section 547, Section 548, Section 550 and other
"avoidance" provisions of Title 11 of the United States Code) applicable in any
such proceeding to such Guarantor and this Agreement or the Loan Documents
(collectively, "APPLICABLE INSOLVENCY LAWS"). To that end, but only in the event
and to the extent that a Guarantor's individual obligations with respect to the
Guaranteed Obligations of the Borrower or any other Guarantor or any payment
made pursuant to such Guaranteed Obligations would, but for the operation of the
foregoing proviso, be subject to avoidance or recovery in any such proceeding
under Applicable Insolvency Laws, the amount of such Guarantor's individual
obligations with respect to such Guaranteed Obligations shall be limited to the
largest amount which, after giving effect thereto, would not, under Applicable
Insolvency Laws, render such Guarantor's individual obligations with respect to
such Guaranteed Obligations unenforceable or avoidable or otherwise subject to
recovery under Applicable Insolvency Laws, which (a) the fair consideration
actually (directly or indirectly) received by such Guarantor under the terms and
as a result of this Agreement and the value of the benefits described herein,
including (and to the extent not inconsistent with applicable federal and state
laws affecting the enforceability of guaranties) distributions, commitments, and
advances made to or for the benefit of said Guarantor with the proceeds of any
credit extended hereunder, or (b) the excess of (i) the amount of the fair value
of the assets of such Guarantor as of the date of this Agreement as determined
in accordance with applicable federal and state laws governing determinations of
the insolvency of debtors as in effect on the date hereof, over (ii) the amount
of all liabilities of such Guarantor as of the date of this Agreement, also as
determined on the basis of applicable federal and state laws governing the
insolvency of debtors as in effect on the date hereof. To the extent any payment
actually made by a Guarantor pursuant to the Guaranteed Obligations of the
Borrower or any other Guarantor exceeds the limitation of the foregoing proviso
and is otherwise subject to avoidance and recovery in any such proceeding under
Applicable Insolvency Laws, the amount subject to avoidance shall in any event
be limited to the amount by which such actual payments exceed such limitation
and the Guaranteed Obligations as limited by the foregoing proviso shall in all
events remain in full force and effect and be fully enforceable against such
Guarantor. The foregoing proviso is intended solely to preserve the rights of
the Lenders hereunder against the Guarantors in such proceeding to the maximum
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extent permitted by Applicable Insolvency Laws and neither the Guarantors nor
any other Person shall have any right or claim under such proviso that would not
otherwise be available under Applicable Insolvency Laws in such proceeding.
ARTICLE XVI
CASH MANAGEMENT
16.1. Lockbox and Cash Management Account. .Each Loan Party has
obtained and shall continue to maintain during the term of this Agreement the
post office box at the U.S. Post Office bearing the address set forth on
Schedule 16.1, or such other address as the Agent may notify the Borrower from
time to time (the "LOCKED BOXES"). Each Loan Party shall notify all of its
customers and Account Debtors to forward all remittances of every kind due to
such Loan Party ("REMITTANCES") to its Locked Box (such notices to be in such
form and substance as the Agent may require from time to time). Promptly upon
receipt thereof, the Loan Parties shall deposit all other proceeds of Accounts
Receivable or other Collateral into the Locked Boxes (or into a Cash Management
Account). The Agent shall have sole access to the Locked Boxes at all times, and
each Loan Party shall take all action necessary to grant the Agent such sole
access. At no time shall any Loan Party remove any item from the Locked Boxes
without the Agent's prior written consent, and each Loan Party shall notify each
customer or Account Debtor not to pay any Remittance to any other place or
address without the Agent's prior written consent. If a Loan Party should
neglect or refuse to notify any customer or Account Debtor to pay any Remittance
to its Locked Box after notice from the Agent, the Agent shall be entitled to
make such notification. Each Loan Party hereby grants to the Agent an
irrevocable power of attorney, coupled with an interest, to take in such Loan
Party's name all action necessary (a) to grant the Agent sole access to its
Locked Box, (b) during the continuance of a Default, to contact Account Debtors
to pay any Remittance to such Locked Box in the event that any such Account
Debtor is not paying any such Remittance to such Locked Box, (c) during the
continuance of a Default, to contact Account Debtors for any reason and (d) to
endorse each Remittance delivered to its Locked Box for deposit to the
Borrower's Cash Management Account. The Borrower shall establish and, unless
otherwise directed by the Agent, maintain a cash management account with the
Agent (each, a "CASH MANAGEMENT ACCOUNT"). The Borrower shall enter into an
agreement with the Agent relating to such Loan Party's Cash Management Account,
in form and substance reasonably satisfactory to the Agent.
16.2 Application of Payments. So long as no Default shall be
continuing, deposits to the Cash Management Account shall be credited to the
Borrower as follows: (i) first, to the payment of any fees, expenses or other
Obligations (other than Obligations to pay principal and interest relating to
the Loans) then due and payable by the Borrower to the Agent or the Lenders
hereunder or under any of the other Loan Documents; (ii) second, to the ratable
payment of interest due on the Loans made to the Borrower; (iii) third, to late
charges until paid in full; (iv) fourth, to the extent requested by the
Borrower, to pay the amounts disbursed from the master concentration accounts of
the Borrower and Integrated Logistics Solutions LLC, (v) fifth, to the
outstanding principal balance of the Borrower's Loans and (vi) sixth, to the
extent of any excess not so credited, such deposits shall be made available to
the Borrower by deposit in the Borrower's operating Account with the Agent.
Notwithstanding the foregoing sentence, so long as the Availability is greater
than or equal to $25,000,000, deposits to the Cash Management Account shall be
credited first to the Borrower as follows: (i) first, to the payment of any
fees, expenses or other Obligations (other than Obligations to pay principal and
interest relating to the Loans) then due and payable by the Borrower to the
Agent or the Lenders hereunder or under any of the other loan Documents; (ii)
second, to the ratable payment of interest due on the Loans made to the
Borrower; (iii) third, to late charges until paid in full, (iv) fourth, to the
extent requested by the Borrower, to pay the amounts disbursed from the master
concentration accounts of the Borrower and Integrated Logistics
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Solutions LLC, and (v) fifth, to the extent of any excess not so credited, such
deposits shall be made available to the Borrower by deposit in the Borrower's
operating Account with the Agent. Upon the occurrence and during the continuance
of a Default which has not been waived in writing, all such deposits to the Cash
Management Account shall be credited to the Borrower: first, to pay any fees,
indemnities, or expense reimbursements including amounts then due to the Agent
from the Borrower (other than in connection with Banking Services or Rate
Management Obligations), second, to pay any fees or expense reimbursements then
due to the Lenders from the Borrower (other than in connection with Banking
Services or Rate Management Obligations), third, to pay interest due in respect
of the Loans, including Non-Ratable Loans, Overadvances and Protective Advances,
fourth, to pay or prepay principal of the Non-Ratable Loans, Overadvances and
Protective Advances, fifth, to pay or prepay principal of the Revolving Loans
(other than Non-Ratable Loans, Overadvances and Protective Advances) and unpaid
reimbursement obligations in respect of Facility LCs, sixth, to pay an amount to
the Agent equal to one hundred five percent (105%) of the aggregate undrawn face
amount of all outstanding Facility LCs and the aggregate amount of any unpaid
reimbursement obligations in respect of Facility LCs, to be held as cash
collateral for such Obligations, seventh, to payment of any amounts owing with
respect to Banking Services and Rate Management Obligations, eighth, to the
payment of any other Obligation due to the Agent or any Lender by the Borrower,
and ninth, to the extent of any excess not so credited, such excess shall be
made available to the Borrower by deposit in the Borrower's operating Account
with the Agent. For the purpose of calculating the Borrower's interest and
determining the aggregate Loans outstanding, all collections and remittances
shall be credited to the Borrower: (i) in the case of collections and
remittances received by wire transfer prior to 11:00 a.m. (Chicago time), on the
same Business Day as received, (ii) in the case of collections and remittances
received by wire transfer after 11:00 a.m. (Chicago time), on the next
succeeding Business Day after such receipt and (iii) in the case of all other
collections and remittances received, conditional on final payment, one (1)
Business Day after the Agent receives notice of the deposit of the proceeds of
such collections and remittances into the Cash Management Account prior to noon
(Chicago time), provided however in the case of clause (iii) above, that in the
event that the Agent receives notice of such deposit later than noon (Chicago
time) on any Business Day, such collection or remittance deposited shall be
credited to the Borrower (conditional upon final collection) two (2) Business
Days after such deposit. From time to time, upon advance written notice to the
Borrower, the Agent may adopt such additional or modified regulations and
procedures as it may deem reasonable and appropriate with respect to the
operation of the Cash Management Account and the services to be provided by the
Agent under this Agreement. Notwithstanding any provision of the foregoing
Section 16.2, in the event that the application of any proceeds to the principal
balance of the Revolving Loans shall reduce such principal balance below the
then Certified Acquisition Amount, then the Agent shall apply such deposit
proceeds to a cash collateral account maintained with the Agent and as to which
the Agent shall have sole access.
ARTICLE XVII
RELATIONSHIP OF THE BORROWER AND THE OTHER LOAN PARTIES
17.1. Notices. Each Loan Party shall immediately notify the Borrower
of the occurrence of any Default or Unmatured Default hereunder referring to
this Agreement describing such Default or Unmatured Default and stating that
such notice is a "notice of default." Any notice provided to the Borrower
hereunder shall constitute notice to each Loan Party on the date received by the
Borrower.
17.2. Execution of Loan Documents; Borrowing Base Certificate. The
Loan Parties hereby empower and authorize the Borrower, on behalf of the Loan
Parties, to execute and deliver to the Agent and the Lenders the Loan Documents
and all related agreements, certificates, documents, or instruments as shall be
necessary or appropriate to effect the purposes of the Loan Documents, including
without
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limitation, the Aggregate Borrowing Base Certificates and the Compliance
Certificates. Each Loan Party agrees that any action taken by the Borrower in
accordance with the terms of this Agreement or the other Loan Documents, and the
exercise by the Borrower of its powers set forth therein or herein, together
with such other powers that are reasonably incidental thereto, shall be binding
upon all of the Loan Parties.
17.3 Reporting. Each Borrowing Loan Party hereby agrees that it
shall furnish promptly after each Fiscal Month to the Borrower, and in no event
later than 20 days after the end of each Fiscal Month, a copy of its Borrowing
Base Certificate and the calculation of its Consolidated Fixed Charge Coverage
Ratio (as defined in the Indenture), on which the Borrower shall rely to prepare
the Aggregate Borrowing Base Certificates and Compliance Certificates and the
Indenture Certificate required pursuant to the provisions of this Agreement. The
Borrower shall retain all such Borrowing Base Certificates until the Facility
Termination Date and shall deliver same to the Agent upon the Agent's request
therefor.
17.4. Disbursement of Loan Proceeds. Upon the receipt by the
Borrower of the proceeds of any Advance, the Borrower shall immediately disburse
such proceeds to itself and to the other Borrowing Loan Parties via intercompany
loans, in each case based upon each such Borrowing Loan Party's Borrowing Base
Certificate. After such initial disbursement, the Loan Parties may make
additional intercompany loans to the extent permitted pursuant to the terms
hereof.
ARTICLE XVIII
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL;
CONFESSION OF JUDGMENT
18.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING
A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS) OF THE STATE OF OHIO, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE
TO NATIONAL BANKS.
18.2. CONSENT TO JURISDICTION. EACH LOAN PARTY HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR OHIO STATE
COURT SITTING IN CLEVELAND, OHIO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND EACH LOAN PARTY HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS
AGAINST ANY AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY
LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
ANY LOAN PARTY AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTION WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CLEVELAND,
OHIO.
18.3. WAIVER OF JURY TRIAL. EACH LOAN PARTY, THE AGENT, THE LC
ISSUER AND EACH LENDER HEREBY WAIVE JURY TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
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SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
18.4 CONFESSION OF JUDGMENT. THE LOAN PARTIES HEREBY AUTHORIZE ANY
ATTORNEY-AT-LAW TO APPEAR IN ANY COURT OF RECORD IN ANY COUNTY IN THE STATE OF
OHIO OR ELSEWHERE WHERE A LOAN PARTY HAS A PLACE OF BUSINESS, SIGNED THIS NOTE
OR CAN BE FOUND, AFTER THE AGENT OR REQUIRED LENDERS DECLARE A DEFAULT AND
ACCELERATE THE BALANCES DUE UNDER THIS AGREEMENT, TO WAIVE THE ISSUANCE OF
SERVICE OF PROCESS AND CONFESS JUDGMENT AGAINST THE LOAN PARTIES IN FAVOR OF THE
AGENT AND LENDERS FOR THE AMOUNTS THEN APPEARING DUE, TOGETHER WITH THE COSTS OF
SUIT, AND THEREUPON TO RELEASE ALL ERRORS AND WAIVE ALL RIGHT OF APPEAL AND STAY
OF EXECUTION. THE LOAN PARTIES AGREE AND CONSENT THAT THE ATTORNEY CONFESSING
JUDGMENT ON BEHALF OF THE LOAN PARTIES HEREUNDER MAY ALSO BE COUNSEL TO THE
AGENT, LENDERS OR ANY OF THEIR AFFILIATES, WAIVES ANY CONFLICT OF INTEREST WHICH
MIGHT OTHERWISE ARISE, AND CONSENTS TO THE AGENT OR LENDERS PAYING SUCH
CONFESSING ATTORNEY A LEGAL FEE OR ALLOWING SUCH ATTORNEY'S FEES TO BE PAID FROM
ANY PROCEEDS OF COLLECTION OF AGREEMENT OR COLLATERAL SECURITY THEREFOR.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the Loan Parties, the Lenders, the LC Issuer and
the Agent have executed this Agreement as of the date first above written.
WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE.
BORROWER:
PARK-OHIO INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman
NOTICE ADDRESS FOR BORROWER
AND ALL LOAN PARTIES:
c/o Park-Ohio Industries, Inc.
Address: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
94
WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE.
LENDERS:
BANK ONE, NA
Individually, as the Agent, a Lender and LC
Issuer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
Address: Mail Code OH2-5167
Akron Centre
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
KEYBANK NATIONAL ASSOCIATION
as Syndication Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
95
WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE.
CITIZENS BANK OF PENNSYLVANIA
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President, Marketing Manager
Address: Citizens Building Credit
▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
96
WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE.
LOAN PARTIES:
THE AJAX MANUFACTURING COMPANY PARK AVENUE TRAVEL LTD.
AJAX TOCCO MAGNETHERMIC PARK-OHIO FORGED & MACHINED
CORPORATION PRODUCTS LLC
ATBD, INC. PARK-OHIO PRODUCTS, INC.
BLUE FALCON FORGE, INC. PHARMACEUTICAL LOGISTICS, INC.
BLUE FALCON TRAVEL, INC. PHARMACY WHOLESALE LOGISTICS,
THE ▇▇▇▇▇▇ ▇▇▇▇ COMPANY INC.
CONTROL TRANSFORMER, INC. PMC INDUSTRIES CORP.
DONEGAL BAY LTD. PMC-COLINET, INC.
FECO, INC. P-O REALTY LLC
FORGING PARTS & MACHINING COMPANY POVI L.L.C.
GATEWAY INDUSTRIAL SUPPLY LLC PRECISION MACHINING CONNECTION
GENERAL ALUMINUM MFG. COMPANY LLC
ILS TECHNOLOGY LLC RB&W LTD.
INTEGRATED HOLDING COMPANY RB&W MANUFACTURING LLC
INTEGRATED LOGISTICS HOLDING COMPANY RED BIRD, INC.
INTEGRATED LOGISTICS SOLUTIONS, INC. SOUTHWEST STEEL PROCESSING LLC
INTEGRATED LOGISTICS SOLUTIONS LLC SUMMERSPACE, INC.
LALLEGRO, INC. TOCCO, INC.
▇▇▇▇▇ & PARK SCREW & BOLT COMPANY TRICKERATION, INC.
WB&R ACQUISITION COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
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